<PAGE>
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
________________________
FORM 8-K
CURRENT REPORT
Pursuant to Section 13 or 15(d) of the
Securities Exchange Act of 1934
__________________________
Date of Report (Date of
earliest event reported): October 30, 1997
----------------
INTERMEDIA COMMUNICATIONS INC.
-------------------------------------------------------
(Exact name of registrant as specified in its charter)
Delaware 59-2913586
-------------------------- -------------------
(State or other jurisdic- (I.R.S. Employer
tion of incorporation or Identification No.)
organization)
0-20135
------------------------
(Commission File Number)
3625 Queen Palm Drive, Tampa, Florida 33619-1309
- ----------------------------------------------------------------------
(Address of principal executive offices) (Zip Code)
Registrant's telephone number, including area code (813) 829-0011
--------------
<PAGE>
Item 5. Other Events
- ---------------------
On October 31, 1997, Intermedia Communications Inc. (the "Company")
announced the completion of two concurrent private offerings (the "Offerings")
of $250 million principal amount of 8 7/8% Senior Notes due 2007 (the "Senior
Notes") and $175 million liquidation preference of Depositary Shares (the
"Depositary Shares"), each representing a one-hundredth interest in a share of
the Company's Series E Junior Convertible Preferred Stock, resulting in gross
proceeds to the Company of $425 million. A copy of the press release announcing
the completion of the Offerings is filed herewith as Exhibit 99.1. Subsequent
thereto, the over-allotment option with respect to the private placement of
Depositary Shares was exercised and the Company sold an additional 1,000,000
Depositary Shares for additional aggregate gross proceeds of approximately
$25,000,000.
The net proceeds from the offering of the Depositary Shares will be
used by the Company to finance the continued expansion of the Company's
telecommunications networks, including but not limited to, network electronics,
such as local/long distance voice and data switches, and for general corporate
purposes, including working capital. The net proceeds from the offering of the
Senior Notes will be used to fund up to 80% of the cost of acquisition or
construction by the Company of telecommunications related assets. A portion of
the Company's expansion may occur through acquisitions (utilizing cash or
securities of the Company) as an alternative to direct investments in the assets
required to implement the expansion.
The Senior Notes and the Depositary Shares sold in the Offerings will
not and have not been registered under the Securities Act or any state
securities or blue sky laws, and may not be offered or sold in the United States
or in any state thereof absent registration or an applicable exemption from the
registration requirements of such laws.
Item 7. Financial Statements and Exhibits
- ------------------------------------------
Exhibit 4.1 Indenture, dated as of October 30, 1997, by and between the
Company and SunTrust Bank, Central Florida, National
Association, as Trustee.
Exhibit 4.2 Certificate of Designation of Voting Power, Designation
Preferences and Relative, Participating, Optional and Other
Special Rights and Qualifications, Limitations and
Restrictions of 7% Series E Junior Convertible Preferred
Stock of the Company, filed with the Secretary of State of
the State of Delaware on October 29, 1997.
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Exhibit 4.3 Deposit Agreement, dated as of October 30, 1997, by and
among the Company, Continental Stock Transfer & Trust
Company and all the holders from time to time of Depositary
Receipts issued thereunder.
Exhibit 99.1 Press Release, dated October 31, 1997.
Item 9. Sales of Equity Securities Pursuant to Regulation S.
- ------------------------------------------------------------
Of the Senior Notes sold, $2 million principal amount of Senior Notes
(the "Reg S Notes") were sold in reliance upon Regulation S under the Securities
Act ("Regulation S"). To make the exemption available, the Company relied upon
the fact that the Reg S Notes were offered for sale and sold outside the United
States to Persons other than U.S. Persons (as defined in Regulation S) in
offshore transactions (as defined in Regulation S) meeting the requirements of
Rule 904 of Regulation S.
The principal placement agents of the offering of the Reg S Notes were
Bear, Stearns & Co., Inc. and Salomon Brothers Inc.
The Reg S Notes were sold for cash. The total offering price of the
Reg S Notes was $2 million and the total placement agent discounts and
commissions was $50,000.
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SIGNATURE
Pursuant to the requirements of the Securities Exchange Act of 1934,
the registrant has duly caused this report to be signed on its behalf by the
undersigned thereunto duly authorized.
Date: November 6, 1997
INTERMEDIA COMMUNICATIONS INC.
------------------------------
(Registrant)
By: /s/ J. Christopher Brown
-------------------------------------
Name: J. Christopher Brown
Title: Senior Vice President -
Investor Relations
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EXHIBIT INDEX
-------------
Exhibit
No. Description
- ------- -----------
4.1 Indenture, dated as of October 30, 1997, by and between the
Company and SunTrust Bank, Central Florida, National Association,
as Trustee.
4.2 Certificate of Designation of Voting Power, Designation
Preferences and Relative, Participating, Optional and Other
Special Rights and Qualifications, Limitations and Restrictions
of 7% Series E Junior Convertible Preferred Stock of the Company,
filed with the Secretary of State of the State of Delaware on
October 29, 1997.
4.3 Deposit Agreement, dated as of October 30, 1997, by and among the
Company, Continental Stock Transfer & Trust Company and all the
holders from time to time of Depositary Receipts issued
thereunder.
99.1 Press Release, dated October 31, 1997.
<PAGE>
EXHIBIT 4.1
EXECUTION COPY
================================================================================
INTERMEDIA COMMUNICATIONS INC.
Up to $285,000,000
8 7/8% SENIOR NOTES DUE 2007
______________________________
_________________
INDENTURE
Dated as of October 30, 1997
_________________
_________________
SUNTRUST BANK, CENTRAL FLORIDA, NATIONAL ASSOCIATION
_________________
Trustee
================================================================================
<PAGE>
CROSS-REFERENCE TABLE*
<TABLE>
<CAPTION>
Trust Indenture
Act Section Indenture Section
<S> <C>
310 (a)(1)......................................... 7.10
(a)(2)......................................... 7.10
(a)(3)......................................... N.A.
(a)(4)......................................... N.A.
(a)(5)......................................... 7.10
(b)............................................ 7.10
(c)............................................ N.A.
311 (a)............................................ 7.11
(b)............................................ 7.11
(c)............................................ N.A.
312 (a)............................................ 2.05
(b)............................................ 10.03
(c)............................................ 10.03
313 (a)............................................ 7.06
(b)(1)......................................... N.A.
(b)(2)......................................... 7.06
(c)............................................ 7.06; 10.02
(d)............................................ 7.06
314 (a)............................................ 4.03; 10.05
(b)............................................ 4.17
(c)(1)......................................... 10.04
(c)(2)......................................... 10.04
(c)(3)......................................... N.A.
(d)............................................ 4.17
(e)............................................ N.A.
(f)............................................ N.A.
315 (a)............................................ N.A.
(b)............................................ 7.05
(c)............................................ N.A.
(d)............................................ N.A.
(e)............................................ N.A.
316 (a)(last sentence)............................. N.A.
(a)(1)(A)...................................... N.A.
(a)(2)......................................... N.A.
(b)............................................ N.A.
(c)............................................ 2.13
317 (a)(1)......................................... N.A.
(a)(2)......................................... N.A.
(b)............................................ N.A.
318 (a)............................................ N.A.
(b)............................................ N.A.
(c)............................................ 10.01
</TABLE>
N.A. means not applicable.
*This Cross-Reference Table is not part of the Indenture.
<PAGE>
TABLE OF CONTENTS
Page
ARTICLE 1
DEFINITIONS AND INCORPORATION
BY REFERENCE
<TABLE>
<S> <C>
Section 1.01. Definitions...................................... 1
Section 1.02. Other Definitions................................ 15
Section 1.03. Incorporation by Reference of Trust Indenture Act 16
Section 1.04. Rules of Construction............................ 16
ARTICLE 2
THE SENIOR NOTES
Section 2.01. Form and Dating.................................. 17
Section 2.02. Execution and Authentication..................... 18
Section 2.03. Registrar and Paying Agent....................... 18
Section 2.04. Paying Agent to Hold Money in Trust.............. 19
Section 2.05. Holder Lists..................................... 19
Section 2.06. Transfer and Exchange............................ 19
Section 2.07. Replacement Notes................................ 31
Section 2.08. Outstanding Notes................................ 31
Section 2.09. Treasury Notes................................... 32
Section 2.10. Temporary Notes.................................. 32
Section 2.11. Cancellation..................................... 32
Section 2.12. Defaulted Interest............................... 32
Section 2.13. Record Date...................................... 33
Section 2.14. CUSIP Number..................................... 33
ARTICLE 3
REDEMPTION AND CERTAIN REPURCHASES
Section 3.01. Notices to Trustee............................... 33
Section 3.02. Selection of Notes to Be Redeemed................ 33
Section 3.03. Notice of Redemption............................. 34
Section 3.04. Effect of Notice of Redemption................... 35
Section 3.05. Deposit of Redemption Price...................... 35
Section 3.06. Senior Notes Redeemed in Part.................... 35
Section 3.07. Optional Redemption.............................. 35
Section 3.08. Mandatory Redemption............................. 36
Section 3.09. Offer to Purchase With Excess Asset Sale Proceeds 36
ARTICLE 4
COVENANTS
Section 4.01. Payment of Notes................................. 38
Section 4.02. Maintenance of Office or Agency.................. 39
Section 4.03. Reports.......................................... 39
Section 4.04. Compliance Certificate........................... 40
Section 4.05. Taxes............................................ 40
Section 4.06. Stay, Extension and Usury Laws................... 41
Section 4.07. Restricted Payments.............................. 41
</TABLE>
i
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<TABLE>
<S> <C>
Section 4.08. Dividend and Other Payment Restrictions Affecting
Subsidiaries..................................... 44
Section 4.09. Incurrence of Indebtedness and Issuance
of Disqualified Stock............................ 45
Section 4.10. Asset Sales...................................... 47
Section 4.11. Transactions with Affiliates..................... 49
Section 4.12. Liens............................................ 49
Section 4.13. Limitations on Sale and Leaseback Transactions... 49
Section 4.14. Corporate Existence.............................. 49
Section 4.15. Offer to Purchase Upon Change of Control......... 50
Section 4.16. Business Activities.............................. 51
Section 4.17. Payments for Consent............................. 51
Section 4.18. Use of Proceeds.................................. 51
ARTICLE 5
SUCCESSORS
Section 5.01. Merger, Consolidation or Sale of Assets.......... 52
Section 5.02. Successor Corporation Substituted................ 52
ARTICLE 6
DEFAULTS AND REMEDIES
Section 6.01. Events of Default................................ 53
Section 6.02. Acceleration..................................... 54
Section 6.03. Other Remedies................................... 55
Section 6.04. Waiver of Past Defaults.......................... 55
Section 6.05. Control by Majority.............................. 56
Section 6.06. Limitation on Suits.............................. 56
Section 6.07. Rights of Holders of Notes to Receive Payment.... 57
Section 6.08. Collection Suit by Trustee....................... 57
Section 6.09. Trustee May File Proofs of Claim................. 57
Section 6.10. Priorities....................................... 57
Section 6.11. Undertaking for Costs............................ 58
ARTICLE 7
TRUSTEE
Section 7.01. Duties of Trustee................................ 58
Section 7.02. Rights of Trustee................................ 59
Section 7.03. Individual Rights of Trustee..................... 60
Section 7.04. Trustee's Disclaimer............................. 60
Section 7.05. Notice of Defaults............................... 60
Section 7.06. Reports by Trustee to Holders of the Senior
Notes............................................ 60
Section 7.07. Compensation and Indemnity....................... 61
Section 7.08. Replacement of Trustee........................... 61
Section 7.09. Successor Trustee by Merger, etc................. 62
Section 7.10. Eligibility; Disqualification.................... 63
Section 7.11. Preferential Collection of Claims Against
Company.......................................... 63
ARTICLE 8
LEGAL DEFEASANCE AND COVENANT DEFEASANCE
Section 8.01. Option to Effect Legal Defeasance or Covenant
Defeasance....................................... 63
</TABLE>
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<PAGE>
<TABLE>
<S> <C>
Section 8.02. Legal Defeasance and Discharge................... 63
Section 8.03. Covenant Defeasance.............................. 64
Section 8.04. Conditions to Legal or Covenant Defeasance....... 64
Section 8.05. Deposited Money and Government Securities to be
Held in Trust; Other Miscellaneous Provisions.... 65
Section 8.06. Repayment to Company............................. 66
Section 8.07. Reinstatement.................................... 66
ARTICLE 9
AMENDMENT, SUPPLEMENT AND WAIVER
Section 9.01. Without Consent of Holders of Senior Notes....... 67
Section 9.02. With Consent of Holders of Senior Notes.......... 67
Section 9.03. Compliance with Trust Indenture Act.............. 68
Section 9.04. Revocation and Effect of Consents................ 69
Section 9.05. Notation on or Exchange of Senior Notes.......... 69
Section 9.06. Trustee to Sign Amendments, etc.................. 69
Section 9.07. Payment for Consents............................. 69
ARTICLE 10
MISCELLANEOUS
Section 10.01. Trust Indenture Act Controls..................... 70
Section 10.02. Notices.......................................... 70
Section 10.03. Communication by Holders of Senior Notes with
Other Holders of Senior Notes.................... 71
Section 10.04. Certificate and Opinion as to Conditions
Precedent........................................ 71
Section 10.05. Statements Required in Certificate or Opinion.... 71
Section 10.06. Rules by Trustee and Agents...................... 72
Section 10.07. No Personal Liability of Partners, Directors,
Officers, Employees and Stockholders............. 72
Section 10.08. Governing Law.................................... 72
Section 10.09. No Adverse Interpretation of Other Agreements.... 72
Section 10.10. Successors....................................... 72
Section 10.11. Severability..................................... 72
Section 10.12. Counterpart Originals............................ 72
Section 10.13. Table of Contents, Headings, etc................. 73
</TABLE>
EXHIBITS
Exhibit A FORM OF NOTE
Exhibit B FORM OF CERTIFICATE OF TRANSFER
Exhibit C FORM OF CERTIFICATE OF EXCHANGE
Exhibit D FORM OF CERTIFICATE OF ACQUIRING
INSTITUTIONAL ACCREDITED INVESTOR
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INDENTURE dated as of October 30, 1997 between Intermedia Communications
Inc. (the "Company"), and SunTrust Bank, Central Florida, National Association,
as trustee (the "Trustee").
The Company and the Trustee agree as follows for the benefit of each other
and for the equal and ratable benefit of the holders of the 8 7/8% Senior Notes
due 2007 (the "Senior Notes"):
ARTICLE 1
DEFINITIONS AND INCORPORATION
BY REFERENCE
Section 1.01. Definitions.
"144A Global Security" means the global security in the form of Exhibit A
hereto bearing the Global Security Legend and the Private Placement Legend and
deposited with and registered in the name of the Depositary or its nominee that
will be issued in a denomination equal to the outstanding principal amount of
the Senior Notes sold in reliance on Rule 144A.
"Acquired Debt" means, with respect to any specified Person, (i)
Indebtedness of any other Person existing at the time such other Person is
merged with or into or became a Subsidiary of such specified Person, including,
without limitation, Indebtedness incurred in connection with, or in
contemplation of, such other Person merging with or into or becoming a
Subsidiary of such specified Person, and (ii) Indebtedness secured by a Lien
encumbering any asset acquired by such specified Person.
"Affiliate" of any specified Person means any other Person directly or
indirectly controlling or controlled by or under direct or indirect common
control with such specified Person. For purposes of this definition, "control"
(including, with correlative meanings, the terms "controlling," "controlled by"
and "under common control with"), as used with respect to any Person, shall mean
the possession, directly or indirectly, of the power to direct or cause the
direction of the management or policies of such Person, whether through the
ownership of voting securities, by agreement or otherwise, provided, however,
that beneficial ownership of 25% or more of the voting securities of a Person
shall be deemed to be control.
"Agent" means any Registrar, Paying Agent or co-registrar.
"Applicable Procedures" means, with respect to any transfer or exchange of
or for beneficial interests in any Global Note, the rules and procedures of the
Depositary, Euroclear and Cedel that apply to such transfer or exchange.
"Attributable Debt" means, with respect to any Sale and Leaseback
Transaction, the present value at the time of determination (discounted at a
rate consistent with accounting guidelines, as determined in good faith by the
Company) of the payments during the remaining term of the lease (including any
period for which such lease has been extended or may, at the option of the
lessor, be extended) or until the earliest date on which the lessee may
terminate such lease without penalty or upon payment of a penalty (in which case
the rental payments shall include such penalty), after excluding all amounts
required to be paid on account of maintenance and repairs, insurance, taxes,
assessments, water, utilities and similar charges.
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"Beneficial Owner" means a beneficial owner as defined in Rules 13d-3 and
13d-5 under the Exchange Act (or any successor rules), including the provision
of such Rules that a Person shall be deemed to have beneficial ownership of all
securities that such Person has a right to acquire within 60 days; provided that
a Person will not be deemed a beneficial owner of, or to own beneficially, any
securities if such beneficial ownership (1) arises solely as a result of a
revocable proxy delivered in response to a proxy or consent solicitation made
pursuant to, and in accordance with, the Exchange Act and (2) is not also then
reportable on Schedule 13D or Schedule 13G (or any successor schedule) under the
Exchange Act.
"Board of Directors" means, unless otherwise specified, the Board of
Directors of the Company or any authorized committee thereof.
"Board Resolution" means a resolution authorized by the Board of
Directors.
"Business Day" means any day other than a Legal Holiday.
"Capital Lease Obligation" means, at the time any determination thereof is
to be made, the amount of the liability in respect of a capital lease that would
at such time be so required to be capitalized on the balance sheet in accordance
with GAAP.
"Capital Stock" means (i) in the case of a corporation, corporate stock,
(ii) in the case of an association or business entity, any and all shares,
interests, participations, rights or other equivalents (however designated) of
corporate stock and (iii) in the case of a partnership, partnership interests
(whether general or limited) and any other interest or participation that
confers on a Person the right to receive a share of the profits and losses of,
or distributions of assets of, such partnership.
"Cedel" means Cedel Bank, SA.
"Certificated Security" means a certificated Senior Note registered in the
name of the holder thereof and issued in accordance with Section 2.06 hereof,
substantially in the form of Exhibit A hereto, except that such Senior Note
shall not bear the Global Security Legend and shall not have the "Schedule of
Exchanges of Interests in the Global Security" attached thereto.
"Change of Control" means the occurrence of any of the following: (i) the
sale, lease, transfer, conveyance or other disposition, in one or a series of
related transactions, of all or substantially all of the assets of the Company
and its Subsidiaries, taken as a whole, to any Person or group (as such term is
used in Section 13(d)(3) and 14(d)(2) of the Exchange Act), (ii) the adoption of
a plan relating to the liquidation or dissolution of the Company, (iii) any
Person or group (as defined above) is or becomes the Beneficial Owner, directly
or indirectly, of more than 50% of the total Voting Stock or Total Common Equity
of the Company, including by way of merger, consolidation or otherwise or (iv)
the first day on which a majority of the members of the Board of Directors of
the Company are not Continuing Directors.
"Closing Price" on any Trading Day with respect to the per share price of
any shares of Capital Stock means the last reported sale price regular way or,
in case no such reported sale takes place on such day, the average of the
reported closing bid and asked prices regular way, in either case on the New
York Stock Exchange or, if such shares of Capital Stock are not listed or
admitted to trading on such exchange, on the principal national securities
exchange on which such shares are listed or admitted to trading or,
2
<PAGE>
if not listed or admitted to trading on any national securities exchange, on the
Nasdaq National Market or, if such shares are not listed or admitted to trading
on any national securities exchange or quoted on Nasdaq National Market but the
issuer is a Foreign Issuer (as defined in Rule 3b-4(b) under the Exchange Act)
and the principal securities exchange on which such shares are listed or
admitted to trading is a Designated Offshore Securities Market (as defined in
Rule 902(a) under the Securities Act), the average of the reported closing bid
and asked prices regular way on such principal exchange, or, if such shares are
not listed or admitted to trading on any national securities exchange or quoted
on Nasdaq National Market and the issuer and principal securities exchange do
not meet such requirements, the average of the closing bid and asked prices in
the over-the-counter market as furnished by any New York Stock Exchange member
firm that is selected from time to time by the Company for that purpose and is
reasonably acceptable to the Trustee.
"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 Cash Flow Leverage Ratio" with respect to any Person means
the ratio of the Consolidated Indebtedness of such Person to the Consolidated
EBITDA of such Person for the relevant period; provided, however, that (1) if
the Company or any Subsidiary of the Company has incurred any Indebtedness
(including Acquired Debt) or if the Company has issued any Disqualified Stock or
if any Subsidiary of the Company has issued any Preferred Stock since the
beginning of such period that remains outstanding on the date of such
determination or if the transaction giving rise to the need to calculate the
Consolidated Cash Flow Leverage Ratio is an incurrence of Indebtedness
(including Acquired Debt) or the issuance of Disqualified Stock by the Company,
Consolidated EBITDA and Consolidated Indebtedness for such period will be
calculated after giving effect on a pro forma basis to (A) such Indebtedness,
Disqualified Stock or Preferred Stock, as applicable, as if such Indebtedness
had been incurred or such stock had been issued on the first day of such period,
(B) the discharge of any other Indebtedness repaid, repurchased, defeased or
otherwise discharged with the proceeds of such new Indebtedness or sale of stock
as if such discharge had occurred on the first day of such period, and (C) the
interest income realized by the Company or its Subsidiaries on the proceeds of
such Indebtedness or of such stock sale, to the extent not yet applied at the
date of determination, assuming such proceeds earned interest at the rate in
effect on the date of determination from the first day of such period through
such date of determination, (2) if since the beginning of such period the
Company or any Subsidiary of the Company has made any sale of assets (including,
without limitation, any Asset Sales or pursuant to any Sale and Leaseback
Transaction), Consolidated EBITDA for such period will be (A) reduced by an
amount equal to Consolidated EBITDA (if positive) directly attributable to the
assets which are the subject of such sale of assets for such period or (B)
increased by an amount equal to Consolidated EBITDA (if negative) directly
attributable thereto for such period and (3) if since the beginning of such
period the Company or any Subsidiary of the Company (by merger or otherwise) has
made an Investment in any Subsidiary of the Company (or any Person which becomes
a Subsidiary of the Company) or has made an acquisition of assets, including,
without limitation, any acquisition of assets occurring in connection with a
transaction causing a calculation of Consolidated EBITDA to be made hereunder,
which constitutes all or substantially all of an operating unit of a business,
Consolidated EBITDA for such period will be calculated after giving pro forma
effect thereto (including the incurrence of any Indebtedness (including Acquired
Debt)) as if such Investment or acquisition occurred on the first day of such
period. For purposes of this definition, whenever pro forma effect is to be
given to an acquisition of assets, the pro forma calculations will be determined
in good faith by a responsible financial or accounting Officer of
3
<PAGE>
the Company, provided, however, that such Officer shall assume (i) the
historical sales and gross profit margins associated with such assets for any
consecutive 12-month period ended prior to the date of purchase (provided that
the first month of such 12-month period will be no more than 18 months prior to
such date of purchase) and (ii) other expenses as if such assets had been owned
by the Company since the first day of such period. If any Indebtedness
(including, without limitation, Acquired Debt) bears a floating rate of interest
and is being given pro forma effect, the interest on such Indebtedness will be
calculated as if the rate in effect on the date of determination had been the
applicable rate for the entire period.
"Consolidated EBITDA" as of any date of determination means the
Consolidated Net Income for such period (but without giving effect to
adjustments, accruals, deductions or entries resulting from purchase accounting,
extraordinary losses or gains and any gains or losses from any Asset Sales),
plus the following to the extent deducted in calculating such Consolidated Net
Income: (i) provision for taxes based on income or profits of such Person and
its Subsidiaries for such period, (ii) Consolidated Interest Expense, (iii)
depreciation, amortization (including amortization of goodwill and other
intangibles) and other non-cash charges (excluding any such non-cash charge to
the extent that it represents an accrual of or reserve for cash charges in any
future period or amortization of a prepaid cash expense that was paid in a prior
period and excluding non-cash interest and dividend income) of such Person and
its Subsidiaries for such period, in each case, on a consolidated basis and
determined in accordance with GAAP. Notwithstanding the foregoing, the provision
for taxes on the income or profits of, and the depreciation, amortization,
interest expense and other non-cash charges of, a Subsidiary of the referent
Person shall be added to Consolidated Net Income to compute Consolidated EBITDA
only to the extent (and in same proportion) that the Net Income of such
Subsidiary was included in calculating the Consolidated Net Income of such
Person and only if a corresponding amount would be permitted at the date of
determination to be dividended to the Company by such Subsidiary, or loaned to
the Company by any such Subsidiary, without prior approval (that has not been
obtained), pursuant to the terms of its charter and all agreements, instruments,
judgments, decrees, orders, statutes, rules and governmental regulations
applicable to that Subsidiary or its stockholders.
"Consolidated Indebtedness" means, with respect to any Person, as of any
date of determination, the aggregate amount of Indebtedness of such Person and
its Subsidiaries as of such date calculated on a consolidated basis in
accordance with GAAP consistently applied.
"Consolidated Interest Expense" means, for any Person, for any period, the
aggregate of the following for such Person for such period determined on a
consolidated basis in accordance with GAAP: (a) the amount of interest in
respect of Indebtedness (including amortization of original issue discount,
amortization of debt issuance costs, and non-cash interest payments on any
Indebtedness, the interest portion of any deferred payment obligation and after
taking into account the effect of elections made under any Interest Rate
Agreement, however denominated, with respect to such Indebtedness), (b) the
amount of Redeemable Dividends (to the extent not already included in
Indebtedness in determining Consolidated Interest Expense for the relevant
period) and (c) the interest component of rentals in respect of any Capital
Lease Obligation paid, in each case whether accrued or scheduled to be paid or
accrued by such Person during such period to the extent such amounts were
deducted in computing Consolidated Net Income, determined on a consolidated
basis in accordance with GAAP. For purposes of this definition, interest on a
Capital Lease Obligation shall be deemed to accrue at an interest rate
reasonably determined by such Person to be the rate of interest implicit in such
Capital Lease Obligation in accordance with GAAP consistently applied.
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<PAGE>
"Consolidated Net Income" means, with respect to any Person for any
period, the aggregate of the Net Income of such Person and its Subsidiaries for
such period, on a consolidated basis, determined in accordance with GAAP;
provided that:
(i) the Net Income of any Person that is not a Subsidiary or that is
accounted for by the equity method of accounting shall be included only to the
extent of the amount of dividends or distributions paid in cash to the referent
Person or a Subsidiary thereof,
(ii) the Net Income of any Subsidiary shall be excluded to the extent
that the declaration or payment of dividends or other distributions by that
Subsidiary of that Net Income is not at the date of determination permitted
without any prior governmental approval (which has not been obtained) or,
directly or indirectly, by operation of the terms of its charter or any
agreement, instrument, judgment, decree, order, statute, rule or governmental
regulation applicable to that Subsidiary or its stockholders,
(iii) the Net Income of any Person acquired in a pooling of interests
transaction for any period prior to the date of such acquisition shall be
excluded,
(iv) the cumulative effect of a change in accounting principles shall be
excluded, and
(v) the Net Income of any Unrestricted Subsidiary shall be excluded,
whether or not distributed to the Company or one of its Subsidiaries.
"Contingent Investment" means, with respect to any Person, any guarantee
by such Person of the performance of another Person or any commitment by such
Person to invest in another Person. Any Investment that consists of a
Contingent Investment shall be deemed made at the time that the guarantee of
performance or the commitment to invest is given, and the amount of such
Investment shall be the maximum monetary obligation under such guarantee of
performance or commitment to invest. To the extent that a Contingent Investment
is released or lapses without payment under the guarantee of performance or the
commitment to invest, such Investment shall be deemed not made to the extent of
such release or lapse. With respect to any Contingent Investment, the payment
of the guarantee of performance or the payment under the commitment to invest
shall not be deemed to be an additional Investment.
"Continuing Directors" means, as of any date of determination, any member
of the Board of Directors of the Company who (i) was a member of such Board of
Directors on the Issue Date or (ii) was nominated for election or elected to
such Board of Directors with the affirmative vote of a majority of the
Continuing Directors who were members of such Board at the time of such
nomination or election.
"Corporate Trust Office of the Trustee" shall be at the address of the
Trustee specified in Section 10.02 hereof or such other address as to which the
Trustee may give notice to the Company.
"Credit Facility" means any credit facility entered into by and among the
Company and one or more commercial banks or financial institutions, providing
for senior term or revolving credit borrowings of a type similar to credit
facilities typically entered into by commercial banks and financial
institutions, including any related notes, Guarantees, collateral documents,
instruments and agreements executed in connection therewith, as such credit
facility and related agreements may be amended, extended, refinanced, renewed,
restated, replaced or refunded from time to time.
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"Default" means any event that is or with the passage of time or the giving
of notice or both would be an Event of Default.
"Depositary" means, with respect to the Senior Notes issuable or issued in
whole or in part in global form, the Person specified in Section 2.03 hereof as
the Depositary with respect to the Senior Notes, until a successor shall have
been appointed and become such pursuant to the applicable provision of this
Indenture, and, thereafter, "Depositary" shall mean or include such successor.
"Disqualified Stock" means any Capital Stock to the extent that, and only
to the extent that, by its terms (or by the terms of any security into which it
is convertible or for which it is exchangeable), or upon the happening of any
event, matures or is mandatorily redeemable, pursuant to a sinking fund
obligation or otherwise, or is redeemable at the option of the holder thereof,
in whole or in part, on or prior to the date on which the Senior Notes mature,
provided, however, that any Capital 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 Capital Stock upon the
occurrence of a Change of Control occurring prior to the final maturity of the
Senior Notes shall not constitute Disqualified Stock if the change in control
provisions applicable to such Capital Stock are no more favorable to the holders
of such Capital Stock than the provisions applicable to the Senior Notes
contained in Section 4.15 hereof and such Capital 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 Senior Notes as are
required to be repurchased pursuant to Section 4.15 hereof.
"Eligible Institution" means a commercial banking institution that has
combined capital and surplus of not less than $500 million or its equivalent in
foreign currency, whose debt is rated "A" (or higher) according to S&P or
Moody's at the time as of which any investment or rollover therein is made.
"Eligible Receivable" means any Receivable not more than 90 days past due
under its scheduled payment terms.
"Equity Interests" means Capital Stock and all warrants, options or other
rights to acquire Capital Stock or that are measured by the value of Capital
Stock (but excluding any debt security that is convertible into or exchangeable
for Capital Stock).
"Euroclear" means Morgan Guaranty Trust Company of New York, Brussels
office as operator of the Euroclear system.
"Exchange Act" means the Securities Exchange Act of 1934, as amended (or
any successor act), and the rules and regulations thereunder.
"Exchange Notes" means the Notes issued in Exchange Offer pursuant to
Section 2.06(f) hereof.
"Exchange Offer" has the meaning set forth in the Note Registration Rights
Agreement.
"Exchange Offer Registration Statement" has the meaning set forth in the
Note Registration Rights Agreement.
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"Existing Indebtedness" means the Existing Senior Notes and all other
Indebtedness of the Company and its Subsidiaries in existence on the Issue Date.
"Existing Senior Notes" means the Company's 12 1/2% Senior Discount Notes
due 2006, the Company's 11 1/4% Senior Discount Notes due 2007 and the Company's
11 1/4% Series B Senior Discount Notes due 2007.
"Fair Market Value" means with respect to any asset or property, the sale
value that would be obtained in an arm's length transaction between an informed
and willing seller under no compulsion to sell and an informed and willing buyer
under no compulsion to buy.
"GAAP" means generally accepted accounting principles set forth in the
opinions and pronouncements of the Accounting Principles Board of the American
Institute of Certified Public Accountants and statements and pronouncements of
the Financial Accounting Standards Board or in such other statements by such
other entity as may be approved by a significant segment of the accounting
profession of the United States, which are in effect on the Issue Date.
"Global Security" means, individually and collectively, each of the
Restricted Global Securities and the Unrestricted Global Security, substantially
in the form of Exhibit A.
"Global Security Legend" means the legend set forth in Section 2.07(g)(ii)
to be placed on all Global Securities issued under this Indenture.
"Government Securities" means direct obligations of, or obligations
guaranteed by, the United States of America for the payment of which guarantee
or obligations the full faith and credit of the United States is pledged.
"Guarantee" means a guarantee (other than by endorsement of negotiable
instruments for collection in the ordinary course of business), direct or
indirect, in any manner (including, without limitation, letters of credit and
reimbursement agreements in respect thereof), of all or any part of any
Indebtedness.
"Hedging Obligations" means, with respect to any Person, the obligations
of such Person under Interest Rate Agreements.
"Holder" and "holder" shall mean a Person in whose name a Senior Note is
registered.
"IAI Global Security" means the Global Security in the form of Exhibit A
hereto bearing the Global Security Legend and the Private Placement Legend and
deposited with and registered in the name of the Depositary or its nominee that
will be issued in a denomination equal to the outstanding principal amount of
the Senior Notes sold to Institutional Accredited Investors.
"Indebtedness" means, with respect to any Person, any indebtedness of such
Person, whether or not contingent, in respect of borrowed money or evidenced by
bonds, notes, debentures or similar instruments or letters of credit (or
reimbursement agreements in respect thereof) or representing the balance
deferred and unpaid of the purchase price of any property (including pursuant to
capital leases) or representing any Hedging Obligations, except any such balance
that constitutes an accrued expense or
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trade payable, if and to the extent any of the foregoing (other than Hedging
Obligations or letters of credit) would appear as a liability upon a balance
sheet of such Person prepared in accordance with GAAP, all indebtedness of
others secured by a Lien on any asset of such Person (whether or not such
indebtedness is assumed by such Persons), all obligations to purchase, redeem,
retire, defease or otherwise acquire for value any Disqualified Stock or any
warrants, rights or options to acquire such Disqualified Stock valued, in the
case of Disqualified Stock, at the greatest amount payable in respect thereof on
a liquidation (whether voluntary or involuntary) plus accrued and unpaid
dividends, the liquidation value of any Preferred Stock issued by Subsidiaries
of such Person plus accrued and unpaid dividends, and also includes, to the
extent not otherwise included, the Guarantee of items that would be included
within this definition and any amendment, supplement, modification, deferral,
renewal, extension or refunding of any of the above; notwithstanding the
foregoing, in no event will performance bonds or similar security for
performance be deemed Indebtedness so long as such performance bonds or similar
security for performance would not appear as a liability on a balance sheet of
such Person prepared in accordance with GAAP; and provided, further that the
amount of any Indebtedness in respect of any Guarantee shall be the maximum
principal amount of the Indebtedness so guaranteed.
"Indenture" means this Indenture, as amended or supplemented from time to
time.
"Indirect Participant" means a Person who holds a beneficial interest in a
Global Security through a Participant.
"Initial Purchasers" means Bear, Stearns & Co. Inc. and Salomon Brothers
Inc, as initial purchasers in the Offering.
"Interest Rate Agreements" means (i) interest rate swap agreements,
interest rate cap agreements and interest rate collar agreements and (ii) other
agreements or arrangements designed to protect such Person against fluctuations
in interest rates.
"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.
"Investments" means, with respect to any Person, all investments by such
Person in other Persons (including Affiliates) in the forms of loans,
Guarantees, Contingent Investments, advances or capital contributions (excluding
commission, travel and similar advances to officers and employees made in the
ordinary course of business), purchases or other acquisitions for consideration
of Indebtedness, Equity Interests or other securities of any other Person and
all other items that are or would be classified as investments on a balance
sheet prepared in accordance with GAAP; provided, however, that any investment
to the extent made with Capital Stock of the Company (other than Disqualified
Stock) shall not be deemed an "Investment" for purposes of this Indenture.
"Issue Date" means October 30, 1997.
"Joint Venture" means a Person in the Telecommunications Business in which
the Company holds less than a majority of the shares of Voting Stock or an
Unrestricted Subsidiary in the Telecommunications Business.
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"Legal Holiday" means a Saturday, a Sunday or a day on which banking
institutions in the City of New York or at a place of payment are authorized by
law, regulation or executive order to remain closed. If a payment date is a
Legal Holiday at a place of payment, payment may be made at that place on the
next succeeding day that is not a Legal Holiday, and no interest shall accrue
for the intervening period.
"Letter of Transmittal" means the letter of transmittal to be prepared by
the Company and sent to all holders of the Senior Notes for use by such holders
in connection with the Exchange Offer.
"Liquidated Damages" means all liquidated damages then owing pursuant to
Section 5 of the Note Registration Rights Agreement.
"Lien" means, with respect to any asset, any mortgage, lien, pledge,
charge, security interest or encumbrance of any kind in respect of such asset,
whether or not filed, recorded or otherwise perfected under applicable law
(including any conditional sale or other title retention agreement, any lease in
the nature thereof, any option or other agreement to sell or give a security
interest in and any filing of or agreement to give any financing statement under
the Uniform Commercial Code (or equivalent statutes) of any jurisdiction).
"Marketable Securities" means:
(i) Government Securities;
(ii) any certificate of deposit maturing not more than 270 days after the
date of acquisition issued by, or time deposit of, an Eligible Institution;
(iii) commercial paper maturing not more than 270 days after the date of
acquisition issued by a corporation (other than an Affiliate of the Company)
with a rating, at the time as of which any investment therein is made, of "A-1"
(or higher) according to S&P or "P-1" (or higher) according to Moody's;
(iv) any banker's acceptances or money market deposit accounts issued or
offered by an Eligible Institution; and
(v) any fund investing exclusively in investments of the types described
in clauses (i) through (iv) above.
"Moody's" means Moody's Investors Service, Inc. and its successors.
"Net Income" means, with respect to any Person, the net income (loss) of
such Person, determined in accordance with GAAP and before any reduction in
respect of preferred stock dividends, excluding, however, (i) any gain (but not
loss), together with any related provision for taxes on such gain (but not
loss), realized in connection with (a) any Asset Sale (including, without
limitation, dispositions pursuant to Sale and Leaseback Transactions) or (b) the
disposition of any securities by such Person or any of its Subsidiaries or the
extinguishment of any Indebtedness of such Person or any of its Subsidiaries and
(ii) any extraordinary gain (but not loss), together with any related provision
for taxes on such extraordinary gain (but not loss).
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"Net Proceeds" means the aggregate cash proceeds received by the Company or
any of its Subsidiaries in respect of any Asset Sale, net of the direct costs
relating to such Asset Sale (including, without limitation, legal, accounting
and investment banking fees, and sales commissions) and any relocation expenses
incurred as a result thereof, taxes paid or payable as a result thereof (after
taking into account any available tax credits or deductions and any tax sharing
arrangements), amounts required to be applied to the repayment of Indebtedness
secured by a Lien on the asset or assets that are the subject of such Asset Sale
and any reserve for adjustment in respect of the sale price of such asset or
assets. Net Proceeds shall exclude any non-cash proceeds received from any Asset
Sale, but shall include such proceeds when and as converted by the Company or
any Subsidiary of the Company to cash.
"Note Custodian" means the Trustee, as custodian with respect to the Senior
Notes in global form, or any successor entity thereto.
"Note Registration Rights Agreement" means the Registration Rights
Agreement dated as of the date hereof between the Company and the Initial
Purchasers.
"Offering" means the offering of the Senior Notes pursuant to the Offering
Memorandum.
"Offering Memorandum" means the offering memorandum of the Company, dated
October 24, 1997, relating to the Offering.
"Officer" means, with respect to any Person, the Chairman of the Board, the
Chief Executive Officer, the President, the Chief Operating Officer, the Chief
Financial Officer, the Treasurer, any Assistant Treasurer, Controller, Secretary
or any Vice-President of such Person.
"Officers' Certificate" means a certificate signed by two Officers of the
Company, one of whom must be the principal executive officer, principal
financial officer, treasurer or principal accounting officer of the Company.
"Opinion of Counsel" means an opinion from legal counsel, who may be an
employee of or counsel to the Company, any Subsidiary of the Company or the
Trustee.
"Pari Passu Notes" means any notes issued by the Company which, by their
terms and the terms of any indenture governing such notes, have an obligation to
be repurchased by the Company upon the occurrence of an Asset Sale.
"Participant" means, with respect to the Depositary, Euroclear or Cedel, a
Person who has an account with the Depositary, Euroclear or Cedel, respectively
(and, with respect to The Depository Trust Company, shall include Euroclear and
Cedel).
"Participating Broker-Dealer" means any broker-dealer that is the
beneficial owner (as defined in Rule 13d-3 under the Exchange Act of Exchange
Notes received by such broker-dealer in the Exchange Offer.
"Permitted Investment" means (a) any Investments in the Company or any
Subsidiary of the Company; (b) any Investments in Marketable Securities; (c)
Investments by the Company or any Subsidiary of the Company in a Person, if as a
result of such Investment (i) such Person becomes a
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Subsidiary of the Company or (ii) such Person is merged, consolidated or
amalgamated with or into, or transfers or conveys substantially all of its
assets to, or is liquidated into, the Company or a Subsidiary of the Company;
(d) any Investments in property or assets to be used in (A) any line of business
in which the Company or any of its Subsidiaries was engaged on the Issue Date or
(B) any Telecommunications Business; (e) Investments in any Person in connection
with the acquisition of such Person or substantially all of the property or
assets of such Person by the Company or any Subsidiary of the Company; provided
that within 180 days from the first date of any such Investment, either (A) such
Person becomes a Subsidiary of the Company or any of its Subsidiaries or (B) the
amount of any such Investment is repaid in full to the Company or any of its
Subsidiaries; (f) Investments pursuant to any agreement or obligation of the
Company or a Subsidiary, in effect on the Issue Date or on the date a subsidiary
becomes a Subsidiary (provided that any such agreement was not entered into in
contemplation of such subsidiary becoming a Subsidiary), to make such
Investments; (g) Investments in prepaid expenses, negotiable instruments held
for collection and lease, utility and workers' compensation, performance and
other similar deposits; (h) Hedging Obligations permitted to be incurred
pursuant to Section 4.09(b) hereof; and (i) bonds, notes, debentures or other
securities received as a result of Asset Sales permitted under Section 4.10
hereof.
"Permitted Liens" means (i) Liens securing Indebtedness (including Capital
Lease Obligations) permitted to be incurred pursuant to Sections 4.09(b)(i) and
4.09(b)(ii) hereof; (ii) Liens in favor of the Company; (iii) Liens on property
of a Person existing at the time such Person is merged into or consolidated with
the Company or any Subsidiary of the Company; provided that such Liens were in
existence prior to the contemplation of such merger or consolidation and do not
extend to any assets other than those of the Person merged into or consolidated
with the Company; (iv) Liens on property existing at the time of acquisition
thereof by the Company or any Subsidiary of the Company, provided that such
Liens were in existence prior to the contemplation of such acquisition; (v)
Liens to secure the performance of statutory obligations, surety or appeal
bonds, performance bonds or other obligations of a like nature incurred in the
ordinary course of business; (vi) Liens existing on the Issue Date; (vii) Liens
for taxes, assessments or governmental charges or claims that are not yet
delinquent or that are being contested in good faith by appropriate proceedings
timely instituted and diligently concluded, provided that any reserve or other
appropriate provision as shall be required in conformity with GAAP shall have
been made therefor; (viii) Liens incurred in the ordinary course of business of
the Company or any Subsidiary of the Company with respect to obligations that do
not exceed $5.0 million at any one time outstanding and that (a) are not
incurred in connection with the borrowing of money or the obtaining of advances
or credit (other than trade credit in the ordinary course of business) and (b)
do not in the aggregate materially detract from the value of the property or
materially impair the use thereof in the operation of business by the Company or
such Subsidiary; (ix) Liens on Telecommunications Related Assets existing during
the time of the construction thereof; (x) Liens on Receivables to secure
Indebtedness permitted to be incurred pursuant to Section 4.09(b) hereof, but
only to the extent that the outstanding amount of the Indebtedness secured by
such Liens would not represent more than 80% of Eligible Receivables; and (xi)
Liens to secure any Permitted Refinancing of any Indebtedness secured by Liens
referred to in the foregoing clauses (i), (iii), (v) or (x); but only to the
extent that such Liens do not extend to any other property or assets and the
principal amount of the Indebtedness secured by such Liens is not increased.
"Person" means any individual, corporation, partnership, joint venture,
association, joint stock company, trust, unincorporated organization, government
or any agency or political subdivision thereof or any other entity.
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"Preferred Stock" as applied to the Capital Stock of any Person, means
Capital Stock of such Person of any class or classes (however designated) that
ranks prior, as to 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.
"Private Placement Legend" means the legend set forth in Section 2.06(g)(i)
to be placed on all Notes issued under this Indenture except where otherwise
permitted by the provisions of this Indenture.
"Public Offering" means an underwritten offering of Common Stock of the
Company registered under the Securities Act.
"QIB" means a "qualified institutional buyer" as defined in Rule 144A.
"Receivables" means, with respect to any Person, all of the following
property and interests in property of such person or entity, whether now
existing or existing in the future or hereafter acquired or arising: (i)
accounts; (ii) accounts receivable, including, without limitation, all rights to
payment created by or arising from sales of goods, leases of goods or the
rendition of services no matter how evidenced, whether or not earned by
performance; (iii) all unpaid seller's or lessor's rights including, without
limitation, rescission, replevin, reclamation and stoppage in transit, relating
to any of the foregoing after creation of the foregoing or arising therefrom;
(iv) all rights to any goods or merchandise represented by any of the foregoing,
including, without limitation, returned or repossessed goods; (v) all reserves
and credit balances with respect to any such accounts receivable or account
debtors; (vi) all letters of credit, security, or Guarantees for any of the
foregoing; (vii) all insurance policies or reports relating to any of the
foregoing; (viii) all collection of deposit accounts relating to any of the
foregoing; (ix) all proceeds of any of the foregoing; and (x) all books and
records relating to any of the foregoing.
"Redeemable Dividend" means, for any dividend with regard to Disqualified
Stock and Preferred Stock, the quotient of the dividend divided by the
difference between one and the maximum statutory federal income tax rate
(expressed as a decimal number between 1 and 0) then applicable to the issuer of
such Disqualified Stock or Preferred Stock.
"Regulation S" means Regulation S promulgated under the Securities Act.
"Regulation S Global Security" means a global Note bearing the Private
Placement Legend and deposited with or on behalf of the Depositary and
registered in the name of the Depositary or its nominee, issued in a
denomination equal to the outstanding principal amount of the Notes initially
sold in reliance on Rule 903 of Regulation S.
"Representative" means the indenture trustee or other trustee, agent or
representative for any Senior Indebtedness.
"Responsible Officer" when used with respect to the Trustee, means any
officer within the Corporate Trust Department of the Trustee (or any successor
group of the Trustee) or any other officer of the Trustee customarily performing
functions similar to those performed by any of the above designated officers and
also means, with respect to a particular corporate trust matter, any other
officer to whom such matter is referred because of his knowledge of and
familiarity with the particular subject.
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"Restricted Certificated Security" means a Certificated Security bearing
the Private Placement Legend.
"Restricted Global Security" means the 144A Global Security, the IAI
Global Security and the Regulation S Global Security, which shall bear the
Private Placement Legend.
"Restricted Investment" means an Investment other than a Permitted
Investment.
"Restricted Period" means the 40-day restricted period as defined in
Regulation S.
"Rule 144" means Rule 144 under the Securities Act.
"Rule 144A" means Rule 144A under the Securities Act.
"Rule 903" means Rule 903 under the Securities Act.
"Rule 904" means Rule 904 under the Securities Act.
"S&P" means Standard and Poor's Corporation and its successors.
"Sale and Leaseback Transaction" means, with respect to any Person, any
direct or indirect arrangement pursuant to which any property (other than
Capital Stock) is sold by such Person or a Subsidiary of such Person and is
thereafter leased back from the purchaser or transferee thereof by such Person
or one of its Subsidiaries.
"Securities Act" means the Securities Act of 1933, as amended (or any
successor act), and the rules and regulations thereunder.
"Senior Indebtedness" means any Indebtedness permitted to be incurred by
the Company under the terms of this Indenture, unless the instrument under which
such Indebtedness is incurred expressly provides that it is subordinated in
right of payment to the Senior Notes. Notwithstanding anything to the contrary
in the foregoing, Senior Indebtedness will not include (i) any liability for
federal, state, local or other taxes owed or owing by the Company, (ii) any
Indebtedness of the Company to any of its Subsidiaries or other Affiliates,
(iii) any trade payables or (iv) any Indebtedness that is incurred in violation
of this Indenture.
"Shelf Registration Statement" means the Shelf Registration Statement as
defined in the Note Registration Rights Agreement.
"Significant Subsidiary" means any Subsidiary that would be a "Significant
Subsidiary" as defined in Article 1, Rule 1-02 of Regulation S-X, promulgated
pursuant to the Securities Act, as such Regulation is in effect on the date
hereof.
"Strategic Investor" means, with respect to any sale of the Company's
Capital Stock, any Person which, both as of the Trading Day immediately before
the day of such sale and the Trading Day immediately after the day of such sale,
has, or whose parent has, a Total Market Capitalization of at least $1.0 billion
on a consolidated basis. In calculating Total Market Capitalization for the
purpose of this
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definition, the consolidated Indebtedness of such Person, solely when calculated
as of the Trading Day immediately after the day of such sale, will be calculated
after giving effect to such sale (including any Indebtedness incurred in
connection with such sale). For purposes of this definition, the term "parent"
means any Person of which the referent Strategic Investor is a Subsidiary.
"Subsidiary" of any Person means (i) any corporation, association or
business entity of which more than 50% of the total voting power of shares of
Capital Stock entitled (without regard to the occurrence of any contingency) to
vote in the election of directors, managers or trustees thereof is at the time
owned or controlled, directly or indirectly, by such Person or one or more of
the other Subsidiaries of such Person or a combination thereof and (ii) any
partnership (a) the sole general partner or the managing general partner of
which is such Person or a Subsidiary of such Person or (b) the only general
partners of which are such Person or one or more Subsidiaries of such Person or
any combination thereof; provided that any Unrestricted Subsidiary shall be
excluded from this definition of "Subsidiary."
"Telecommunications Business" means, when used in reference to any Person,
that such Person is engaged primarily in the business of (i) transmitting, or
providing services relating to the transmission of, voice, video or data through
owned or leased transmission facilities, (ii) creating, developing or marketing
communications related network equipment, software and other devices for use in
a Telecommunications Business or (iii) evaluating, participating or pursuing any
other activity or opportunity that is related to those identified in (i) or (ii)
above; provided that the determination of what constitutes a Telecommunications
Business shall be made in good faith by the Board of Directors of the Company.
"Telecommunications Related Assets" means all assets, rights (contractual
or otherwise) and properties, whether tangible or intangible, used in connection
with a Telecommunications Business.
"TIA" means the Trust Indenture Act of 1939 (15 U.S.C. (S)(S) 77aaa-
77bbbb) as in effect on the date on which this Indenture is qualified under the
TIA, except as provided in Section 9.03 hereof.
"Total Common Equity" of any Person means, as of any date of determination,
the product of (i) the aggregate number of outstanding primary shares of Common
Stock of such Person on such day (which shall not include any options or
warrants on, or securities convertible or exchangeable into, shares of Common
Stock of such Person) and (ii) the average Closing Price of such Common Stock
over the 20 consecutive Trading Days immediately preceding such day. If no such
Closing Price exists with respect to shares of any such class, the value of such
shares for purposes of clause (ii) of the preceding sentence shall be determined
by the Board of Directors of the Company in good faith and evidenced by a
resolution of the Board of Directors filed with the Trustee.
"Total Market Capitalization" of any Person means, as of any day of
determination (and as modified for purposes of the definition of "Strategic
Investor"), the sum of (1) the consolidated Indebtedness of such Person and its
Subsidiaries (except in the case of the Company, in which case of the Company
and its Subsidiaries) on such day, plus (2) the product of (i) the aggregate
number of outstanding primary shares of Common Stock of such Person on such day
(which shall not include any options or warrants on, or securities convertible
or exchangeable into, shares of Common Stock of such Person) and (ii) the
average Closing Price of such Common Stock over the 20 consecutive Trading Days
immediately preceding such day, plus (3) the liquidation value of any
outstanding shares of Preferred Stock of such Person on such day. If no such
Closing Price exists with respect to shares of any such class, the value of such
shares for purposes of clause (2) of the preceding sentence shall be determined
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by the Company's Board of Directors in good faith and evidenced by a resolution
of the Board of Directors filed with the Trustee.
"Trading Day," with respect to a securities exchange or automated quotation
system, means a day on which such exchange or system is open for a full day of
trading.
"Trustee" means the party named as such above until a successor replaces
it in accordance with the applicable provisions of this Indenture and thereafter
means the successor serving hereunder.
"Unrestricted Certificated Security" means one or more Certificated
Securities that do not and are not required to bear the Private Placement
Legend.
"Unrestricted Global Security" means a permanent global security in the
form of Exhibit A attached hereto that bears the Global Security Legend and the
"Schedule of Exchanges of Interests in the Global Security" attached thereto,
and that is deposited with and registered in the name of the Depositary,
representing a series of Senior Notes that do not bear the Private Placement
Legend.
"Unrestricted Subsidiary" means any Subsidiary that is designated by the
Board of Directors as an Unrestricted Subsidiary pursuant to a Board Resolution.
"U.S. Person" means a U.S. person as defined in Rule 902(o) under the
Securities Act.
"Vendor Indebtedness" means any Indebtedness of the Company or any
Subsidiary incurred in connection with the acquisition or construction of
Telecommunications Related Assets.
"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 so long as no
senior class of securities has such voting power by reason of any contingency.
"Weighted Average Life to Maturity" means, when applied to any Indebtedness
at any date, the number of years obtained by dividing (a) the then outstanding
principal amount of such Indebtedness into (b) the total of the product obtained
by multiplying (x) the amount of each then remaining installment, sinking fund,
serial maturity or other required payments of principal, including payment at
final maturity, in respect thereof, by (y) the number of years (calculated to
the nearest one-twelfth) that will elapse between such date and the making of
such payment; provided, that with respect to Capital Lease Obligations, that
maturity shall be calculated after giving effect to all renewal options by the
Lessee.
<TABLE>
<CAPTION>
Section 1.02. Other Definitions.
Defined in
Term Section
<S> <C>
"Affiliate Transaction"........... 4.11
"Asset Sale"...................... 4.10
"Bankruptcy Custodian"............ 6.01
"Bankruptcy Law".................. 4.01
"Change of Control Offer"......... 4.15
</TABLE>
15
<PAGE>
<TABLE>
<CAPTION>
<S> <C>
"Change of Control Payment"....... 4.15
"Change of Control Payment Date".. 4.15
"Commission"...................... 4.03
"Covenant Defeasance"............. 8.03
"Event of Default"................ 6.01
"Excess Proceeds"................. 4.10
"Excess Proceeds Offer"........... 3.09
"incur"........................... 4.09
"Legal Defeasance"................ 8.02
"Offer Amount".................... 3.09
"Offer Period".................... 3.09
"Paying Agent".................... 2.03
"Payment Default"................. 6.01
"Permitted Refinancing"........... 4.09
"Purchase Date"................... 3.09
"Refinance"....................... 4.09
"Registrar"....................... 2.03
"Restricted Payments"............. 4.07
"Retire".......................... 4.07
"SEC Reports"..................... 4.03
</TABLE>
Section 1.03. Incorporation by Reference of Trust Indenture Act.
Whenever this Indenture refers to a provision of the TIA, the provision is
incorporated by reference in and made a part of this Indenture.
The following TIA terms used in this Indenture have the following
meanings:
"indenture securities" means the Senior Notes;
"indenture security holder" means a holder of a Note;
"indenture to be qualified" means this Indenture;
"indenture trustee" or "institutional trustee" means the Trustee;
"obligor" on the Senior Notes means the Company and any successor obligor
upon the Senior Notes.
All other terms used in this Indenture that are defined by the TIA, defined
by TIA reference to another statute or defined by SEC rule under the TIA have
the meanings so assigned to them.
Section 1.04. Rules of Construction.
Unless the context otherwise requires:
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(1) a capitalized term has the meaning assigned to it under this Article
1;
(2) an accounting term not otherwise defined has the meaning assigned to it
in accordance with GAAP;
(3) "or" is not exclusive;
(4) "including" means including without limitation; and
(5) words in the singular include the plural, and in the plural include the
singular.
ARTICLE 2
THE SENIOR NOTES
Section 2.01. Form and Dating.
The Senior Notes and the Trustee's certificate of authentication shall be
substantially in the form of Exhibit A hereto, the terms of which are
incorporated in and made a part of this Indenture. The Senior Notes may have
notations, legends or endorsements required by law, stock exchange rule or
usage. Each Senior Note shall be dated the date of its authentication. The
Senior Notes shall be in denominations of $1,000 and integral multiples thereof.
The terms and provisions contained in the Senior Notes shall constitute,
and are hereby expressly made, a part of this Indenture and the Company and the
Trustee, by their execution and delivery of this Indenture, expressly agree to
such terms and provisions and to be bound thereby. However, to the extent any
provision of any Senior Note conflicts with the express provisions of this
Indenture, the provisions of this Indenture shall govern and be controlling.
Senior Notes issued in global form shall be substantially in the form of
Exhibit A attached hereto (including the Global Security Legend and the
"Schedule of Exchanges in the Global Security" attached thereto). Senior Notes
issued in definitive form shall be substantially in the form of Exhibit A
attached hereto (but without the Global Security Legend and without the
"Schedule of Exchanges of Interests in the Global Security" attached thereto).
Each Global Security shall represent such of the outstanding Senior Notes as
shall be specified therein and each shall provide that it shall represent the
aggregate principal amount of outstanding Senior Notes from time to time
endorsed thereon and that the aggregate principal amount of outstanding Senior
Notes represented thereby may from time to time be reduced or increased, as
appropriate, to reflect exchanges and redemptions. Any endorsement of a Global
Security to reflect the amount of any increase or decrease in the aggregate
principal amount of outstanding Senior Notes represented thereby shall be made
by the Trustee or the Note Custodian, at the direction of the Trustee, in
accordance with instructions given by the holder thereof as required by Section
2.06 hereof.
The provisions of the "Operating Procedures of the Euroclear System" and
"Terms and Conditions Governing Use of Euroclear" and the "General Terms and
Conditions of Cedel Bank" and "Customer Handbook" of Cedel Bank shall be
applicable to transfers of beneficial interests in the Regulation S Global Notes
that are held by Participants through Euroclear or Cedel Bank.
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Section 2.02. Execution and Authentication.
One Officer of the Company shall sign the Senior Notes for the Company by
manual or facsimile signature.
If an Officer whose signature is on a Senior Note no longer holds that
office at the time a Senior Note is authenticated, the Senior Note shall
nevertheless be valid. In addition, if a Person is not an Officer at the time a
Senior Note is authenticated, but becomes an Officer on or prior to the delivery
of the Senior Note, the Senior Note shall nevertheless be valid.
A Senior Note shall not be valid until authenticated by the manual
signature of an authorized signatory of the Trustee. The signature of the
Trustee shall be conclusive evidence that the Senior Note has been authenticated
under this Indenture.
The Trustee shall, upon a written order of the Company signed by an Officer
of the Company, authenticate Senior Notes for original issue up to the aggregate
principal amount stated in paragraph 4 of the Senior Notes. The aggregate
principal amount of Senior Notes outstanding at any time may not exceed such
amount except as provided in Section 2.07 hereof.
The Trustee may appoint an authenticating agent acceptable to the Company
to authenticate Senior Notes. Unless limited by the terms of such appointment,
an authenticating agent may authenticate Senior Notes whenever the Trustee may
do so. Each reference in this Indenture to authentication by the Trustee
includes authentication by such agent. An authenticating agent has the same
rights as an Agent to deal with the Company or an Affiliate of the Company.
Section 2.03. Registrar and Paying Agent.
The Company shall maintain an office or agency where Senior Notes may be
presented for registration of transfer or for exchange ("Registrar") and an
office or agency where Senior Notes may be presented for payment ("Paying
Agent"). The Registrar shall keep a register of the Senior Notes and of their
transfer and exchange. The Company may appoint one or more co-registrars and
one or more additional paying agents. The term "Registrar" includes any co-
registrar and the term "Paying Agent" includes any additional paying agent. The
Company may change any Paying Agent or Registrar without notice to any holder.
The Company shall notify the Trustee and the Trustee shall notify the holders of
the Senior Notes in writing of the name and address of any Agent not a party to
this Indenture. If the Company fails to appoint or maintain another entity as
Registrar or Paying Agent, the Trustee shall act as such. The Company or any of
its Subsidiaries may act as Paying Agent or Registrar. The Company shall enter
into an appropriate agency agreement with any Agent not a party to this
Indenture, which shall incorporate the provisions of the TIA. The agreement
shall implement the provisions of this Indenture that relate to such Agent. The
Company shall notify the Trustee of the name and address of any such Agent. If
the Company fails to maintain a Registrar or Paying Agent, or fails to give the
foregoing notice, the Trustee shall act as such, and shall be entitled to
appropriate compensation in accordance with Section 7.07 hereof.
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<PAGE>
The Company initially appoints The Depository Trust Company ("DTC") to act
as Depositary with respect to the Global Securities.
The Company initially appoints the Trustee to act as the Registrar and
Paying Agent and to act as Note Custodian with respect to the Global Securities.
Except as otherwise specifically provided herein, (i) all references in this
Indenture to the Trustee shall be deemed to refer to the Trustee in its capacity
as Trustee and in its capacities as Registrar and Paying Agent and (ii) every
provision of this Indenture relating to the conduct of or affecting the
liability of or offering protection, immunity or indemnity to the Trustee shall
be deemed to apply with the same force and effect to the Trustee acting in its
capacities as Paying Agent and Registrar.
Section 2.04. Paying Agent to Hold Money in Trust.
The Company shall require each Paying Agent other than the Trustee to agree
in writing that the Paying Agent shall hold in trust for the benefit of holders
or the Trustee all money held by the Paying Agent for the payment of principal,
premium or Liquidated Damages, if any, or interest on the Senior Notes, and will
notify the Trustee of any default by the Company in making any such payment.
While any such default continues, the Trustee may require a Paying Agent to pay
all money held by it to the Trustee. The Company at any time may require a
Paying Agent to pay all money held by it to the Trustee. Upon payment over to
the Trustee, the Paying Agent (if other than the Company or a Subsidiary) shall
have no further liability for the money. If the Company or a Subsidiary acts as
Paying Agent, it shall segregate and hold in a separate trust fund for the
benefit of the holders all money held by it as Paying Agent. Upon any bankruptcy
or reorganization proceedings relating to the Company, the Trustee shall serve
as Paying Agent and Registrar for the Senior Notes.
Section 2.05. Holder Lists.
If it is the Registrar, the Trustee shall preserve in as current a form as
is reasonably practicable the most recent list available to it of the names and
addresses of all holders and shall otherwise comply with TIA (S) 312(a). If the
Trustee is not the Registrar, the Company shall furnish to the Trustee at least
five Business Days before each interest payment date and at such other times as
the Trustee may request in writing, a list in such form and as of such date as
the Trustee may reasonably require of the names and addresses of the holders of
the Senior Notes and the Company shall otherwise comply with TIA (S) 312(a).
Section 2.06. Transfer and Exchange.
(a) Transfer and Exchange of Global Securities. A Global Security may not be
transferred as a whole except by the Depositary to a nominee of the Depositary,
by a nominee of the Depositary to the Depositary or to another nominee of the
Depositary, or by the Depositary or any such nominee to a successor Depositary
or a nominee of such successor Depositary. All Global Securities will be
exchanged by the Company for Certificated Securities if (i) the Company delivers
to the Trustee notice from the Depositary that it is unwilling or unable to
continue to act as Depositary or that it is no longer a clearing agency
registered under the Exchange Act and, in either case, a successor Depositary is
not appointed by the Company within 120 days after the date of such notice from
the Depositary or (ii) the Company
19
<PAGE>
in its sole discretion determines that the Global Securities (in whole but not
in part) should be exchanged for Certificated Securities and delivers a written
notice to such effect to the Trustee. Upon the occurrence of either of the
preceding events in (i) or (ii) above, Certificated Securities shall be issued
in such names as the Depositary shall instruct the Trustee. Global Securities
also may be exchanged or replaced, in whole or in part, as provided in Sections
2.07 and 2.10 hereof. Every Senior Note authenticated and delivered in exchange
for, or in lieu of, a Global Security or any portion thereof, pursuant to this
Section 2.06 or Section 2.07 or 2.10 hereof, shall be authenticated and
delivered in the form of, and shall be, a Global Security. A Global Security may
not be exchanged for another Senior Note other than as provided in this Section
2.06(a), however beneficial interests in a Global Security may be transferred
and exchanged as provided in Section 2.06(b), (c) or (f) hereof.
(b) Transfer and Exchange of Beneficial Interests in the Global Securities.
The transfer and exchange of beneficial interests in the Global Securities shall
be effected through the Depositary, in accordance with the provisions of this
Indenture and the Applicable Procedures. Beneficial interests in the Restricted
Global Securities shall be subject to restrictions on transfer comparable to
those set forth herein to the extent required by the Securities Act. The Trustee
shall have no obligation to ascertain the Depositary's compliance with any such
restrictions on transfer. Transfers of beneficial interests in the Global
Securities also shall require compliance with either subparagraph (i) or (ii)
below, as applicable, as well as one or more of the other following
subparagraphs as applicable:
(i) Transfer of Beneficial Interests in the Same Global Security.
Beneficial interests in any Restricted Global Security may be transferred to
Persons who take delivery thereof in the form of a beneficial interest in the
same Restricted Global Security in accordance with the transfer restrictions
set forth in the Private Placement Legend; provided, however, that prior to
the expiration of the Restricted Period, transfers of beneficial interests in
the Regulation S Global Security may not be made to a U.S. Person or for the
account or benefit of a U.S. Person (other than an Initial Purchaser).
Beneficial interests in any Unrestricted Global Security may be transferred
only to Persons who take delivery thereof in the form of a beneficial interest
in an Unrestricted Global Security. No written orders or instructions shall be
required to be delivered to the Registrar to effect the transfers described in
this Section 2.06(b)(i).
(ii) All Other Transfers and Exchanges of Beneficial Interests in Global
Securities. In connection with all transfers and exchanges of beneficial
interests (other than transfers of beneficial interests in a Global Security
to Persons who take delivery thereof in the form of a beneficial interest in
the same Global Security), the transferor of such beneficial interest must
deliver to the Registrar either (A) (1) a written order from a Participant or
an Indirect Participant given to the Depositary in accordance with the
Applicable Procedures directing the Depositary to credit or cause to be
credited a beneficial interest in the specified Global Security in an amount
equal to the beneficial interest to be transferred or exchanged and (2)
instructions given in accordance with the Applicable Procedures containing
information regarding the Participant account to be credited with such
increase or (B) (1) a written order from a Participant or an Indirect
Participant given to the Depositary in accordance with the Applicable
Procedures directing the Depositary to cause to be issued a Certificated
Security in an amount equal to the beneficial interest to be transferred or
exchanged and (2) instructions given by the Depositary to the Registrar
containing information regarding the Person in whose name such Certificated
Security shall be registered to effect the transfer or exchange referred to in
(1) above. Upon an Exchange Offer by the Company in accordance with Section
2.06(f) hereof, the requirements of this Section 2.06(b)(ii) shall be deemed
to have been satisfied upon receipt by the Registrar of the instructions
contained in the Letter of Transmittal delivered by
20
<PAGE>
the holder of such beneficial interests in the Restricted Global
Securities. Upon satisfaction of all of the requirements for transfer or
exchange of beneficial interests in Global Securities contained in this
Indenture, the Notes and otherwise applicable under the Securities Act, the
Trustee shall adjust the principal amount of the relevant Global Security
pursuant to Section 2.06(h) hereof.
(iii) Transfer of Beneficial Interests to Another Restricted Global
Security. Beneficial interests in any Restricted Global Security may be
transferred to Persons who take delivery thereof in the form of a
beneficial interest in another Restricted Global Security if the transfer
complies with the requirements of Section 2.06(b)(ii) above and the
Registrar receives the following:
(A) if the transferee will take delivery in the form of a
beneficial interest in the 144A Global Security, then the transferor
must deliver a certificate in the form of Exhibit B hereto, including
the certifications in item (1) thereof;
(B) if the transferee will take delivery in the form of a
beneficial interest in the IAI Global Security, then the transferor
must deliver (x) a certificate in the form of Exhibit B hereto,
including the certifications in item (2) thereof, (y) to the extent
required by item 2(d) of Exhibit B hereto, an Opinion of Counsel in
form reasonably acceptable to the Company to the effect that such
transfer is in compliance with the Securities Act and such beneficial
interest is being transferred in compliance with any applicable blue
sky securities laws of any State of the United States and (z) if the
transfer is being made to an Institutional Accredited Investor and
effected pursuant to an exemption from the registration requirements
of the Securities Act other than Rule 144A under the Securities Act,
Rule 144 under the Securities Act or Rule 904 under the Securities
Act, a certificate from the transferee in the form of Exhibit D
hereto; and
(C) if the transferee will take delivery in the form of a
beneficial interest in the Regulation S Global Security, then the
transferor must deliver a certificate in the form of Exhibit B hereto,
including the certifications in item (3) thereof.
(iv) Transfer and Exchange of Beneficial Interests in a Restricted
Global Security for Beneficial Interests in the Unrestricted Global
Security. Beneficial interests in any Restricted Global Security may be
exchanged by any holder thereof for a beneficial interest in the
Unrestricted Global Security or transferred to Persons who take delivery
thereof in the form of a beneficial interest in the Unrestricted Global
Security if the exchange or transfer complies with the requirements of
Section 2.06(b)(ii) above and:
(A) such exchange or transfer is effected pursuant to the
Exchange Offer in accordance with the Note Registration Rights
Agreement and the holder, in the case of an exchange, or the
transferee, in the case of a transfer, certifies in the applicable
Letter of Transmittal that it is not (1) a broker-dealer, (2) a Person
participating in the distribution of the Exchange Notes or (3) a
Person who is an affiliate (as defined in Rule 144) of the Company;
(B) any such transfer is effected pursuant to the Shelf
Registration Statement in accordance with the Note Registration Rights
Agreement;
(C) any such transfer is effected by a Participating Broker-
Dealer pursuant to the Exchange Offer Registration Statement in
accordance with the Note Registration Rights Agreement; or
21
<PAGE>
(D) the Registrar receives the following:
(1) if the holder of such beneficial interest in a
Restricted Global Security proposes to exchange such beneficial
interest for a beneficial interest in the Unrestricted Global
Security, a certificate from such holder in the form of Exhibit C
hereto, including the certifications in item (1)(a) thereof;
(2) if the holder of such beneficial interest in a
Restricted Global Security proposes to transfer such beneficial
interest to a Person who shall take delivery thereof in the form of a
beneficial interest in the Unrestricted Global Security, a certificate
from such holder in the form of Exhibit B hereto, including the
certifications in item (4) thereof;
(3) in each such case set forth in this subparagraph (D),
an Opinion of Counsel in form reasonably acceptable to the Registrar
to the effect that such exchange or transfer is in compliance with the
Securities Act, that the restrictions on transfer contained herein and
in the Private Placement Legend are not required in order to maintain
compliance with the Securities Act, and such beneficial interest is
being exchanged or transferred in compliance with any applicable blue
sky securities laws of any State of the United States.
If any such transfer is effected pursuant to subparagraph (B) or
(D) above at a time when an Unrestricted Global Security has not yet been
issued, the Company shall issue and, upon receipt of an authentication
order in accordance with Section 2.02 hereof, the Trustee shall
authenticate one or more Unrestricted Global Securities in an aggregate
principal amount equal to the principal amount of beneficial interests
transferred pursuant to subparagraph (B) or (D) above.
Beneficial interests in an Unrestricted Global Security cannot
be exchanged for, or transferred to Persons who take delivery thereof in
the form of, a beneficial interest in any Restricted Global Security.
(c) Transfer or Exchange of Beneficial Interests for Certificated
Securities.
(i) If any holder of a beneficial interest in a Restricted Global
Security proposes to exchange such beneficial interest for a Certificated
Security or to transfer such beneficial interest to a Person who takes
delivery thereof in the form of a Certificated Security, then, upon receipt
by the Registrar of the following documentation (all of which may be
submitted by facsimile):
(A) if the holder of such beneficial interest in a Restricted
Global Security proposes to exchange such beneficial interest for a
Certificated Security, a certificate from such holder in the form of
Exhibit C hereto, including the certifications in item (2)(a) thereof;
(B) if such beneficial interest is being transferred to a QIB
in accordance with Rule 144A under the Securities Act, a certificate
to the effect set forth in Exhibit B hereto, including the
certifications in item (1) thereof;
(C) if such beneficial interest is being transferred to a Non-
U.S. Person in an offshore transaction in accordance with Rule 903 or
904 under the Securities Act, a certificate to the effect set forth in
Exhibit B hereto, including the certifications in item (3) thereof;
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(D) if such beneficial interest is being transferred pursuant
to an exemption from the registration requirements of the Securities
Act in accordance with Rule 144 under the Securities Act, a
certificate to the effect set forth in Exhibit B hereto, including the
certifications in item (2)(a) thereof;
(E) if such beneficial interest is being transferred to an
Institutional Accredited Investor in reliance on an exemption from the
registration requirements of the Securities Act other than those
listed in subparagraphs (B) through (D) above, a certificate to the
effect set forth in Exhibit B hereto, including the certifications in
item (2)(d) thereof, a certificate from the transferee to the effect
set forth in Exhibit D hereof and, to the extent required by item 3(d)
of Exhibit B, an Opinion of Counsel from the transferee or the
transferor reasonably acceptable to the Company to the effect that
such transfer is in compliance with the Securities Act and such
beneficial interest is being transferred in compliance with any
applicable blue sky securities laws of any State of the United States;
(F) if such beneficial interest is being transferred to the
Company or any of its Subsidiaries, a certificate to the effect set
forth in Exhibit B hereto, including the certifications in item (2)(b)
thereof; or
(G) if such beneficial interest is being transferred pursuant
to an effective registration statement under the Securities Act, a
certificate to the effect set forth in Exhibit B hereto, including the
certifications in item (2)(c) thereof,
the Trustee shall cause the aggregate principal amount of the applicable
Global Security to be reduced accordingly pursuant to Section 2.06(h)
hereof, and the Company shall execute and the Trustee shall authenticate
and deliver to the Person designated in the instructions a Certificated
Security in the appropriate principal amount. Certificated Securities
issued in exchange for beneficial interests in a Restricted Global Security
pursuant to this Section 2.06(c) shall be registered in such names and in
such authorized denominations as the holder shall instruct the Registrar
through instructions from the Depositary and the Participant or Indirect
Participant. The Trustee shall deliver such Certificated Securities to the
Persons in whose names such Notes are so registered. Certificated
Securities issued in exchange for a beneficial interest in a Restricted
Global Security pursuant to this Section 2.06(c)(i) shall bear the Private
Placement Legend and shall be subject to all restrictions on transfer
contained therein.
(ii) Notwithstanding 2.06(c)(i), a holder of a beneficial interest in
a Restricted Global Security may exchange such beneficial interest for an
Unrestricted Certificated Security or may transfer such beneficial interest
to a Person who takes delivery thereof in the form of an Unrestricted
Certificated Security only if:
(A) such exchange or transfer is effected pursuant to the
Exchange Offer in accordance with the Note Registration Rights Agreement
and the holder, in the case of an exchange, or the transferee, in the case
of a transfer, certifies in the applicable Letter of Transmittal that it is
not (1) a broker-dealer, (2) a Person participating in the distribution of
the Exchange Notes or (3) a Person who is an affiliate (as defined in Rule
144) of the Company;
(B) any such transfer is effected pursuant to the Shelf
Registration Statement in accordance with the Note Registration Rights
Agreement;
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(C) any such transfer is effected by a Participating Broker-
Dealer pursuant to the Exchange Offer Registration Statement in accordance
with the Note Registration Rights Agreement; or
(D) the Registrar receives the following:
(1) if the holder of such beneficial interest in a
Restricted Global Security proposes to exchange such beneficial
interest for a Certificated Security that does not bear the Private
Placement Legend, a certificate from such holder in the form of
Exhibit C hereto, including the certifications in item (1)(b) thereof;
(2) if the holder of such beneficial interest in a
Restricted Global Security proposes to transfer such beneficial
interest to a Person who shall take delivery thereof in the form of a
Certificated Security that does not bear the Private Placement Legend,
a certificate from such holder in the form of Exhibit B hereto,
including the certifications in item (4) thereof; and
(3) in each such case set forth in this subparagraph (D),
an Opinion of Counsel in form reasonably acceptable to the Company, to
the effect that such exchange or transfer is in compliance with the
Securities Act, that the restrictions on transfer contained herein and
in the Private Placement Legend are not required in order to maintain
compliance with the Securities Act, and such beneficial interest in a
Restricted Global Security is being exchanged or transferred in
compliance with any applicable blue sky securities laws of any State
of the United States.
(iii) If any holder of a beneficial interest in an Unrestricted Global
Security proposes to exchange such beneficial interest for a Certificated
Security or to transfer such beneficial interest to a Person who takes
delivery thereof in the form of a Certificated Security, then, upon
satisfaction of the conditions set forth in Section 2.06(b)(ii), the
Trustee shall cause the aggregate principal amount of the applicable Global
Security to be reduced accordingly pursuant to Section 2.06(h) hereof, and
the Company shall execute and the Trustee shall authenticate and deliver to
the Person designated in the instructions a Certificated Security in the
appropriate principal amount. Certificated Securities issued in exchange
for a beneficial interest pursuant to this Section 2.06(c)(iii) shall be
registered in such names and in such authorized denominations as the holder
shall instruct the Registrar through instructions from the Depositary and
the Participant or Indirect Participant. The Trustee shall deliver such
Certificated Securities to the Persons in whose names such Notes are so
registered. Certificated Securities issued in exchange for a beneficial
interest pursuant to this section 2.06(c)(iii) shall not bear the Private
Placement Legend. Beneficial interests in an Unrestricted Global Security
cannot be exchanged for a Certificated Security bearing the Private
Placement Legend or transferred to a Person who takes delivery thereof in
the form of a Certificated Security bearing the Private Placement Legend.
(d) Transfer or Exchange of Certificated Securities for Beneficial
Interests.
(i) If any holder of Restricted Certificated Securities proposes to
exchange such Notes for a beneficial interest in a Restricted Global
Security or to transfer such Certificated Securities to a Person who takes
delivery thereof in the form of a beneficial interest in a Restricted
Global Security, then, upon receipt by the Registrar of the following
documentation (all of which may be submitted by facsimile):
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(A) if the holder of such Restricted Certificated Securities
proposes to exchange such Notes for a beneficial interest in a
Restricted Global Security, a certificate from such holder in the form
of Exhibit C hereto, including the certifications in item (2)(b)
thereof;
(B) if such Certificated Securities are being transferred to a
QIB in accordance with Rule 144A under the Securities Act, a
certificate to the effect set forth in Exhibit B hereto, including the
certifications in item (1) thereof;
(C) if such Certificated Securities are being transferred to a
Non-U.S. Person in an offshore transaction in accordance with Rule 904
under the Securities Act, a certificate to the effect set forth in
Exhibit B hereto, including the certifications in item (3) thereof;
(D) if such Certificated Securities are being transferred
pursuant to an exemption from the registration requirements of the
Securities Act in accordance with Rule 144 under the Securities Act, a
certificate to the effect set forth in Exhibit B hereto, including the
certifications in item (2)(a) thereof;
(E) if such Certificated Securities are being transferred to an
Institutional Accredited Investor in reliance on an exemption from the
registration requirements of the Securities Act other than those
listed in subparagraphs (B) through (D) above, a certificate to the
effect set forth in Exhibit B hereto, including the certifications in
item (2)(d) thereof, a certificate from the transferee to the effect
set forth in Exhibit D hereof and, to the extent required by item 2(d)
of Exhibit B, an Opinion of Counsel from the transferee or the
transferor reasonably acceptable to the Company to the effect that
such transfer is in compliance with the Securities Act and such
Certificated Securities are being transferred in compliance with any
applicable blue sky securities laws of any State of the United States;
(F) if such Certificated Securities are being transferred to
the Company or any of its Subsidiaries, a certificate to the effect
set forth in Exhibit B hereto, including the certifications in item
(2)(b) thereof; or
(G) if such Certificated Securities are being transferred
pursuant to an effective registration statement under the Securities
Act, a certificate to the effect set forth in Exhibit B hereto,
including the certifications in item (2)(c) thereof,
the Trustee shall cancel the Certificated Securities, increase or cause to
be increased the aggregate principal amount of, in the case of clause (A)
above, the appropriate Restricted Global Security, in the case of clause
(B) above, the 144A Global Security, in the case of clause (C) above, the
Regulation S Global Security, and in all other cases, the IAI Global
Security.
(ii) A holder of Restricted Certificated Securities may exchange such
Notes for a beneficial interest in the Unrestricted Global Security or
transfer such Restricted Certificated Securities to a Person who takes
delivery thereof in the form of a beneficial interest in the Unrestricted
Global Security only if:
(A) such exchange or transfer is effected pursuant to the
Exchange Offer in accordance with the Note Registration Rights
Agreement and the holder, in the case of an exchange, or the
transferee, in the case of a transfer, certifies in the applicable
Letter of Transmittal that it is not
25
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(1) a broker-dealer, (2) a Person participating in the distribution of
the Exchange Notes or (3) a Person who is an affiliate (as defined in
Rule 144) of the Company;
(B) any such transfer is effected pursuant to the Shelf
Registration Statement in accordance with the Note Registration Rights
Agreement;
(C) any such transfer is effected by a Participating Broker-
Dealer pursuant to the Exchange Offer Registration Statement in
accordance with the Note Registration Rights Agreement; or
(D) the Registrar receives the following:
(1) if the holder of such Certificated Securities proposes
to exchange such Notes for a beneficial interest in the Unrestricted
Global Security, a certificate from such holder in the form of Exhibit
C hereto, including the certifications in item (1)(c) thereof;
(2) if the holder of such Certificated Securities proposes
to transfer such Notes to a Person who shall take delivery thereof in
the form of a beneficial interest in the Unrestricted Global Security,
a certificate from such holder in the form of Exhibit B hereto,
including the certifications in item (4) thereof; and
(3) in each such case set forth in this subparagraph (D),
an Opinion of Counsel in form reasonably acceptable to the Company to
the effect that such exchange or transfer is in compliance with the
Securities Act, that the restrictions on transfer contained herein and
in the Private Placement Legend are not required in order to maintain
compliance with the Securities Act, and such Certificated Securities
are being exchanged or transferred in compliance with any applicable
blue sky securities laws of any State of the United States.
Upon satisfaction of the conditions of any of the subparagraphs in this
Section 2.06(d)(ii), the Trustee shall cancel the Certificated Securities
and increase or cause to be increased the aggregate principal amount of the
Unrestricted Global Security.
(iii) A holder of Unrestricted Certificated Securities may exchange
such Notes for a beneficial interest in the Unrestricted Global Security or
transfer such Certificated Securities to a Person who takes delivery
thereof in the form of a beneficial interest in the Unrestricted Global
Security. Upon receipt of a request for such an exchange or transfer, the
Trustee shall cancel the Unrestricted Certificated Securities and increase
or cause to be increased the aggregate principal amount of the Unrestricted
Global Security.
If any such exchange or transfer from a Certificated Security to a
beneficial interest is effected pursuant to subparagraphs (ii)(B), (ii)(D) or
(iii) above at a time when an Unrestricted Global Security has not yet been
issued, the Company shall issue and, upon receipt of an authentication order in
accordance with Section 2.02 hereof, the Trustee shall authenticate one or more
Unrestricted Global Securities in an aggregate principal amount equal to the
principal amount of beneficial interests transferred pursuant to subparagraphs
(ii)(B), (ii)(D) or (iii) above.
(e) Transfer and Exchange of Certificated Securities. Upon request by a
holder of Certificated Securities and such holder's compliance with the
provisions of this Section 2.06(e), the Registrar shall register the transfer or
26
<PAGE>
exchange of Certificated Securities. Prior to such registration of transfer or
exchange, the requesting holder shall present or surrender to the Registrar the
Certificated Securities duly endorsed or accompanied by a written instruction of
transfer in form satisfactory to the Registrar duly executed by such holder or
by his attorney, duly authorized in writing. In addition, the requesting holder
shall provide any additional certifications, documents and information, as
applicable, pursuant to the provisions of this Section 2.06(e).
(i) Restricted Certificated Securities may be transferred to and
registered in the name of Persons who take delivery thereof in the form of
Restricted Certificated Securities if the Registrar receives the following:
(A) if the transfer will be made pursuant to Rule 144A under
the Securities Act, then the transferor must deliver a certificate in
the form of Exhibit B hereto, including the certifications in item (1)
thereof;
(B) if the transfer will be made pursuant to Rule 903 or 904,
then the transferor must deliver a certificate in the form of Exhibit
B hereto, including the certifications in item (2) thereof; and
(C) if the transfer will be made pursuant to any other
exemption from the registration requirements of the Securities Act,
then the transferor must deliver (x) a certificate in the form of
Exhibit B hereto, including the certifications in item (2) thereof,
(y) to the extent required by item 2(d) of Exhibit B hereto, an
Opinion of Counsel in form reasonably acceptable to the Company to the
effect that such transfer is in compliance with the Securities Act and
such beneficial interest is being transferred in compliance with any
applicable blue sky securities laws of any State of the United States
and (z) if the transfer is being made to an Institutional Accredited
Investor and effected pursuant to an exemption from the registration
requirements of the Securities Act other than Rule 144A under the
Securities Act, Rule 144 under the Securities Act or Rule 903 or 904
under the Securities Act, a certificate from the transferee in the
form of Exhibit D hereto.
(ii) Restricted Certificated Securities may be exchanged by any
holder thereof for an Unrestricted Certificated Security or transferred to
Persons who take delivery thereof in the form of an Unrestricted
Certificated Security if:
(A) such exchange or transfer is effected pursuant to the
Exchange Offer in accordance with the Note Registration Rights
Agreement and the holder, in the case of an exchange, or the
transferee, in the case of a transfer, certifies in the applicable
Letter of Transmittal that it is not (1) a broker-dealer, (2) a Person
participating in the distribution of the Exchange Notes or (3) a
Person who is an affiliate (as defined in Rule 144) of the Company;
(B) any such transfer is effected pursuant to the Shelf
Registration Statement in accordance with the Note Registration Rights
Agreement;
(C) any such transfer is effected by a Participating Broker-
Dealer pursuant to the Exchange Offer Registration Statement in
accordance with the Note Registration Rights Agreement; or
(D) the Registrar receives the following:
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<PAGE>
(1) if the holder of such Restricted Certificated Securities
proposes to exchange such Notes for an Unrestricted Certificated
Security, a certificate from such holder in the form of Exhibit C
hereto, including the certifications in item (1)(a) thereof;
(2) if the holder of such Restricted Certificated Securities
proposes to transfer such Notes to a Person who shall take delivery
thereof in the form of an Unrestricted Certificated Security, a
certificate from such holder in the form of Exhibit B hereto,
including the certifications in item (4) thereof; and
(3) in each such case set forth in this subparagraph (D), an
Opinion of Counsel in form reasonably acceptable to the Company to the
effect that such exchange or transfer is in compliance with the
Securities Act, that the restrictions on transfer contained herein and
in the Private Placement Legend are not required in order to maintain
compliance with the Securities Act, and such Restricted Certificated
Security is being exchanged or transferred in compliance with any
applicable blue sky securities laws of any State of the United States.
(iii) A holder of Unrestricted Certificated Securities may transfer
such Notes to a Person who takes delivery thereof in the form of an
Unrestricted Certificated Security. Upon receipt of a request for such a
transfer, the Registrar shall register the Unrestricted Certificated
Securities pursuant to the instructions from the holder thereof.
Unrestricted Certificated Securities cannot be exchanged for or transferred
to Persons who take delivery thereof in the form of a Restricted
Certificated Security.
(f) Exchange Offer. Upon the occurrence of the Exchange Offer in
accordance with the Note Registration Rights Agreement, the Company shall issue
and, upon receipt of an authentication order in accordance with Section 2.02,
the Trustee shall authenticate (i) one or more Unrestricted Global Securities in
an aggregate principal amount equal to the principal amount of the beneficial
interests in the Restricted Global Securities tendered for acceptance by persons
that are not (x) broker-dealers, (y) Persons participating in the distribution
of the Exchange Notes or (z) Persons who are affiliates (as defined in Rule 144)
of the Company and accepted for exchange in the exchange Offer and (ii)
Certificated Securities in an aggregate principal amount equal to the principal
amount of the Restricted Certificated Securities accepted for exchange in the
Exchange Offer. Concurrent with the issuance of such Notes, the Trustee shall
cause the aggregate principal amount of the applicable Restricted Global
Securities to be reduced accordingly, and the Company shall execute and the
Trustee shall authenticate and deliver to the Persons designated by the holders
of Certificated Securities so accepted Certificated Securities in the
appropriate principal amount.
(g) Legends. The following legends shall appear on the face of all Global
Securities and Certificated Securities issued under this Indenture unless
specifically stated otherwise in the applicable provisions of this Indenture.
(i) Private Placement Legend.
(A) Except as permitted by subparagraph (b) below, each Global
Security and each Certificated Security (and all Notes issued in exchange
therefor or substitution thereof) shall bear the legend in substantially
the following form:
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"THE SECURITY (OR ITS PREDECESSOR) EVIDENCED HEREBY WAS
ORIGINALLY ISSUED IN A TRANSACTION EXEMPT FORM REGISTRATION
UNDER SECTION 5 OF THE UNITED STATES SECURITIES ACT OF 1933, AS
AMENDED (THE "SECURITIES ACT"), AND THE SECURITY EVIDENCED
HEREBY MAY NOT BE OFFERED, SOLD OR OTHERWISE TRANSFERRED IN THE
ABSENCE OF SUCH REGISTRATION OR AN APPLICABLE EXEMPTION
THEREFROM. EACH PURCHASER OF THE SECURITY EVIDENCED HEREBY IS
HEREBY NOTIFIED THAT THE SELLER MAY BE RELYING ON THE EXEMPTION
FROM THE PROVISIONS OF SECTION 5 OF THE SECURITIES ACT PROVIDED
BY RULE 144A THEREUNDER. THE HOLDER OF THE SECURITY EVIDENCED
HEREBY AGREES FOR THE BENEFIT OF THE COMPANY THAT (A) SUCH
SECURITY MAY BE RESOLD, PLEDGED OR OTHERWISE TRANSFERRED, ONLY
(1) TO THE COMPANY, (2) PURSUANT TO A REGISTRATION STATEMENT
WHICH HAS BEEN DECLARED EFFECTIVE UNDER THE SECURITIES ACT, (3)
TO A PERSON IT REASONABLY BELIEVES IS A "QUALIFIED INSTITUTIONAL
BUYER" AS DEFINED IN RULE 144A IN A TRANSACTION MEETING THE
REQUIREMENTS OF RULE 144A, (4) PURSUANT TO OFFERS AND SALES TO
NON-U.S. PERSONS THAT OCCUR OUTSIDE THE UNITED STATES IN A
TRANSACTION MEETING THE REQUIREMENTS OF RULE 904 OF REGULATION S
UNDER THE SECURITIES ACT, (5) TO AN INSTITUTIONAL "ACCREDITED
INVESTOR" (AS DEFINED IN RULE 501 (A)(1), (2), (3) OR (7) OF
REGULATION D UNDER THE SECURITIES ACT (AN "IAI") THAT, PRIOR TO
SUCH TRANSFER, FURNISHES TO THE TRUSTEE A SIGNED LETTER
CONTAINING CERTAIN REPRESENTATIONS AND AGREEMENTS RELATING TO
THE TRANSFER OF THIS SECURITY (THE FORM OF WHICH LETTER CAN BE
OBTAINED FROM THE TRUSTEE OR TRANSFER AGENT) OR (6) PURSUANT TO
ANY OTHER AVAILABLE EXEMPTION FROM THE REGISTRATION REQUIREMENTS
UNDER THE SECURITIES ACT (AND BASED ON AN OPINION OF COUNSEL IF
THE COMPANY SO REQUESTS), SUBJECT IN EACH OF THE FOREGOING CASES
TO SECURITIES LAWS OF ANY STATE OF THE UNITED STATES OR ANY
OTHER APPLICABLE JURISDICTION AND (B) THE HOLDER WILL, AND EACH
SUBSEQUENT HOLDER IS REQUIRED TO, NOTIFY ANY PURCHASER FROM IT
OF THE SECURITY EVIDENCED HEREBY OF THE RESALE RESTRICTIONS SET
FORTH IN (A) ABOVE.
(B) Notwithstanding the foregoing, any Global Security or
Certificated Security issued pursuant to subparagraphs (b)(iv),
(c)(ii), (c)(iii), (d)(ii), (d)(iii), (e)(ii), (e)(iii) or (f) to this
Section 2.06 (and all Senior Notes issued in exchange therefor or
substitution thereof) shall not bear the Private Placement Legend .
(ii) Global Security Legend. Each Global Security shall bear a legend
in substantially the following form:
"THIS GLOBAL SECURITY IS HELD BY THE DEPOSITARY (AS DEFINED IN
THE INDENTURE GOVERNING THIS NOTE) OR ITS NOMINEE IN CUSTODY FOR
THE BENEFIT OF THE BENEFICIAL OWNERS HEREOF, AND IS NOT
TRANSFERABLE TO ANY PERSON UNDER ANY CIRCUMSTANCES EXCEPT THAT
(I) THE TRUSTEE MAY MAKE SUCH NOTATIONS HEREON AS MAY
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<PAGE>
BE REQUIRED PURSUANT TO SECTION 2.07 OF THE INDENTURE, (II) THIS
GLOBAL SECURITY MAY BE EXCHANGED IN WHOLE BUT NOT IN PART
PURSUANT TO SECTION 2.06(a) OF THE INDENTURE, (III) THIS GLOBAL
SECURITY MAY BE DELIVERED TO THE TRUSTEE FOR CANCELLATION
PURSUANT TO SECTION 2.11 OF THE INDENTURE AND (IV) THIS GLOBAL
SECURITY MAY BE TRANSFERRED TO A SUCCESSOR DEPOSITARY WITH THE
PRIOR WRITTEN CONSENT OF THE COMPANY."
(h) Cancellation and/or Adjustment of Global Securities. At such
time as all beneficial interests in a particular Global Security have been
exchanged for Certificated Securities or a particular Global Security has been
redeemed, repurchased or cancelled in whole and not in part, each such Global
Security shall be returned to or retained and cancelled by the Trustee in
accordance with Section 2.11 hereof. At any time prior to such cancellation, if
any beneficial interest in a Global Security is exchanged for or transferred to
a Person who will take delivery thereof in the form of a beneficial interest in
another Global Security or Certificated Securities, the principal amount of
Senior Notes represented by such Global Security shall be reduced accordingly
and an endorsement shall be made on such Global Security, by the Trustee or by
the Depositary at the direction of the Trustee, to reflect such reduction; and
if the beneficial interest is being exchanged for or transferred to a Person who
will take delivery thereof in the form of a beneficial interest in another
Global Security, such other Global Security shall be increased accordingly and
an endorsement shall be made on such Global Security, by the Trustee or by the
Depositary at the direction of the Trustee, to reflect such increase.
(i) General Provisions Relating to Transfers and Exchanges.
(i) To permit registrations of transfers and exchanges, the Company
shall execute and the Trustee shall authenticate Global Securities and
Certificated Securities upon the Company's order or at the Registrar's
request.
(ii) No service charge shall be made to a holder of a beneficial
interest in a Global Security or to a holder of a Certificated Security for
any registration of transfer or exchange, but the Company may require
payment of a sum sufficient to cover any transfer tax or similar
governmental charge payable in connection therewith (other than any such
transfer taxes or similar governmental charge payable upon exchange or
transfer pursuant to Sections 2.10, 3.06, 4.10, 4.15 and 9.05 hereof).
(iii) The Registrar shall not be required to register the transfer of
or exchange any Senior Note selected for redemption in whole or in part,
except the unredeemed portion of any Senior Note being redeemed in part.
(iv) All Global Securities and Certificated Securities issued upon
any registration of transfer or exchange of Global Securities or
Certificated Securities shall be the valid obligations of the Company,
evidencing the same debt, and entitled to the same benefits under this
Indenture, as the Global Securities or Certificated Securities surrendered
upon such registration of transfer or exchange.
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<PAGE>
(v) The Company shall not be required (A) to issue, to register the
transfer of or to exchange Senior Notes during a period beginning at the
opening of business 15 days before the day of any selection of Senior Notes
for redemption under Section 3.02 hereof and ending at the close of
business on the day of selection, (B) to register the transfer of or to
exchange any Senior Note so selected for redemption in whole or in part,
except the unredeemed portion of any Senior Note being redeemed in part or
(C) to register the transfer of or to exchange a Senior Note between a
record date and the next succeeding Interest Payment Date.
(vi) Prior to due presentment for the registration of a transfer of
any Senior Note, the Trustee, any Agent and the Company may deem and treat
the Person in whose name any Note is registered as the absolute owner of
such Senior Note for the purpose of receiving payment of principal of and
interest on such Senior Notes and for all other purposes, and none of the
Trustee, any Agent or the Company shall be affected by notice to the
contrary.
(vii) The Trustee shall authenticate Global Securities and
Certificated Securities in accordance with the provisions of Section 2.02
hereof.
Section 2.07. Replacement Notes.
If any mutilated Note is surrendered to the Trustee, or the Company
and the Trustee receives evidence to their satisfaction of the destruction, loss
or theft of any Note, the Company shall issue and the Trustee, upon the written
order of the Company signed by two Officers of the Company, shall authenticate a
replacement Senior Note if the Trustee's requirements are met. If required by
the Trustee or the Company, an indemnity bond must be supplied by the holder
that is sufficient in the judgment of the Trustee and the Company to protect the
Company, the Trustee, any Agent and any authenticating agent from any loss that
any of them may suffer if a Note is replaced. The Company may charge for its
expenses in replacing a Note.
Every replacement Note is an additional obligation of the Company and
shall be entitled to all of the benefits of this Indenture equally and
proportionately with all other Notes duly issued hereunder.
Section 2.08. Outstanding Notes.
The Senior Notes outstanding at any time are all the Senior Notes
authenticated by the Trustee except for those cancelled by it, those delivered
to it for cancellation and those described in this Section 2.08 as not
outstanding. Except as set forth in Section 2.09 hereof, a Note does not cease
to be outstanding because the Company or an Affiliate of the Company holds the
Note.
If a Senior Note is replaced pursuant to Section 2.07 hereof, it
ceases to be outstanding unless the Trustee receives proof satisfactory to it
that the replaced Senior Note is held by a bona fide purchaser.
If the principal amount of any Senior Note is considered paid under
Section 4.01 hereof, it ceases to be outstanding and interest on it ceases to
accrue.
If the Paying Agent (other than the Company, a Subsidiary or an
Affiliate of any thereof) segregates and holds in trust, in accordance with this
Indenture, on a redemption date or maturity date,
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<PAGE>
money sufficient to pay all principal and interest, if any, payable on that date
with respect to the Senior Notes (or the portion thereof to be redeemed or
maturing, as the case may be), then on and after that date such Senior Notes (or
portions thereof) shall be deemed to be no longer outstanding and shall cease to
accrue interest.
Section 2.09. Treasury Notes.
In determining whether the holders of the required principal amount of
Senior Notes have concurred in any direction, waiver or consent, Senior Notes
owned by the Company, or an Affiliate of the Company, shall be considered as
though not outstanding, except that for the purposes of determining whether the
Trustee shall be protected in relying on any such direction, waiver or consent,
only Senior Notes that a Trustee knows are so owned shall be so disregarded.
Section 2.10. Temporary Notes.
Until definitive Senior Notes are ready for delivery, the Company may
prepare and the Trustee shall authenticate temporary Senior Notes upon a written
order of the Company signed by two Officers of the Company. Temporary Senior
Notes shall be substantially in the form of definitive Senior Notes but may have
variations that the Company considers appropriate for temporary Senior Notes and
as shall be reasonably acceptable to the Trustee. Without unreasonable delay,
the Company shall prepare and the Trustee shall authenticate definitive Senior
Notes and deliver them in exchange for temporary Senior Notes.
Holders of temporary Senior Notes shall be entitled to all of the
benefits of this Indenture.
Section 2.11. Cancellation.
The Company at any time may deliver Senior Notes to the Trustee for
cancellation. The Registrar and Paying Agent shall forward to the Trustee any
Senior Notes surrendered to them for registration of transfer, exchange or
payment. The Trustee and no one else shall cancel all Senior Notes surrendered
for registration of transfer, exchange, payment, replacement or cancellation and
shall destroy cancelled Senior Notes (subject to the record retention
requirement of the Exchange Act), unless the Company directs cancelled Senior
Notes to be returned to it. Certification of the destruction of all cancelled
Senior Notes shall be delivered to the Company for all certificates so
destroyed. The Company may not issue new Senior Notes to replace Senior Notes
that it has redeemed, paid or delivered to the Trustee for cancellation.
Section 2.12. Defaulted Interest.
If the Company defaults in a payment of interest on the Senior Notes,
it shall pay the defaulted interest in any lawful manner plus, to the extent
lawful, interest payable on the defaulted interest, to the Persons who are
holders on a subsequent special record date, which date shall be at the earliest
practicable date but in all events at least five Business Days prior to the
payment date, in each case at the rate provided in the Senior Notes and in
Section 4.01 hereof. The Company shall fix or cause to be fixed each such
special record date and payment date, provided that the Company shall fix or
cause to be fixed
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<PAGE>
each such special record date as early as practicable prior to the payment date,
and the Company shall mail or cause to be mailed as early as practicable to each
holder a notice that states the special record date, the related payment date
and the amount of defaulted interest to be paid.
Section 2.13. Record Date.
The record date for purposes of determining the identity of holders of
the Senior Notes entitled to vote or consent to any action by vote or consent
authorized or permitted under this Indenture shall be determined as provided for
in TIA (S) 316(c).
Section 2.14. CUSIP Number.
The Company in issuing the Senior Notes may use a "CUSIP" number and,
if it does so, the Trustee shall use the CUSIP number in notices of redemption
or exchange as a convenience to holders; provided 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 Senior Notes and that reliance may be
placed only on the other identification numbers printed on the Senior Notes. The
Company will promptly notify the Trustee of any change in the CUSIP number.
ARTICLE 3
REDEMPTION AND CERTAIN REPURCHASES
Section 3.01. Notices to Trustee.
If the Company elects to redeem Senior Notes pursuant to the optional
redemption provisions of Section 3.07 hereof, it shall furnish to the Trustee,
at least 45 days (unless a shorter period is acceptable to the Trustee) but not
more than 60 days before a redemption date, an Officers' Certificate setting
forth (i) the clause of this Indenture pursuant to which the redemption shall
occur, (ii) the redemption date, (iii) the principal amount of Senior Notes to
be redeemed and (iv) the redemption price.
Section 3.02. Selection of Notes to Be Redeemed.
If less than all of the Senior Notes are to be redeemed at any time,
except as provided in Section 3.09, the Trustee shall select the Senior Notes to
be redeemed or purchased in compliance with the requirements of the principal
national securities exchange, if any, on which the Senior Notes are listed, or,
if the Senior Notes are not so listed, on a pro rata basis, by lot or in
accordance with any other method the Trustee considers fair and appropriate (and
in such manner as complies with applicable legal and stock exchange
requirements, if any), provided that no Senior Notes with a principal amount of
$1,000 or less shall be redeemed or purchased in part. A new Senior Note in
principal amount equal to the unredeemed or unpurchased portion shall be issued
in the name of the holder thereof upon cancellation of the original Note. On
and after the redemption or purchase date, interest shall cease to accrue on the
Senior Notes or portions of them called for redemption or purchase. In the
event of partial redemption by lot, the particular Senior Notes to be redeemed
shall be selected, unless otherwise provided
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herein, not less than 30 nor more than 60 days prior to the redemption date by
the Trustee from the outstanding Senior Notes not previously called for
redemption.
The Trustee shall promptly notify the Company in writing of the Senior
Notes selected for redemption and, in the case of any Note selected for partial
redemption, the principal amount thereof to be redeemed. Senior Notes and
portions of them selected shall be in amounts of $1,000 or whole multiples of
$1,000; except that if all of the Senior Notes of a holder are to be redeemed,
the entire outstanding amount of Senior Notes held by such holder, even if not a
multiple of $1,000, shall be redeemed. Except as provided in the preceding
sentence, provisions of this Indenture that apply to Senior Notes called for
redemption also apply to portions of Senior Notes called for redemption.
Section 3.03. Notice of Redemption.
Subject to the provisions of Section 3.09 hereof, at least 30 days but
not more than 60 days before a redemption date, the Company shall mail or cause
to be mailed, by first class mail, a notice of redemption to each holder whose
Senior Notes are to be redeemed at its registered address (provided that in the
event of a redemption pursuant to Section 3.07(b) hereof arising out of a sale
of the Company's Capital Stock (other than Disqualified Stock) to a Strategic
Equity Investor, such notice shall not be mailed prior to the consummation of
such sale).
The notice shall identify the Senior Notes to be redeemed and shall
state:
(a) the redemption date;
(b) the redemption price;
(c) if any Note is being redeemed in part, the portion of the
principal amount of such Note to be redeemed and that, after the redemption
date upon surrender of such Note, a new Note or Senior Notes in principal
amount equal to the unredeemed portion shall be issued;
(d) the name and address of the Paying Agent;
(e) that Senior Notes called for redemption must be surrendered to
the Paying Agent to collect the redemption price;
(f) that, unless the Company defaults in making such redemption
payment, interest on Senior Notes (or portions thereof) called for
redemption ceases to accrue on and after the redemption date;
(g) the paragraph of the Senior Notes and/or section of this
Indenture pursuant to which the Senior Notes called for redemption are
being redeemed; and
(h) that no representation is made as to the correctness or accuracy
of the CUSIP number, if any, listed in such notice or printed on the Senior
Notes.
At the Company's request, the Trustee shall give the notice of
redemption in the Company's name and at its expense; provided, however, that the
Company shall have delivered to the Trustee, at least 45 days (unless, except as
set forth above, a shorter period is acceptable to the Trustee) prior to the
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redemption date, an Officers' Certificate requesting that the Trustee give such
notice and setting forth the information to be stated in such notice as provided
in the preceding paragraph.
Section 3.04. Effect of Notice of Redemption.
Once notice of redemption is mailed in accordance with Section 3.03
hereof, Senior Notes called for redemption become due and payable on the
redemption date at the redemption price stated in such notice. A notice of
redemption may not be conditional.
Section 3.05. Deposit of Redemption Price.
On or prior to the redemption date, the Company shall deposit with the
Trustee or with the Paying Agent (or, if the Company or a Subsidiary is the
Paying Agent, shall segregate and hold in trust) immediately available funds
sufficient to pay the redemption price of and accrued interest, if any, on all
Senior Notes to be redeemed on that date. The Trustee or the Paying Agent shall
promptly return to the Company any funds deposited with the Trustee or the
Paying Agent by the Company in excess of the amounts necessary to pay the
redemption price of, and accrued interest, if any, on, all Senior Notes to be
redeemed.
If the Company complies with the provisions of the preceding
paragraph, on and after the redemption date, interest shall cease to accrue on
the Senior Notes or the portions of Senior Notes called for redemption. If a
Note is redeemed on or after an interest record date but on or prior to the
related interest payment date, then any accrued and unpaid interest shall be
paid to the Person in whose name such Note was registered at the close of
business on such record date. If any Note called for redemption shall not be so
paid upon surrender for redemption because of the failure of the Company to
comply with the preceding paragraph, interest shall be paid on the unpaid
redemption price, from the redemption date until such redemption price is paid,
and to the extent lawful on any interest not paid on such unpaid principal, in
each case at the rate provided in the Senior Notes and in Section 4.01 hereof.
Section 3.06. Senior Notes Redeemed in Part.
Upon surrender of a Senior Note that is redeemed in part, the Company
shall issue and the Trustee shall authenticate for the holder of the Senior
Notes at the expense of the Company a new Senior Note equal in principal amount
to the unredeemed portion of the Senior Note surrendered.
Section 3.07. Optional Redemption.
(a) Except as set forth in Section 3.07(b) below, the Senior Notes
will not be redeemable at the Company's option prior to November 1, 2002.
Thereafter, the Senior Notes will be subject to redemption at the option of the
Company, in whole or in part, upon not less than 30 nor more than 60 days'
notice to the holders, at the redemption prices (expressed as percentages of
principal amount) set forth below plus accrued and unpaid interest and
Liquidated Damages, if any, thereon to the applicable redemption date, if
redeemed during the twelve-month period beginning on November 1 of the years
indicated below:
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<TABLE>
<CAPTION>
YEAR PERCENTAGE
---- ----------
<S> <C>
2002......................................................................... 104.438%
2003......................................................................... 102.958%
2004......................................................................... 101.479%
2005 and thereafter.......................................................... 100.000%
</TABLE>
(b) Notwithstanding the provisions of Section 3.07(a) above, in the
event of the sale by the Company prior to November 1, 2000 of its Capital Stock
(other than Disqualified Stock) (i) to a Strategic Investor in a single
transaction or series of related transactions for an aggregate purchase price
equal to or exceeding $50.0 million or (ii) in one or more Public Offerings, up
to a maximum of 25% of the aggregate principal amount of the Senior Notes
originally issued shall, at the option of the Company, be redeemable from the
net cash proceeds of such sale or sales to such Strategic Investor (but only to
the extent such proceeds consist of cash or readily marketable cash equivalents
received in respect of the Capital Stock, other than Disqualified Stock, so
sold) at a redemption price equal to 108.875% of the principal amount thereof
plus accrued and unpaid interest and Liquidated Damages, if any, thereon to the
redemption date, provided that at least 75% of the aggregate principal amount of
the Senior Notes originally issued remains outstanding immediately after the
occurrence of such redemption and that such redemption occurs within 90 days of
the date of the closing of such sale.
(c) Any redemption pursuant to this Section 3.07 shall be made pursuant to
the provisions of Sections 3.01 through 3.06 hereof.
Section 3.08. Mandatory Redemption.
Except as set forth under Sections 3.09 and 4.15 hereof, the Company
shall not be required to make mandatory redemption or sinking fund payments with
respect to the Senior Notes.
Section 3.09. Offer to Purchase With Excess Asset Sale Proceeds.
If at any time the cumulative amount of Excess Proceeds that have not
been applied in accordance with this Section 3.09 exceeds $5.0 million, the
Company shall, within 30 days thereafter, make an offer to all holders of Senior
Notes and Pari Passu Notes (an "Excess Proceeds Offer"), to purchase the maximum
principal amount of Senior Notes and Pari Passu Notes that may be purchased out
of such Excess Proceeds, at an offer price in cash in an amount equal to 100% of
the outstanding principal amount of the Senior Notes and 100% of the outstanding
principal amount or accreted value, as applicable, of the Pari Passu Notes, plus
accrued and unpaid interest and Liquidated Damages thereon, if any, to the date
fixed for the closing of such offer, in accordance with the procedures specified
below.
The Excess Proceeds Offer shall remain open for a period of 20
Business Days following its commencement and no longer, except to the extent
that a longer period is required by applicable law (the "Offer Period"). No
later than five Business Days after the termination of the Offer Period (the
"Purchase Date"), the Company shall purchase the maximum accreted value or
principal amount, as the case may be, of Senior Notes and Pari Passu Notes that
may be purchased with such Excess Proceeds (on a pro rata basis if Senior Notes
and Pari Passu Notes tendered is in excess of the Excess Proceeds) (which
maximum principal amount of Senior Notes shall be the "Offer Amount") or, if
less than the Offer
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Amount has been tendered, all Senior Notes and Pari Passu Notes tendered in
response to the Excess Proceeds Offer, subject to the provisions of Section 4.10
hereof.
If the Purchase Date is on or after an interest record date and on or
before the related interest payment date, any accrued interest on the Senior
Notes shall be paid to the Person in whose name a Senior Note is registered at
the close of business on such record date, and no additional interest shall be
payable to holders who tender Senior Notes pursuant to the Excess Proceeds Offer
on the portion of the tendered Senior Notes purchased pursuant to the Excess
Proceeds Offer.
Upon the commencement of any Excess Proceeds Offer, the Company shall
send, by first class mail, a notice to the Trustee and each of the holders of
the Senior Notes, with a copy to the Trustee. The notice shall contain all
instructions and materials necessary to enable such holders to tender Senior
Notes pursuant to the Excess Proceeds Offer. The Excess Proceeds Offer shall be
made to all holders. The notice, which shall govern the terms of the Excess
Proceeds Offer, shall state:
(a) that the Excess Proceeds Offer is being made pursuant to Sections
3.09 and 4.10 hereof and the length of time the Excess Proceeds Offer shall
remain open;
(b) the Offer Amount, the purchase price and the Purchase Date;
(c) that any Senior Note or portion thereof not tendered or accepted
for payment shall continue to accrue interest;
(d) that any Senior Note or portion thereof accepted for payment
pursuant to the Excess Proceeds Offer shall cease to accrue interest after
the Purchase Date;
(e) that holders electing to have a Senior Note or portion thereof
purchased pursuant to any Excess Proceeds Offer shall be required to
surrender the Senior Note, with the form entitled "Option of Holder to
Elect Purchase" on the reverse of the Senior Note completed, to the
Company, a depositary, if appointed by the Company, or a Paying Agent at
the address specified in the notice at least three Business Days before the
Purchase Date;
(f) that holders shall be entitled to withdraw their election if the
Company, depositary or Paying Agent, as the case may be, receives, not
later than the expiration of the Offer Period, a telegram, telex, facsimile
transmission or letter setting forth the name of the holder, the principal
amount of the Senior Note or portion thereof the holder delivered for
purchase and a statement that such holder is withdrawing his election to
have the Senior Note or portion thereof purchased;
(g) that, if the aggregate principal amount, and/or the aggregate
accreted value as the case may be, of Senior Notes and Pari Passu Notes
tendered by holders of such notes exceeds the Offer Amount, the Trustee
shall select the Senior Notes to be purchased on a pro rata basis above
(with such adjustments as may be deemed appropriate by the Trustee so that
only Senior Notes in denominations of $1,000, or integral multiples
thereof, shall be purchased); and
(h) that holders whose Senior Notes were purchased only in part shall
be issued new Senior Notes equal in principal amount to the unpurchased
portion of the Senior Notes surrendered (or transferred by book-entry
transfer).
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On or before the Purchase Date, the Company shall, to the extent
lawful, accept for payment, on a pro rata basis (as described above) to the
extent necessary, the Offer Amount of Senior Notes, Parri Passu Notes or
portions thereof tendered pursuant to the Excess Proceeds Offer, or if less than
the Offer Amount has been tendered, all Senior Notes, Parri Passu Notes or
portions thereof tendered, and deliver to the Trustee an Officers' Certificate
stating that such Senior Notes, Parri Passu Notes or portions thereof were
accepted for payment by the Company in accordance with the terms of this Section
3.09. The Company or Paying Agent, as the case may be, shall promptly (but in
any case not later than five days after the Purchase Date) mail or deliver to
each tendering holder an amount equal to the purchase price of the Senior Note
or portion thereof tendered by such holder and accepted by the Company for
purchase, and the Company shall promptly issue a new Senior Note, and the
Trustee shall authenticate and mail or deliver such new Senior Note to such
holder equal in principal amount to any unpurchased portion of the Senior Note
surrendered. Any Senior Note not so accepted shall be promptly mailed or
delivered by the Company to the holder thereof. The Company shall publicly
announce the results of the Excess Proceeds Offer on the Purchase Date. In the
event that the aggregate amount of Excess Proceeds exceeds the aggregate
principal amount or accreted value, as the case may be, of Senior Notes, Pari
Passu Notes or portions thereof surrendered by holders of such notes pursuant to
an Excess Proceeds Offer, the Company may use the remaining Excess Proceeds for
general purposes. Upon completion of an Excess Proceeds Offer, the amount of
Excess Proceeds shall be deemed to be reset at zero.
Other than as specifically provided in this Section 3.09, any purchase
pursuant to this Section 3.09 shall be made pursuant to the provisions of
Sections 3.01 through 3.06 hereof. No repurchase of Senior Notes under this
Section 3.9 shall be deemed to be a redemption of Senior Notes.
ARTICLE 4
COVENANTS
Section 4.01. Payment of Notes.
The Company shall pay or cause to be paid the principal of, premium,
if any, and interest, on the Senior Notes on the dates and in the manner
provided in the Senior Notes and this Indenture. Principal, premium, if any, and
interest shall be considered paid on the date due if the Paying Agent, if other
than the Company, holds as of the due date money deposited by, or on behalf of,
the Company in immediately available funds and designated for and sufficient to
pay all principal, premium, if any, and interest then due. The Company shall pay
all Liquidated Damages, if any, in the same manner on the dates and in the
amounts set forth in the Note Registration Rights Agreement.
The Company shall pay interest (including post-petition interest in
any proceeding under any Bankruptcy Law) on overdue principal at the rate equal
to the then applicable interest rate on the Senior Notes to the extent lawful
until such overdue principal is paid; it shall pay interest (including post-
petition interest in any proceeding under any Bankruptcy Law) on overdue
installments of interest (without regard to any applicable grace period) at the
same rate to the extent lawful until such overdue installments of interest are
paid.
The term "Bankruptcy Law" means title 11, U.S. Code or any similar
federal or state law for the relief of debtors.
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Section 4.02. Maintenance of Office or Agency.
The Company shall maintain an office or agency (which may be an office
of the Trustee or an affiliate of the Trustee, Registrar or co-registrar) where
Senior Notes may be surrendered for registration of transfer or exchange and
where notices and demands to or upon the Company in respect of the Senior Notes
and this Indenture may be served. The Company shall give prompt written notice
to the Trustee of the location, and any change in the location, of such office
or agency. If at any time the Company shall fail to maintain any such required
office or agency or shall fail to furnish the Trustee with the address thereof,
such presentations, surrenders, notices and demands may be made or served at the
Corporate Trust Office of the Trustee.
The Company may also from time to time designate one or more other
offices or agencies where the Senior Notes may be presented or surrendered for
any or all such purposes and may from time to time rescind such designations;
provided, however, that no such designation or rescission shall in any manner
relieve the Company of its obligation to maintain an office or agency for such
purposes. The Company shall give prompt written notice to the Trustee of any
such designation or rescission and of any change in the location of any such
other office or agency.
The Company hereby designates the Corporate Trust Office of the
Trustee as one such office or agency of the Company in accordance with Section
2.03 hereof.
Section 4.03. Reports.
(a) So long as any of the Senior Notes remain outstanding, the
Company shall cause copies of all quarterly and annual financial reports and of
the information, documents, and other reports (or copies of such portions of any
of the foregoing as the Securities and Exchange Commission (the "Commission")
may by rules and regulations prescribe) which the Company is required to file
with the Commission pursuant to Section 13(a) or 15(d) of the Exchange Act ("SEC
Reports") to be filed with the Trustee within 15 days of filing with the
Commission. If the Company is not subject to the requirements of Section 13(a)
or 15(d) of the Exchange Act or shall cease to be required by the Commission to
file SEC Reports pursuant to the Exchange Act, the Company shall nevertheless
continue to cause SEC Reports, comparable to those which it would be required to
file pursuant to Section 13(a) or 15(d) of the Exchange Act if it were subject
to the requirements of either such section, to be so filed with the Commission
(unless the Commission will not accept such a filing) and with the Trustee
within the same time periods as would have applied (including under the
preceding sentence) had the Company been subject to the requirements of Section
13(a) or 15(d) of the Exchange Act. Whether or not required by the Exchange Act
to file SEC Reports with the Commission, so long as any Senior Notes are
outstanding, the Company shall furnish copies of the SEC Reports to the holders
of Senior Notes at the time the Company is required to file the same with the
Trustee and make such information available to investors who request it in
writing. In addition, the Company shall, for so long as any Senior Notes remain
outstanding, furnish to the holders and to securities analysts and prospective
investors, upon their request, the information required to be delivered pursuant
to Rule 144(d)(4) under the Securities Act. The Company shall also comply with
the provisions of TIA (S) 314(a).
(b) The Company shall provide the Trustee with a sufficient number of
copies of all SEC Reports that the Trustee may be required to deliver to the
holders of the Senior Notes under this Section 4.03.
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Section 4.04. Compliance Certificate.
(a) The Company shall deliver to the Trustee, within 90 days after
the end of each fiscal year of the Company, an Officers' Certificate stating
that (i) a review of the activities of the Company and its Subsidiaries during
the preceding fiscal year has been made under the supervision of the signing
Officers with a view to determining whether the Company has (x) kept, observed,
performed and fulfilled, and (y) caused each of its Subsidiaries to keep,
observe, perform and fulfill, its obligations under this Indenture, and (ii) as
to each such Officer signing such certificate, that to the best of his or her
knowledge (A) the Company has kept, observed, performed and fulfilled, and has
caused each of its Subsidiaries to keep, observe, perform and fulfill, each and
every covenant contained in this Indenture and is not in default in the
performance or observance of any of the terms, provisions and conditions of this
Indenture to be performed or observed by it (or, if a Default or Event of
Default shall have occurred, describing all such Defaults or Events of Default
of which he or she may have knowledge and what action each is taking or proposes
to take with respect thereto) and (B) no event has occurred and remains in
existence by reason of which payments on account of the principal of or
interest, if any, on the Senior Notes is prohibited or if such event has
occurred, a description of the event and what action each is taking or proposes
to take with respect thereto.
(b) So long as not contrary to the then current recommendations of
the American Institute of Certified Public Accountants, the year-end financial
statements delivered pursuant to Section 4.03 above shall be accompanied by a
written statement of the Company's independent public accountants (who shall be
a firm of established national reputation) that in making the examination
necessary for certification of such financial statements, nothing has come to
their attention which would lead them to believe that the Company has violated
any provisions of Article 4 or Article 5 of this Indenture or, if any such
violation has occurred, specifying the nature and period of existence thereof,
it being understood that such accountants shall not be liable directly or
indirectly to any Person for any failure to obtain knowledge of any such
violation.
(c) The Company shall, so long as any of the Senior Notes are
outstanding, deliver to the Trustee, forthwith upon any Officer becoming aware
of any Default or Event of Default, an Officers' Certificate specifying such
Default, Event of Default or default and what action the Company is taking or
proposes to take with respect thereto.
(d) The Company shall deliver to the Trustee an Officers' Certificate
as required by, and in accordance with, Section 4.07(f) hereof.
Section 4.05. Taxes.
The Company shall pay, and shall cause each of its Subsidiaries to
pay, prior to delinquency, all material taxes, assessments, and governmental
levies, except as contested in good faith and by appropriate proceedings or
where the failure to effect such payment is not adverse in any material respect
to the holders of the Senior Notes.
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Section 4.06. Stay, Extension and Usury Laws.
The Company covenants (to the extent that it may lawfully do so) that it
shall not at any time insist upon, plead, or in any manner whatsoever claim or
take the benefit or advantage of, any stay, extension or usury law wherever
enacted, now or at any time hereafter in force, that may affect the covenants or
the performance of this Indenture; and the Company (to the extent that it may
lawfully do so) hereby expressly waives all benefit or advantage of any such
law, and covenants that it shall not, by resort to any such law, hinder, delay
or impede the execution of any power herein granted to the Trustee, but shall
suffer and permit the execution of every such power as though no such law has
been enacted.
Section 4.07. Restricted Payments.
(a) The Company shall not, and shall not permit any of its Subsidiaries
to, directly or indirectly:
(i) declare or pay any dividend or make any distribution on account
of any Equity Interests of the Company or any of its Subsidiaries other
than dividends or distributions payable (A) in Equity Interests of the
Company that are not Disqualified Stock or (B) to the Company or any
Subsidiary;
(ii) purchase, redeem, defease, retire or otherwise acquire for value
("Retire" and correlatively, a "Retirement") any Equity Interests of the
Company or any of its Subsidiaries or other Affiliate of the Company (other
than any such Equity Interests owned by the Company or any Subsidiary);
(iii) Retire for value any Indebtedness of (A) the Company that is
subordinate in right of payment to the Senior Notes or (B) any Subsidiary,
except, with respect to clause (i)(A) or (i)(B) above, at final maturity or
in accordance with the mandatory redemption or repayment provisions set
forth in the original documentation governing such Indebtedness; or
(iv) make any Restricted Investment (all such payments and other
actions set forth in clauses (i) through (iv) above being collectively
referred to as "Restricted Payments"), unless, at the time of such
Restricted Payment:
(1) no Default or Event of Default has occurred and is
continuing or would occur as a consequence thereof;
(2) after giving effect to such Restricted Payment on a pro
forma basis as if such Restricted Payment had been made at the
beginning of the applicable four-quarter period, the Company could
incur at least $1.00 of additional Indebtedness pursuant to the
Consolidated Cash Flow Leverage Ratio test set forth in Section
4.09(a) hereof; and
(3) such Restricted Payment, together with the aggregate of all
other Restricted Payments made by the Company and its Subsidiaries
after the Issue Date (including any Restricted Payments made pursuant
to clauses (i), (v) and (vi) of Section 4.07(b)), is less than the sum
of
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(w) 50% of the Consolidated Net Income of the Company for the
period (taken as one accounting period) from June 30, 1996 to the end
of the Company's most recently ended fiscal quarter for which internal
financial statements are available at the time of such Restricted
Payment (or, if such Consolidated Net Income for such period is a
deficit, less 100% of such deficit), plus
(x) 100% of the aggregate net cash proceeds received by the
Company from the issue or sale of Equity Interests of the Company or
of debt securities or Disqualified Stock of the Company that have been
converted into such Equity Interests (other than Equity Interests (or
convertible debt securities) sold to a Subsidiary of the Company and
other than Disqualified Stock or debt securities that have been
converted into Disqualified Stock) after June 30, 1996 (other than any
such Equity Interests, the proceeds of which were used as set forth in
clause (b)(ii) below), plus
(y) 100% of the sum of, without duplication, (1) aggregate
dividends or distributions received by the Company or any Subsidiary
from any Joint Venture (other than dividends or distributions to pay
any obligations of such Joint Venture to Persons other than the
Company or any Subsidiary, such as income taxes), with non-cash
distributions to be valued at the lower of book value or fair market
value as determined by the Board of Directors, (2) the amount of the
principal and interest payments received since the Issue Date by the
Company or any Subsidiary from any Joint Venture and (3) the net
proceeds from the sale of an Investment in a Joint Venture received by
the Company or any Subsidiary; provided that there is no obligation to
return any such amounts to the Joint Venture, and excluding any such
dividend, distribution, interest payment or net proceeds that
constitutes a return of capital invested pursuant to clause (b)(vi) of
this Section 4.07, plus
(z) $10.0 million.
(b) The foregoing provisions in Section 4.07(a) shall not prohibit:
(i) the payment of any dividend within 60 days after the date of
declaration thereof, if at such date of declaration such payment would have
complied with the provisions of this Indenture;
(ii) the Retirement of (A) any Equity Interests of the Company or any
Subsidiary of the Company, (B) Indebtedness of the Company that is
subordinate to the Senior Notes or (C) Indebtedness of a Subsidiary of the
Company, in exchange for, or out of the proceeds of the substantially
concurrent sale (other than to a Subsidiary of the Company) of, Equity
Interests of the Company (other than Disqualified Stock);
(iii) the Retirement of any Indebtedness of the Company subordinated
in right of payment to the Senior Notes in exchange for, or out of the
proceeds of the substantially concurrent incurrence of Indebtedness of the
Company (other than Indebtedness to a Subsidiary of the Company), but only
to the extent that such new Indebtedness is permitted under Section 4.09
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hereof and (1) is subordinated in right of payment to the Senior Notes at
least to the same extent as, (2) has a Weighted Average Life to Maturity at
least as long as, and (3) has no scheduled principal payments due in any
amount earlier than, any equivalent amount of principal under the
Indebtedness so Retired;
(iv) the Retirement of any Indebtedness of a Subsidiary of the
Company in exchange for, or out of the proceeds of the substantially
concurrent incurrence of Indebtedness of the Company or any Subsidiary but
only to the extent that such incurrence is permitted under Section 4.09
hereof and only to the extent that such Indebtedness (1) is not secured by
any assets of the Company or any Subsidiary to a greater extent than the
Retired Indebtedness was so secured, (2) has a Weighted Average Life to
Maturity at least as long as the Retired Indebtedness and (3) if such
Retired Indebtedness was an obligation of the Company, is pari passu or
subordinated in right of payment to the Senior Notes at least to the same
extent as the Retired Indebtedness;
(v) the Retirement of any Equity Interests of the Company or any
Subsidiary of the Company held by any member of the Company's (or any of
its Subsidiaries') management pursuant to any management equity
subscription agreement or stock option agreement; provided that the
aggregate price paid for all such repurchased, redeemed, acquired or
retired Equity Interests shall not exceed $1.0 million in any twelve-month
period plus the aggregate cash proceeds received by the Company during such
twelve-month period from any reissuance of Equity Interests by the Company
to members of management of the Company and its Subsidiaries;
(vi) Investments in any Joint Venture; provided that at the time any
such Investment is made, such Investment shall not cause the aggregate
amount of Investments at any one time outstanding under this clause (vi) to
exceed the greater of (x) $25.0 million and (y) 5% of the Total Common
Equity of the Company; and
(vii) the payment of cash in lieu of fractional shares (a) payable as
dividends on Equity Interests of the Company or (b) issuable upon
conversion of or in exchange for securities convertible into or
exchangeable for Equity Interests of the Company or (c) issuable as a
result of a corporate reorganization, provided that, in the case of (a) and
(b), the issuance of such Equity Interests or securities and, in the case
of (c), such corporate reorganization, is permitted under the terms of this
Indenture.
provided, however, that at the time of, and after giving effect to, any
Restricted Payment permitted under clauses (i), (ii), (iii), (iv), (v) and (vi),
no Default or Event of Default shall have occurred and be continuing.
(c) A Permitted Investment that ceases to be a Permitted Investment
pursuant to the definition thereof set forth in Section 1.01 hereof, shall
become a Restricted Investment, deemed to have been made on the date that it
ceases to be a Permitted Investment.
(d) The Board of Directors may designate any Subsidiary to be an
Unrestricted Subsidiary if such designation would not cause a Default or an
Event of Default pursuant to Article 6 hereof. For purposes of making such
determination, all outstanding Investments by the Company and its Subsidiaries
(except to the extent repaid in cash) in such Subsidiary so designated shall be
deemed to be Restricted
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Payments at the time of such designation and shall reduce the amount available
for Restricted Payments under paragraph (a) of this Section 4.07. All such
outstanding Investments will be deemed to constitute Investments in an amount
equal to the greatest of (x) the net book value of such Investments at the time
of such designation, (y) the fair market value of such Investments at the time
of such designation and (z) the original fair market value of such Investments
at the time they were made. Such designation will only be permitted if such
Restricted Payment would be permitted at such time.
(e) The Board of Directors of the Company may at any time designate any
Unrestricted Subsidiary to be a Subsidiary; provided that such designation shall
be deemed to be an incurrence of Indebtedness by a Subsidiary of the Company of
any outstanding Indebtedness of such Unrestricted Subsidiary and such
designation shall only be permitted if (i) such Indebtedness is permitted under
Section 4.09 hereof and (ii) no Default or Event of Default pursuant to Article
6 hereof would be in existence following such designation.
(f) Not later than the date of making any Restricted Payment, the Company
shall deliver to the Trustee an Officers' Certificate stating that such
Restricted Payment is permitted and setting forth the basis upon which the
calculations required by this Section 4.07 were computed, which calculations may
be based upon the Company's latest available financial statements.
Section 4.08. Dividend and Other Payment Restrictions Affecting Subsidiaries.
The Company shall not, and shall not permit any of its Subsidiaries to,
directly or indirectly, create or otherwise cause to become effective any
consensual encumbrance or restriction on the ability of any Subsidiary to:
(i) pay dividends or make any other distributions to the Company or
any of its Subsidiaries on its Capital Stock or with respect to any other
interest or participation in, or measured by, its prof its, or pay any
Indebtedness owed to the Company or any of its Subsidiaries;
(ii) make loans or advances to the Company or any of its
Subsidiaries; or
(iii) transfer any of its properties or assets to the Company or any
of its Subsidiaries;
except for such encumbrances or restrictions existing as of the Issue Date or
under or by reason of:
(a) Existing Indebtedness;
(b) applicable law;
(c) any instrument governing Acquired Debt as in effect at the time
of acquisition (except to the extent such Indebtedness was incurred in
connection with, or in contemplation of, such acquisition), which
encumbrance or restriction is not applicable to any Person, or the
properties or assets of any Person, other than the Person, or the property
or assets of the Person, so acquired;
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(d) by reason of customary non-assignment provisions in leases
entered into in the ordinary course of business and consistent with past
practices;
(e) Indebtedness in respect of a Permitted Refinancing, provided that
the restrictions contained in the agreements governing such Refinancing
Indebtedness are not materially more restrictive than those contained in
the agreements governing the Indebtedness being refinanced;
(f) with respect to clause (iii) above, purchase money obligations
for property acquired in the ordinary course of business, Vendor
Indebtedness incurred in connection with the purchase or lease of
Telecommunications Related Assets or performance bonds or similar security
for performance which liens securing such obligations do not cover any
asset other than the asset acquired or, in the case of performance bonds or
similar security for performance, the assets associated with the Company's
performance;
(g) Indebtedness incurred under Section 4.09(b)(i) hereof;
(h) this Indenture and the Senior Notes or future Indebtedness with
substantially similar restrictions, if any, to the Senior Notes; or
(i) in the case of clauses (a), (c), (e), (g) and (h) above, any
amendments, modifications, restatements, renewals, increases,
supplements, refundings, replacements or refinancings thereof;
provided that such amendments, modifications, restatements, renewals,
increases, supplements, refundings, replacements or refinancings are
not materially more restrictive with respect to such dividend and
other payment restrictions than those contained in such instruments as
in effect on the date of their incurrence or, if later, the Issue
Date.
Section 4.09. Incurrence of Indebtedness and Issuance of Disqualified Stock.
(a) The Company and its Subsidiaries shall not, directly or indirectly,
(i) create, incur, issue, assume, guarantee or otherwise become directly or
indirectly liable for the payment of (collectively, "incur" and, correlatively,
"incurred" and "incurrence") any Indebtedness (including, without limitation,
Acquired Debt) or (ii) issue any Disqualified Stock; provided, however, that the
Company and/or any of its Subsidiaries may incur Indebtedness (including,
without limitation, Acquired Debt) or issue shares of Disqualified Stock if,
after giving effect to the incurrence of such Indebtedness or the issuance of
such Disqualified Stock, the Consolidated Cash Flow Leverage Ratio for the
Company's most recently ended four full fiscal quarters for which internal
financial statements are available immediately preceding the date of such
incurrence or issuance (x) does not exceed 5.5 to 1 if such incurrence or
issuance occurs on or prior to June 1, 1999 and (y) does not exceed 5.0 to 1 if
such occurrence or issuance occurs after June 1, 1999, in each case, determined
on a pro forma basis (including a pro forma application of the net proceeds
therefrom), as if the additional Indebtedness had been incurred, or the
Disqualified Stock had been issued, as the case may be, at the beginning of such
four-quarter period. If the Company incurs any Indebtedness or issues or redeems
any Preferred Stock subsequent to the commencement of the period for which such
ratio is being calculated but prior to the event for which the calculation of
the ratio is made, then the ratio will be calculated giving pro forma effect to
any such incurrence of Indebtedness, or such issuance or redemption of Preferred
Stock, as if the same had occurred at the beginning of the applicable period. In
making such calculation on a pro forma basis, interest attributable to
Indebtedness
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bearing a floating interest rate shall be computed as if the rate in effect on
the date of computation had been the applicable rate for the entire period.
(b) The foregoing limitation in Section 4.09(a) shall not apply to (with
each exception to be given independent effect):
(i) the incurrence by the Company and/or any of its Subsidiaries of
Indebtedness under the Credit Facility in an aggregate principal
amount at any one time outstanding (with letters of credit being
deemed to have a principal amount equal to the maximum potential
liability of the Company and/or any of its Subsidiaries thereunder)
not to exceed $75.0 million in the aggregate at any one time
outstanding, less the aggregate amount of all Net Proceeds of Asset
Sales applied to permanently reduce the commitments with respect to
such Indebtedness pursuant to Section 4.10 hereof;
(ii) the incurrence by the Company and/or any of its Subsidiaries of
Vendor Indebtedness, provided that the aggregate amount of such Vendor
Indebtedness incurred does not exceed 80% of the total cost of the
Telecommunications Related Assets financed therewith (or 100% of the
total cost of the Telecommunications Related Assets financed therewith
if such Vendor Indebtedness was extended for the purchase of tangible
physical assets and was so financed by the vendor thereof or an
affiliate of such vendor);
(iii) the incurrence by the Company and/or any of its Subsidiaries of
the Existing Indebtedness, including the Existing Senior Notes;
(iv) the incurrence by the Company and/or any of its Subsidiaries of
Indebtedness in an aggregate amount not to exceed $25.0 million at any
one time outstanding;
(v) the incurrence by the Company of Indebtedness, but only to the
extent that such Indebtedness is expressly subordinate to the payment
in full of all Obligations with respect to the Senior Notes and has a
final maturity no earlier than, and a Weighted Average Life to
Maturity equal to or greater than, the final maturity and Weighted
Average Life to Maturity, respectively, of the Senior Notes, in an
aggregate principal amount not to exceed 2.0 times the net cash
proceeds received by the Company after June 30, 1996 from the issuance
and sale of Equity Interests of the Company (that are not Disqualified
Stock) plus the fair market value of Equity Interests (other than
Disqualified Stock) issued after June 30, 1996 in connection with any
acquisition of any Telecommunications Business;
(vi) the incurrence (a "Permitted Refinancing") by the Company and/or
any of its Subsidiaries of Indebtedness issued in exchange for, or the
proceeds of which are used to refinance, replace, refund or defease
("Refinance" and correlatively, "Refinanced" and "Refinancing")
Indebtedness, other than Indebtedness incurred pursuant to clause (i)
above, but only to the extent that:
(1) the net proceeds of such Refinancing Indebtedness shall
not exceed the principal amount of and premium, if any, and
accrued interest on the Indebtedness so Refinanced (or if such
Indebtedness was issued at an original issue discount, the
original issue price plus amortization of the original issue
discount at the time of the repayment of
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such Indebtedness) plus the fees, expenses and costs of such
Refinancing and reasonable prepayment premiums, if any, in
connection therewith;
(2) the Refinancing Indebtedness shall have a final maturity
no earlier than, and a Weighted Average Life to Maturity equal
to or greater than, the final maturity and Weighted Average Life
to Maturity of the Indebtedness being Refinanced; and
(3) if the Indebtedness being Refinanced is subordinated in
right of payment to the Senior Notes, the Refinancing
Indebtedness shall be subordinated in right of payment to the
Senior Notes on terms at least as favorable to the holders of
Senior Notes as those contained in the documentation governing
the Indebtedness being so Refinanced;
(vii) the incurrence by the Company or any of its Subsidiaries of
intercompany Indebtedness between or among the Company and any of its
Subsidiaries; and
(viii) the incurrence by the Company or any of its Subsidiaries of
Hedging Obligations that are incurred for the purpose of fixing or
hedging interest rate or foreign currency risk with respect to any
floating rate Indebtedness that is permitted by the terms of this
Indenture to be outstanding.
For purposes of determining compliance with this Section 4.09, in the
event that an item of Indebtedness, Disqualified Stock or Preferred Stock meets
the criteria of more than one of the categories described in clauses (i) through
(viii) above or is entitled to be incurred pursuant to Section 4.09(a), the
Company shall, in its sole discretion, classify such item in any manner that
complies with this Section and such item shall be treated as having been
incurred pursuant to only one of such clauses or pursuant to Section 4.09(a).
Accrual of interest or dividends, the accretion of accreted value or liquidation
preference and the payment of interest or dividends in the form of additional
Indebtedness, Common Stock or Preferred Stock shall not be deemed to be an
incurrence of Indebtedness for purposes of this Section.
Section 4.10. Asset Sales.
(a) The Company shall not, and shall not permit any of its
Subsidiaries to, whether in a single transaction or a series of related
transactions occurring within any twelve-month period,
(i) sell, lease, convey, dispose or otherwise transfer any
assets (including by way of a Sale and Leaseback Transaction) other
than sales, leases, conveyances, dispositions or other transfers (A)
in the ordinary course of business, (B) to the Company by any
Subsidiary of the Company or from the Company to any Subsidiary of the
Company, (C) that constitute a Restricted Payment, Investment or
dividend or distribution permitted under Section 4.07 hereof or (D)
that constitute the disposition of all or substantially all of the
assets of the Company pursuant to Section 5.01 hereof or
(ii) issue or sell Equity Interests in any of its Subsidiaries
(other than an issuance or sale of Equity Interests of any such
Subsidiary to the Company or a Subsidiary),
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if, in the case of either (i) or (ii) above, in a single transaction or a series
of related transactions occurring within any twelve-month period, such assets or
securities
(x) have a Fair Market Value in excess of $2.0 million or
(y) are sold or otherwise disposed of for net proceeds in excess of
$2.0 million (each of the foregoing, an "Asset Sale"), unless:
(a) no Default or Event of Default exists or would occur as a
result thereof;
(b) the Company, or such Subsidiary, as the case may be,
receives consideration at the time of such Asset Sale at least equal
to the Fair Market Value (evidenced by a resolution of the Board of
Directors of the Company set forth in an Officers' Certificate
delivered to the Trustee), of the assets or securities issued or sold
or otherwise disposed of; and
(c) at least 85% of the consideration therefor received by the
Company or such Subsidiary is in the form of cash, provided, however,
that (A) the amount of (x) any liabilities (as shown on the Company's
or such Subsidiary's most recent balance sheet or in the notes
thereto), of the Company or any Subsidiary of the Company (other than
liabilities that are by their terms subordinated to the Senior Notes)
that are assumed by the transferee of any such assets and (y) any
notes, obligations or other securities received by the Company or any
such Subsidiary from such transferee that are immediately converted by
the Company or such Subsidiary into cash, shall be deemed to be cash
(to the extent of the cash received in the case of subclause (y)) for
purposes of this clause (c); and (B) an amount equal to the Fair
Market Value (determined as set forth in clause (b) above) of (1)
Telecommunications Related Assets received by the Company or any such
Subsidiary from the transferee that will be used by the Company or any
such Subsidiary in the operation of a Telecommunications Business in
the United States and (2) the Voting Stock of any Person engaged in
the Telecommunications Business in the United States received by the
Company or any such Subsidiary (provided that such Voting Stock is
converted to cash within 270 days or such Person concurrently becomes
or is a Subsidiary of the Company) shall be deemed to be cash for
purposes of this clause (c).
The foregoing provisions shall not apply to a sale, lease, conveyance
or other disposition of all or substantially all of the assets of the Company,
which shall be governed by Article 5 hereof.
(b) Within 270 days after the receipt of net proceeds of any Asset
Sale, the Company (or such Subsidiary, as the case may be) may apply the Net
Proceeds from such Asset Sale to (i) permanently reduce the amounts permitted to
be borrowed by the Company under the terms of any of its Senior Indebtedness or
(ii) the purchase of Telecommunications Related Assets or Voting Stock of any
Person engaged in the Telecommunications Business in the United States (provided
that such Person concurrently becomes a Subsidiary of the Company). Any Net
Proceeds from any Asset Sales that are not so applied or invested as provided in
the preceding sentence, shall constitute "Excess Proceeds." When the aggregate
amount of Excess Proceeds exceeds $5.0 million, the Company shall be required to
make an Excess Proceeds Offer in accordance with the terms of Section 3.09
hereof.
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Section 4.11. Transactions with Affiliates.
The Company shall not, and shall not permit any of its Subsidiaries
to, sell, lease, transfer or otherwise dispose of any of their respective
properties or assets to, or purchase any property or assets from, or enter into
any contract, agreement, understanding, loan, advance or guarantee with, or for
the benefit of, any Affiliate (each of the foregoing, an "Affiliate
Transaction"), unless: (i) such Affiliate Transaction is on terms that are no
less favorable to the Company or the relevant Subsidiary than those that would
have been obtained in a comparable transaction by the Company or such Subsidiary
with an unrelated Person; (ii) such Affiliate Transaction is approved by a
majority of the disinterested directors on the Board of Directors of the
Company; and (iii) the Company delivers to the Trustee, with respect to any
Affiliate Transaction involving aggregate payments in excess of $1.0 million, a
resolution of a committee of independent directors of the Company set forth in
an Officers' Certificate certifying that such Affiliate Transaction complies
with clauses (i) and (ii) above; provided that (a) transactions pursuant to any
employment, stock option or stock purchase agreement entered into by the Company
or any of its Subsidiaries, or any grant of stock, in the ordinary course of
business that are approved by the Board of Directors of the Company, (b)
transactions between or among the Company and its Subsidiaries, (c) transactions
permitted by Section 4.07 hereof, and (d) loans and advances to employees and
officers of the Company or any of its Subsidiaries in the ordinary course of
business in an aggregate principal amount not to exceed $1.0 million at any one
time outstanding, shall not be deemed Affiliate Transactions.
Section 4.12. Liens.
The Company shall not, and shall not permit any of its Subsidiaries
to, directly or indirectly, create, incur, assume or suffer to exist any Lien on
any asset now owned or hereafter acquired, or any income or profits therefrom or
assign or convey any right to receive income therefrom, except for Permitted
Liens.
Section 4.13. Limitations on Sale and Leaseback Transactions.
The Company shall not, and shall not permit any of its Subsidiaries
to, directly or indirectly, enter into, assume, Guarantee or otherwise become
liable with respect to any Sale and Leaseback Transaction, provided that the
Company or any Subsidiary of the Company may enter into any such transaction if
(i) the Company or such Subsidiary would be permitted under Sections 4.09 and
4.12 hereof to incur secured Indebtedness in an amount equal to the Attributable
Debt with respect to such transaction, (ii) the consideration received by the
Company or such Subsidiary from such transaction is at least equal to the Fair
Market Value of the property being transferred, and (iii) the Net Proceeds
received by the Company or such Subsidiary from such transaction are applied in
accordance with Section 4.10 hereof.
Section 4.14. Corporate Existence.
Subject to Article 5 hereof, the Company shall do or cause to be done
all things necessary to preserve and keep in full force and effect (i) its
existence as a corporation, and the corporate, partnership or other existence of
any Subsidiary, in accordance with the respective organizational documents (as
the
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same may be amended from time to time) of the Company or any such Subsidiary and
(ii) the rights (charter and statutory), licenses and franchises of the Company
and its Subsidiaries; provided, however, that the Company shall not be required
to preserve any such right, license or franchise, or the corporate, partnership
or other existence of any of its Subsidiaries if the Board of Directors of the
Company shall determine that the preservation thereof is no longer desirable in
the conduct of the business of the Company and its Subsidiaries, taken as a
whole, and that the loss thereof is not adverse in any material respect to the
holders of the Senior Notes.
Section 4.15. Offer to Purchase Upon Change of Control.
(a) Upon the occurrence of a Change of Control, the Company shall
make an offer (the "Change of Control Offer") to each holder of Senior Notes to
repurchase all or any part (equal to $1,000 or an integral multiple thereof) of
such holder's Senior Notes at a purchase price equal to 101% of the aggregate
principal amount thereof plus accrued and unpaid interest and Liquidated
Damages, if any, thereon, to the date of purchase (the "Change of Control
Payment"), provided that if the date of purchase is on or after an interest
record date and on or before the related interest payment date, any accrued
interest shall be paid to the Person in whose name a Senior Note is registered
at the close of business on such record date, and no additional interest shall
be paid or payable to holders who tender Senior Notes pursuant to the Change of
Control Offer. Within thirty (30) days following any Change of Control, the
Company shall mail a notice to the Trustee and each holder stating: (1) that the
Change of Control Offer is being made pursuant to this Section 4.15 and that all
Senior Notes or portions thereof tendered will be accepted for payment; (2) the
purchase price and the purchase date, which shall be no earlier than 30 days nor
later than 40 days (unless required by applicable law) from the date such notice
is mailed (the "Change of Control Payment Date"); (3) that any Senior Note or
portion thereof not tendered will continue to accrue interest in accordance with
its terms; (4) that, unless the Company defaults in the payment of the Change of
Control Payment, all Senior Notes or portions thereof accepted for payment
pursuant to the Change of Control Offer shall cease to accrue interest after the
Change of Control Payment Date; (5) that holders electing to have any Senior
Notes or portions thereof purchased pursuant to a Change of Control Offer will
be required to surrender the Senior Notes, with the form entitled "Option of
Holder to Elect Purchase" on the reverse of the Senior Notes completed, to the
Paying Agent at the address specified in the notice prior to the close of
business on the third Business Day preceding the Change of Control Payment Date;
(6) that holders will be entitled to withdraw their election if the Paying Agent
receives, not later than the close of business on the second Business Day
preceding the Change of Control Payment Date, a telegram, telex, facsimile
transmission or letter setting forth the name of the holder, the principal
amount of Senior Notes or portions thereof delivered for purchase, and a
statement that such holder is withdrawing his election to have such Senior Notes
or portions thereof purchased; and (7) that holders whose Senior Notes are being
purchased only in part will be issued new Senior Notes equal in principal amount
to the unpurchased portion of the Senior Notes surrendered, which unpurchased
portion must be equal to $1,000 in principal amount or an integral multiple
thereof. The Company shall comply with the requirements of Rule 14e-1 under the
Exchange Act and any other securities laws and regulations thereunder to the
extent such laws and regulations are applicable in connection with the
repurchase of the Senior Notes or portions thereof in connection with a Change
of Control.
(b) On the Change of Control Payment Date, the Company shall, to the
extent lawful, (i) accept for payment Senior Notes or portions thereof tendered
pursuant to the Change of Control Offer, (ii) deposit with the Paying Agent an
amount equal to the Change of Control Payment in respect of all
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Senior Notes or portions thereof, and the Trustee shall promptly authenticate
and mail to each holder a new Senior Note equal in principal amount to any
unpurchased portion of the Senior Notes surrendered, if any; provided, that each
such new Senior Note shall be in a principal amount of $1,000 or an integral
multiple thereof. The Company shall publicly announce the results of the Change
of Control Offer on or as soon as practicable after the Change of Control
Payment Date.
Section 4.16. Business Activities.
The Company shall not, and shall not permit any of its Subsidiaries
to, directly or indirectly, engage in any business other than the
Telecommunications Business.
Section 4.17. Payments for Consent.
The Company shall not, and shall not permit any of its Affiliates to,
directly or indirectly, pay or cause to be paid any consideration, whether by
way of interest, fee or otherwise, to any holder of any Senior Notes for or as
an inducement to any consent, waiver or amendment of any of the terms or
provisions of this Indenture or the Senior Notes unless such consideration is
offered to be paid or agreed to be paid to all holders of the Senior Notes that
consent, waive or agree to amend in the time frame set forth in the solicitation
documents relating to such consent, waiver or agreement.
Section 4.18. Use of Proceeds.
The Company shall use the gross proceeds from the sale of the Senior
Notes only for the following purposes:
(i) to pay the fees and expenses of the issuance of the Senior Notes
including any discount or commission to the Initial Purchasers of the Senior
Notes; and
(ii) with respect to any funds remaining after application under clause (i)
above, to fund up to 80% of the cost of the acquisition or construction of
Telecommunications Related Assets, or to the repayment of the Existing Senior
Notes.
Pending application of the proceeds in accordance with clause (ii)
above, the Company shall deposit such proceeds into a segregated account in the
Company's name. The Company shall deliver to the Trustee an Officer's
Certificate with each annual compliance certificate certifying that the amounts
in such account were applied in accordance with this Section 4.18.
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ARTICLE 5
SUCCESSORS
Section 5.01.Merger, Consolidation or Sale of Assets.
The Company shall not consolidate or merge with or into (whether or not the
Company is the surviving entity), or sell, assign, transfer, lease, convey or
otherwise dispose of all or substantially all of its properties or assets in one
or more related transactions to another corporation, Person or entity unless:
(i) the Company is the surviving entity or the entity or Person
formed by or surviving any such consolidation or merger (if other than the
Company) or to which such sale, assignment, transfer, lease, conveyance or
other disposition has been made is a corporation organized or existing
under the laws of the United States, any state thereof or the District of
Columbia;
(ii) the entity or Person formed by or surviving any such
consolidation or merger (if other than the Company) or the entity or Person
to which such sale, assignment, transfer, lease, conveyance or other
disposition has been made assumes all the obligations of the Company under
the Senior Notes and this Indenture pursuant to a supplemental indenture in
form reasonably satisfactory to the Trustee;
(iii) immediately after such transaction no Default or Event of
Default exists;
(iv) except in connection with a Merger with or into a wholly-owned
Subsidiary of the Company, the Company, or any entity or Person formed by
or surviving any such consolidation or merger, or to which such sale,
assignment, transfer, lease, conveyance or other disposition has been made,
at the time of such transaction after giving pro forma effect thereto as if
such transaction had occurred at the beginning of the applicable fiscal
quarter (including any Indebtedness incurred or anticipated to be incurred
in connection with or in respect of such transaction or series of
transactions), either (A) could incur at least $1.00 of additional
Indebtedness pursuant to the Consolidated Cash Flow Leverage Ratio test
described under Section 4.09 hereof or (B) would have (x) Total Market
Capitalization of at least $1.0 billion and (y) total Indebtedness in an
amount no greater than 30% of its Total Market Capitalization; and
(v) such transaction would not result in the loss, material
impairment or adverse modification or amendment of any authorization or
license of the Company or its Subsidiaries that would have a material
adverse effect on the business or operations of the Company and its
Subsidiaries taken as a whole.
Section 5.02.Successor Corporation Substituted.
Upon any consolidation or merger, or any sale, lease, conveyance or other
disposition of all or substantially all of the assets of the Company in
accordance with Section 5.01 hereof, the successor corporation formed by such
consolidation or into or with which the Company is merged or to which such sale,
lease, conveyance or other disposition is made shall succeed to, and be
substituted for (so that from
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and after the date of such consolidation, merger, sale, lease, conveyance or
other disposition, the provisions of this Indenture referring to the Company
shall refer instead to the successor corporation and not to the Company), and
may exercise every right and power of the Company under this Indenture with the
same effect as if such successor Person had been named as the Company, herein;
provided, however, that the predecessor Company shall not be relieved from the
obligations to pay the principal of, premium, if any, and interest on the Senior
Notes, except in the case of a sale of all of the Company's assets that meets
the requirements of Section 5.01 hereof.
ARTICLE 6
DEFAULTS AND REMEDIES
Section 6.01. Events of Default.
Each of the following constitutes an "Event of Default":
(a) default for 30 days in the payment when due of interest or Liquidated
Damages, if any, on the Senior Notes;
(b) default in payment when due of principal or premium, if any, on the
Senior Notes at maturity, upon redemption or otherwise;
(c) failure by the Company to perform or comply with the provisions of
Sections 4.07, 4.09, 4.10, 4.15 or 5.01 hereof;
(d) failure by the Company for 30 days after notice from the Trustee or
the holders of at least 25% in principal amount of the Senior Notes
then outstanding to comply with its other agreements in this Indenture
or the Senior Notes;
(e) default under any mortgage, indenture or instrument under which there
may be issued or by which there may be secured or evidenced any
Indebtedness for money borrowed by the Company or any of its
Subsidiaries (or the payment of which is guaranteed by the Company or
any of its Subsidiaries), whether such Indebtedness or Guarantee now
exists, or is created after the Issue Date, which default (x) is
caused by a failure to pay when due principal, premium, if any, or
interest on such Indebtedness within the grace period provided in such
Indebtedness (a "Payment Default"), and the principal amount of any
such Indebtedness, together with the principal amount of any other
such Indebtedness of the Company or any Significant Subsidiary under
which there has been a Payment Default or the maturity of which has
been accelerated as provided in clause (y), aggregates $5.0 million or
more or (y) results in the acceleration (which acceleration has not
been rescinded) of such Indebtedness prior to its express maturity and
the principal amount of any such Indebtedness, together with the
principal amount of any other such Indebtedness under which there has
been a Payment Default or the maturity of which has been so
accelerated, aggregates $5.0 million or more;
(f) failure by the Company or any of its Significant Subsidiaries to pay
final judgments (other than any judgment as to which a reputable
insurance company has accepted full liability
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in writing) aggregating in excess of $5.0 million which judgments are
not paid, discharged or stayed within 45 days after their entry; and
(g) the Company or any of its Significant Subsidiaries pursuant to or
within the meaning of Bankruptcy Law:
(A) commences a voluntary case,
(B) consents to the entry of an order for relief against it in
an involuntary case,
(C) consents to the appointment of a Bankruptcy Custodian of it
or for all or substantially all of its property,
(D) makes a general assignment for the benefit of its creditors,
or
(E) admits in writing that it is generally not paying its debts
(other than debts which are the subject of a bona fide
dispute) as they become due; or
(h) a court of competent jurisdiction enters an order or decree under any
Bankruptcy Law that;
(A) is for relief against the Company or any of its Significant
Subsidiaries in an involuntary case;
(B) appoints a Bankruptcy Custodian of the Company or any of its
Significant Subsidiaries or for all or substantially all of the
property of the Company or any of its Significant Subsidiaries; or
(C) orders the liquidation of the Company or any of its
Significant Subsidiaries;
and the order or decree remains unstayed and in effect for 60 consecutive
days; provided, however; that if the entry of such order or decree is
appealed and dismissed on appeal or otherwise has ceased to be in effect,
then the Event of Default hereunder by reason of the entry of such order or
decree shall be deemed to have been cured and the related acceleration,
provided that no other Event of Default has occurred and is continuing,
shall be deemed rescinded.
The term "Bankruptcy Custodian" means any receiver, trustee, assignee,
liquidator or similar official under any Bankruptcy Law.
Section 6.02. Acceleration.
If any Event of Default occurs and is continuing under this Indenture, the
Trustee or the holders of at least 25% in principal amount of the then
outstanding Senior Notes may declare all the Senior Notes to be due and payable
immediately. Upon such declaration, the principal of, premium, if any, and
accrued and unpaid interest and Liquidated Damages, if any, on the Senior Notes
shall be due and payable immediately. Notwithstanding the foregoing, in the
case of an Event of Default arising under Sections 6.01(g) or (h) hereof with
respect to the Company or any of its Significant Subsidiaries, the
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foregoing amount shall ipso facto become due and payable without further action
or notice. No premium is payable upon acceleration of the Senior Notes except
that in the case of an Event of Default that is the result of an action or
inaction by the Company or any of its Subsidiaries intended to avoid
restrictions on or premiums related to redemptions of the Senior Notes contained
in this Indenture or the Senior Notes, the amount declared due and payable shall
include the premium that would have been applicable on a voluntary prepayment of
the Senior Notes or, if voluntary prepayment is not then permitted, the premium
set forth in this Indenture. Holders of the Senior Notes may not enforce this
Indenture or the Senior Notes except as provided herein.
In the case of any Event of Default occurring by reason of any willful
action (or inaction) taken (or not taken) by or on behalf of the Company with
the intention of avoiding payment of the premium that the Company would have had
to pay if the Company then had elected to redeem the Senior Notes pursuant to
Section 3.07 hereof, an equivalent premium shall also become and be immediately
due and payable to the extent permitted by law. If an Event of Default occurs
prior to November 1, 2002 by reason of any willful action (or inaction) taken
(or not taken) by or on behalf of the Company with the intention of avoiding the
prohibition on redemption of the Senior Notes prior to such date pursuant to
Section 3.07 hereof, then the premium payable for purposes of this paragraph for
each of the years beginning on November 1st of the years set forth below shall
be as set forth in the following table, expressed as a percentage of the amount
that would otherwise be due but for the provisions of this paragraph, plus
accrued interest, if any, to the date of payment:
YEAR PERCENTAGE
---- ----------
1997............................... 8.875%
1998............................... 7.988%
1999............................... 7.101%
2000............................... 6.213%
2001............................... 5.326%
2002............................... 4.438%
Section 6.03. Other Remedies.
If an Event of Default occurs and is continuing, the Trustee may
pursue any available remedy to collect the payment of principal, premium, if
any, interest and Liquidated Damages, if any, on the Senior Notes or to enforce
the performance of any provision of the Senior Notes or this Indenture.
The Trustee may maintain a proceeding even if it does not possess any
of the Senior Notes or does not produce any of them in the proceeding. A delay
or omission by the Trustee or any holder of a Note in exercising any right or
remedy accruing upon an Event of Default shall not impair the right or remedy or
constitute a waiver of or acquiescence in the Event of Default. All remedies are
cumulative to the extent permitted by law.
Section 6.04. Waiver of Past Defaults.
Holders of not less than a majority in aggregate principal amount of
the Senior Notes then outstanding, by notice to the Trustee, may on behalf of
the holders of all of the Senior Notes, waive any existing Default or Event of
Default and its consequences, except a continuing Default or Event of
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Default in the payment of interest or Liquidated Damages or premium on, or the
principal of, the Senior Notes. Upon any such waiver, such Default shall cease
to exist, and any Event of Default arising therefrom shall be deemed to have
been cured for every purpose of this Indenture; but no such waiver shall extend
to any subsequent or other Default or impair any right consequent thereon.
Section 6.05. Control by Majority.
Holders of a majority in principal amount of the then outstanding Senior
Notes may direct the time, method and place of conducting any proceeding for
exercising any remedy available to the Trustee or exercising any trust or power
conferred on it. However, the Trustee may refuse to follow any direction that
conflicts with the law or this Indenture that the Trustee, in its sole
discretion, determines may be unduly prejudicial to the rights of other holders
of Senior Notes or that may involve the Trustee in personal liability.
Section 6.06. Limitation on Suits.
No holder of any Senior Note shall have any right to institute any
proceeding with respect to this Indenture or the Senior Notes or for any remedy
thereunder, unless:
(i) the holder of a Note gives to the Trustee written notice of a
continuing Event of Default;
(ii) the holders of at least 25% in principal amount of the then
outstanding Senior Notes make a written request to the Trustee to pursue
the remedy;
(iii) such holder of a Senior Note or holders of the Senior Notes
offer and, if requested, provide to the Trustee indemnity satisfactory to
the Trustee against any loss, liability or expense; and
(iv) the Trustee does not comply with the request within 60 days
after receipt of the request and the offer and, if requested, the provision
of indemnity.
Otherwise, no holder of any Senior Note shall have any right to
institute any proceeding with respect to this Indenture or the Senior Notes or
for any remedy thereunder, except:
(x) a holder of a Senior Note may institute suit for enforcement of
payment of the principal of and premium, if any, or interest on such Senior Note
on or after the respective due dates expressed in such Senior Note (including
upon acceleration thereof) or
(y) the institution of any proceeding with respect to this Indenture
or the Senior Notes or any remedy thereunder, including without limitation
acceleration, by the holders of a majority in principal amount of the
outstanding Senior Notes; provided that, upon institution of any proceeding or
exercise of any remedy such holders provide the Trustee with prompt written
notice thereof.
A holder of a Senior Note may not use this Indenture to prejudice the
rights of another holder of a Senior Note or to obtain a preference or priority
over another holder of a Senior Note.
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Section 6.07. Rights of Holders of Notes to Receive Payment.
Notwithstanding any other provision of this Indenture, the right of
any holder of a Senior Note to receive payment of principal, premium and
Liquidated Damages, if any, and interest on the Senior Note, on or after the
respective due dates expressed in the Senior Note, or to bring suit for the
enforcement of any such payment on or after such respective dates, shall not be
impaired or affected without the consent of the holder of the Senior Note.
Section 6.08. Collection Suit by Trustee.
If an Event of Default specified in Section 6.01(a) or (b) hereof
occurs and is continuing, the Trustee is authorized to recover judgment in its
own name and as trustee of an express trust against the Company for the whole
amount of principal of, premium and Liquidated Damages, if any, and interest
remaining unpaid on the Senior Notes and interest on overdue principal and, to
the extent lawful, interest and such further amount as shall be sufficient to
cover the costs and expenses of collection, including the reasonable
compensation, expenses, disbursements and advances of the Trustee, its agents
and counsel.
Section 6.09. Trustee May File Proofs of Claim.
The Trustee is authorized to file such proofs of claim and other
papers or documents as may be necessary or advisable in order to have the claims
of the Trustee (including any claim for the reasonable compensation, expenses,
disbursements and advances of the Trustee, its agents and counsel) and the
holders of the Senior Notes allowed in any judicial proceedings relative to the
Company (or any other obligor upon the Senior Notes), the Company's creditors or
the Company's property and shall be entitled and empowered to collect, receive
and distribute any money or other property payable or deliverable on any such
claims and any custodian in any such judicial proceeding is hereby authorized by
each holder of a Note 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 of the Senior Notes, to pay to the Trustee any amount due to it for the
reasonable compensation, expenses, disbursements and advances of the Trustee,
its agents and counsel, and any other amounts due the Trustee under Section 7.07
hereof. To the extent that the payment of any such compensation, expenses,
disbursements and advances of the Trustee, its agents and counsel, and any other
amounts due the Trustee under Section 7.07 hereof out of the estate in any such
proceeding, shall be denied for any reason, payment of the same shall be secured
by a Lien on, and shall be paid out of, any and all distributions, dividends,
money, securities and other properties which the holders of the Senior Notes may
be entitled to receive in such proceeding whether in liquidation or under any
plan of reorganization or arrangement or otherwise. Nothing contained herein
shall be deemed to authorize the Trustee to authorize or consent to or accept or
adopt on behalf of any holder of a Note any plan of reorganization, arrangement,
adjustment or composition affecting the Senior Notes or the rights of any holder
of a Note thereof, or to authorize the Trustee to vote in respect of the claim
of any holder of a Note in any such proceeding.
Section 6.10. Priorities.
If the Trustee collects any money pursuant to this Article 6, it shall
pay out the money in the following order:
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First: to the Trustee, its agents and attorneys for amounts due under
Section 7.07 hereof, including payment of all compensation, expense and
liabilities incurred, and all advances made, by the Trustee and the costs and
expenses of collection;
Second: (i) first to holders of Senior Notes, for amounts due and
unpaid on such Senior Notes for interest, ratably, without preference or
priority of any kind, according to the amounts due and payable on the Senior
Notes for interest, and (ii) second, to the extent any other monies are
available, to holders of all Senior Notes for amounts due and unpaid on all such
Senior Notes for principal and premium and Liquidated Damages, if any, ratably,
without preference or priority of any kind, according to the amounts due and
payable on the Senior Notes for principal and premium and Liquidated Damages, if
any; and
Third: to the Company or to such party as a court of competent
jurisdiction shall direct.
The Trustee may fix a record date and payment date for any such
payment to holders of Senior Notes.
Section 6.11. Undertaking for Costs.
In any suit for the enforcement of any right or remedy under this
Indenture or in any suit against the Trustee for any action taken or omitted by
it as a Trustee, a court in its discretion may require the filing by any party
litigant in the suit of an undertaking to pay the costs of the suit, and the
court in its discretion may assess reasonable costs, including reasonable
attorneys' fees, against any party litigant in the suit, having due regard to
the merits and good faith of the claims or defenses made by the party litigant.
This Section 6.11 does not apply to a suit by the Trustee, a suit by a holder of
a Senior Note pursuant to Section 6.07 hereof, or a suit by holders of more than
10% in principal amount of the then outstanding Senior Notes.
ARTICLE 7
TRUSTEE
Section 7.01. Duties of Trustee.
(a) If an Event of Default has occurred and is continuing, the
Trustee shall exercise such of the rights and powers vested in it by this
Indenture, and shall use the same degree of care and skill in their exercise as
a prudent man would exercise or use under the circumstances in the conduct of
his own affairs.
(b) Except during the continuance of an Event of Default:
(i) the duties of the Trustee shall be determined solely by the
express provisions of this Indenture and the Trustee need perform only
those duties that are specifically set forth in this Indenture and no
others, and no implied covenants or obligations shall be read into this
Indenture against the Trustee, and
(ii) in the absence of bad faith on its part, the Trustee may
conclusively rely, as to the truth of the statements and the correctness of
the opinions expressed therein, upon certificates or
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opinions furnished to the Trustee and conforming to the requirements of
this Indenture. However, the Trustee shall examine the certificates and
opinions to determine whether or not they conform to the requirements of
this Indenture.
(c) The Trustee may not be relieved from liabilities for its own
negligent action, its own negligent failure to act, or its own willful
misconduct, except that:
(i) this paragraph does not limit the effect of paragraph (b) of
this Section 7.01;
(ii) the Trustee shall not be liable for any error of judgment made
in good faith by a Responsible Officer, unless it is proved that the
Trustee was negligent in ascertaining the pertinent facts; and
(iii) the Trustee shall not be liable with respect to any action it
takes or omits to take in good faith in accordance with a direction
received by it pursuant to Section 6.05 hereof.
(d) Whether or not therein expressly so provided, every provision of
this Indenture that in any way relates to the Trustee is subject to paragraphs
(a), (b), and (c) of this Section 7.01.
(e) No provision of this Indenture shall require the Trustee to
expend or risk its own funds or incur any liability. The Trustee shall be under
no obligation to exercise any of its rights and powers under this Indenture at
the request of any holders of Senior Notes, unless such holder shall have
provided to the Trustee security and indemnity satisfactory to the Trustee
against any loss, liability or expense.
(f) The Trustee shall not be liable for interest on any money
received by it except as the Trustee may agree in writing with the Company.
Money held in trust by the Trustee need not be segregated from other funds
except to the extent required by law.
Section 7.02. Rights of Trustee.
(a) The Trustee may conclusively rely upon any document believed by
it to be genuine and to have been signed or presented by the proper Person. The
Trustee need not investigate any fact or matter stated in the document.
(b) Before the Trustee acts or refrains from acting, it may require
an Officers' Certificate or an Opinion of Counsel or both. The Trustee shall
not be liable for any action it takes or omits to take in good faith in reliance
on such Officers' Certificate or Opinion of Counsel. The Trustee may consult
with counsel and the advice of such counsel or any Opinion of Counsel shall be
full and complete authorization and protection from liability in respect of any
action taken, suffered or omitted by it hereunder in good faith and in reliance
thereon.
(c) The Trustee may act through its attorneys and agents and shall
not be responsible for the misconduct or negligence of any agent appointed with
due care.
(d) The Trustee shall not be liable for any action it takes or omits
to take in good faith which it believes to be authorized or within its rights or
powers conferred upon it by this Indenture.
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(e) Unless otherwise specifically provided in this Indenture, any
demand, request, direction or notice from the Company shall be sufficient if
signed by an Officer of the Company.
(f) The Trustee shall be under no obligation to exercise any of the
rights or powers vested in it by this Indenture at the request or direction of
any of the holders unless such holders shall have provided to the Trustee
reasonable security or indemnity against the costs, expenses and liabilities
that might be incurred by it in compliance with such request or direction.
Section 7.03. Individual Rights of Trustee.
The Trustee in its individual or any other capacity may become the
owner or pledgee of Senior Notes and may otherwise deal with the Company or any
Affiliate of the Company with the same rights it would have if it were not
Trustee. However, in the event that the Trustee acquires any conflicting
interest, it must eliminate such conflict within 90 days, apply to the
Commission for permission to continue as Trustee or resign. Any Agent may do the
same with like rights and duties. The Trustee is also subject to Sections 7.10
and 7.11 hereof.
Section 7.04. Trustee's Disclaimer.
The Trustee shall not be responsible for and makes no representation
as to the validity or adequacy of this Indenture or the Senior Notes, it shall
not be accountable for the Company's use of the proceeds from the Senior Notes
or any money paid to the Company or upon the Company's direction under any
provision of this Indenture, it shall not be responsible for the use or
application of any money received by any Paying Agent other than the Trustee,
and it shall not be responsible for any statement or recital herein or any
statement in the Senior Notes or any other document in connection with the sale
of the Senior Notes or pursuant to this Indenture other than its certificate of
authentication.
Section 7.05. Notice of Defaults.
If a Default or Event of Default occurs and is continuing and if it is
known to a Responsible Officer of the Trustee, the Trustee shall mail to holders
of Senior Notes a notice of the Default or Event of Default within 90 days after
it occurs. Except in the case of a Default or Event of Default in payment of
principal of, premium, if any, or interest on any Note, the Trustee may withhold
the notice if and so long as a committee of its Responsible Officers in good
faith determines that withholding the notice is in the interests of the holders
of the Senior Notes.
Section 7.06. Reports by Trustee to Holders of the Senior Notes.
Within 60 days after each May 15th beginning with the May 15th
following the date of this Indenture, the Trustee shall mail to the holders of
the Senior Notes a brief report dated as of such reporting date that complies
with TIA (S) 313(a) (but if no event described in TIA (S) 313(a) has occurred
within the twelve months preceding the reporting date, no report need be
transmitted). The Trustee also shall comply with TIA (S) 313(b)(2). The
Trustee shall also transmit by mail all reports as required by TIA (S) 313(c).
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A copy of each report at the time of its mailing to the holders of
Senior Notes shall be mailed to the Company and filed with the Commission and
each stock exchange on which the Senior Notes are listed. The Company shall
promptly notify the Trustee when the Senior Notes are listed on any stock
exchange.
Section 7.07. Compensation and Indemnity.
The Company shall pay to the Trustee from time to time reasonable
compensation for its acceptance of this Indenture and services hereunder. The
Trustee's compensation shall not be limited by any law on compensation of a
trustee of an express trust. The Company shall reimburse the Trustee promptly
upon request for all reasonable disbursements, advances and expenses incurred or
made by it in addition to the compensation for its services. Such expenses shall
include the reasonable compensation, disbursements and expenses of the Trustee's
agents and counsel.
The Company shall indemnify the Trustee against any and all losses,
liabilities or expenses incurred by it arising out of or in connection with the
acceptance or administration of its duties under this Indenture, except any such
loss, liability or expense as may be attributable to the negligence or bad faith
of the Trustee. The Trustee shall notify the Company promptly of any claim for
which it may seek indemnity. Failure by the Trustee to so notify the Company
shall not relieve the Company of its obligations hereunder. The Company shall
defend the claim and the Trustee shall cooperate in the defense. The Trustee, in
its sole discretion, may elect to have separate counsel selected by it and the
Company shall pay the reasonable fees and expenses of such counsel. The Company
need not pay for any settlement made without its consent, which consent shall
not be unreasonably withheld.
The obligations of the Company under this Section 7.07 shall survive
the satisfaction and discharge of this Indenture.
To secure the Company' payment obligations in this Section 7.07, the
Trustee shall have a Lien prior to the Senior Notes on all money or property
held or collected by the Trustee, except that held in trust to pay principal,
premium, if any, interest and Liquidated Damages, if any, on particular Senior
Notes. Such Lien shall survive the satisfaction and discharge of this Indenture.
When the Trustee incurs expenses or renders services after an Event of
Default specified in Section 6.01(g) or (h) hereof occurs, the expenses and the
compensation for the services (including the fees and expenses of its agents and
counsel) are intended to constitute expenses of administration under any
Bankruptcy Law.
Section 7.08. Replacement of Trustee.
A resignation or removal of the Trustee and appointment of a successor
Trustee shall become effective only upon the successor Trustee's acceptance of
appointment as provided in this Section 7.08.
The Trustee may resign in writing at any time and be discharged from
the trust hereby created by so notifying the Company. The holders of a majority
in principal amount of the then
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outstanding Senior Notes may remove the Trustee by so notifying the Trustee and
the Company in writing. The Company may remove the Trustee if:
(a) the Trustee fails to comply with Section 7.10 hereof;
(b) the Trustee is adjudged a bankrupt or an insolvent or an order
for relief is entered with respect to the Trustee under any Bankruptcy Law;
(c) a Bankruptcy Custodian or public officer takes charge of the
Trustee or its property; or
(d) the Trustee becomes incapable of acting.
If the Trustee resigns or is removed or if a vacancy exists in the
office of Trustee for any reason, the Company shall promptly appoint a successor
Trustee. Within one year after the successor Trustee takes office, the holders
of a majority in principal amount of the then outstanding Senior Notes may
appoint a successor Trustee to replace the successor Trustee appointed by the
Company.
If a successor Trustee does not take office within 60 days after the
retiring Trustee resigns or is removed, the retiring Trustee, the Company, or
the holders of Senior Notes of at least 10% in principal amount of the then
outstanding Senior Notes may petition any court of competent jurisdiction for
the appointment of a successor Trustee.
If the Trustee after written request by any holder of a Senior Note
who has been a holder of a Senior Note for at least six months fails to comply
with Section 7.10 hereof, such holder of a Senior Note may petition any court of
competent jurisdiction for the removal of the Trustee and the appointment of a
successor Trustee.
A successor Trustee shall deliver a written acceptance of its
appointment to the retiring Trustee and to the Company. Thereupon, the
resignation or removal of the retiring Trustee shall become effective, and the
successor Trustee shall have all the rights, powers and duties of the Trustee
under this Indenture. The successor Trustee shall mail a notice of its
succession to holders of the Senior Notes. The retiring Trustee shall promptly
transfer all property held by it as Trustee to the successor Trustee, provided
all sums owing to the Trustee hereunder have been paid and subject to the Lien
provided for in Section 7.07 hereof. Notwithstanding replacement of the Trustee
pursuant to this Section 7.08, the Company's obligations under Section 7.07
hereof shall continue for the benefit of the retiring Trustee.
Section 7.09. Successor Trustee by Merger, etc.
If the Trustee consolidates, merges or converts into, or transfers all
or substantially all of its corporate trust business to, another corporation,
the successor corporation without any further act shall be the successor
Trustee.
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Section 7.10. Eligibility; Disqualification.
There shall at all times be a Trustee hereunder which shall be a
corporation organized and doing business under the laws of the United States of
America or of any state thereof authorized under such laws to exercise corporate
trustee power, shall be subject to supervision or examination by federal or
state authority and shall have a combined capital and surplus of at least $25.0
million as set forth in its most recent published annual report of condition.
This Indenture shall always have a Trustee who satisfies the
requirements of TIA (S) 310(a)(1), (2) and (5). The Trustee is subject to TIA
(S) 310(b).
Section 7.11. Preferential Collection of Claims Against Company.
The Trustee is subject to TIA (S) 311(a), excluding any creditor
relationship listed in TIA (S) 311(b). A Trustee who has resigned or been
removed shall be subject to TIA (S) 311(a) to the extent indicated therein.
ARTICLE 8
LEGAL DEFEASANCE AND COVENANT DEFEASANCE
Section 8.01. Option to Effect Legal Defeasance or Covenant Defeasance.
The Company may, at the option of its Board of Directors evidenced by
a resolution set forth in an Officers' Certificate and at any time, with respect
to the Senior Notes, elect to have either Section 8.02 or 8.03 hereof be applied
to all outstanding Senior Notes upon compliance with the conditions set forth
below in this Article 8.
Section 8.02. Legal Defeasance and Discharge.
Upon the Company's exercise under Section 8.01 hereof of the option
applicable to this Section 8.02, the Company shall be deemed to have been
discharged from its obligations with respect to all outstanding Senior Notes on
the date the conditions set forth in Section 8.04 are satisfied (hereinafter,
"Legal Defeasance"). For this purpose, such Legal Defeasance means that the
Company shall be deemed to have paid and discharged the entire Indebtedness
represented by the outstanding Senior Notes, which shall thereafter be deemed to
be "outstanding" only for the purposes of Section 8.05 hereof and the other
sections of this Indenture referred to in (a) and (b) below, and to have
satisfied all of its other obligations under such Senior Notes and this
Indenture (and the Trustee, on demand of and at the expense of the Company,
shall execute proper instruments acknowledging the same), except for the
following which shall survive until otherwise terminated or discharged
hereunder: (a) the rights of holders of outstanding Senior Notes to receive from
the trust described below payments in respect of the principal of, premium, if
any, and interest on and Liquidated Damages with respect to such Senior Notes
when such payments are due, or on the redemption date, as the case may be; (b)
the Company's obligations with respect to the Senior Notes concerning issuing
temporary Senior Notes, registration of Senior Notes, mutilated, destroyed, lost
or stolen Senior Notes and the maintenance of an office or agency for payment
and money for security payments held in trust; (c) the rights, powers, trust,
duties and immunities of the Trustee,
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and the Company's obligations in connection therewith; and (d) the Legal
Defeasance provisions of this Indenture.
Section 8.03. Covenant Defeasance.
Upon the Company's exercise under Section 8.01 hereof of the option
applicable to this Section 8.03, the Company shall be released from its
obligations under the covenants contained in Sections 4.03, 4.04, 4.05, 4.07,
4.08, 4.09, 4.10, 4.11, 4.12, 4.13, 4.15, 4.16, 4.17 and 4.18 hereof and Article
5 hereof with respect to the outstanding Senior Notes on and after the date the
conditions set forth in Section 8.04 are satisfied (hereinafter, "Covenant
Defeasance"), and the Senior Notes shall thereafter be deemed not "outstanding"
for the purposes of any direction, waiver, consent or declaration or act of
holders (and the consequences of any thereof) in connection with such covenants,
but shall continue to be deemed "outstanding" for all other purposes hereunder
(it being understood that such Senior Notes shall not be deemed outstanding for
accounting purposes). For this purpose, such Covenant Defeasance means that,
with respect to the outstanding Senior Notes, the Company may omit to comply
with and shall have no liability in respect of any term, condition or limitation
set forth in any such covenant, whether directly or indirectly, by reason of any
reference elsewhere herein to any such covenant or by reason of any reference in
any such covenant to any other provision herein or in any other document and
such omission to comply shall not constitute a Default or an Event of Default
under Section 6.01 hereof but, except as specified above, the remainder of this
Indenture and such Senior Notes shall be unaffected thereby. In addition, upon
the Company's exercise under Section 8.01 hereof of the option applicable to
this Section 8.03, subject to the satisfaction of the conditions set forth in
Section 8.04 hereof, Sections 6.01(d) through 6.01(f) hereof shall not
constitute Events of Default.
Section 8.04. Conditions to Legal or Covenant Defeasance.
The following shall be the conditions to the application of either Section
8.02 or Section 8.03 hereof to the outstanding Senior Notes:
(a) The Company shall irrevocably have deposited or caused to be
deposited with the Trustee (or another trustee satisfying the requirements
of Section 7.10 hereof who shall agree to comply with the provisions of
this Article 8 applicable to it), in trust, for purpose of making the
following payments, specifically pledged as security for, and dedicated
solely to, the benefit of the holders of the Senior Notes, (i) cash in U.S.
dollars, (ii) non-callable Government Securities, or (iii) a combination
thereof, in such amounts as will be sufficient, in the opinion of a
nationally recognized firm of independent public accountants selected by
the Company, to pay the principal of, premium and Liquidated Damages, if
any, and interest on the outstanding Senior Notes, on the stated maturity
or on the applicable optional redemption date, as the case may be, of such
principal or installment of principal of, premium, if any, or interest on
or Liquidated Damages with respect to the outstanding Senior Notes;
(b) In the case of Legal Defeasance, the Company shall have delivered
to the Trustee an opinion of counsel in the United States reasonably
acceptable to the Trustee confirming that (i) the Company has received
from, or there has been published by, the Internal Revenue Service a ruling
or (ii) since the Issue Date, there has been a change in the applicable
federal income tax law, in either case to the effect that, and based
thereon such opinion of counsel shall confirm that, the holders of the
outstanding Senior Notes will not recognize income, gain or loss for
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federal income tax purposes as a result of such Legal Defeasance and will
be subject to federal income tax on the same amounts, in the same manner
and at the same times as would have been the case if such Legal Defeasance
had not occurred;
(c) In the case of Covenant Defeasance, the Company shall have
delivered to the Trustee an opinion of counsel in the United States
reasonably acceptable to the Trustee confirming that the holders of the
outstanding Senior Notes will not recognize income, gain or loss for
federal income tax purposes as a result of such Covenant Defeasance and
will be subject to federal income tax on the same amounts, in the same
manner and at the same times as would have been the case if such Covenant
Defeasance had not occurred;
(d) No Default or Event of Default shall have occurred and be
continuing on the date of such deposit (other than a Default or Event of
Default resulting from the borrowing of funds to be applied to such
deposit) or insofar as Events of Default from bankruptcy or insolvency
events are concerned, at any time in the period ending on the 91st day
after the date of deposit;
(e) Such Legal Defeasance or Covenant Defeasance shall not result in
a breach or violation of, or constitute a default under any material
agreement or instrument (other than this Indenture) to which the Company or
any of its Subsidiaries is a party or by which the Company or any of its
Subsidiaries is bound;
(f) The Company shall have delivered to the Trustee an opinion of
counsel to the effect that after the 91st day (or such other applicable
date) following the deposit, the trust funds will not be subject to the
effect of any applicable bankruptcy, insolvency, reorganization or similar
laws affecting creditors' rights generally;
(g) The Company shall have delivered to the Trustee an Officers'
Certificate stating that the deposit was not made by the Company with the
intent of preferring the holders of Senior Notes over the other creditors
of the Company with the intent of defeating, hindering, delaying or
defrauding creditors of the Company or others; and
(h) The Company shall have delivered to the Trustee an Officers'
Certificate and an opinion of counsel, each stating that all conditions
precedent provided for relating to the Legal Defeasance or the Covenant
Defeasance have been complied with.
Section 8.05. Deposited Money and Government Securities to be Held in Trust;
Other Miscellaneous Provisions.
Subject to Section 8.06 hereof, all money and Government Securities
(including the proceeds thereof) deposited with the Trustee (or other qualifying
trustee, collectively for purposes of this Section 8.05, the "Trustee") pursuant
to Section 8.04 hereof in respect of the outstanding Senior Notes shall be held
in trust and applied by the Trustee, in accordance with the provisions of such
Senior Notes and this Indenture, to the payment, either directly or through any
Paying Agent (including the Company acting as Paying Agent) as the Trustee may
determine, to the holders of such Senior Notes of all sums due and to become due
thereon in respect of principal, premium, if any, and interest, but such money
and Government Securities (including any proceeds thereof) need not be
segregated from other funds except to the extent required by law.
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The Company shall pay and indemnify the Trustee against any tax, fee or
other charge imposed on or assessed against the cash or Government Securities
deposited pursuant to Section 8.04 hereof or the principal and interest received
in respect thereof other than any such tax, fee or other charge which by law is
for the account of the holders of the outstanding Senior Notes.
Anything in this Article 8 to the contrary notwithstanding, the Trustee
shall deliver or pay to the Company from time to time upon the request of the
Company any money or Government Securities held by it as provided in Section
8.04 hereof which, in the opinion of a nationally recognized firm of independent
public accountants expressed in a written certification thereof delivered to the
Trustee (which may be the opinion delivered under Section 8.04(a) hereof), are
in excess of the amount thereof which would then be required to be deposited to
effect an equivalent Legal Defeasance or Covenant Defeasance.
Section 8.06. Repayment to Company.
Any money deposited with the Trustee or any Paying Agent, or then held by
the Company, in trust for the payment of the principal of, premium, or interest
on any Senior Note and remaining unclaimed for two years after such principal,
and premium, if any, or interest has become due and payable shall be paid to the
Company on its written request or (if then held by the Company) shall be
discharged from such trust; and the holder of such Senior Note shall thereafter,
as a 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 the New York Times and The Wall Street Journal (national edition),
notice that such money remains unclaimed and that, after a date specified
therein, which shall not be less than 30 days from the date of such notification
or publication, any unclaimed balance of such money then remaining will be
repaid to the Company.
Section 8.07. Reinstatement.
If the Trustee or Paying Agent is unable to apply any United States
Dollars or Government Securities in accordance with Section 8.02 or 8.03 hereof,
as the case may be, by reason of any order or judgment of any court or
governmental authority enjoining, restraining or otherwise prohibiting such
application, then the Company's obligations under this Indenture and the Senior
Notes shall be revived and reinstated as though no deposit had occurred pursuant
to Section 8.02 or 8.03 hereof until such time as the Trustee or Paying Agent is
permitted to apply all such money in accordance with Section 8.02 or 8.03
hereof, as the case may be; provided, however, that, if the Company makes any
payment of principal of, premium, if any, or interest on any Senior Note
following the reinstatement of its obligations, the Company shall be subrogated
to the rights of the holders of such Senior Notes to receive such payment from
the money held by the Trustee or Paying Agent.
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ARTICLE 9
AMENDMENT, SUPPLEMENT AND WAIVER
Section 9.01. Without Consent of Holders of Senior Notes.
Notwithstanding Section 9.02 hereof, the Company and the Trustee may amend
or supplement this Indenture or the Senior Notes without the consent of any
holder of Senior Notes:
(a) to cure any ambiguity, defect or inconsistency;
(b) to provide for uncertificated Senior Notes in addition to or in place
of certificated Senior Notes;
(c) to provide for the assumption of the Company's obligations to holders
of the Senior Notes in the case of a merger or consolidation;
(d) to make any change that would provide any additional rights or
benefits to the holders of the Senior Notes or that does not adversely
affect the legal rights under this Indenture of any such holder; or
(e) to comply with requirements of the Commission in order to effect or
maintain the qualification of this Indenture under the Trust Indenture
Act.
Upon the request of the Company accompanied by a resolution of the Board
of Directors of the Company authorizing the execution of any such amended or
supplemental Indenture, and upon receipt by the Trustee of the documents
described in Section 9.06 hereof, the Trustee shall join with the Company in the
execution of any amended or supplemental Indenture authorized or permitted by
the terms of this Indenture and to make any further appropriate agreements and
stipulations which may be therein contained, but the Trustee shall not be
obligated to enter into such amended or supplemental Indenture which affects its
own rights, duties or immunities under this Indenture or otherwise.
Section 9.02. With Consent of Holders of Senior Notes.
The Company and the Trustee may amend or supplement this Indenture or the
Senior Notes or any amended or supplemental Indenture with the written consent
of the holders of Senior Notes of at least a majority in aggregate principal
amount of the Senior Notes then outstanding (including consents obtained in
connection with a tender offer or exchange offer for the Senior Notes), and any
existing Default and its consequences or compliance with any provision of this
Indenture or the Senior Notes may be waived with the consent of the holders of a
majority in principal amount of the then outstanding Senior Notes (including
consents obtained in connection with a tender offer or exchange offer for the
Senior Notes).
Upon the request of the Company accompanied by a resolution of the Board
of Directors of the Company authorizing the execution of any such amended or
supplemental Indenture, and upon the filing with the Trustee of evidence
satisfactory to the Trustee of the consent of the holders of Senior Notes as
aforesaid, and upon receipt by the Trustee of the documents described in Section
9.06 hereof, the Trustee shall join with the Company in the execution of such
amended or supplemental Indenture unless such
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amended or supplemental Indenture affects the Trustee's own rights, duties or
immunities under this Indenture or otherwise, in which case the Trustee may in
its discretion, but shall not be obligated to, enter into such amended or
supplemental Indenture.
It shall not be necessary for the consent of the holders of Senior Notes
under this Section 9.02 to approve the particular form of any proposed amendment
or waiver, but it shall be sufficient if such consent approves the substance
thereof.
After an amendment, supplement or waiver under this Section 9.02 becomes
effective, the Company shall mail to the holders of Senior Notes affected
thereby a notice briefly describing the amendment, supplement or waiver. Any
failure of the Company to mail such notice, or any defect therein, shall not,
however, in any way impair or affect the validity of any such amended or
supplemental Indenture or waiver. Subject to Sections 6.04 and 6.07 hereof, the
holders of a majority in aggregate principal amount of the Senior Notes then
outstanding may waive compliance in a particular instance by the Company with
any provision of this Indenture or the Senior Notes. However, without the
consent of each holder affected, an amendment or waiver may not (with respect to
any Senior Notes held by a non-consenting holder of Senior Notes):
(i) reduce the principal amount of Senior Notes whose holders must consent
to an amendment, supplement or waiver;
(ii) reduce the principal of or change the fixed maturity of any Note or
alter the provisions with respect to the redemption of the Senior
Notes (other than Sections 3.09 and 4.15 hereof);
(iii) reduce the rate of or change the time for payment of interest on any
Senior Notes;
(iv) waive a Default or Event of Default in the payment of principal of or
premium, if any, or interest on the Senior Notes (except a rescission
of acceleration of the Senior Notes by the holders of at least a
majority in aggregate principal amount of the Senior Notes and a
waiver of the payment default that resulted from such acceleration);
(v) make any Note payable in money other than that stated in the Senior
Notes;
(vi) make any change in the provisions of this Indenture relating to
waivers of past Defaults or the rights of holders of Senior Notes to
receive payments of principal of, premium, if any, or interest on the
Senior Notes;
(vii) waive a redemption payment with respect to any Senior Note (other than
a payment required by Sections 3.09 or 4.15 hereof); or
(viii) make any change in the foregoing amendment and waiver provisions.
Section 9.03. Compliance with Trust Indenture Act.
Every amendment or supplement to this Indenture or the Senior Notes shall
be set forth in a amended or supplemental Indenture that complies with the TIA
as then in effect.
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Section 9.04. Revocation and Effect of Consents.
Until an amendment, supplement or waiver becomes effective, a consent to
it by a holder of a Senior Note is a continuing consent by the holder of a
Senior Note and every subsequent holder of a Senior Note or portion of a Note
that evidences the same debt as the consenting holder's Senior Note, even if
notation of the consent is not made on any Senior Note. However, any such
holder of a Senior Note or subsequent holder of a Note may revoke the consent as
to its Senior Note if the Trustee receives written notice of revocation before
the date the waiver, supplement or amendment becomes effective. An amendment,
supplement or waiver becomes effective in accordance with its terms and
thereafter binds every holder of a Senior Note.
The Company may fix a record date for determining which holders of the
Senior Notes must consent to such amendment, supplement or waiver. If the
Company fixes a record date, the record date shall be fixed at (i) the later of
30 days prior to the first solicitation of such consent or the date of the most
recent list of holders of Senior Notes furnished to the Trustee prior to such
solicitation pursuant to Section 2.05 hereof or (ii) such other date as the
Company shall designate.
Section 9.05. Notation on or Exchange of Senior Notes.
The Trustee may place an appropriate notation about an amendment,
supplement or waiver on any Senior Note thereafter authenticated. The Company
in exchange for all Senior Notes may issue and the Trustee shall authenticate
new Senior Notes that reflect the amendment, supplement or waiver.
Failure to make the appropriate notation or issue a new Senior Note shall
not affect the validity and effect of such amendment, supplement or waiver.
Section 9.06. Trustee to Sign Amendments, etc.
The Trustee shall sign any amended or supplemental Indenture authorized
pursuant to this Article 9 if the amendment or supplement does not adversely
affect the rights, duties, liabilities or immunities of the Trustee. The
Company may not sign an amendment or supplemental Indenture until the Board of
Directors approves it.
Section 9.07. Payment for Consents.
The Company shall not, and shall not permit any of its Subsidiaries to,
directly or indirectly, pay or cause to be paid any consideration, whether by
way of interest, fee or otherwise, to any holder of Senior Notes for or as an
inducement to any consent, waiver or amendment of any of the terms or provisions
of this Indenture or the Senior Notes, unless such consideration is offered to
be paid or agreed to be paid to all holders of the Senior Notes that consent,
waive or agree to amend in the time frame set forth in the solicitation
documents relating to such consent, waiver or agreement.
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ARTICLE 10
MISCELLANEOUS
Section 10.01. Trust Indenture Act Controls.
If any provision of this Indenture limits, qualifies or conflicts with the
duties imposed by TIA (S) 318(c), the imposed duties shall control.
Section 10.02. Notices.
Any notice or communication by the Company or the Trustee to the other is
duly given if in writing and delivered in Person or mailed by first class mail
(registered or certified, return receipt requested), telex, telecopier or
overnight air courier guaranteeing next day delivery, to the other's address:
If to the Company:
Intermedia Telecommunications Inc.
3625 Queen Palm Drive
Tampa, Florida 33619
Telecopier No.: (813) 829-2390
Attention: Chief Financial Officer
If to the Trustee:
SunTrust Bank, Central Florida, National Association
225 East Robinson Street, Suite 250
Orlando, Florida 32801
Telephone No.: (407) 237-5179
Telecopier No.: (407) 237-5299
Attention: Corporate Trust Department
The Company or the Trustee, by notice to the other may designate
additional or different addresses for subsequent notices or communications.
All notices and communications (other than those sent to holders of Senior
Notes) shall be deemed to have been duly given: at the time delivered by hand,
if personally delivered; five Business Days after being deposited in the mail,
postage prepaid, if mailed; when answered back, if telexed; when receipt
acknowledged, if telecopied; and the next Business Day after timely delivery to
the courier, if sent by overnight air courier guaranteeing next day delivery.
Any notice or communication to a holder of a Senior Note shall be mailed
by first class mail to its address shown on the register kept by the Registrar.
Any notice or communication shall also be so mailed to any Person described in
TIA (S) 313(c), to the extent required by the TIA. Failure to mail a notice or
communication to a holder of a Senior Note or any defect in it shall not affect
its sufficiency with respect to other holders of Senior Notes.
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If a notice or communication is mailed in the manner provided above
within the time prescribed, it is duly given, whether or not the addressee
receives it.
If the Company mails a notice or communication to holders of Senior
Notes, it shall mail a copy to the Trustee and each Agent at the same time.
Section 10.03. Communication by Holders of Senior Notes with Other Holders of
Senior Notes.
Holders of the Senior Notes may communicate pursuant to TIA (S) 312(b)
with other holders of Senior Notes with respect to their rights under this
Indenture or the Senior Notes. The Company, the Trustee, the Registrar and
anyone else shall have the protection of TIA (S) 312(c).
Section 10.04. Certificate and Opinion as to Conditions Precedent.
Upon any request or application by the Company to the Trustee to take
any action under this Indenture, the Company shall furnish to the Trustee:
(a) an Officers' Certificate in form and substance reasonably
satisfactory to the Trustee (which shall include the statements set forth
in Section 10.05 hereof) stating that, in the opinion of the signers, all
conditions precedent and covenants, if any, provided for in this Indenture
relating to the proposed action have been satisfied; and
(b) an Opinion of Counsel in form and substance reasonably
satisfactory to the Trustee (which shall include the statements set forth
in Section 10.05 hereof) stating that, in the opinion of such counsel, all
such conditions precedent and covenants have been satisfied.
Section 10.05. Statements Required in Certificate or Opinion.
Each certificate or opinion with respect to compliance with a
condition or covenant provided for in this Indenture (other than a certificate
provided pursuant to TIA (S) 314(a)(4)) shall include:
(a) a statement that the Person making such certificate or opinion
has read such covenant or condition;
(b) a brief statement as to the nature and scope of the examination
or investigation upon which the statements or opinions contained in such
certificate or opinion are based;
(c) a statement that, in the opinion of such Person, he has made such
examination or investigation as is necessary to enable him to express an
informed opinion as to whether or not such covenant or condition has been
satisfied; and
(d) a statement as to whether or not, in the opinion of such Person,
such condition or covenant has been satisfied.
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Section 10.06. Rules by Trustee and Agents.
The Trustee may make reasonable rules for action by or at a meeting of
holders of Senior Notes. The Registrar or Paying Agent may make reasonable
rules and set reasonable requirements for its functions.
Section 10.07. No Personal Liability of Partners, Directors, Officers, Employees
and Stockholders.
No director, officer, employee, incorporator or stockholder of the
Company, as such, shall have any liability for any obligations of the Company
under the Senior Notes or this Indenture or for any claim based on, in respect
of, or by reason of, such obligations or their creation. Each holder of the
Senior Notes by accepting a Senior Note waives and releases all such liability.
The waiver and release are part of the consideration for issuance of the Senior
Notes. Such waiver may not be effective to waive liabilities under the federal
securities laws and it is the view of the Commission that such a waiver is
against public policy.
Section 10.08. Governing Law.
The internal law of the State of New York shall govern and be used to
construe this Indenture and the Senior Notes.
Section 10.09. No Adverse Interpretation of Other Agreements.
This Indenture may not be used to interpret another indenture, loan or
debt agreement of the Company or its Subsidiaries. Any such indenture, loan or
debt agreement may not be used to interpret this Indenture.
Section 10.10. Successors.
All agreements of the Company in this Indenture and the Senior Notes
shall bind its successors. All agreements of the Trustee in this Indenture shall
bind its successor.
Section 10.11. Severability.
In case any provision in this Indenture or in the Senior Notes shall
be invalid, illegal or unenforceable, the validity, legality and enforceability
of the remaining provisions shall not in any way be affected or impaired
thereby.
Section 10.12. Counterpart Originals.
The parties may sign any number of copies of this Indenture. Each
signed copy shall be an original, but all of them together represent the same
agreement.
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Section 10.13. Table of Contents, Headings, etc.
The Table of Contents, Cross-Reference Table and Headings of the
articles and sections of this Indenture have been inserted for convenience of
reference only, are not to be considered a part of this Indenture and shall in
no way modify or restrict any of the terms or provisions hereof.
[Signatures on following page]
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<PAGE>
SIGNATURES
Dated as of October 30, 1997 Intermedia Communications Inc.
By: /s/ Robert M. Manning
-----------------------------------------
Name: Robert M. Manning
Title: Senior Vice President &
Chief Financial Officer
Attest:
- ----------------------------------
Name:
Title:
Dated as of October 30, 1997 SunTrust Bank, Central Florida,
National Association
Trustee
By: /s/ Alice L. Springer
-----------------------------------------
Name: Alice L. Springer
Title: Assistant Vice President
Attest:
/s/ Janice Entsminger
- ----------------------------------
Name: Janice Entsminger
Title: Assistant Vice President
<PAGE>
EXHIBIT A
(Face of Note)
8 7/8% Senior Note due 2007
No. $_______________
CUSIP No.
INTERMEDIA COMMUNICATIONS INC.
promises to pay to Cede & Co.
or its registered assigns,
the principal sum of $____________
on November 1, 2007.
Interest Payment Dates: May 1 and November 1, commencing May 1, 1998.
Record Dates: April 15 and October 15 (whether or not a Business Day).
Dated: October 30, 1997 INTERMEDIA COMMUNICATIONS INC.
By:________________________________________________
Title:
Trustee's Certification of Authentication
Dated: October 30, 1997
This is one of the Senior Notes
referred to in the within-
mentioned Indenture:
SunTrust Bank, Central Florida, National Association,
as Trustee
By: _______________________________________
(Authorized Signatory)
Additional provisions of this Senior Note are set forth on the other
side of this Senior Note.
A-1
<PAGE>
(Back of Note)
8 7/8% Senior Note due 2007
THIS GLOBAL SECURITY IS HELD BY THE DEPOSITARY (AS DEFINED IN THE INDENTURE
GOVERNING THIS NOTE) OR ITS NOMINEE IN CUSTODY FOR THE BENEFIT OF THE BENEFICIAL
OWNERS HEREOF, AND IS NOT TRANSFERABLE TO ANY PERSON UNDER ANY CIRCUMSTANCES
EXCEPT THAT (I) THE TRUSTEE MAY MAKE SUCH NOTATIONS HEREON AS MAY BE REQUIRED
PURSUANT TO SECTION 2.07 OF THE INDENTURE, (II) THIS GLOBAL SECURITY MAY BE
EXCHANGED IN WHOLE BUT NOT IN PART PURSUANT TO SECTION 2.06(a) OF THE INDENTURE,
(III) THIS GLOBAL SECURITY MAY BE DELIVERED TO THE TRUSTEE FOR CANCELLATION
PURSUANT TO SECTION 2.11 OF THE INDENTURE AND (IV) THIS GLOBAL SECURITY MAY BE
TRANSFERRED TO A SUCCESSOR DEPOSITARY WITH THE PRIOR WRITTEN CONSENT OF THE
COMPANY.
THE SECURITY (OR ITS PREDECESSOR) EVIDENCED HEREBY WAS ORIGINALLY ISSUED IN
A TRANSACTION EXEMPT FORM REGISTRATION UNDER SECTION 5 OF THE UNITED STATES
SECURITIES ACT OF 1933, AS AMENDED (THE "SECURITIES ACT"), AND THE SECURITY
EVIDENCED HEREBY MAY NOT BE OFFERED, SOLD OR OTHERWISE TRANSFERRED IN THE
ABSENCE OF SUCH REGISTRATION OR AN APPLICABLE EXEMPTION THEREFROM. EACH
PURCHASER OF THE SECURITY EVIDENCED HEREBY IS HEREBY NOTIFIED THAT THE SELLER
MAY BE RELYING ON THE EXEMPTION FROM THE PROVISIONS OF SECTION 5 OF THE
SECURITIES ACT PROVIDED BY RULE 144A THEREUNDER. THE HOLDER OF THE SECURITY
EVIDENCED HEREBY AGREES FOR THE BENEFIT OF THE COMPANY THAT (A) SUCH SECURITY
MAY BE RESOLD, PLEDGED OR OTHERWISE TRANSFERRED, ONLY (1) TO THE COMPANY, (2)
PURSUANT TO A REGISTRATION STATEMENT WHICH HAS BEEN DECLARED EFFECTIVE UNDER THE
SECURITIES ACT, (3) TO A PERSON IT REASONABLY BELIEVES IS A "QUALIFIED
INSTITUTIONAL BUYER" AS DEFINED IN RULE 144A IN A TRANSACTION MEETING THE
REQUIREMENTS OF RULE 144A, (4) PURSUANT TO OFFERS AND SALES TO NON-U.S. PERSONS
THAT OCCUR OUTSIDE THE UNITED STATES IN A TRANSACTION MEETING THE REQUIREMENTS
OF RULE 904 OF REGULATION S UNDER THE SECURITIES ACT, (5) TO AN INSTITUTIONAL
"ACCREDITED INVESTOR" (AS DEFINED IN RULE 501 (A)(1), (2), (3) OR (7) OF
REGULATION D UNDER THE SECURITIES ACT (AN "IAI") THAT, PRIOR TO SUCH TRANSFER,
FURNISHES TO THE TRUSTEE A SIGNED LETTER CONTAINING CERTAIN REPRESENTATIONS AND
AGREEMENTS RELATING TO THE TRANSFER OF THIS SECURITY (THE FORM OF WHICH LETTER
CAN BE OBTAINED FROM THE TRUSTEE OR TRANSFER AGENT) OR (6) PURSUANT TO ANY OTHER
AVAILABLE EXEMPTION FROM THE REGISTRATION REQUIREMENTS UNDER THE SECURITIES ACT
(AND BASED ON AN OPINION OF COUNSEL IF THE COMPANY SO REQUESTS), SUBJECT IN EACH
OF THE FOREGOING CASES TO APPLICABLE SECURITIES LAWS OF ANY STATE OF THE UNITED
STATES OR ANY OTHER APPLICABLE JURISDICTION AND (B) THE HOLDER WILL, AND EACH
SUBSEQUENT HOLDER IS REQUIRED TO, NOTIFY ANY PURCHASER FROM IT OF THE SECURITY
EVIDENCED HEREBY OF THE RESALE RESTRICTIONS SET FORTH IN (A) ABOVE.
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<PAGE>
Capitalized terms used herein have the meanings assigned to them in the
Indenture (as defined below) unless otherwise indicated.
1. Interest. Intermedia Communications Inc., a Delaware corporation (the
"Company"), promises to pay interest on the principal amount of this Senior Note
at the rate and in the manner specified below. Interest will accrue at a rate
of 8 7/8% and will be payable semi-annually, in arrears, on May 1 and November 1
of each year, commencing on May 1, 1998 or if any such day is not a Business Day
on the next succeeding Business Day (each an "Interest Payment Date") to holders
of record of the Senior Notes at the close of business on the immediately
preceding April 15 and October 15, whether or not a Business Day. Interest on
the Senior Notes will accrue from the most recent date to which interest has
been paid or, if no interest has been paid, from the Issue Date. Interest will
be computed on the basis of a 360-day year comprised of twelve 30-day months. To
the extent lawful, the Company shall pay interest on overdue principal at the
then applicable interest rate on the Senior Notes; it shall pay interest on
overdue installments of interest (without regard to any applicable grace
periods) at the same rate to the extent lawful.
2. Method of Payment. The Company will pay interest on the Senior Notes
(except defaulted interest) to the Persons who are registered holders of Senior
Notes at the close of business on the record date next preceding the Interest
Payment Date, even if such Senior Notes are cancelled after such record date and
on or before such Interest Payment Date. The holder hereof must surrender this
Senior Note to a Paying Agent to collect principal payments. Principal,
premium, Liquidated Damages, if any, and interest on the Senior Notes will be
payable by wire transfer of immediately available funds to the accounts
specified by the holders thereof or if no such account(s) is specified, by
mailing a check to the address set forth for such holder in the register of the
holders of Senior Notes. Unless otherwise designated by the Company, the
Company's office or agency in New York will be the office of the Trustee
maintained for such purpose.
3. Paying Agent and Registrar. Initially, the Trustee will act as Paying
Agent and Registrar. The Company may change any Paying Agent, Registrar or co-
registrar without prior notice to any holder of a Note. The Company may act in
any such capacity.
4. Indenture. The Company issued the Senior Notes under an Indenture,
dated as of October 30, 1997 (the "Indenture"), between the Company and the
Trustee. The terms of the Senior Notes include those stated in the Indenture
and those made part of the Indenture by reference to the Trust Indenture Act of
1939, as amended (15 U.S. Code (S)(S) 77aaa-77bbbb), as in effect on the date of
the Indenture. The Senior Notes are subject to all such terms, and holders of
Senior Notes are referred to the Indenture and such act for a statement of such
terms. The terms of the Indenture shall govern any inconsistencies between the
Indenture and the Senior Notes. The Senior Notes are obligations of the Company
limited to the sum of $250,000,000 in aggregate principal amount of Senior Notes
($285,000,000 in aggregate principal amount if the Initial Purchasers exercise
their over-allotment option as described in the Offering Memorandum).
5. Optional Redemption. The Senior Notes will not be redeemable at the
Company's option prior to November 1, 2002. Thereafter, the Senior Notes will
be subject to redemption at the option of the Company, in whole or in part, upon
not less than 30 nor more than 60 days' notice to the holders thereof, at the
redemption prices (expressed as percentages of principal amount) set forth below
plus accrued and unpaid interest and Liquidated Damages, if any, thereon to the
applicable redemption date, if redeemed during the twelve-month period beginning
on November 1 of the years indicated below:
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<PAGE>
YEAR PERCENTAGE
---- ----------
2002 ......................................... 104.438%
2003 ......................................... 102.958%
2004 ......................................... 101.479%
2005 ......................................... 100.000%
Notwithstanding the provisions of Section 3.07(a) of the Indenture, in the
event of the sale by the Company prior to November 1, 2000 of its Capital Stock
(other than Disqualified Stock) (i) to a Strategic Investor in a single
transaction or series of related transactions for an aggregate purchase price
equal to or exceeding $50.0 million or (ii) in one or more Public Offerings, up
to a maximum of 25% of the aggregate principal amount of the Senior Notes
originally issued shall, at the option of the Company, be redeemable from the
net cash proceeds of such sale or sales to such Strategic Investor (but only to
the extent such proceeds consist of cash or readily marketable cash equivalents
received in respect of the Capital Stock, other than Disqualified Stock, so
sold) at a redemption price equal to 108.875% of the principal amount thereof
plus accrued and unpaid interest and Liquidated Damages, if any, thereon to the
redemption date; provided that at least 75% of the aggregate principal amount of
the Senior Notes originally issued remains outstanding immediately after the
occurrence of such redemption and that such redemption occurs within 90 days of
the date of the closing of such sale.
6. Mandatory Redemption. Except as set forth in Sections 3.09 and 4.15
of the Indenture, the Company will not be required to make mandatory redemption
or sinking fund payments with respect to the Senior Notes.
7. Repurchase at Option of holder. (a) Upon the occurrence of a Change
of Control, the Company shall be required to make an offer to repurchase on the
Change of Control Payment Date all or any part (equal to $1,000 or an integral
multiple thereof) of the outstanding Senior Notes at a purchase price equal to
101% of the aggregate principal amount thereof plus accrued and unpaid interest,
and Liquidated Damages, if any thereon to the Change of Control Payment Date.
Holders of Senior Notes that are subject to an offer to purchase will receive a
Change of Control Offer from the Company prior to any related Change of Control
Payment Date and may elect to have such Senior Notes purchased by completing the
form entitled "Option of Holder to Elect Purchase" appearing below.
(b) The Company shall be required when the cumulative amount of Excess
Proceeds from Asset Sales exceeds $5.0 million to offer to purchase the maximum
principal amount of Senior Notes and Pari Passu Notes that may be purchased out
of the Excess Proceeds, at an offer price in cash in an amount equal to 100% of
the outstanding principal amount of the Senior Notes and 100% of the accreted
value or 100% of the outstanding principal amount, as applicable, of the Pari
Passu Notes, plus accrued and unpaid interest and Liquidated Damages thereon, if
any, to the date fixed for the closing of such accordance with the procedures
set forth in Section 3.09 of the Indenture. If the principal amount and/or
aggregate accreted value, as the case may be, of Senior Notes and Pari Passu
Notes surrendered by holders thereof exceeds the amount of Excess Proceeds, the
Trustee shall select the Senior Notes and Pari Passu Notes to be purchased on a
pro rata basis (with such adjustments as may be deemed appropriate by the
Company so that only Senior Notes and Pari Passu Notes in denominations of
$1,000, or integral multiples thereof shall be purchased). Holders of Senior
Notes that are the subject of an offer to purchase will receive an Excess
Proceeds Offer from the Company prior to any related purchase date and may elect
to have such Senior Notes purchased by completing the form entitled "Option of
Holder to Elect Purchase" appearing below.
A-4
<PAGE>
8. Notice of Redemption. Notice of redemption shall be mailed by first
class mail at least 30 days but not more than 60 days before the redemption date
to each holder of Senior Notes to be redeemed at its registered address. Senior
Notes may be redeemed in part but only in whole multiples of $1,000, unless all
of the Senior Notes held by a holder of Senior Notes are to be redeemed. If any
Senior Note is to be redeemed in part only, the notice of redemption that
relates to such Senior Note shall state the portion of the principal amount to
be redeemed. On and after the redemption date, interest ceases to accrue on
Senior Notes or portions of them called for redemption.
9. Denominations, Transfer, Exchange. The Senior Notes are in registered
form without coupons in denominations of $1,000 and integral multiples of
$1,000. The transfer of Senior Notes may be registered and Senior Notes may be
exchanged as provided in the Indenture. The Registrar and the Trustee may
require a holder of a Senior Note, among other things, to furnish appropriate
endorsements and transfer documents and the Company may require a holder of a
Senior Note to pay any taxes and fees required by law or permitted by the
Indenture. Neither the Company nor the Registrar need exchange or register the
transfer of any Senior Note or portion of a Senior Note selected for redemption.
Also, neither the Company nor the Registrar need exchange or register the
transfer of any Senior Notes for a period of 15 days before a selection of
Senior Notes to be redeemed.
10. Persons Deemed Owners. Prior to due presentment to the Trustee for
registration of the transfer of this Senior Note, the Trustee, any Agent and the
Company shall deem and treat the Person in whose name this Senior Note is
registered as its absolute owner for the purpose of receiving payment of
principal of, premium, Liquidated Damages, if any, and interest on this Senior
Note and for all other purposes whatsoever, whether or not this Senior Note is
overdue, and neither the Trustee, any Agent nor the Company shall be affected by
notice to the contrary. The registered holder of a Senior Note shall be treated
as its owner for all purposes.
11. Amendments, Supplement and Waivers. Subject to certain exceptions,
the Indenture or the Senior Notes may be amended or supplemented with the
consent of the holders of at least a majority in principal amount of the Senior
Notes then outstanding (including consents obtained in connection with a tender
offer or exchange offer for Senior Notes), and any existing default or
compliance with any provision of the Indenture or the Senior Notes may be waived
with the consent of the holders of a majority in principal amount of the then
outstanding Senior Notes (including consents obtained in connection with a
tender offer or exchange offer for Senior Notes). Without the consent of any
holder of a Senior Note, the Indenture or the Senior Notes may be amended or
supplemented to cure any ambiguity, defect or inconsistency; to provide for
uncertificated Senior Notes in addition to or in place of certificated Senior
Notes; to provide for the assumption of the Company's obligations to holders of
the Senior Notes in case of a merger or consolidation; to make any change that
would provide any additional rights or benefits to the holders of the Senior
Notes or that does not adversely affect the legal rights under the Indenture of
any such holder; or to comply with the requirements of the Commission in order
to effect or maintain the qualification of the Indenture under the Trust
Indenture Act. However, without the consent of each holder affected, an
amendment or waiver may not (with respect to any Senior Notes held by a non-
consenting holder of Senior Notes) reduce the principal amount of Senior Notes
whose holders must consent to an amendment, supplement or waiver; reduce the
principal of or change the fixed maturity of any Senior Note or alter the
provisions with respect to the redemption of the Senior Notes (other than a
payment required by Section 3.09 or Section 4.15 of the Indenture); reduce the
rate of or change the time for payment of interest on any Senior Notes; waive a
Default or Event of Default in the payment of principal of or premium, if any,
or interest on the Senior Notes (except a rescission of acceleration of the
Senior Notes by the holders of at least a majority in aggregate principal amount
of the Senior Notes and a waiver of the payment default that resulted from such
acceleration); make any Senior Note payable in money other than that stated in
the Senior Notes; make any change in the
A-5
<PAGE>
provisions of the Indenture relating to waivers of past Defaults or the rights
of holders of Senior Notes to receive payments of principal of, premium, if any,
or interest on the Senior Notes; waive a redemption payment with respect to any
Senior Note (other than a payment required by Section 3.09 or Section 4.15 of
the Indenture) or make any change in the foregoing amendment and waiver
provisions.
12. Defaults and Remedies. Events of Default include: default for 30
days in the payment when due of interest on the Senior Notes; default in payment
when due of principal or premium, if any, on the Senior Notes at maturity, upon
redemption or otherwise; failure by the Company to perform or comply with the
provisions described under Sections 4.07, 4.09, 4.10, 4.15 or 5.01 of the
Indenture; failure by the Company for 30 days after notice from the Trustee or
the holders of at least 25% in principal amount of the Senior Notes then
outstanding to comply with its other agreements in the Indenture or the Senior
Notes; default under any mortgage, indenture or instrument under which there may
be issued or by which there may be secured or evidenced any Indebtedness for
money borrowed by the Company or any of its Subsidiaries (or the payment of
which is guaranteed by the Company or any of its Subsidiaries), whether such
Indebtedness or Guarantee now exists, or is created after the Issue Date, which
default (x) is caused by a Payment Default, and the principal amount of any such
Indebtedness, together with the principal amount of any other such Indebtedness
of the Company or any Significant Subsidiary under which there has been a
Payment Default or the maturity of which has been accelerated as provided in
clause (y), aggregates $5.0 million or more or (y) results in the acceleration
(which acceleration has not been rescinded) of such Indebtedness prior to its
express maturity and the principal amount of any such Indebtedness, together
with the principal amount of any other such Indebtedness under which there has
been a Payment Default or the maturity of which has been so accelerated,
aggregates $5.0 million or more; failure by the Company or any of its
Subsidiaries to pay final judgments (other than any judgment as to which a
reputable insurance company has accepted full liability in writing) aggregating
in excess of $5.0 million which judgments are not paid, discharged or stayed
within 45 days after their entry; and certain events of bankruptcy or insolvency
with respect to the Company or any of its Significant Subsidiaries. If any Event
of Default occurs and is continuing, the Trustee or the holders of at least 25%
in principal amount of the then outstanding Senior Notes may declare all the
Senior Notes to be due and payable immediately. Upon such declaration, the
principal of, premium, if any, and accrued and unpaid interest and Liquidated
Damages, if any, on the Senior Notes shall be due and payable immediately.
Notwithstanding the foregoing, in the case of an Event of Default arising from
certain events of bankruptcy or insolvency with respect to the Company or any of
its Significant Subsidiaries, the foregoing amount shall ipso facto become due
and payable without further action or notice. Holders of the Senior Notes may
not enforce the Indenture or the Senior Notes except as provided in the
Indenture. The holders of a majority in aggregate principal amount of the Senior
Notes then outstanding, by notice to the Trustee, may on behalf of the holders
of all of the Senior Notes, waive any existing Default or Event of Default and
its consequences under the Indenture, except a continuing Default or Event of
Default in the payment of interest or Liquidated Damages or premium on, or the
principal of, the Senior Notes.
13. Trustee Dealings with Company. The Trustee under the Indenture, in
its individual or any other capacity, may make loans to, accept deposits from,
and perform services for the Company or its Affiliates, and may otherwise deal
with the Company or its Affiliates, as if it were not Trustee; however, if the
Trustee acquires any conflicting interest, it must eliminate such conflict
within 90 days, apply to the Commission for permission to continue as Trustee or
resign.
14. No Personal Liabilities of Directors, Officers, Employees and
Stockholders. No director, officer, employee, incorporator or stockholder of
the Company, as such, shall have any liability for any obligations of the
Company under the Senior Notes or the Indenture or for any claim based on, in
respect of, or by reason of, such obligations or their creation. Each holder of
the Senior Notes by accepting a
A-6
<PAGE>
Senior Note waives and releases all such liability. The waiver and release are
part of the consideration for issuance of the Senior Notes.
15. Authentication. This Senior Note shall not be valid until
authenticated by the manual signature of the Trustee or an authenticating agent.
16. Abbreviations. Customary abbreviations may be used in the name of a
holder of a Senior Note or an assignee, such as: TEN COM (= tenants in common),
TEN ENT (= tenants by the entireties), JT TEN (= joint tenants with right of
survivorship and not as tenants in common), CUST (= Custodian), and U/G/M/A (=
Uniform Gifts to Minors Act).
17. Additional Rights of Holders of Transfer Restricted Securities. In
addition to the rights provided to holders of Senior Notes under the Indenture,
holders of Transfer Restricted Securities shall have all the rights set forth in
the Note Registration Rights Agreement.
18. CUSIP Numbers. Pursuant to a recommendation promulgated by the
Committee on Uniform Security Identification Procedures, the Company has caused
CUSIP numbers to be printed on the Senior Notes and has directed the Trustee to
use CUSIP numbers in notices of redemption as a convenience to holders of Senior
Notes. No representation is made as to the accuracy of such numbers either as
printed on the Senior Notes or as contained in any notice of redemption and
reliance may be placed only on the other identification numbers placed thereon.
The Company will furnish to any holder of a Senior Note upon written
request and without charge a copy of the Indenture. Request may be made to:
Intermedia Communications Inc.
3625 Queen Palm Drive
Tampa, Florida 33619
Attention: Chief Financial Officer
A-7
<PAGE>
ASSIGNMENT FORM
To assign this Senior Note, fill in the form below: (I) or (we) assign and
transfer this Senior Note to
________________________________________________________________________________
(Insert assignee's soc. sec. or tax I.D. no.)
________________________________________________________________________________
________________________________________________________________________________
________________________________________________________________________________
________________________________________________________________________________
(Print or type assignee's name, address and zip code)
and irrevocably appoint_________________________________________________________
agent to transfer this Senior Note on the books of the Company. The agent may
substitute another to act for him.
________________________________________________________________________________
Date: ______________
Your Signature:__________________________________
(Sign exactly as your name appears on the face of
this Note)
Signature Guarantee.
<PAGE>
OPTION OF HOLDER TO ELECT PURCHASE
If you want to elect to have all or any part of this Senior Note purchased
by the Company pursuant to Section 3.09 or Section 4.15 of the Indenture check
the appropriate box:
[_] Section 3.09 [_] Section 4.15
If you want to have only part of the Senior Note purchased by the Company
pursuant to Section 3.09 or Section 4.15 of the Indenture, state the amount you
elect to have purchased:
$ _______________
Date:____________
Your Signature:__________________________________
(Sign exactly as your name appears on the face of
this Note)
Signature Guarantee.
<PAGE>
SCHEDULE OF EXCHANGES OF INTERESTS IN THE GLOBAL SECURITY
The following exchanges of a part of this Global Security for an
interest in another Global Security or for a Certificated Security, or exchanges
of a part of another Global Security or Certificated Security for an interest in
this Global Security, have been made:
<TABLE>
<CAPTION>
Principal Amount
Amount of decrease in Amount of increase in of Signature of
Principal Amount Principal Amount this Global Security authorized officer of
of of following such decrease Trustee or Note
Date of Exchange this Global Security this Global Security (or increase) Custodian
- ------------------ --------------------- --------------------- ----------------------- ------------------------
<S> <C> <C> <C> <C>
</TABLE>
<PAGE>
EXHIBIT B
FORM OF CERTIFICATE OF TRANSFER
Intermedia Communications Inc.
3625 Queen Palm Drive
Tampa, Florida 33619
Attention: Chief Financial Officer
SunTrust Bank, Central Florida, National Association
225 East Robinson Street, Suite 250
Orlando, Florida 32801
Attention: Corporate Trust Department
Re: 8 7/8% [_] Senior Notes due 2007
--------------------------------
Reference is hereby made to the Indenture, dated as of October 30, 1997
(the "Indenture"), between Intermedia Communications Inc., as issuer (the
---------
"Company"), and SunTrust Bank, Central Florida, National Association, as
--------
trustee. Capitalized terms used but not defined herein shall have the meanings
given to them in the Indenture.
______________, (the "Transferor") owns and proposes to transfer the
----------
Senior Note[s] or interest in such Senior Note[s] specified in Annex A hereto,
in the principal amount of $___________ in such Senior Note[s] or interests (the
"Transfer"), to __________ (the "Transferee"), as further specified in Annex A
-------- ----------
hereto. In connection with the Transfer, the Transferor hereby certifies that:
[CHECK ALL THAT APPLY]
1. [_] CHECK IF TRANSFEREE WILL TAKE DELIVERY OF BOOK-ENTRY INTERESTS IN THE
---------------------------------------------------------------------
GLOBAL SECURITY OR CERTIFICATED SECURITIES PURSUANT TO RULE 144A. The Transfer
- ----------------------------------------------------------------
is being effected pursuant to and in accordance with Rule 144A under the United
States Securities Act of 1933, as amended (the "Securities Act"), and,
--------------
accordingly, the Transferor hereby further certifies that the Book-Entry
Interests or Certificated Securities are being transferred to a Person that the
Transferor reasonably believes is purchasing the Book-Entry Interests or
Certificated Securities for its own account, or for one or more accounts with
respect to which such Person exercises sole investment discretion, and such
Person and each such account is a "qualified institutional buyer" within the
meaning of Rule 144A in a transaction meeting the requirements of Rule 144A and
such Transfer is in compliance with any applicable blue sky securities laws of
any state of the United States. Upon consummation of the proposed Transfer in
accordance with the terms of the Indenture, the transferred Book-Entry Interest
or Certificated Security will be subject to the restrictions on transfer
enumerated in the Private Placement Legend printed on the Global Security and/or
the Certificated Security and in the Indenture and the Securities Act.
2. [_] CHECK AND COMPLETE IF TRANSFEREE WILL TAKE DELIVERY OF BOOK-ENTRY
-----------------------------------------------------------------
INTERESTS IN THE GLOBAL SECURITY OR CERTIFICATED SECURITIES PURSUANT TO ANY
- ---------------------------------------------------------------------------
PROVISION OF THE SECURITIES ACT OTHER THAN RULE 144A OR REGULATION S. The
- --------------------------------------------------------------------
Transfer is being effected in compliance with the transfer restrictions
applicable to Book-Entry Interests in the Restricted Global Security and
Certificated Securities bearing the Private Placement Legend and pursuant to and
in accordance with the Securities Act and any applicable blue sky securities
laws of any State of the United States, and accordingly the Transferor hereby
further certifies that (check one):
<PAGE>
(a) [_] such Transfer is being effected pursuant to and in accordance with
Rule 144 under the Securities Act;
or
(b) [_] such Transfer is being effected to the Company or a subsidiary
thereof,
or
(c) [_] such Transfer is being effected pursuant to an effective
registration statement under th,e Se,cu,.rities Act; on statement under the
Security Act;
or
(d) [_] such Transfer is being effected to an Institutional Accredited
Investor and pursuant to an exemption from the registration requirements of the
Securities Act other than Rule 144A, Rule 144 or Rule 904, and the Transferor
hereby further certifies that the Transfer complies with the transfer
restrictions applicable to Book-Entry Interests in a Restricted Global Security
or Certificated Securities bearing the Private Placement Legend and the
requirements of the exemption claimed, which certification is supported by (1) a
certificate executed by the Transferee in the form of Exhibit D to the Indenture
and (2) an Opinion of Counsel provided by the Transferor or the Transferee (a
copy of which the Transferor has attached to this certification), to the effect
that (1) such Transfer is in compliance with the Securities Act and (2) such
Transfer complies with any applicable blue sky securities laws of any state of
the United States. Upon consummation of the proposed transfer in accordance
with the terms of the Indenture, the transferred Book-Entry Interest or
Certificated Security will be subject to the restrictions on transfer enumerated
in the Private Placement Legend printed on the Global Security and/or the
Certificated Securities and in the Indenture and the Securities Act.
3. [_] CHECK IF TRANSFEREE WILL TAKE DELIVERY OF A BENEFICIAL INTEREST IN THE
----------------------------------------------------------------------
REGULATION S GLOBAL SECURITY OR A DEFINITIVE NOTE PURSUANT TO REGULATION S. The
- --------------------------------------------------------------------------
Transfer is being effected pursuant to and in accordance with Rule 903 or Rule
904 under the Securities Act and, accordingly, the Transferor hereby further
certifies that (i) the Transfer is not being made to a person in the United
States and (x) at the time the buy order was originated, the Transferee was
outside the United States or such Transferor and any Person acting on its behalf
reasonably believed and believes that the Transferee was outside the United
States or (y) the transaction was executed in, on or through the facilities of a
designated offshore securities market and neither such Transferor nor any Person
acting on its behalf knows that the transaction was prearranged with a buyer in
the United States, (ii) no directed selling efforts have been made in
contravention of the requirements of Rule 903(b) or Rule 904(b) of Regulation S
under the Securities Act, (iii) the transaction is not part of a plan or scheme
to evade the registration requirements of the Securities Act and (iv) if the
proposed transfer is being made prior to the expiration of the Restricted
Period, the transfer is not being made to a U.S. Person or for the account or
benefit of a U.S. Person (other than an Initial Purchaser). Upon consummation
of the proposed transfer in accordance with the terms of the Indenture, the
transferred beneficial interest or Definitive Note will be subject to the
restrictions on Transfer enumerated in the Private Placement Legend printed on
the Regulation S Global Security and/or the Definitive Note and in the Indenture
and the Securities Act.
4. [_] CHECK IF TRANSFEREE WILL TAKE DELIVERY OF BOOK-ENTRY INTERESTS IN THE
---------------------------------------------------------------------
UNRESTRICTED GLOBAL SECURITY OR IN CERTIFICATED SECURITIES THAT DO NOT BEAR THE
- -------------------------------------------------------------------------------
PRIVATE PLACEMENT LEGEND.
- ------------------------
(a) [_] CHECK IF TRANSFER IS PURSUANT TO RULE 144. (i) The Transfer is being
effected pursuant to and in accordance with Rule 144 under the Securities Act
and in compliance with the transfer
B-2
<PAGE>
restrictions contained in the Indenture and any applicable blue sky securities
laws of any state of the United States and (ii) the restrictions on transfer
contained in the Indenture and the Private Placement Legend are not required in
order to maintain compliance with the Securities Act. Upon consummation of the
proposed Transfer in accordance with the terms of the Indenture, the transferred
Book-Entry Interests or Certificated Securities will no longer be subject to the
restrictions on transfer enumerated in the Private Placement Legend printed on
the Restricted Global Security, on Certificated Securities bearing the Private
Placement Legend and in the Indenture.
(b) [_] CHECK IF TRANSFER IS PURSUANT TO OTHER EXEMPTION. (i) The Transfer
is being effected pursuant to and in compliance with an exemption from the
registration requirements of the Securities Act other than Rule 144, Rule 903 or
Rule 904 and in compliance with the transfer restrictions contained in the
Indenture and any applicable blue sky securities laws of any State of the United
States and (ii) the restrictions on transfer contained in the Indenture and the
Private Placement Legend are not required in order to maintain compliance with
the Securities Act. Upon consummation of the proposed Transfer in accordance
with the terms of the Indenture, the transferred Book-Entry Interests or
Certificated Securities will not be subject to the restrictions on transfer
enumerated in the Private Placement Legend printed on the Restricted Global
Security or Certificated Securities bearing the Private Placement Legend and in
the Indenture.
This certificate and the statements contained herein are made for your
benefit and the benefit of the Company.
______________
[NAME OF TRANSFEROR]
By: _____________
Name:
Title:
Dated: _________________, ______
B-3
<PAGE>
ANNEX A TO CERTIFICATE OF TRANSFER
1. The Transferor owns and proposes to transfer the following:
[CHECK ONE OF (a) OR (b)]
(a) [_] Book-Entry Interests in the Global Security:
(i) [_] 144A Global Security (CUSIP _________), or
(ii) [_] IAI Global Security (CUSIP ________); or
(iii) [_] Regulation S Global Security (CUSIP ____); or
(b) [_] Restricted Certificated Securities.
2. After the Transfer the Transferee will hold:
[CHECK ONE]
(a) [_] Book-Entry Interests in the:
(i) [_] 144A Global Security (CUSIP ________), or
(ii) [_] IAI Global Security (CUSIP ________); or
(iii)[_] Unrestricted Global Security (CUSIP ________); or
(iv) [_] Regulation S Global Security (CUSIP ______); or
(b) [_] Restricted Certificated Securities; or
(c) [_] Certificated Securities that do not bear the Private Placement
Legend,
in accordance with the terms of the Indenture.
B-4
<PAGE>
EXHIBIT C
FORM OF CERTIFICATE OF EXCHANGE
Intermedia Communications Inc.
3625 Queen Palm Drive
Tampa, Florida 33619
Attention: Chief Financial Officer
SunTrust Bank, Central Florida, National Association
225 East Robinson Street, Suite 250
Orlando, Florida 32801
Attention: Corporate Trust Department
Re: 8 7/8% Senior Notes due 2007
-----------------------------
(CUSIP _____________________)
Reference is hereby made to the Indenture, dated as of October 30, 1997
(the "Indenture"), between Intermedia Communications Inc., as issuer (the
---------
"Company") and SunTrust Bank, Central Florida, National Association, as trustee.
- --------
Capitalized terms used but not defined herein shall have the meanings given to
them in the Indenture.
______________, (the "Holder") owns and proposes to exchange the
------
Senior Note[s] or interest in such Senior Note[s] specified herein, in the
principal amount of $____________ in such Senior Note[s] or interests (the
"Exchange"). In connection with the Exchange, the Holder hereby certifies that:
---------
1. EXCHANGE OF RESTRICTED CERTIFICATED SECURITIES OR RESTRICTED BOOK-ENTRY
INTERESTS FOR CERTIFICATED SECURITIES THAT DO NOT BEAR THE PRIVATE PLACEMENT
LEGEND OR UNRESTRICTED BOOK-ENTRY INTERESTS
(a) [_] CHECK IF EXCHANGE IS FROM RESTRICTED BOOK-ENTRY INTEREST TO
-----------------------------------------------------------
UNRESTRICTED BOOK-ENTRY INTEREST. In connection with the Exchange of the
- --------------------------------
Holder's Restricted Book-Entry Interest for Unrestricted Book-Entry Interests in
an equal principal amount, the Holder hereby certifies (i) the Unrestricted
Book-Entry Interests are being acquired for the Holder's own account without
transfer, (ii) such Exchange has been effected in compliance with the transfer
restrictions applicable to the Global Security and pursuant to and in accordance
with the United States Securities Act of 1933, as amended (the "Securities
----------
Act"), (iii) the restrictions on transfer contained in the Indenture and the
- ---
Private Placement Legend are not required in order to maintain compliance with
the Securities Act and (iv) the Unrestricted Book-Entry Interests are being
acquired in compliance with any applicable blue sky securities laws of any state
of the United States.
(b) [_] CHECK IF EXCHANGE IS FROM RESTRICTED BOOK-ENTRY INTEREST TO
-----------------------------------------------------------
CERTIFICATED SECURITIES THAT DO NOT BEAR THE PRIVATE PLACEMENT LEGEND. In
- ---------------------------------------------------------------------
connection with the Exchange of the Holder's Restricted Book-Entry Interests for
Certificated Securities that do not bear the Private Placement Legend, the
Holder hereby certifies (i) the Certificated Securities are being acquired for
the Holder's own account without transfer, (ii) such Exchange has been effected
in compliance with the transfer restrictions applicable to the Restricted Global
Security and pursuant to and in accordance with the Securities Act, (iii) the
restrictions on transfer contained in the Indenture and the Private Placement
Legend are not
C-1
<PAGE>
required in order to maintain compliance with the Securities Act and (iv) the
Certificated Securities are being acquired in compliance with any applicable
blue sky securities laws of any state of the United States.
(c) [_] CHECK IF EXCHANGE IS FROM RESTRICTED CERTIFICATED SECURITIES TO
---------------------------------------------------------------
UNRESTRICTED BOOK-ENTRY INTERESTS. In connection with the Holder's Exchange of
- ---------------------------------
Restricted Certificated Securities for Unrestricted Book-Entry Interests, (i)
the Unrestricted Book-Entry Interests are being acquired for the Holder's own
account without transfer, (ii) such Exchange has been effected in compliance
with the transfer restrictions applicable to Restricted Certificated Securities
and pursuant to and in accordance with the Securities Act, (iii) the
restrictions on transfer contained in the Indenture and the Private Placement
Legend are not required in order to maintain compliance with the Securities Act
and (iv) the Unrestricted Book-Entry Interests are being acquired in compliance
with any applicable blue sky securities laws of any state of the United States.
(d) [_] CHECK IF EXCHANGE IS FROM RESTRICTED CERTIFICATED SECURITIES TO
---------------------------------------------------------------
CERTIFICATED SECURITIES THAT DO NOT BEAR THE PRIVATE PLACEMENT LEGEND. In
- ---------------------------------------------------------------------
connection with the Holder's Exchange of a Restricted Certificated Security for
Certificated Securities that do not bear the Private Placement Legend, the
Holder hereby certifies (i) the Certificated Securities that do not bear the
Private Placement Legend are being acquired for the Holder's own account without
transfer, (ii) such Exchange has been effected in compliance with the transfer
restrictions applicable to Restricted Certificated Securities and pursuant to
and in accordance with the Securities Act , (iii) the restrictions on transfer
contained in the Indenture and the Private Placement Legend are not required in
order to maintain compliance with the Securities Act and (iv) the Senior Notes
are being acquired in compliance with any applicable blue sky securities laws of
any state of the United States.
2. EXCHANGE OF RESTRICTED CERTIFICATED SECURITIES OR RESTRICTED BOOK-ENTRY
INTERESTS FOR RESTRICTED CERTIFICATED SECURITIES OR RESTRICTED BOOK-ENTRY
INTERESTS
(a) [_] CHECK IF EXCHANGE IS FROM RESTRICTED BOOK-ENTRY INTERESTS TO
------------------------------------------------------------
RESTRICTED CERTIFICATED SECURITY. In connection with the Exchange of the
- --------------------------------
Holder's Restricted Book-Entry Interest for Restricted Certificated Securities
with an equal principal amount, (i) the Restricted Certificated Securities are
being acquired for the Holder's own account without transfer and (ii) such
Exchange has been effected in compliance with the transfer restrictions
applicable to the Restricted Global Security and pursuant to and in accordance
with the Securities Act, and in compliance with any applicable blue sky
securities laws of any state of the United States. Upon consummation of the
proposed Exchange in accordance with the terms of the Indenture, the Restricted
Certificated Securities issued will be subject to the restrictions on transfer
enumerated in the Private Placement Legend printed on the Restricted
Certificated Securities and in the Indenture and the Securities Act.
(b) [_] CHECK IF EXCHANGE IS FROM RESTRICTED CERTIFICATED SECURITIES TO
---------------------------------------------------------------
RESTRICTED BOOK-ENTRY INTERESTS. In connection with the Exchange of the
- -------------------------------
Holder's Restricted Certificated Security for Restricted Book-Entry Interests in
the [CHECK ONE] [_] 144A Global Security, [_] IAI Global Security [_] Regulation
S Global Security with an equal principal amount, (i) the Certificated
Securities are being acquired for the Holder's own account without transfer and
(ii) such Exchange has been effected in compliance with the transfer
restrictions applicable to the Restricted Certificated Security and pursuant to
and in accordance with the Securities Act, and in compliance with any applicable
blue sky securities laws of any state of the United States. Upon consummation of
the proposed Exchange in accordance with the terms of the Indenture, the Book-
Entry Interests issued will be subject to the restrictions on transfer
enumerated in the Private Placement Legend printed on the relevant Restricted
Global Security and in the Indenture and the Securities Act .
C-2
<PAGE>
This certificate and the statements contained herein are made for your
benefit and the benefit of the Company.
__________________________
[Insert Name of Holder]
By:_______________________
Name:
Title:
Dated: _________________, _____
C-3
<PAGE>
EXHIBIT D
FORM OF CERTIFICATE FROM
ACQUIRING INSTITUTIONAL ACCREDITED INVESTOR
Intermedia Communications Inc.
3625 Queen Palm Drive
Tampa, Florida 33619
Attention: Chief Financial Officer
SunTrust Bank, Central Florida, National Association
225 East Robinson Street, Suite 250
Orlando, Florida 32801
Attention: Corporate Trust Department
Re: 8 7/8% Senior Notes due 2007
----------------------------
Reference is hereby made to the Indenture, dated as of October 30,
1997 (the "Indenture"), between Intermedia Communications Inc., as issuer (the
---------
"Company") and SunTrust Bank, Central Florida, National Association, as
- --------
trustee. Capitalized terms used but not defined herein shall have the meanings
given to them in Indenture.
In connection with our propose purchase of $____________ aggregate
principle amount of:
(a) [_] Book-Entry Interests, or
(b) [_] Certificated Securities,
we confirm that:
1. We understand that any subsequent transfer of the Senior Notes or
any interest therein is subject to certain restrictions and conditions set forth
in the Indenture and the undersigned agrees to be bound by, and not to resell,
pledge or otherwise transfer the Senior Notes or any interest therein except in
compliance with, such restrictions and conditions and the United States
Securities Act of 1933, as amended (the "Securities Act").
--------------
2. We understand that the offer and sale of the Senior Notes have
not been registered under the Securities Act, and that the Senior Notes and any
interest therein may not be offered or sold except as permitted in the following
sentence. We agree, on our own behalf and on behalf of any accounts for which
we are acting as hereinafter stated, that if we should sell the Senior Notes or
any interest therein, we will do so only (A) to the Company or any subsidiary
thereof, (B) in accordance with Rule 144A under the Securities Act to a
"qualified institutional buyer" (as defined therein), (C) to an institutional
"accredited investor" (as defined below) that, prior to such transfer, furnishes
(or has furnished on its behalf by a U.S. broker-dealer) to you and to the
Company a signed letter substantially in the form of this letter and an Opinion
of Counsel in form reasonably acceptable to the Company to the effect that such
transfer is in compliance with the Securities Act, (D) pursuant to the
provisions of Rule 144 under the Securities Act, (E) outside the United States
in accordance with Rule 904 of Regulation S under the Securities Act or (F)
pursuant to an effective registration statement under the Securities Act,
D-1
<PAGE>
and we further agree to provide to any person purchasing the Certificated
Securities or Book-Entry Interests from us in a transaction meeting the
requirements of clauses (A) through (E) of this paragraph a notice advising such
purchaser that resales thereof are restricted as stated herein.
3. We understand that, on any proposed resale of the Senior Notes or
Book-Entry Interests, we will be required to furnish to you and the Company such
certifications, legal opinions and other information as you and the Company may
reasonably require to confirm that the proposed sale complies with the foregoing
restrictions. We further understand that the Senior Notes purchased by us will
bear a legend to the foregoing effect. We further understand that any
subsequent transfer by us of the Senior Notes or Book-Entry Interests therein
acquired by us must be effected through one of the Placement Agents.
4. We are an institutional "accredited investor" (as defined in Rule
501(a)(1), (2), (3) or (7) of Regulation D under the Securities Act) and have
such knowledge and experience in financial and business matters as to be capable
of evaluating the merits and risks of our investment in the Senior Notes, and we
and any accounts for which we are acting are each able to bear the economic risk
of our or its investment.
5. We are acquiring the Senior Notes or Book-Entry Interests
purchased by us for our own account or for one or more accounts (each of which
is an institutional "accredited investor") as to each of which we exercise sole
investment discretion.
You and the Company are entitled to rely upon this letter and are
irrevocably authorized to produce this letter or a copy hereof to any interested
party in any administrative or legal proceedings or official inquiry with
respect to the matters covered hereby.
____________________________________
[Insert Name of Accredited Investor]
By:________________________________
Name:
Title:
Dated: _________________, ______
D-2
<PAGE>
EXHIBIT 4.2
State of Delaware
OFFICE OF THE SECRETARY OF STATE PAGE 1
--------------------------------
I, EDWARD J. FREEL, SECRETARY OF STATE OF THE STATE OF DELAWARE, DO HEREBY
CERTIFY THE ATTACHED IS A TRUE AND CORRECT COPY OF THE CERTIFICATE OF
DESIGNATION OF INTERMEDIA COMMUNICATIONS INC., FILED IN THIS OFFICE ON THE
TWENTY-NINTH DAY OF OCTOBER, A.D. 1997, AT 9 O'CLOCK A.M.
A CERTIFIED COPY OF THIS CERTIFICATE HAS BEEN FORWARDED TO THE NEW CASTLE
COUNTY RECORDER OF DEEDS FOR RECORDING.
[SEAL APPEARS HERE]
/s/ Edward Freel
-----------------------------------
[SEAL APPEARS HERE] Edward J. Freel, Secretary of State
AUTHENTICATION: 8729116
DATE: 10-29-97
<PAGE>
CERTIFICATE OF DESIGNATION OF VOTING POWER,
DESIGNATION PREFERENCES
AND RELATIVE, PARTICIPATING, OPTIONAL AND
OTHER SPECIAL RIGHTS
AND QUALIFICATIONS, LIMITATIONS
AND RESTRICTIONS
OF
7% SERIES E JUNIOR CONVERTIBLE PREFERRED STOCK
OF
INTERMEDIA COMMUNICATIONS INC.
_________________________
Pursuant to Section 151 of the
General Corporation Law of the State of Delaware
_________________________
Intermedia Communications Inc., a Delaware corporation (the
"Company"), certifies that pursuant to the authority contained in ARTICLE FOURTH
of its Restated Certificate of Incorporation, as amended (the "Certificate of
Incorporation"), and in accordance with the provisions of Section 151 of the
General Corporation Law of the State of Delaware (the "DGCL"), the Board of
Directors of the Company at a special meeting duly called and held on October
21, 1997, duly approved and adopted the following resolution which resolution
remains in full force and effect on the date hereof:
RESOLVED, that pursuant to the authority vested in the Board of
Directors by the Certificate of Incorporation, the Board of Directors does
hereby designate, create, authorize and provide for the issue of a series of
preferred stock having a par value of $1.00 per share, with a liquidation
preference of $2,500 per share (the "Liquidation Preference") which shall be
designated as Series E Junior Convertible Preferred Stock (the "Preferred
Stock") consisting of 87,500 shares (which shares of preferred stock were
authorized to be issued by the Company by resolution of the Board of Directors
of the Company dated as of March 17, 1997, and by resolution of the stockholders
of the Company dated as of May 22, 1997), having the following voting powers,
preferences and relative, participating, optional and other special rights, and
qualifications, limitations and restrictions thereof as follows:
1. Ranking. The Preferred Stock shall rank, with respect to dividend
-------
distributions and distributions upon the liquidation, winding-up and dissolution
of the Company, (i) senior to all classes of common stock of the Company and to
each other class of capital stock or series of preferred stock established after
October 24, 1997 by the Board of Directors the terms of which do not expressly
provide that it ranks senior to or on a parity with the Preferred Stock as to
dividend distributions and distributions upon the liquidation, winding-up and
dissolution of the Company (collectively referred to with the common stock of
the Company as "Junior Securities"); (ii) on a parity with Series D Preferred
Stock, any additional shares of Series D Preferred Stock or Preferred Stock
issued by the Company in the future and any other class of capital stock or
series of preferred stock issued by the Company established after October 24,
1997 by the Board of Directors, the terms of which expressly provide that such
class or
<PAGE>
series will rank on a parity with the Preferred Stock as to dividend
distributions and distributions upon the liquidation, winding-up and dissolution
of the Company (collectively referred to as "Parity Securities"); and (iii)
junior to the Series B Preferred Stock and to each class of capital stock or
series of preferred stock issued by the Company established after October 24,
1997 by the Board of Directors the terms of which expressly provide that such
class or series will rank senior to the Preferred Stock as to dividend
distributions and distributions upon liquidation, winding-up and dissolution of
the Company (collectively referred to as "Senior Securities").
No dividend whatsoever shall be declared or paid upon, or any sum set apart
for the payment of dividends upon, any outstanding share of the Preferred Stock
with respect to any dividend period unless all dividends for all preceding
dividend periods have been declared and paid, or declared and a sufficient sum
set apart for the payment of such dividend, upon all outstanding shares of
Senior Securities.
2. Dividends.
---------
(i) The holders of shares of the Preferred Stock shall be entitled to
receive, when, as and if dividends are declared by the Board of Directors out of
funds of the Company legally available therefor, cumulative dividends from the
Preferred Stock Issue Date accruing at the rate per annum of 7% of the
Liquidation Preference per share, payable quarterly in arrears on each January
15, April 15, July 15 and October 15, commencing on January 15, 1998 (each a
"Dividend Payment Date"). If any such date is not a Business Day, such payment
shall be made on the next succeeding Business Day, to the holders of record as
of the next preceding January 1, April 1, July 1 and October 1 (each, a "Record
Date"). Dividends will be payable, at the option of the Company, (i) in cash,
(ii) by delivery of shares of Common Stock to holders (based upon 95% of the
Average Stock Price (as defined below)), or (iii) through any combination of the
foregoing. If the dividends are paid in shares of Common Stock, the number of
shares of Common Stock to be issued on each Dividend Payment Date will be
determined by dividing the total dividend to be paid on each share of Preferred
Stock by 95% of the average of the high and low sales prices of the Common Stock
as reported by the Nasdaq National Market or any national securities exchange
upon which the Common Stock is then listed, for each of the ten consecutive
trading days immediately preceding the fifth Business Day preceding the Record
Date (the "Average Stock Price"). The Transfer Agent is hereby authorized and
directed to aggregate any fractional shares of Common Stock that are issued as
dividends, sell them at the best available price and distribute the proceeds to
the holders in proportion to their respective interests therein. The Company
shall pay the expenses of the Transfer Agent with respect to such sale,
including brokerage commissions. In the event the sale by the Transfer Agent of
such aggregated fractional interests would be restricted, the Company and the
Transfer Agent will agree upon other appropriate arrangements for the cash
realization of the fractional interests. Dividends payable on the Preferred
Stock will be computed on the basis of a 360-day year consisting of twelve 30-
day months and will be deemed to accrue on a daily basis.
(ii) Dividends on the Preferred Stock shall accrue whether or not the
Company has earnings or profits, whether or not there are funds legally
available for the payment of such dividends and whether or not dividends are
declared. Dividends will accumulate to the extent they are not paid on the
Dividend Payment Date for the period to which they relate. The Company shall
take all actions required or permitted under the DGCL to permit the payment of
dividends on the Preferred Stock, including, without limitation, through the
revaluation of its assets in accordance with the DGCL, to make or keep funds
legally available for the payment of dividends.
(iii) No dividend whatsoever shall be declared or paid upon, or any sum
set apart for the payment of dividends upon, any outstanding share of the
Preferred Stock with respect to any dividend
2
<PAGE>
period unless all dividends for all preceding dividend periods have been
declared and paid, or declared and a sufficient sum set apart for the payment of
such dividend, upon all outstanding shares of Preferred Stock. Unless full
cumulative dividends on all outstanding shares of Preferred Stock for all past
dividend periods shall have been declared and paid, or declared and a sufficient
sum for the payment thereof set apart, then: (a) no dividend (other than a
dividend payable solely in shares of any Junior Securities) shall be declared or
paid upon, or any sum set apart for the payment of dividends upon, any shares of
Junior Securities; (b) no other distribution shall be declared or made upon, or
any sum set apart for the payment of any distribution upon, any shares of Junior
Securities, other than a distribution consisting solely of Junior Securities;
(c) no shares of Junior Securities shall be purchased, redeemed or otherwise
acquired or retired for value (excluding an exchange for shares of other Junior
Securities) by the Company or any of its Subsidiaries; and (d) no monies shall
be paid into or set apart or made available for a sinking or other like fund for
the purchase, redemption or other acquisition or retirement for value of any
shares of Junior Securities by the Company or any of its Subsidiaries. Holders
of the Preferred Stock will not be entitled to any dividends, whether payable in
cash, property or stock, in excess of the full cumulative dividends as herein
described.
(iv) When dividends are declared by the Board of Directors, the Company
shall issue a press release at least 15 Business Days prior to the Record Date
setting forth (a) the method of payment for such dividends (cash, Common Stock
or a combination thereof) and (b) the pricing period used to determine the
Average Stock Price.
3. Conversion.
----------
(i) A holder of shares of Preferred Stock may convert such shares into
Common Stock at any time after December 29, 1997, unless previously redeemed.
For the purposes of conversion, each share of Preferred Stock shall be valued at
the Liquidation Preference, which shall be divided by the Conversion Price in
effect on the Conversion Date to determine the number of shares issuable upon
conversion, except that the right to convert shares of Preferred Stock called
for redemption shall terminate at the close of business on the Business Day
preceding the Redemption Date and shall be lost if not exercised prior to that
time, unless the Company shall default in payment of the Applicable Redemption
Price. Immediately following such conversion, the rights of the holders of
converted Preferred Stock shall cease and the persons entitled to receive the
Common Stock upon the conversion of Preferred Stock shall be treated for all
purposes as having become the owners of such Common Stock.
(ii) To convert Preferred Stock, a holder must (A) surrender the
certificate or certificates evidencing the shares of Preferred Stock to be
converted, duly endorsed in a form satisfactory to the Company, at the office of
the Company or transfer agent for the Preferred Stock, (B) notify the Company at
such office that he elects to convert Preferred Stock and the number of shares
he wishes to convert, (C) state in writing the name or names in which he wishes
the certificate or certificates for shares of Common Stock to be issued, and (D)
pay any transfer or similar tax if required. In the event that a holder fails
to notify the Company of the number of shares of Preferred Stock which he wishes
to convert, he shall be deemed to have elected to convert all shares represented
by the certificate or certificates surrendered for conversion. The date on
which the holder satisfies all those requirements is the "Conversion Date." As
soon as practical, the Company shall deliver a certificate for the number of
full shares of Common Stock issuable upon the conversion, and a new certificate
representing the unconverted portion, if any, of the shares of Preferred Stock
represented by the certificate or certificates surrendered for conversion. The
person in whose name the Common Stock certificate is registered shall be treated
as the stockholder of record on and after the Conversion Date. No payment or
adjustment will be made for accrued and unpaid dividends on converted shares of
Preferred Stock or for dividends on
3
<PAGE>
any Common Stock issued upon such conversion. A share of Preferred Stock
surrendered for conversion during the period from the close of business on any
record date for the payment of dividends to the opening of business of the
corresponding Dividend Payment Date must be accompanied by a payment in cash,
Common Stock or a combination thereof, in an amount equal to the dividend
payable on such Dividend Payment Date, unless such share of Preferred Stock has
been called for redemption on a redemption date occurring during the period from
the close of business on any record date for the payment of dividends to the
close of business on the Business Day immediately following the corresponding
Dividend Payment Date. The dividend payment with respect to a share of Preferred
Stock called for redemption on a date during the period from the close of
business on any record date for the payment of dividends to the close of
business on the Business Day immediately following the corresponding Dividend
Payment Date will be payable on such Dividend Payment Date to the record holder
of such share on such record date, notwithstanding the conversion of such share
after such record date and prior to such Dividend Payment Date, and the holder
converting such share of Preferred Stock need not include a payment of such
dividend amount upon surrender of such share of Preferred Stock for conversion.
If a holder of Preferred Stock converts more than one share at a time, the
number of full shares of Common Stock issuable upon conversion shall be based on
the total liquidation preference of all shares of Preferred Stock converted. If
the last day on which Preferred Stock may be converted is not a Business Day,
Preferred Stock may be surrendered for conversion on the next succeeding
Business Day.
(iii) The Company shall not issue any fractional shares of Common Stock
upon conversion of Preferred Stock. Instead the Company shall round the results
of a conversion up to the nearest full share of Common Stock.
(iv) If a holder converts shares of Preferred Stock, the Company shall
pay any documentary, stamp or similar issue or transfer tax due on the issue of
shares of Common Stock upon the conversion. However, the holder shall pay any
such tax that is due because the shares are issued in a name other than the
holder's name.
(v) The Company has reserved and shall continue to reserve out of its
authorized but unissued Common Stock or its Common Stock held in treasury enough
shares of Common Stock to permit the conversion of the Preferred Stock in full.
All shares of Common Stock that may be issued upon conversion of Preferred Stock
shall be fully paid and nonassessable. The Company shall endeavor to comply
with all securities laws regulating the offer and delivery of shares of Common
Stock upon conversion of Preferred Stock and shall endeavor to list such shares
on each national securities exchange or automated quotation system on which the
Common Stock is listed.
(vi) In case the Company shall pay or make a dividend or other
distribution on any class of capital stock of the Company in Common Stock other
than the payment of dividends in Common Stock on the Preferred Stock or any
other regularly scheduled dividend on any other preferred stock which does not
trigger any anti-dilution provisions in any other security, the Conversion Price
in effect at the opening of business on the day following the date fixed for the
determination of stockholders entitled to receive such dividend or other
distribution shall be reduced by multiplying such Conversion Price by a fraction
the numerator of which shall be the number of shares of Common Stock outstanding
at the close of business on the date fixed for such determination and the
denominator of which shall be the sum of such number of shares and the total
number shares constituting such dividend or other distribution, such reduction
to become effective immediately after the opening of business on the day
following the date fixed for such determination of the holders entitled to such
dividends and distributions. For the purposes of this paragraph 3(vi), the
number of shares of Common Stock at any time outstanding shall not include
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<PAGE>
shares held in the treasury of the Company. The Company will not pay any
dividend or make any distribution on shares of Common Stock held in the treasury
of the Company.
(vii) In case the Company shall issue rights, options or warrants to all
holders of its Common Stock entitling them to subscribe for, purchase or acquire
shares of Common Stock at a price per share less than the current market price
per share (determined as provided in paragraph 3(xi) below) of the Common Stock
on the date fixed for the determination of stockholders entitled to receive such
rights, options or warrants, the Conversion Price in effect at the opening of
business on the day following the date fixed for such determination shall be
reduced by multiplying such Conversion Price by a fraction the numerator of
which shall be the number of shares of Common Stock outstanding at the close of
business on the date fixed for such determination plus the number of shares of
Common Stock which the aggregate of the offering price of the total number of
shares of Common Stock so offered for subscription, purchase or acquisition
would purchase at such current market price and the denominator of which shall
be the number of shares of Common Stock outstanding at the close of business on
the date fixed for such determination plus the number of shares of Common Stock
so offered for subscription, purchase or acquisition, such reduction to become
effective immediately after the opening of business on the day following the
date fixed for such determination of the holders entitled to such rights,
options or warrants. However, upon the expiration of any right, option or
warrant to purchase Common Stock, the issuance of which resulted in an
adjustment in the Conversion Price pursuant to this paragraph 3(vii), if any
such right, option or warrant shall expire and shall not have been exercised,
the Conversion Price shall be recomputed immediately upon such expiration and
effective immediately upon such expiration shall be increased to the price it
would have been (but reflecting any other adjustments to the Conversion Price
made pursuant to the provisions of this paragraph 3 after the issuance of such
rights, options or warrants) had the adjustment of the Conversion Price made
upon the issuance of such rights, options or warrants been made on the basis of
offering for subscription or purchase only that number of shares of Common Stock
actually purchased upon the exercise of such rights, options or warrants. No
further adjustment shall be made upon exercise of any right, option or warrant
if any adjustment shall have been made upon the issuance of such security. For
the purposes of this paragraph 3(vii), the number of shares of Common Stock at
any time outstanding shall not include shares held in the treasury of the
Company. The Company will not issue any rights, options or warrants in respect
of shares of Common Stock held in the treasury of the Company.
(viii) In case the outstanding shares of Common Stock shall be subdivided
into a greater number of shares of Common Stock, the Conversion Price in effect
at the opening of business on the day following the day upon which such
subdivision becomes effective shall be reduced, and, conversely, in case the
outstanding shares of Common Stock shall each be combined into a smaller number
of shares of Common Stock, the Conversion Price in effect at the opening of
business on the day following the day upon which such combination becomes
effective shall be increased to equal the product of the Conversion Price in
effect on such date and a fraction the numerator of which shall be the number of
shares of Common Stock outstanding immediately prior to such subdivision or
combination, as the case may be, and the denominator of which shall be the
number of shares of Common Stock outstanding immediately after such subdivision
or combination, as the case may be. Such reduction or increase, as the case may
be, shall become effective immediately after the opening of business on the day
following the day upon which such subdivision or combination becomes effective.
(ix) In case the Company shall, by dividend or otherwise, distribute to
all holders of its Common Stock (A) evidences of its indebtedness or (B) shares
of any class of capital stock, cash or other assets (including securities, but
excluding (x) any rights, options or warrants referred to in paragraph 3(vii)
above, (y) any dividend or distribution referred to in paragraph 3(vi) or
3(viii) above, and (z) cash
5
<PAGE>
dividends paid from the Company's retained earnings), unless the sum of (1) all
such cash dividends and distributions made within the preceding 12 months in
respect of which no adjustment has been made and (2) any cash and the fair
market value of other consideration paid in respect of any repurchases of Common
Stock by the Company or any of its subsidiaries within the preceding 12 months
in respect of which no adjustment has been made, exceeds 20% of the Company's
market capitalization (being the product of the then current market price per
share (determined as provided in paragraph 3(xi) below) of the Common Stock
times the aggregate number of shares of Common Stock then outstanding on the
record date for such distribution), then in each case, the Conversion Price in
effect at the opening of business on the day following the date fixed for the
determination of holders of Common Stock entitled to receive such distribution
shall be adjusted by multiplying such Conversion Price by a fraction of which
the numerator shall be the current market price per share (determined as
provided in paragraph 3(xi) below) of the Common Stock on such date of
determination (or, if earlier, on the date on which the Common Stock goes "ex-
dividend" in respect of such distribution) less the then fair market value as
determined by the Board of Directors (whose determination shall be conclusive
and shall be described in a statement filed with the Transfer Agent) of the
portion of the capital stock, cash or other assets or evidences of indebtedness
so distributed (and for which an adjustment to the Conversion Price has not
previously been made pursuant to the terms of this paragraph 3) applicable to
one share of Common Stock, and the denominator shall be such current market
price per share of the Common Stock, such adjustment to become effective
immediately after the opening of business on the day following such date of
determination of the holders entitled to such distribution. The following
transactions shall be excluded from the foregoing clauses (1) and (2): (I)
repurchases of Common Stock issued under the Company's stock incentive programs;
and (II) dividends or distributions payable-in-kind in additional shares of, or
warrants, rights, calls or options exercisable for or convertible into
additional shares of Junior Securities.
(x) The reclassification or change of Common Stock into securities,
including securities other than Common Stock, (other than any reclassification
upon a consolidation or merger to which paragraph 3(xviii) below shall apply)
shall be deemed to involve (A) a distribution of such securities other than
Common Stock to all holders of Common Stock (and the effective date of such
reclassification shall be deemed to be "the date fixed for the determination of
holders of Common Stock entitled to receive such distribution" within the
meaning of paragraph 3(ix) above), and (B) a subdivision or combination, as the
case may be, of the number of shares of Common Stock outstanding immediately
prior to such reclassification into the number of shares of Common Stock
outstanding immediately thereafter (and the effective date of such
reclassification shall be deemed to be "the day upon which such subdivision
becomes effective" or "the day upon which such combination becomes effective,"
as the case may be, and "the day upon which such subdivision or combination
becomes effective" within the meaning of paragraph 3(viii) above).
(xi) For the purpose of any computation under paragraph 3(vii) or 3(ix)
above, the current market price per share of Common Stock on any day shall be
deemed to be the average of the Closing Prices of the Common Stock for the 20
consecutive Trading Days selected by the Board of Directors commencing no more
than 30 Trading Days before and ending no later than the day before the day in
question; provided that, in the case of paragraph 3(ix), if the period between
the date of the public announcement of the dividend or distribution and the date
for the determination of holders of Common Stock entitled to receive such
dividend or distribution (or, if earlier, the date on which the Common Stock
goes "ex-dividend" in respect of such dividend or distribution) shall be less
than 20 Trading Days, the period shall be such lesser number of Trading Days
but, in any event, not less than five Trading Days.
(xii) No adjustment in the Conversion Price need be made until all
cumulative adjustments amount to 1% or more of the Conversion Price as last
adjusted. Any adjustments that are not made shall
6
<PAGE>
be carried forward and taken into account in any subsequent adjustment. All
calculations under this paragraph 3 shall be made to the nearest 1/10,000th of a
cent or to the nearest 1/10,000th of a share, as the case may be.
(xiii) For purposes of this paragraph 3, "Common Stock" includes any
stock of any class of the Company which has no preference in respect of
dividends or of amounts payable in the event of any voluntary or involuntary
liquidation, dissolution or winding-up of the Company and which is not subject
to redemption by the Company. However, subject to the provisions of paragraph
3(xviii) below, shares issuable on conversion of shares of Preferred Stock shall
include only shares of the class designated as Common Stock of the Company on
the Preferred Stock Issue Date or shares of any class or classes resulting from
any reclassification thereof and which have no preferences in respect of
dividends or amounts payable in the event of any voluntary or involuntary
liquidation, dissolution or winding-up of the Company and which are not subject
to redemption by the Company; provided that, if at any time there shall be more
than one such resulting class, the shares of each such class then so issuable
shall be substantially in the proportion which the total number of shares of
such class resulting from all such reclassifications bears to the total number
of shares of all such classes resulting from all such reclassifications.
(xiv) No adjustment in the Conversion Price shall reduce the Conversion
Price below the then par value of the Common Stock. No adjustment in the
Conversion Price need be made under paragraphs 3(vi), 3(vii) and 3(ix) above if
the Company issues or distributes to each holder of Preferred Stock the shares
of Common Stock, evidences of indebtedness, assets, rights, options or warrants
referred to in those paragraphs which each holder would have been entitled to
receive had Preferred Stock been converted into Common Stock prior to the
happening of such event or the record date with respect thereto.
(xv) Whenever the Conversion Price is adjusted, the Company shall
promptly mail to holders of Preferred Stock, first class, postage prepaid, a
notice of the adjustment. The Company shall file with the transfer agent for the
Preferred Stock, if any, a certificate from the Company's independent public
accountants briefly stating the facts requiring the adjustment and the manner of
computing it. Subject to paragraph 3(xvi) below, the certificate shall be
conclusive evidence that the adjustment is correct.
(xvi) The Company from time to time may reduce the Conversion Price if it
considers such reductions to be advisable in order that any event treated for
federal income tax purposes as a dividend of stock or stock rights will not be
taxable to the holders of Common Stock by any amount, but in no event may the
Conversion Price be less than the par value of a share of Common Stock.
Whenever the Conversion Price is reduced, the Company shall mail to holders of
Preferred Stock a notice of the reduction. The Company shall mail, first class,
postage prepaid, the notice at least 15 days before the date the reduced
Conversion Price takes effect. The notice shall state the reduced Conversion
Price and the period it will be in effect. A reduction of the Conversion Price
does not change or adjust the Conversion Price otherwise in effect for purposes
of paragraphs 3(vi), 3(vii), 3(viii) and 3(ix) above.
(xvii) If:
(A) the Company takes any action which would require an adjustment
in the Conversion Price pursuant to paragraph 3(vii), 3(ix) or 3(x) above;
(B) the Company consolidates or merges with, or transfers all or
substantially all of its assets to, another corporation, and stockholders of the
Company must approve the transaction; or
7
<PAGE>
(C) there is a dissolution or liquidation of the Company;
the Company shall mail to holders of the Preferred Stock, first class, postage
prepaid, a notice stating the proposed record or effective date, as the case may
be. The Company shall mail the notice at least 10 days before such date.
However, failure to mail the notice or any defect in it shall not affect the
validity of any transaction referred to in clause (A), (B) or (C) of this
paragraph 3(xvii).
(xviii) In the case of any consolidation of the Company or the merger of
the Company with or into any other entity or the sale or transfer of all or
substantially all the assets of the Company pursuant to which the Company's
Common Stock is converted into other securities, cash or assets, upon
consummation of such transaction, each share of Preferred Stock shall
automatically become convertible into the kind and amount of securities, cash or
other assets receivable upon the consolidation, merger, sale or transfer by a
holder of the number of shares of Common Stock into which such share of
Preferred Stock might have been converted immediately prior to such
consolidation, merger, transfer or sale (assuming such holder of Common Stock
failed to exercise any rights of election and received per share the kind and
amount of consideration receivable per share by a plurality of non-electing
shares). Appropriate adjustment (as determined by the Board of Directors of the
Company) shall be made in the application of the provisions herein set forth
with respect to the rights and interests thereafter of the holders of Preferred
Stock, to the end that the provisions set forth herein (including provisions
with respect to changes in and other adjustment of the Conversion Price) shall
thereafter be applicable, as nearly as reasonably may be, in relation to any
shares of stock or other securities or property thereafter deliverable upon the
conversion of Preferred Stock. If this paragraph 3(xviii) applies, paragraphs
3(vi), 3(viii) and 3(x) do not apply.
(xix) In any case in which this paragraph 3 shall require that an
adjustment as a result of any event become effective from and after a record
date, the Company may elect to defer until after the occurrence of such event
the issuance to the holder of any shares of Preferred Stock converted after such
record date and before the occurrence of such event of the additional shares of
Common Stock issuable upon such conversion over and above the shares issuable on
the basis of the Conversion Price in effect immediately prior to adjustment;
provided, however, that if such event shall not have occurred and authorization
of such event shall be rescinded by the Company, the Conversion Price shall be
recomputed immediately upon such recision to the price that would have been in
effect had such event not been authorized, provided that such recision is
permitted by and effective under applicable laws.
4. Liquidation Rights. Upon any voluntary or involuntary liquidation,
------------------
dissolution or winding-up of the Company or reduction or decrease in its capital
stock resulting in a distribution of assets to the holders of any class or
series of the Company's capital stock, each holder of shares of the Preferred
Stock will be entitled to payment out of the assets of the Company available for
distribution of an amount equal to the Liquidation Preference per share of
Preferred Stock held by such holder, plus accrued and unpaid dividends and
Liquidated Damages, if any, to the date fixed for liquidation, dissolution,
winding-up or reduction or decrease in capital stock, before any distribution is
made on any Junior Securities, including, without limitation, common stock of
the Company. After payment in full of the Liquidation Preference and all accrued
dividends and Liquidated Damages, if any, to which holders of Preferred Stock
are entitled, such holders will not be entitled to any further participation in
any distribution of assets of the Company. If, upon any voluntary or involuntary
liquidation, dissolution or winding-up of the Company, the amounts payable with
respect to the Preferred Stock and all other Parity Securities are not paid in
full, the holders of the Preferred Stock and the Parity Securities will share
equally and ratably in any distribution of assets of the Company in proportion
to the full liquidation preference and accumulated and unpaid dividends and
Liquidated Damages, if any, to which each is
8
<PAGE>
entitled. However, neither the voluntary sale, conveyance, exchange or transfer
(for cash, shares of stock, securities or other consideration) of all or
substantially all of the property or assets of the Company nor the consolidation
or merger of the Company with or into one or more Persons will be deemed to be a
voluntary or involuntary liquidation, dissolution or winding-up of the Company
or reduction or decrease in capital stock, unless such sale, conveyance,
exchange or transfer shall be in connection with a liquidation, dissolution or
winding-up of the business of the Company or reduction or decrease in capital
stock.
5. Optional Redemption.
-------------------
(i) The Preferred Stock may not be redeemed at the option of the Company
prior to October 18, 2000. The Preferred Stock may be redeemed for cash, in
whole or in part, at the option of the Company on or after October 18, 2000, at
the redemption prices specified below (expressed as percentages of the
Liquidation Preference thereof), in each case, together with accumulated and
unpaid dividends (including an amount in cash equal to a prorated dividend for
any partial dividend period) and Liquidated Damages, if any, to the date of
redemption (the "Applicable Redemption Price"), upon not less than 30 nor more
than 60 days' prior written notice, if redeemed during the 12-month period
commencing on October 18 of each of the years set forth below:
<TABLE>
<CAPTION>
Year Percentage
---- ----------
<S> <C>
2000............................. 104.00%
2001............................. 103.00%
2002............................. 102.00%
2003............................. 101.00%
2004 and thereafter.............. 100.00%
</TABLE>
No optional redemption pursuant to this paragraph 5(i) shall be authorized
or made unless, prior to giving the applicable redemption notice, all
accumulated and unpaid dividends for periods ended prior to the date of such
redemption notice shall have been paid in cash, Common Stock or a combination
thereof.
(ii) In case of redemption of less than all of the shares of Preferred
Stock at the time outstanding, the shares to be redeemed shall be selected pro
rata or by lot as determined by the Company in its sole discretion.
(iii) Notice of any redemption shall be sent by or on behalf of the
Company not less than 30 nor more than 60 days prior to the date specified for
redemption in such notice (the "Redemption Date"), by first class mail, postage
prepaid, to all holders of record of the Preferred Stock at their last addresses
as they shall appear on the books of the Company; provided, however, that no
failure to give such notice or any defect therein or in the mailing thereof
shall affect the validity of the proceedings for the redemption of any shares of
Preferred Stock except as to the holder to whom the Company has failed to give
notice or except as to the holder to whom notice was defective. In addition to
any information required by law or by the applicable rules of any exchange upon
which Preferred Stock may be listed or admitted to trading, such notice shall
state: (i) that such redemption is being made pursuant to the optional
redemption provisions hereof; (ii) the Redemption Date; (iii) the Applicable
Redemption Price; (iv) the number of shares of Preferred Stock to be redeemed
and, if less than all shares held by such holder are to be redeemed, the number
of such shares to be redeemed; (v) the place or places where certificates for
such shares are to be surrendered for payment of the Applicable Redemption
Price,
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<PAGE>
including any procedures applicable to redemptions to be accomplished through
book-entry transfers; and (vi) that dividends on the shares to be redeemed will
cease to accumulate on the Redemption Date. Upon the mailing of any such notice
of redemption, the Company shall become obligated to redeem at the time of
redemption specified thereon all shares called for redemption.
(iv) If notice has been mailed in accordance with Section 5(iii) above
and provided that on or before the Redemption Date specified in such notice, all
funds necessary for such redemption shall have been set aside by the Company,
separate and apart from its other funds in trust for the pro rata benefit of the
holders of the shares so called for redemption, so as to be, and to continue to
be available therefor, then, from and after the Redemption Date, dividends on
the shares of the Preferred Stock so called for redemption shall cease to
accumulate, and said shares shall no longer be deemed to be outstanding and
shall not have the status of shares of Preferred Stock, and all rights of the
holders thereof as stockholders of the Company (except the right to receive from
the Company the Applicable Redemption Price) shall cease. Upon surrender, in
accordance with said notice, of the certificates for any shares so redeemed
(properly endorsed or assigned for transfer, if the Company shall so require and
the notice shall so state), such shares shall be redeemed by the Company at the
Applicable Redemption Price. In case fewer than all the shares represented by
any such certificate are redeemed, a new certificate or certificates shall be
issued representing the unredeemed shares without cost to the holder thereof.
(v) Any funds deposited with a bank or trust company for the purpose of
redeeming Preferred Stock shall be irrevocable except that:
(a) the Company shall be entitled to receive from such bank or
trust company the interest or other earnings, if any, earned on any money
so deposited in trust, and the holders of any shares redeemed shall have no
claim to such interest or other earnings; and
(b) any balance of monies so deposited by the Company and unclaimed
by the holders of the Preferred Stock entitled thereto at the expiration of
two years from the applicable Redemption Date shall be repaid, together
with any interest or other earnings earned thereon, to the Company, and
after any such repayment, the holders of the shares entitled to the funds
so repaid to the Company shall look only to the Company for payment without
interest or other earnings.
(vi) No Preferred Stock may be redeemed except with funds legally
available for such purpose. The Company shall take all actions required or
permitted under the DGCL to permit any such redemption.
(vii) Notwithstanding the foregoing provisions of this Section 5, unless
the full cumulative dividends on all outstanding shares of Preferred Stock shall
have been paid or contemporaneously are declared and paid for all past dividend
periods, none of the shares of Preferred Stock shall be redeemed unless all
outstanding shares of Preferred Stock are simultaneously redeemed.
6. Change of Control.
-----------------
(i) Subject to paragraph (6)(v) hereof, upon the occurrence of a Change
of Control, the Company shall be required to make an offer (a "Preferred Stock
Change of Control Offer") to each holder of shares of Preferred Stock to
repurchase all or any part of such holder's shares of Preferred Stock at an
offer price in cash equal to 100% of the aggregate Liquidation Preference
thereof, plus accumulated and unpaid dividends (including an amount equal to a
prorated dividend for the period from
10
<PAGE>
the Dividend Payment Date immediately prior to the Change of Control Payment
Date) and Liquidated Damages, if any, thereon to the date of repurchase (the
"Change of Control Payment").
(ii) Within 30 days following any Change of Control, the Company shall
(a) publish a notice of the Change of Control in The Wall Street Journal or a
similar daily business publication of national distribution and (b) mail a
notice to each holder of Preferred Stock describing the transaction that
constitutes the Change of Control, together with such other information as may
be required pursuant to the securities laws, and stating: (A) that the Change of
Control Offer is being made pursuant to this Certificate of Designations and
that, to the extent lawful, all shares of Preferred Stock validly tendered will
be accepted for payment; (B) the purchase price and the purchase date, which
shall be no earlier than 30 days nor later than 60 days from the date such
notice is mailed (the "Change of Control Payment Date"); (C) that any shares of
Preferred Stock not tendered will continue to accrue dividends in accordance
with the terms of this Certificate of Designations; (D) that, unless the Company
defaults in the payment of the Change of Control Payment, all shares of
Preferred Stock accepted for payment pursuant to the Change of Control Offer
shall cease to accrue dividends on the Change of Control Payment Date; and (E) a
description of the procedures to be followed by such holder in order to have its
shares of Preferred Stock repurchased.
(iii) On the Change of Control Payment Date, the Company shall, to the
extent lawful, (A) accept for payment shares of Preferred Stock validly tendered
pursuant to the Change of Control Offer and (B) promptly mail to each holder of
shares of Preferred Stock so accepted payment in an amount equal to the purchase
price for such shares and (C) unless the Company defaults in the payment for the
shares of Preferred Stock tendered pursuant to the Preferred Stock Change of
Control Offer, dividends will cease to accrue with respect to the shares of
Preferred Stock tendered and all rights of holders of such tendered shares will
terminate, except for the right to receive payment therefor, on the Change of
Control Payment Date. The Company shall publicly announce the results of the
Preferred Stock Change of Control Offer on or as soon as practicable after the
Change of Control Payment Date.
(iv) The Company shall comply with any securities laws and regulations,
to the extent such laws and regulations are applicable to the repurchase of
shares of the Preferred Stock in connection with a Change of Control.
(v) Notwithstanding the foregoing, prior to complying with this
paragraph 6, but in any event within 90 days following a Change of Control, the
Company shall either (a) repay or refinance all outstanding indebtedness or (b)
obtain the requisite consents, if any, under all agreements governing
outstanding indebtedness necessary to permit the repurchase of the Preferred
Stock required by this paragraph 6. The Company must first comply with the
covenants in its outstanding indebtedness or take the actions described in the
preceding sentence before it will be required to repurchase shares of Preferred
Stock in the event of a Change of Control; provided, that if the Company fails
to repurchase shares of Preferred Stock, the sole remedy to holders of Preferred
Stock will be the voting rights arising from a Voting Rights Triggering Event.
Moreover, the Company will not repurchase or redeem any Preferred Stock pursuant
to this Change of Control provision prior to the Company's repurchase of the
Series B Preferred Stock pursuant to the Change of Control covenants in the
Series B Preferred Stock and the Company's repurchase or redemption obligation
may be concurrent with analogous obligations under Parity Securities.
(vi) Notwithstanding the foregoing, the Company shall not be required to
make a Preferred Stock Change of Control Offer following a Change of Control if
a third party makes the Preferred Stock Change of Control Offer in the manner,
at the times and otherwise in compliance with the requirements
11
<PAGE>
set forth in this Certificate of Designations applicable to a Preferred Stock
Change of Control Offer made by the Company and purchases all of the Preferred
Stock validly tendered and not withdrawn under such Preferred Stock Change of
Control Offer.
7. Voting Rights.
-------------
(i) The holders of record of shares of the Preferred Stock shall have no
voting rights, except as required by law and as hereinafter provided in this
Section 7.
(ii) Upon:
(a) the accumulation of accrued and unpaid dividends on the
outstanding Preferred Stock in an amount equal to six (6) quarterly
dividends (whether or not consecutive); or
(b) the failure of the Company to make a Preferred Stock Change of
Control Offer or to repurchase all of the Preferred Stock tendered in a
Preferred Stock Change of Control Offer (each of the events described in
clauses (a) and (b) being referred to herein as a "Voting Rights Triggering
Event");
then the holders of a majority of the outstanding shares of Preferred Stock,
voting together with any subsequently issued Parity Securities than entitled to
voting rights, shall be entitled to elect such number of members to the Board of
Directors of the Company constituting at least 20% of the then existing Board of
Directors before such election (rounded to the nearest whole number), provided,
however, that such number shall be no less than one nor greater than two, and
the number of members of the Company's Board of Directors shall be immediately
and automatically increased by one or two, as the case may be.
(iii) Whenever such voting right shall have vested, such right may be
exercised initially either at a special meeting of the holders of Preferred
Stock, called as hereinafter provided, or at any annual meeting of stockholders
held for the purpose of electing directors, and thereafter at such annual
meetings or by the written consent of the holders of Preferred Stock. Such
right of the holders of Preferred Stock to elect directors may be exercised
until (a) all dividends in arrears shall have been paid in full and (b) all
other Voting Rights Triggering Events have been cured or waived, at which time
the term of such directors previously elected shall thereupon terminate, and
such directors shall be deemed to have resigned.
(iv) At any time when such voting right shall have vested in the holders
of Preferred Stock and if such right shall not already have been initially
exercised, a proper officer of the Company shall, upon the written request of
holders of record of 10% or more of the Preferred Stock then outstanding,
addressed to the Secretary of the Company, call a special meeting of holders of
Preferred Stock. Such meeting shall be held at the earliest practicable date
upon the notice required for annual meetings of stockholders at the place for
holding annual meetings of stockholders of the Company or, if none, at a place
designated by the Secretary of the Company. If such meeting shall not be called
by the proper officers of the Company within 30 days after the personal service
of such written request upon the Secretary of the Company, or within 30 days
after mailing the same within the United States, by registered mail, addressed
to the Secretary of the Company at its principal office (such mailing to be
evidenced by the registry receipt issued by the postal authorities), then the
holders of record of 10% of the shares of Preferred Stock then outstanding may
designate in writing a holder of Preferred Stock to call such meeting at the
expense of the Company, and such meeting may be called by such person so
designated upon the notice required for annual meetings of stockholders and
shall be held at the place for
12
<PAGE>
holding annual meetings of the Company or, if none, at a place designated by
such holder. Any holder of Preferred Stock that would be entitled to vote at
such meeting shall have access to the stock books of the Company for the purpose
of causing a meeting of stockholders to be called pursuant to the provisions of
this Section 7. Notwithstanding the provisions of this paragraph, however, no
such special meeting shall be called if any such request is received less than
90 days before the date fixed for the next ensuing annual or special meeting of
stockholders.
(v) If any director so elected by the holders of Preferred Stock shall
cease to serve as a director before his term shall expire, the holders of
Preferred Stock then outstanding may, at a special meeting of the holders called
as provided above, elect a successor to hold office for the unexpired term of
the director whose place shall be vacant.
(vi) The Company shall not, without the affirmative vote or consent of
the holders of at least a majority of the shares of Preferred Stock then
outstanding (with shares held by the Company or any of its affiliates not being
considered to be outstanding for this purpose) voting or consenting as the case
may be, as one class:
(a) authorize, create (by way of reclassification or otherwise) or
issue any Senior Securities or any obligation or security convertible or
exchangeable into or evidencing the right to purchase, shares of any class
or series of Senior Securities;
(b) amend or otherwise alter this Certificate of Designation
(including the provisions of Section 7 hereof) in any manner that adversely
affects the specified rights, preferences, privileges or voting rights of
holders of Preferred Stock;
(c) authorize the issuance of any additional shares of Preferred
Stock; or
(d) waive any existing Voting Rights Triggering Event or compliance
with any provision of this Certificate of Designation;
provided, however, that the Company shall not amend the Change of Control
provisions of this Certificate of Designation (including the related
definitions) without the approval of the holders of at least 66 2/3% of the then
outstanding shares of Preferred Stock, voting or consenting, as the case may be,
as one class.
(vii) Without the consent of each holder affected, an amendment or waiver
of the Company's Certificate of Incorporation or of this Certificate of
Designation may not (with respect to any shares of Preferred Stock held by a
non-consenting holder):
(a) alter the voting rights with respect to the Preferred Stock or
reduce the number of shares of Preferred Stock whose holders must consent
to an amendment, supplement or waiver;
(b) reduce the Liquidation Preference of or alter the provisions
with respect to the redemption of the Preferred Stock (except as provided
with respect to Section 6 hereof);
(c) reduce the rate of or change the time for payment of dividends
on any share of Preferred Stock;
(d) waive the consequences of any failure to pay dividends on the
Preferred Stock;
13
<PAGE>
(e) make any share of Preferred Stock payable in any form other
than that stated in this Certificate of Designation;
(f) make any change in the provisions of this Certificate of
Designation relating to waivers of the rights of holders of Preferred Stock
to receive the Liquidation Preference and dividends on the Preferred Stock;
(g) waive a redemption payment with respect to any share of
Preferred Stock (except as provided with respect to Section 6 hereof); or
(h) make any change in the foregoing amendment and waiver
provisions.
(viii) The Company in its sole discretion may without the vote or consent
of any holders of the Preferred Stock amend or supplement this Certificate of
Designation:
(a) to cure any ambiguity, defect or inconsistency;
(b) to provide for uncertificated Preferred Stock in addition to or
in place of certificated Preferred Stock; or
(c) to make any change that would provide any additional rights or
benefits to the holders of the Preferred Stock or that does not adversely
affect the legal rights under this Certificate of Designation of any such
holder.
Except as set forth above, (x) the creation, authorization or issuance of any
shares of Junior Securities, Parity Securities or Senior Securities or (y) the
increase or decrease in the amount of authorized capital stock of any class,
including any preferred stock, shall not require the consent of the holders of
the Preferred Stock and shall not be deemed to affect adversely the rights,
preferences, privileges, special rights or voting rights of holders of shares of
Preferred Stock.
8. Merger, Consolidation and Sale of Assets. Without the vote or
----------------------------------------
consent of the holders of a majority of the then outstanding shares of Preferred
Stock, the Company may not consolidate or merge with or into, or sell, assign,
transfer, lease, convey or otherwise dispose of all or substantially all of its
assets to, any person unless (i) the entity formed by such consolidation or
merger (if other than the Company) or to which such sale, assignment, transfer,
lease, conveyance or other disposition shall have been made (in any such case,
the "resulting entity") is a corporation organized and existing under the laws
of the United States or any State thereof or the District of Columbia; (ii) if
the Company is not the resulting entity, the Preferred Stock is converted into
or exchanged for and becomes shares of such resulting entity, having in respect
of such resulting entity the same (or more favorable) powers, preferences and
relative, participating, optional or other special rights thereof that the
Preferred Stock had immediately prior to such transaction; and (iii) immediately
after giving effect to such transaction, no Voting Rights Triggering Event has
occurred and is continuing. The resulting entity of such transaction shall
thereafter be deemed to be the "Company" for all purposes of this Certificate of
Designations.
9. Reports. The Company shall file within 15 days after it files them
-------
with the Commission copies of the annual and quarterly reports and the
information, documents, and other reports that the Company is required to file
with the Commission pursuant to Section 13(a) or 15(d) of the Exchange Act ("SEC
Reports") with the Transfer Agent. In the event the Company is not required or
shall cease to be
14
<PAGE>
required to file SEC Reports, pursuant to the Exchange Act, the Company shall
nevertheless continue to file such reports with the Commission (unless the
Commission shall not accept such a filing) and the Transfer Agent. Whether or
not required by the Exchange Act to file SEC Reports with the Commission, so
long as any shares of Preferred Stock are outstanding, the Company shall furnish
copies of the SEC Reports to the holders of Preferred Stock at the time the
Company is required to make such information available to the Transfer Agent and
any investors who request it in writing. In addition, the Company has agreed
that, for so long as any Preferred Stock remain outstanding, it will furnish to
the holders and to securities analysts and prospective investors, upon their
request, the information required to be delivered pursuant to Rule 144A(d)(4)
under the Securities Act.
10. Amendment. This Certificate of Designation shall not be amended,
---------
either directly or indirectly, or through merger or consolidation with another
entity, in any manner that would alter or change the powers, preferences or
special rights of the Preferred Stock so as to affect them adversely without the
affirmative vote of the holders of a majority or more of the outstanding
Preferred Stock, voting separately as a class.
11. Exclusion of Other Rights. Except as may otherwise be required by
-------------------------
law, the shares of Preferred Stock shall not have any voting powers, preferences
and relative, participating, optional or other special rights, other than those
specifically set forth in this resolution (as such resolution may be amended
from time to time) and in the Certificate of Incorporation. The shares of
Preferred Stock shall have no preemptive or subscription rights.
12. Headings of Subdivisions. The headings of the various subdivisions
------------------------
hereof are for convenience of reference only and shall not affect the
interpretation of any of the provisions hereof.
13. Severability of Provisions. If any voting powers, preferences and
--------------------------
relative, participating, optional and other special rights of the Preferred
Stock and qualifications, limitations and restrictions thereof set forth in this
resolution (as such resolution may be amended from time to time) is invalid,
unlawful or incapable of being enforced by reason of any rule of law or public
policy, all other voting powers, preferences and relative, participating,
optional and other special rights of Preferred Stock and qualifications,
limitations and restrictions thereof set forth in this resolution (as so
amended) which can be given effect without the invalid, unlawful or
unenforceable voting powers, preferences and relative, participating, optional
and other special rights of Preferred Stock and qualifications, limitations and
restrictions thereof shall, nevertheless, remain in full force and effect, and
no voting powers, preferences and relative, participating, optional or other
special rights of Preferred Stock and qualifications, limitations and
restrictions thereof herein set forth shall be deemed dependent upon any other
such voting powers, preferences and relative, participating, optional or other
special rights of Preferred Stock and qualifications, limitations and
restrictions thereof unless so expressed herein.
14. Reissuance of Preferred Stock. Shares of Preferred Stock that have
-----------------------------
been issued and reacquired in any manner, including shares purchased or redeemed
or exchanged or converted, shall (upon compliance with any applicable provisions
of the laws of Delaware) have the status of authorized but unissued shares of
preferred stock of the Company undesignated as to series and may be designated
or redesignated and issued or reissued, as the case may be, as part of any
series of preferred stock of the Company, provided that any issuance of such
shares as Preferred Stock must be in compliance with the terms hereof.
15. Mutilated or Missing Preferred Stock Certificates. If any of the
-------------------------------------------------
Preferred Stock certificates shall be mutilated, lost, stolen or destroyed, the
Company shall issue, in exchange and in
15
<PAGE>
substitution for and upon cancellation of the mutilated Preferred Stock
certificate, or in lieu of and substitution for the Preferred Stock certificate
lost, stolen or destroyed, a new Preferred Stock certificate of like tenor and
representing an equivalent amount of shares of Preferred Stock, but only upon
receipt of evidence of such loss, theft or destruction of such Preferred Stock
certificate and indemnity, if requested, satisfactory to the Company and the
transfer agent (if other than the Company).
16. Certain Definitions. As used in this Certificate of Designations,
-------------------
the following terms shall have the following meanings (with terms defined in the
singular having comparable meanings when used in the plural and vice versa),
unless the context otherwise requires:
"Business Day" means any day except a Saturday, a Sunday, or any day on
------------
which banking institutions in New York, New York are required or authorized by
law or other governmental action to be closed.
"Change of Control" means the occurrence of any of the following: (i) the
-----------------
sale, lease, transfer, conveyance or other disposition (other than by way of
merger or consolidation), in one or a series of related transactions, of all or
substantially all of the assets of the Company and its subsidiaries, taken as a
whole, (ii) the adoption of a plan relating to the liquidation or dissolution of
the Company, (iii) the consummation of any transaction (including, without
limitation, any merger or consolidation) the result of which is that any
"person" or "group" (as such terms are used in Section 13(d)(3) of the Exchange
Act) becomes the "beneficial owner" (as such term is defined in Rule 13d-3 and
Rule 13d-5 under the Exchange Act), directly or indirectly through one or more
intermediaries, of more than 50% of the voting power of the outstanding voting
stock of the Company, unless (A) the closing price per share of Common Stock for
any five Trading Days within the period of ten consecutive Trading Days ending
immediately after the announcement of such Change of Control equals or exceeds
105% of the Conversion Price then in effect or (B) at least 90% of the
consideration in the transaction or transactions constituting a Change of
Control pursuant to clause (iii) consists of shares of common stock traded or to
be traded immediately following such Change of Control on a national securities
exchange or the Nasdaq National Market and, as a result of such transaction or
transactions, the Preferred Stock become convertible solely into such common
stock (and any rights attached thereto), or (iv) the first day on which more
than a majority of the Board of Directors are not Continuing Directors;
provided, however, that a transaction in which the Company becomes a subsidiary
of another entity shall not constitute a Change of Control if (A) the
stockholders of the Company immediately prior to such transaction "beneficially
own" (as such term is defined in Rule 13d-3 and Rule 13d-5 under the Exchange
Act), directly or indirectly through one or more intermediaries, at least a
majority of the voting power of the outstanding voting stock of the Company
immediately following the consummation of such transaction and (B) immediately
following the consummation of such transaction, no "person" or "group" (as such
terms are defined above), other than such other entity (but including holders of
equity interests of such other entity), "beneficially owns" (as such term is
defined above), directly or indirectly through one or more intermediaries, more
than 50% of the voting power of the outstanding voting stock of the Company.
"Closing Price" means, for each Trading Day, the last reported sale price
-------------
regular way on the Nasdaq National Market or, if the Common Stock is not quoted
on the Nasdaq National Market, the average of the closing bid and asked prices
in the over-the-counter market as furnished by any New York Stock Exchange
member firm selected from time to time by the corporation for that purpose.
"Commission" means the Securities and Exchange Commission.
----------
"Common Stock" means the Common Stock, par value $0.01 per share, of the
------------
Company.
16
<PAGE>
"Continuing Directors" means, as of any date of determination, any member
--------------------
of the Board of Directors of the Company who (a) was a member of the Board of
Directors on the date of original issuance of the Preferred Stock or (b) was
nominated for election to the Board of Directors with the approval of, or whose
election was ratified by, at least two-thirds of the Continuing Directors who
were members of the Board of Directors at the time of such nomination or
election.
"Conversion Price" shall initially mean $60.47 per share and thereafter
----------------
shall be subject to adjustment from time to time pursuant to the terms of
paragraph 3 hereof.
"Exchange Act" means the Securities Exchange Act of 1934, as amended.
------------
"Liquidated Damages" means all liquidated damages then owing under the
------------------
Registration Rights Agreement.
"Person" means any individual, corporation, partnership, joint venture,
------
association, joint stock company, trust, unincorporated organization, government
or any agency or political subdivision thereof or any other entity.
"Preferred Stock Issue Date" means October 30, 1997.
--------------------------
"Registration Rights Agreement" means the Registration Rights Agreement
-----------------------------
with respect to the Preferred Stock, dated as of October 30, 1997, by and among
the Company, Bear, Stearns & Co. Inc. and Salomon Brothers Inc, as such
agreement may be amended, modified or supplemented from time to time.
"Series B Preferred Stock" means the Company's outstanding Series B
------------------------
Redeemable Exchangeable Preferred Stock due 2009.
"Series D Preferred Stock" means the Company's outstanding Series D Junior
------------------------
Convertible Preferred Stock.
"Trading Day" means any day on which the Nasdaq National Market or other
-----------
applicable stock exchange or market is open for business.
"Transfer Agent" shall be Continental Stock Transfer & Trust Co. unless and
--------------
until a successor is selected by the Company.
17
<PAGE>
IN WITNESS WHEREOF, the Company has caused this certificate to be duly
executed by Robert M. Manning, Senior Vice President and Chief Financial Officer
of the Company and attested by David C. Ruberg, Chairman of the Board, President
and Chief Executive Officer of the Company, this 29th day of October, 1997.
INTERMEDIA COMMUNICATIONS INC.
By: /S/ Robert M. Manning
------------------------------
Name: Robert M. Manning
Title: Senior Vice President and
Chief Financial Officer
ATTEST:
By: /S/ David C. Ruberg
-----------------------
Name: David C. Ruberg
Title: Chairman of the Board, President
and Chief Executive Officer
<PAGE>
EXHIBIT 4.3
INTERMEDIA COMMUNICATIONS INC.
and
CONTINENTAL STOCK TRANSFER & TRUST COMPANY
As Depositary
and
HOLDERS OF DEPOSITARY RECEIPTS
DEPOSIT AGREEMENT
Dated as of October 30, 1997
<PAGE>
DEPOSIT AGREEMENT, dated as of October 30, 1997, among INTERMEDIA
COMMUNICATIONS INC., a Delaware corporation (the "Company"), CONTINENTAL STOCK
TRANSFER & TRUST COMPANY, a New York banking corporation, as depositary (the
"Depositary"), and all holders from time to time of Depositary Receipts issued
hereunder.
WITNESSETH
WHEREAS, the Company desires to provide for the deposit of shares of
7% Series E Junior Convertible Preferred Stock, par value $1.00 per share (the
"Preferred Stock"), of the Company and for the issuance of Depository Receipts
evidencing Depositary Shares in respect of the Preferred Stock so deposited, all
on the terms and conditions set forth in this Agreement; and
WHEREAS, the Depositary Receipts are to be substantially in the form
of Exhibit A annexed hereto, with appropriate insertions, modifications and
omissions, as hereinafter provided in this Deposit Agreement;
NOW THEREFORE, in consideration of the mutual premises contained
herein, it is agreed by and among the parties hereto as follows:
ARTICLE I
DEFINITIONS
SECTION 1.1 DEFINITIONS. The following definitions shall for all
purposes, unless otherwise clearly indicated, apply to the respective terms used
in this Agreement and the Depositary Receipts:
"Authorizing Resolutions" means the resolutions adopted by the
Company's Board of Directors establishing and setting forth the rights,
preferences and privileges of the Preferred Stock.
"Certificate of Incorporation" means the Restated Certificate of
Incorporation, as amended from time to time, of the Company.
"Certificate of Designation" means the Certificate of Designation of
Voting Power, Designation Preferences and Relative, Participating, Optional or
other Special Rights and Qualifications, Limitations and Restrictions, filed
with the Secretary of State of the State of Delaware, setting forth the terms of
the Preferred Stock.
"Company" means Intermedia Communications Inc., a Delaware corporation
having its principal office at 3625 Queen Palm Drive, Tampa, Florida 33619-
1309, and its successors.
<PAGE>
"Common Stock" means the common stock, par value $0.01 per share, of
the Company.
"Corporate Trust Office" means the principal office of the Depositary
in New York, New York, at which at any particular time its corporate trust
business shall be administered.
"Deposit Agreement" means this Agreement, as the same may be amended
or supplemented from time to time.
"Depositary" means Continental Stock Transfer & Trust Company, a New
York banking corporation, and any successor as depositary hereunder.
"Depositary Shares" means the interest in Preferred Stock deposited
with the Depositary hereunder and represented by the Receipts. Each Depositary
Share shall, as provided herein, represent an interest in one one-hundredth
(1/100) of one share of Preferred Stock (as such fraction may from time to time
be adjusted in the event of certain amendments to the Certificate of
Incorporation affecting the Preferred Stock).
"Depositary's Agent" means an agent appointed by the Depositary as
provided, and for purposes specified, in Section 7.5.
"Issue Date" means October 30, 1997.
"Liquidated Damages" means all liquidated damages then owing under the
Registration Rights Agreement.
"Liquidation Preference" means, with respect to the Preferred Stock, a
liquidation preference of $2,500 per share.
"Nasdaq National Market" means the National Association of Securities
Dealers, Inc. Nasdaq National Market.
"Person" means any individual, partnership, firm, corporation,
association, trust, unincorporated organization or other entity, as well as any
syndicate or group that would be deemed to be a person under Section 13(d)(3) of
the Securities Exchange Act of 1934, as amended.
"Preferred Stock" means shares of the Company's 7% Series E Junior
Convertible Preferred Stock, par value $1.00 per share.
"Receipt" means one or more of the Depositary Receipts issued
hereunder.
2
<PAGE>
"Record Holder" as applied to a Receipt means the Person in whose name
a Receipt is registered on the books of the Depositary maintained for such
purpose.
"Registrar" means any bank or trust company which shall be appointed
to register Receipts as herein provided.
"Registration Rights Agreement" means the Registration Rights
Agreement with respect to the Preferred Stock, dated as of October 30, 1997, by
and among the Company, Bears, Stearns & Co. Inc. and Salomon Brothers Inc, as
such agreement may be amended, modified or supplemented from time to time.
"Securities Act of 1933" means the Act of May 27, 1933 (15 U.S. Code,
Secs. 77a-77aa), as from time to time amended.
"Stockholders" means the holders of the Preferred Stock.
ARTICLE II
FORM OF RECEIPTS, DEPOSIT OF PREFERRED STOCK, EXECUTION
AND DELIVERY, TRANSFER, SURRENDER AND REDEMPTION OF RECEIPTS
SECTION 2.1 FORM AND TRANSFERABILITY OF RECEIPTS. (a) Receipts shall
be engraved or printed or lithographed on steel engraved borders and shall be
substantially in the form set forth in Exhibit A annexed to this Deposit
Agreement, with appropriate insertions, modifications and omissions, as
hereinafter provided. Receipts shall be executed by the Depositary by the manual
signature of a duly authorized representative of the Depositary, provided that
such signature may be a facsimile if a Registrar for the Receipts (other than
the Depositary) shall have been appointed and such Receipts are countersigned by
manual signature of a duly authorized representative of the Registrar. No
Receipt shall be entitled to any benefits under this Deposit Agreement or be
valid or obligatory for any purpose unless it shall have been executed on behalf
of the Company by the manual or facsimile signature of a duly authorized officer
and executed manually or, if a Registrar for the Receipts (other than the
Depositary) shall have been appointed, by facsimile signature of a duly
authorized representative of the Depositary and, if executed by facsimile
signature of the Depositary, shall have been countersigned manually by a duly
authorized representative of such Registrar. The Depositary shall record on its
books each Receipt so signed and delivered as hereinafter provided.
(b) Receipts shall be in denominations of any number of whole
Depositary Shares, unless otherwise directed by the Company.
3
<PAGE>
(c) Receipts may be endorsed with or have incorporated in the
text thereof such legends or recitals or changes not inconsistent with the
provisions of this Deposit Agreement as may be required by the Depositary at the
direction of the Company or required to comply with any applicable law or any
regulation thereunder or with the rules and regulations of any securities
exchange or Nasdaq National Market upon which the Preferred Stock, the
Depositary Shares or the Receipts may be listed or to conform with any usage
with respect thereto, or to indicate any special limitations or restrictions to
which any particular Receipts are subject by reason of the date of issuance of
the Preferred Stock or otherwise.
(d) Title to Depositary Shares evidenced by a Receipt which is
properly endorsed or accompanied by a properly executed instrument of transfer,
shall be transferable by delivery with the same effect as in the case of a
negotiable instrument; provided, however, that until a Receipt shall be
-------- -------
transferred on the books of the Depositary as provided in Section 2.6, the
Depositary may, notwithstanding any notice to the contrary, treat the Record
Holder thereof at such time as the absolute owner thereof for the purpose of
determining the Person entitled to distribution of dividends or other
distributions or to any notice provided for in this Deposit Agreement and for
all other purposes.
SECTION 2.2 FORM, DENOMINATION AND REGISTRATION. (a)The Depositary
Shares shall be issued in the form of one or more Global Certificates ("Global
Certificates"). The Global Certificates shall be deposited on the Issue Date
with, or on behalf of, the Depositary Trust Company (the "DTC") and registered
in the name of Cede & Co., as DTC's nominee (such nominee being referred to as
the "Global Certificate Holder").
(b) So long as the Global Certificate Holder is the registered owner
of any Depositary Shares, the Global Certificate Holder will be considered the
sole holder under this Deposit Agreement of any Depositary Shares evidenced by
the Global Certificate. Beneficial owners of Depositary Shares shall not be
considered the owners or holders thereof under this Deposit Agreement for any
purpose.
(c) Payments in respect of the Liquidation Preference, dividends and
Liquidated Damages, if any, on any Preferred Stock underlying Depositary Shares
registered in the name of the Global Certificate Holder on the applicable record
date shall be payable by the Company to or at the direction of the Global
Certificate Holder in its capacity as the registered holder under this Deposit
Agreement. The Company may treat the persons in whose name Depositary Shares,
including the Global Certificate, are registered as the owners thereof for the
purpose of receiving such payments.
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(d) Any person having a beneficial interest in a Global Certificate
may, upon request to the Company, exchange such beneficial interest for
Depositary Shares in the form of registered definitive certificates (the
"Definitive Securities"). Upon any such issuance, the Company shall register
such Definitive Securities in the name of, and cause the same to be delivered
to, such person or persons (or the nominee of any thereof). If (i) the Company
notifies the holders in writing that the DTC is no longer willing or able to act
as a depositary and the Company is unable to locate a qualified successor within
90 days or (ii) the Company, at its option, notifies the holder in writing that
it elects to cause the issuance of Depositary Shares in the form of Definitive
Securities under this Deposit Agreement, then, upon surrender by the Global
Certificate Holder of its Global Certificate, Depositary Shares in such form
will be issued to each person that the Global Certificate Holder and the DTC
identify as being the beneficial owner of the related Depositary Shares.
(e) Each Global Certificate shall bear a legend in substantially the
following form:
"UNLESS AND UNTIL IT IS EXCHANGED IN WHOLE OR IN PART FOR A SECURITY
IN DEFINITIVE FORM, THIS SECURITY MAY NOT BE TRANSFERRED EXCEPT AS A
WHOLE BY THE DEPOSITARY TO A NOMINEE OF THE DEPOSITARY OR BY A NOMINEE
OF THE DEPOSITARY TO THE DEPOSITARY OR ANOTHER NOMINEE OF THE
DEPOSITARY OR BY THE DEPOSITARY OR ANY SUCH NOMINEE TO A SUCCESSOR
DEPOSITARY OR A NOMINEE OF SUCH SUCCESSOR DEPOSITARY. THE DEPOSITARY
TRUST COMPANY SHALL ACT AS THE DEPOSITARY UNTIL A SUCCESSOR SHALL BE
APPOINTED BY THE COMPANY AND THE TRANSFER AGENT. UNLESS THIS
CERTIFICATE IS PRESENTED BY AN AUTHORIZED REPRESENTATIVE OF THE
DEPOSITARY TRUST COMPANY (55 WATER STREET, NEW YORK, NEW YORK) ("DTC")
TO THE ISSUER OR ITS AGENT FOR REGISTRATION OF TRANSFER, EXCHANGE OR
PAYMENT, AND ANY CERTIFICATE ISSUED IS REGISTERED IN THE NAME OF CEDE
& CO. OR SUCH OTHER NAME AS MAY BE REQUESTED BY AN AUTHORIZED
REPRESENTATIVE OF DTC (AND ANY PAYMENT IS MADE TO CEDE & CO. OR SUCH
OTHER ENTITY AS MAY BE 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."
(f) The Depositary Shares, Preferred Stock issuable upon exchange for
the Depositary Shares and the Common Stock issuable upon conversion of the
Depositary Shares shall bear a legend to the following effect, unless the
Company determines otherwise in compliance with applicable law:
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"THE SECURITY (OR ITS PREDECESSOR) EVIDENCED HEREBY WAS ORIGINALLY
ISSUED IN A TRANSACTION EXEMPT FROM REGISTRATION UNDER SECTION 5 OF
THE UNITED STATES SECURITIES ACT OF 1933, AS AMENDED (THE "SECURITIES
ACT"), AND THE SECURITY EVIDENCED HEREBY MAY NOT BE OFFERED, SOLD OR
OTHERWISE TRANSFERRED IN THE ABSENCE OF SUCH REGISTRATION OR AN
APPLICABLE EXEMPTION THEREFROM. EACH PURCHASER OF THE SECURITY
EVIDENCED HEREBY IS HEREBY NOTIFIED THAT THE SELLER MAY BE RELYING ON
THE EXEMPTION FROM THE PROVISIONS OF SECTION 5 OF THE SECURITIES ACT
PROVIDED BY RULE 144A THEREUNDER. THE HOLDER OF THE SECURITY
EVIDENCED HEREBY AGREES FOR THE BENEFIT OF THE COMPANY THAT (A) SUCH
SECURITY MAY BE RESOLD, PLEDGED OR OTHERWISE TRANSFERRED, ONLY (1) TO
THE COMPANY, (2) PURSUANT TO A REGISTRATION STATEMENT WHICH HAS BEEN
DECLARED EFFECTIVE UNDER THE SECURITIES ACT, (3) TO A PERSON IT
REASONABLY BELIEVES IS A "QUALIFIED INSTITUTIONAL BUYER" AS DEFINED IN
RULE 144A IN A TRANSACTION MEETING THE REQUIREMENTS OF RULE 144A, (4)
PURSUANT TO OFFERS AND SALES TO NON-U.S. PERSONS THAT OCCUR OUTSIDE
THE UNITED STATES IN A TRANSACTION MEETING THE REQUIREMENTS OF RULE
904 OF REGULATION S UNDER THE SECURITIES ACT, (5) TO AN INSTITUTIONAL
"ACCREDITED INVESTOR" (AS DEFINED IN RULE 501(A)(1), (2), (3) OR (7)
OR REGULATION D UNDER THE SECURITIES ACT (AN "IAI") THAT, PRIOR TO
SUCH TRANSFER, FURNISHES TO THE TRUSTEE A SIGNED LETTER CONTAINING
CERTAIN REPRESENTATIONS AND AGREEMENTS RELATING TO THE TRANSFER OF
THIS SECURITY (THE FORM OF WHICH LETTER CAN BE OBTAINED FROM THE
TRUSTEE OR TRANSFER AGENT) OR (6) PURSUANT TO ANY OTHER AVAILABLE
EXEMPTION FROM THE REGISTRATION REQUIREMENTS UNDER THE SECURITIES ACT
(AND BASED ON AN OPINION OF COUNSEL IF THE COMPANY SO REQUESTS),
SUBJECT IN EACH OF THE FOREGOING CASES TO APPLICABLE SECURITIES LAWS
OF ANY STATE OF THE UNITED STATES OR ANY OTHER APPLICABLE JURISDICTION
AND (B) THE HOLDER WILL, AND EACH SUBSEQUENT HOLDER IS REQUIRED TO,
NOTIFY ANY PURCHASER FROM IT OF THE SECURITY EVIDENCED HEREBY OF THE
RESALE RESTRICTIONS SET FORTH IN (A) ABOVE."
(g) Holders of the Depositary Shares, the Preferred Stock issuable
upon exchange for the Depositary Shares and the Common Stock issuable upon
conversion of the Depositary Shares shall have such rights with respect to such
securities as are set forth in the Registration Rights Agreement.
SECTION 2.3 DEPOSIT OF PREFERRED STOCK, EXECUTION AND DELIVERY OF
RECEIPTS IN RESPECT THEREOF. (a) Subject to the terms and conditions of this
Deposit Agreement, any holder of Preferred Stock may deposit such Preferred
Stock under this Deposit Agreement by delivery to the Depositary at its
Corporate
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Trust Office (or at such other place as may be agreeable to the Depositary) of a
certificate or certificates for the Preferred Stock to be deposited, properly
endorsed or accompanied, if required by the Depositary, by a duly executed
instrument of transfer or endorsement, in form satisfactory to the Depositary,
together with all such certifications as may be required by the Depositary in
accordance with the provisions of this Deposit Agreement, and together with a
written order directing the Depositary to execute and deliver to, or upon the
written order of, the Person or Persons stated in such order a Receipt for the
number of Depositary Shares representing such deposited Preferred Stock.
(b) The Depositary shall require, at the direction of the
Company, that Preferred Stock presented for deposit at any time, whether or not
the register of Stockholders of the Company is closed, shall also be accompanied
by an agreement or assignment, or other instrument satisfactory to the
Depositary, which will provide for the prompt transfer to the Depositary or its
nominee of any dividend or right to subscribe for additional Preferred Stock or
to receive other property which any Person in whose name the Preferred Stock is
or has been recorded may thereafter receive upon or in respect of such deposited
Preferred Stock, or in lieu thereof such agreement of indemnity or other
agreement as shall be satisfactory to the Depositary.
(c) Subject to the terms and conditions of this Deposit
Agreement, Preferred Stock may also be deposited hereunder in connection with
the delivery of Receipts to represent distributions under Section 4.2 and upon
exercise of the rights to subscribe referred to in Section 4.3.
(d) Upon each delivery to the Depositary of a certificate or
certificates for Preferred Stock to be deposited hereunder, together with the
other documents above specified, the Depositary shall, as soon as transfer and
recordation can be accomplished, present such certificate or certificates to the
Registrar and transfer agent of the Preferred Stock for transfer and recordation
in the name of the Depositary or its nominee of the Preferred Stock being
deposited. Deposited Preferred Stock shall be held by the Depositary, at the
Depositary's Corporate Trust Office, or at such other place or places as the
Depositary shall determine.
(e) Upon receipt by the Depositary of a certificate or
certificates for Preferred Stock deposited in accordance with the provisions of
this Section, together with the other documents required as above specified, the
Depositary, subject to the terms and conditions of this Deposit Agreement, shall
execute and deliver to or upon the order of the Person or Persons named in the
written order delivered to the Depositary
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referred to in Section 2.3(a), a Receipt for the number of Depositary Shares
representing the Preferred Stock so deposited and registered in such name or
names as may be requested by such Person or Persons. The Depositary shall
execute and deliver such Receipts at its Corporate Trust Office and at such
other offices, if any, as it may designate. Delivery at other offices shall be
at the risk and expense of the Person requesting such delivery. However, in
each case, such delivery will be made only upon payment to the Depositary of the
fee of the Depositary by the Company (unless payable by the holder) as provided
in Section 5.7, for the execution and delivery of such Receipt and of all taxes
and governmental charges and fees payable in connection with such deposit and
the transfer of the deposited Preferred Stock.
SECTION 2.4 OPTIONAL REDEMPTION OF PREFERRED STOCK. (a) The Company
shall have the right to redeem the Preferred Stock in accordance with the terms
of the Preferred Stock. Whenever the Company shall elect to redeem shares of
Preferred Stock pursuant to the terms of the Preferred Stock, it shall (unless
otherwise agreed in writing with the Depositary) give the Depositary not less
than 60 days' notice of the date of such proposed redemption of Preferred Stock
and of the number of shares held by the Depositary to be so redeemed. On the
date of such redemption, provided that the Company shall then have deposited
with the Depositary the amount of cash necessary to effect such redemption, the
Depositary shall redeem the number of Depositary Shares representing such
Preferred Stock. The Depositary shall mail notice of such redemption and the
proposed simultaneous redemption of the number of Depositary Shares representing
the Preferred Stock to be redeemed, by first class postage prepaid, not less
than 30 and not more than 60 days prior to the date fixed for redemption of such
Preferred Stock and Depositary Shares (the "Redemption Date"), to the holders of
record on the record date for such redemption (determined pursuant to Section
4.4) of the Receipts evidencing the Depositary Shares to be so redeemed, at the
addresses of such holders as the same appear on the records of the Depositary;
but neither failure to mail any such notice to one or more such holders nor any
defect in any notice shall affect the sufficiency of the proceedings for
redemption as to other holders. Each such notice shall state the record date
for the purposes of such redemption; the Redemption Date; the number of
Depositary Shares to be redeemed and, if less than all of the Depositary Shares
held by any such holder are to be redeemed, the number of such Depositary Shares
held by such holder to be so redeemed; the amount of cash to be received by such
holder; the place or places where Receipts evidencing Depositary Shares are to
be surrendered for cash; and that dividends in respect of the Preferred Stock
represented by the Depositary Shares to be redeemed will cease to accrue at the
close of business on such Redemption Date. In case less than all the
outstanding Depositary Shares are to be
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<PAGE>
redeemed, the Depositary Shares to be so redeemed shall be selected by lot or
pro rata (as nearly as may be) or in any other equitable manner determined by
the Depositary to be consistent with the method determined by the Board of
Directors with respect to the Preferred Stock.
(b) Notice having been mailed by the Depositary as described in
Section 2.4(a), from and after the Redemption Date (unless the Company shall
have failed to redeem the shares of Preferred Stock to be redeemed by it as set
forth in the Company's notice provided for in Section 2.4(a)), all dividends in
respect of the shares of Preferred Stock so called for redemption shall cease to
accrue, the Depositary Shares being so redeemed shall be deemed no longer to be
outstanding, all rights of the holders of Receipts evidencing such Depositary
Shares shall cease and terminate and, upon surrender in accordance with said
notice of the Receipts evidencing any such Depositary Shares (properly endorsed
or assigned for transfer, if the Depositary shall so require), such Depositary
Shares shall be redeemed by the Depositary for the consideration therefor
specified in said notice, plus all money and other property, if any, represented
by such Depositary Shares, including all amounts, if any, paid by the Company in
respect of dividends which on the Redemption Date have accrued on the shares of
Preferred Stock to be so redeemed and have not theretofore been paid. If less
than all of the Depositary Shares evidenced by any Receipt are called for
redemption, the Depositary will deliver to the holder of such Receipt upon its
surrender to the Depositary, together with the redemption payment, a new Receipt
evidencing the Depositary Shares evidenced by such prior Receipt and not called
for redemption. The foregoing shall further be subject to the terms and
conditions of the Preferred Stock, as set forth in the Certificate of
Incorporation and Certificate of Designation.
(c) Any balance of monies deposited by the Company for the
purpose of redeeming Preferred Stock underlying the Depositary Shares and
unclaimed by the holders of the Depositary Shares entitled thereto at the
expiration of two years from the Redemption Date shall be repaid, together with
any interest or earnings thereon, if any, to the Company. After any such
repayment, such holders of Depositary Shares entitled to the funds so repaid to
the Company shall look only to the Company for payment without interest or other
earnings.
SECTION 2.5 CONVERSION OF DEPOSITARY SHARES. (a) The Depositary
Shares held by any holder of a Receipt or Receipts may, at the option of such
holder, be converted, in whole, or from time to time in part (but only in lots
of 100 Depositary Shares or integral multiples thereof if less then all the
Depositary Shares held by such holder are being converted), into shares of
Common Stock upon the same terms and conditions as the Preferred Stock, except
that the number of shares of Common Stock
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<PAGE>
received upon conversion of each Depositary Share will be equal to the number of
shares of Common Stock received upon conversion of one share of Preferred Stock
divided by 100. Whenever a holder of a Receipt or Receipts shall elect to
convert the Depositary Shares represented by such Receipt or Receipts into
shares of Common Stock pursuant to the terms of the Preferred Stock, such holder
shall deliver to the Depositary or the Depositary's Agent the Receipt or
Receipts evidencing the Depositary Shares to be converted, together with a
written notice of conversion and an assignment of the Receipt or Receipts to the
Company or in blank, in form reasonably acceptable to the Depositary. In
addition, if such holder surrenders such Depositary Shares for conversion during
the period from the close of business on any record date fixed pursuant to
Section 4.4 for the payment of dividends until the opening of business of the
dividend payment date corresponding to such record date (the "Dividend Payment
Date"), such Receipt or Receipts shall be accompanied by a payment in cash,
Common Stock or a combination thereof (depending on the method of payment that
the Company has chosen to pay the dividend) in an amount equal to the dividend
payable on the Dividend Payment Date, unless such Depositary Shares have been
called for redemption on a Redemption Date occurring during the period from the
close of business on such record date until the close of business on the
business day immediately following the Dividend Payment Date. The dividend
payment with respect to Depositary Shares called for redemption on a date during
the period from the close of business on such record date to the close of
business on the business day immediately following the Dividend Payment Date
will be payable on the Dividend Payment Date to the record holder of such
Depositary Shares on such record date, notwithstanding the conversion of such
Depositary Shares after such record date and prior to the Dividend Payment Date,
and the holder converting such Depositary Shares need not include a payment of
such dividend amount upon surrender of such Depositary Shares. Each conversion
of Depositary Shares shall be deemed to have been effected immediately before
the close of business on the date on which the requirements specified in the
preceding sentence shall have been satisfied (the "Conversion Date").
(b) If a holder of a Receipt elects to convert less than all of
the Depositary Shares evidenced by a Receipt, the Depositary will deliver to the
holder of the Receipt upon its surrender to the Depositary a new Receipt
evidencing the Depositary Shares evidenced by such prior Receipt and not
converted, together with a certificate for the shares of Common Stock issued
upon conversion. The foregoing shall further be subject to the terms and
conditions of the Preferred Stock, as set forth in the Certificate of
Incorporation and Certificate of Designation.
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(c) No fractional shares of Common Stock will be issued upon
conversion of Depositary Shares. If such conversion would otherwise result in a
fractional share of Common Stock being issued, the number of shares of Common
Stock to be issued upon conversion shall be rounded up to the nearest whole
share.
(d) From and after the Conversion Date, the Depositary Shares
being converted shall be deemed no longer to be outstanding, all dividends in
respect of the shares of Preferred Stock converted shall cease to accrue, all
rights of the holders of Receipts evidencing such Depositary Shares shall, to
the extent of such Depositary Shares, cease and terminate, except the right to
receive shares of Common Stock into which the Depositary Shares have been
converted and the right to receive any money or other property to which the
holders of such Receipts were entitled upon conversion (including all amounts,
if any, paid by the Company in respect of dividends which, on the Conversion
Date, have accrued on the shares of Preferred Stock to be converted and have not
theretofore been paid).
SECTION 2.6 TRANSFER OF RECEIPTS. Subject to the terms and
conditions of this Deposit Agreement, the Depositary shall make transfers on its
books from time to time of Receipts upon any surrender thereof at the
Depositary's Corporate Trust Office by the holder in person or by duly
authorized attorney, properly endorsed or accompanied by a properly executed
instrument of transfer, and duly stamped as may be required by law. Thereupon
the Depositary shall execute a new Receipt or Receipts and deliver the same to
or upon the order of the Person entitled thereto evidencing the same aggregate
number of Depositary Shares as those evidenced by the Receipt or Receipts
surrendered.
SECTION 2.7 COMBINATIONS AND SPLIT-UPS OF RECEIPTS. Upon surrender
of a Receipt or Receipts at the Depositary's Corporate Trust Office or at such
other offices as it may designate for the purpose of effecting a split-up or
combination of such Receipt or Receipts, and subject to the terms and conditions
of this Deposit Agreement, the Depositary shall execute and deliver a new
Receipt or Receipts in the authorized denominations requested, evidencing the
same aggregate number of Depositary Shares evidenced by the Receipt or Receipts
surrendered.
SECTION 2.8 SURRENDER OF RECEIPTS AND WITHDRAWAL OF PREFERRED
STOCK. (a) Any holder of a Receipt or Receipts representing any number of
whole shares of Preferred Stock may withdraw the Preferred Stock and all money
and other property, if any, represented thereby by surrendering such Receipt or
Receipts, at the Depositary's Corporate Trust Office or at such other offices as
the Depositary may designate for such withdrawals. Thereafter, without
unreasonable delay, the
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Depositary shall deliver to such holder, or to the Person or Persons designated
by such holder as hereinafter provided, the number of whole shares of Preferred
Stock and all money and other property, if any, represented by the Receipt or
Receipts so surrendered for withdrawal. If the Receipt delivered by the holder
to the Depositary in connection with such withdrawal shall evidence a number of
Depositary Shares in excess of the number of Depositary Shares representing the
number of whole shares of Preferred Stock to be so withdrawn, the Depositary
shall at the same time, in addition to such number of whole shares of Preferred
Stock and such money and other property, if any, to be so withdrawn, deliver to
such holder, or upon his order, a new Receipt evidencing such excess number of
Depositary Shares. In no event will fractional shares of Preferred Stock (or
cash in lieu thereof) be distributed by the Depositary. Delivery of the
Preferred Stock and money and other property being withdrawn may be made by the
delivery of such certificates, documents of title and other instruments as the
Depositary may deem appropriate, which, if required by the Depositary, shall be
properly endorsed or accompanied by proper instruments of transfer.
(b) If the Preferred Stock and the money and other property
being withdrawn are to be delivered to a Person or Persons other than the Record
Holder of the Receipt or Receipts being surrendered for withdrawal of Preferred
Stock, such Record Holder shall execute and deliver to the Depositary a written
order so directing the Depositary and the Depositary may require that the
Receipt or Receipts surrendered by such holder for withdrawal of such shares of
Preferred Stock be properly endorsed in blank or accompanied by a properly
executed instrument of transfer in blank.
(c) Delivery of the Preferred Stock and the money and other
property, if any, represented by Receipts surrendered for withdrawal shall be
made by the Depositary at its Corporate Trust Office, except that at the
request, risk and expense of the holder that surrendered such Receipt or
Receipts, and for the account of the holder thereof, such delivery may be made
at such other place as may be designated by such holder.
SECTION 2.9 LIMITATIONS ON EXECUTION AND DELIVERY, TRANSFER, SPLIT-
UP, COMBINATION AND SURRENDER OF RECEIPTS. (a) As a condition precedent to the
execution and delivery, transfer, split-up, combination or surrender of any
Receipt, the Depositary, or any of the Depositary's Agents, or the Company, may
require (i) payment to it of a sum sufficient for the payment (or, in the event
that the Depositary or the Company shall have made such payment, the
reimbursement to it) of any tax or other governmental charge with respect
thereto (including any such tax or charge with respect to Preferred Stock being
deposited or withdrawn), (ii) the production of proof satisfactory to it as to
the identity and genuineness of any signature and (iii)
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<PAGE>
compliance with such regulations, if any, as the Depositary or the Company may
establish consistent with the provisions of this Deposit Agreement.
(b) The deposit of Preferred Stock may be refused, or the
delivery of Receipts against Preferred Stock may be suspended or the transfer of
Receipts may be refused, or the transfer, split-up, combination or surrender of
outstanding Receipts may be suspended (i) during any period when the register of
Stockholders of the Company is closed, or (ii) if any such action is deemed
necessary or advisable by the Depositary, any of the Depositary's Agents or the
Company at any time or from time to time because of any requirement of law or of
any government or governmental body or commission, or under any provision of
this Deposit Agreement or, with the approval of the Company, for any other
reason.
SECTION 2.10 LOST RECEIPTS, ETC. In case any Receipt shall be
mutilated or destroyed or lost or stolen, the Depositary in its discretion may
execute and deliver a Receipt of like form and tenor in exchange and
substitution for such mutilated Receipt, or in lieu of and in substitution for
such destroyed, lost or stolen Receipt, upon (a) the filing by the holder
thereof with the Depositary of evidence satisfactory to the Depositary of such
destruction or loss or theft of such Receipt, of the authenticity thereof and of
his ownership thereof and (b) the furnishing of the Depositary with an indemnity
bond or other reasonable indemnification satisfactory to it.
SECTION 2.11 CANCELLATION AND DESTRUCTION OF SURRENDERED RECEIPTS.
All Receipts surrendered to the Depositary or any Depositary's Agent shall be
cancelled by the Depositary. Except as prohibited by applicable law or
regulation, the Depositary shall, unless otherwise directed by the Company, hold
on behalf of the Company such Receipts so cancelled.
ARTICLE III
CERTAIN OBLIGATIONS OF HOLDERS OF RECEIPTS AND THE COMPANY
SECTION 3.1 FILING PROOFS, CERTIFICATES AND OTHER INFORMATION. Any
Person presenting Preferred Stock for deposit or any holder of a Receipt may be
required from time to time to file such proof of residence, or other matters or
other information, to execute such certificates and to make such representations
and warranties as the Depositary or the Company may reasonably deem necessary or
proper. The Depositary or the Company may withhold the delivery or delay the
transfer, redemption or exchange of any receipt or the withdrawal of the
Preferred Stock represented by the Depositary Shares evidenced by any Receipt or
the distribution of any dividend or other distribution or the sale of any rights
or of the proceeds thereof
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until such proof or other information is filed or such certificates are executed
or such representations and warranties are made.
SECTION 3.2 PAYMENT OF TAXES OR OTHER GOVERNMENTAL CHARGES. If any
tax or other governmental charge shall become payable by or on behalf of the
Depositary with respect to any Receipt evidencing Depositary Shares or with
respect to the Preferred Stock (or any fractional interest therein) represented
by such Depositary Shares, such tax (including transfer taxes, if any) or
governmental charge shall be payable by the holder of such Receipt, subject to
certain exceptions set forth in Section 5.7. Transfer of any Receipt or any
withdrawal of Preferred Stock and all money or other property, if any,
represented by the Depositary Shares evidenced by such Receipt may be refused
until such payment is made, and any dividends, interest payments or other
distributions may be withheld, or any part or all of the Preferred Stock or
other property represented by the Depositary Shares evidenced by such Receipt
and not theretofore sold may be sold for the account of the holder thereof
(after attempting by reasonable means to notify such holder prior to such sale),
and such dividends, interest payments or other distributions or the proceeds of
any such sale may be applied to any payment of such tax or other governmental
charge, the holder of such Receipt remaining liable for any deficiency.
SECTION 3.3 REPRESENTATIONS AND WARRANTIES AS TO PREFERRED STOCK.
In the case of the initial deposit of the Preferred Stock, the Company and, in
the case of subsequent deposits thereof, each Person so depositing Preferred
Stock under this Deposit Agreement shall be deemed thereby to represent and
warrant that such Preferred Stock and each certificate therefore are valid and
that the Person making such deposit is duly authorized so to do. The Company
hereby further represents and warrants that the Preferred Stock, when issued,
will be validly issued, fully paid and nonassessable. Such representations and
warranties shall survive the deposit of the Preferred Stock and the issuance of
Receipts.
ARTICLE IV
THE DEPOSITED SECURITIES; NOTICES
SECTION 4.1 CASH DISTRIBUTIONS. Whenever the Depositary shall
receive any cash dividend or other cash distribution on Preferred Stock, the
Depositary shall, subject to Section 3.2, distribute to Record Holders of
Receipts on the record date fixed pursuant to Section 4.4 such amounts of such
sum as are, as nearly as practicable, in proportion to the respective numbers of
Depositary Shares evidenced by the Receipts held by such holders; provided,
--------
however, that in case the Company or the Depositary shall be required to
- -------
withhold and does withhold
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from any cash dividend or other cash distribution in respect of the Preferred
Stock an amount on account of taxes, the amount made available for distribution
or distributed in respect of Depositary Shares shall be reduced accordingly.
The Depositary shall distribute or make available for distribution, as the case
may be, only such amount, however, as can be distributed without attributing to
any owner of Depositary Shares a fraction of one cent, and any balance not so
distributable shall be held by the Depositary (without liability for interest
thereon) and shall be added to and be treated as part of the next sum received
by the Depositary for distribution to Record Holders of Receipts then
outstanding.
SECTION 4.2 DISTRIBUTIONS OTHER THAN CASH. Whenever the Depositary
shall receive any distribution upon the Preferred Stock in shares of Common
Stock, the Depositary shall, subject to Section 3.2, distribute to Record
Holders of Receipts on the record date fixed pursuant to Section 4.4, such
shares of Common Stock received by it in proportion to the respective numbers of
Depositary Shares evidenced by the Receipts held by such holders, except that
the Depositary may not distribute fractional shares of Common Stock. If in the
opinion of the Company, after consultation with the Depositary, such
distribution cannot be made proportionately among such Record Holders, or if for
any reason (including any requirement that the Company or the Depositary
withhold an amount on account of taxes) the Depositary deems, after consultation
with the Company, such distribution not to be feasible, the Depositary may, at
the direction of the Company, adopt such method as the Company deems equitable
and practicable for the purpose of effecting such distribution, including the
sale at public sale of the other securities or property thus received, or any
part thereof, at such place or places and upon such terms as it may deem proper.
No fractional shares of Common Stock will be issued as a distribution on the
Preferred Stock and, if such distribution would otherwise result in a fractional
share of Common Stock being issued, the Depositary shall sell the total number
of shares of Common Stock that would have been represented by such fractional
shares at public sale at such place or places and upon such terms it deems
proper. The net proceeds of any sale made pursuant to this Section 4.2 shall,
subject to Section 3.2, be distributed or made available for distribution, as
the case may be, by the Depositary to Record Holders of Receipts as provided by
Section 4.1 in the case of a distribution received in cash.
SECTION 4.3 SUBSCRIPTION RIGHTS, PREFERENCES OR PRIVILEGES. (a) If
the Company shall at any time offer or cause to be offered to the Persons in
whose names Preferred Stock is recorded on the books of the Company any rights,
preferences or privileges to subscribe for or to purchase any securities or any
rights, preferences or privileges of any other nature, such rights, preferences
or privileges shall in each such instance be
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made available by the Depositary to the Record Holders of Receipts in such
manner as the Company may determine, either by the issue to such record holders
of warrants representing such rights, preferences or privileges or by such other
method as may be approved by the Company in its discretion with the approval of
the Depositary; provided, however, that (a) if at the time of issue or offer of
-------- -------
any such rights, preferences or privileges the Company determines that it is not
lawful or (after consultation with the Depositary) not feasible to make such
rights, preferences or privileges available to holders of Receipts by the issue
of warrants or otherwise or (b) if and to the extent so instructed by holders of
Receipts who do not desire to exercise such rights, preferences or privileges,
then the Company, in its discretion (with the approval of the Depositary, in any
case where the Company has determined that it is not feasible to make such
rights, preferences or privileges available), may, if applicable laws or the
terms of such rights, preferences or privileges permit such transfer, sell such
rights, preferences or privileges at public sale, at such place or places and
upon such terms as it may deem proper. The net proceeds of any such sale shall
be distributed by the Depositary to the Record Holders of Receipts entitled
thereto as provided by Section 4.1 in the case of a distribution received in
cash.
(b) If registration under the Securities Act of 1933 of the
securities to which any rights, preferences or privileges relate is required in
order for holders of Receipts to be offered or sold the securities to which such
rights, preferences or privileges relate, the Company agrees with the Depositary
that it will promptly file a registration statement pursuant to such Act with
respect to such rights, preferences or privileges and securities and use its
best efforts and take all steps available to it to cause such registration
statement to become effective sufficiently in advance of the expiration of such
rights, preferences or privileges. In no event shall the Depositary make
available to the holders of Receipts any right, preference or privilege to
subscribe for or to purchase any securities unless and until the Company
provides to the Depositary an opinion of counsel stating that the securities to
which such rights, preferences or privileges relate have been registered under
the Securities Act of 1933 or do not need to be registered under such Act.
(c) If any other action under the laws of any jurisdiction or
any governmental or administrative authorization, consent or permit is required
in order for such rights, preferences or privileges to be made available to
holders of Receipts, the Company agrees with the Depositary that the Company
will use its best efforts to take such action or obtain such authorization,
consent or permit sufficiently in advance of the expiration of such rights,
preferences or privileges to enable such holders to exercise such rights,
preferences or privileges.
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SECTION 4.4 NOTICE OF DIVIDENDS; FIXING OF RECORD DATE FOR HOLDERS
OF RECEIPTS. Whenever (a) any cash dividend or other cash distribution shall
become payable or any distribution other than cash shall be made, or any rights,
preferences or privileges shall at any time be offered, with respect to
Preferred Stock, or (b) the Depositary shall receive notice of any meeting at
which holders of Preferred Stock are entitled to vote or of which holders of
Preferred Stock are entitled to notice or of any election on the part of the
Company to redeem any shares of Preferred Stock, the Depositary shall in each
such instance fix a record date (which shall be the same date as the record date
fixed by the Company with respect to the Preferred Stock) for the determination
of the holders of Receipts (x) who shall be entitled to receive such dividend,
distribution, rights, preferences or privileges or the net proceeds of the sale
thereof, or (y) who shall be entitled to give instructions for the exercise of
voting rights at any such meeting, or who shall be entitled to notice of such
meeting, or (z) whose Depositary Shares are to be redeemed.
SECTION 4.5 VOTING RIGHTS. Upon receipt of notice of any meeting
at which the holders of Preferred Stock are entitled to vote, the Depositary
shall, as soon as practicable thereafter, mail to the Record Holders of Receipts
a notice which shall contain (a) such information as is contained in such notice
of meeting, and (b) a statement that the holders of Receipts at the close of
business on a specified record date determined pursuant to Section 4.4 will be
entitled, subject to any applicable provision of law and of the Certificate of
Incorporation or the Authorizing Resolution, to instruct the Depositary as to
the exercise of the voting rights pertaining to the amount of Preferred Stock
represented by their respective Depositary Shares, and a brief statement as to
the manner in which such instructions may be given. Upon the written request of
a holder of a Receipt on such record date, the Depositary shall endeavor insofar
as practicable to vote or cause to be voted the amount of Preferred Stock
represented by the Depositary Shares evidenced by such Receipt in accordance
with the instructions set forth in such request. To the extent any such
instructions request the voting of a fraction of a share of Preferred Stock, the
Depositary shall aggregate such fraction with all other fractions resulting from
requests with the same voting instructions and shall vote the number of whole
shares resulting from such aggregation in accordance with the instructions
received in such requests. The Company hereby agrees to take all reasonable
action which may be deemed necessary by the Depositary in order to enable the
Depositary to vote such Preferred Stock or cause such Preferred Stock to be
voted. In the absence of specific written instructions from the holder of a
Receipt, the Depositary will abstain from voting to the extent of the Preferred
Stock represented by the Depositary Shares evidenced by such Receipt.
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SECTION 4.6 CHANGES AFFECTING DEPOSITED SECURITIES AND
RECLASSIFICATIONS, RECAPITALIZATIONS, ETC. Upon any change in par or stated
value, split-up, consolidation or any other reclassification of the Preferred
Stock, or upon any recapitalization, reorganization, merger, amalgamation or
consolidation or sale of all or substantially all of the Company's assets
affecting the Company or to which it is a party, the Depositary shall, upon the
instructions of the Company and in such manner as the Company may deem
equitable, (a) make such adjustments in (i) the fraction of an interest
represented by one Depositary Share in one share of Preferred Stock and (ii) the
ratio of the redemption price per Depositary Share to the redemption price of a
share of Preferred Stock in each case as may be necessary to fully reflect the
effects of such change in par or stated value, split-up, consolidation or other
reclassification of the Preferred Stock, or of such recapitalization,
reorganization, merger, amalgamation or such consolidation or sale and (b) treat
any securities which shall be received by the Depositary in exchange for or upon
conversion of or otherwise in respect of the Preferred Stock as new deposited
securities under this Deposit Agreement, and Receipts then outstanding shall
thenceforth represent the new deposited securities so received. In any such
case the Company may in its discretion, direct the Depositary to execute and
deliver additional Receipts, or may call for the surrender of all outstanding
Receipts to be exchanged for new Receipts specifically describing such new
deposited securities.
SECTION 4.7 REPORTS. The Depositary shall make available for
inspection by holders of Receipts at its Corporate Trust Office, and at such
other places as it may from time to time deem advisable, any reports and
communications received from the Company which are received by the Depositary as
the holder of Preferred Stock unless at the time of or prior to receipt the
Company advises the Depositary that such reports or communications have not been
generally available to the holders of Preferred Stock.
SECTION 4.8 LISTS OF RECEIPT HOLDERS. Upon request from time to
time by the Company, the Depositary shall, without unreasonable delay, furnish
to the Company a list, as of a recent date, of the names, addresses and holdings
of Preferred Stock by all Persons in whose names Receipts are registered on the
books of the Depositary.
ARTICLE V
THE DEPOSITARY AND THE COMPANY
SECTION 5.1 MAINTENANCE OF OFFICE, AGENCIES, TRANSFER BOOKS BY THE
DEPOSITARY REGISTRAR. (a) Upon execution of this Deposit Agreement in
accordance with its terms, the
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Depositary shall maintain at its Corporate Trust Office facilities for the
execution and delivery, transfer, surrender and exchange of Receipts, and at the
offices of the Depositary's Agents, if any, facilities for the delivery,
transfer, surrender and exchange of Receipts, all in accordance with the
provisions of this Deposit Agreement.
(b) The Depositary shall keep books at its Corporate Trust
Office for the transfer of Receipts, which books at all reasonable times shall
be open for inspection by the Record Holders of Receipts, unless the Company
advises the Depositary in a particular instance that such inspection is not for
a proper purpose reasonably related to such Person's interest as an owner of
Depositary Shares evidenced by the Receipts. The Depositary may close such
books, at any time or from time to time, when deemed expedient by it in
connection with the performance of its duties hereunder.
(c) If the Receipts or the Depositary Shares evidenced thereby
or the Preferred Stock represented by such Depositary Shares shall be quoted on
the Nasdaq National Market, the Company may, upon consultation with the
Depositary, appoint a Registrar for registry of such Receipts or Depositary
Shares in accordance with the requirements of the Nasdaq National Market. Such
Registrar (which may be the Depositary if so permitted by the requirements of
the Nasdaq National Market) may be removed and a substitute registrar appointed
by the Depositary upon the request or with the approval of the Company. If the
Receipts of such Depositary Shares or such Preferred Stock are listed on one or
more stock exchanges, the Depositary will, at the request of the Company,
arrange such facilities for the delivery, transfer, surrender and exchange of
such Receipts or such Depositary Share or such Preferred Stock as may be
required by law or applicable stock exchange regulation.
SECTION 5.2 PREVENTION OR DELAY IN PERFORMANCE BY THE DEPOSITARY,
THE DEPOSITARY'S AGENTS OR THE COMPANY. Neither the Depositary nor any
Depositary's Agent nor the Company shall incur any liability to any holder of
any Receipt, if by reason of any provision of any present or future law, or
regulation thereunder of the United States of America, or of any other
governmental authority or, in the case of the Depositary or the Depositary's
Agent, by reason of any provision, present or future, of the Certificate of
Incorporation or the Authorizing Resolution or by reason of any act of God or
war or other circumstance beyond the control of the relevant party, the
Depositary, any Depositary's Agent or the Company shall be prevented or
forbidden from or delayed in doing or performing any act or thing which the
terms of this Deposit Agreement provide shall or may be done or performed, or by
reason of any exercise of, or failure to exercise, any discretion provided for
in this Deposit Agreement.
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SECTION 5.3 OBLIGATIONS OF THE DEPOSITARY, THE DEPOSITARY'S AGENTS
AND THE COMPANY. (a) Neither the Depositary nor any Depositary's Agent nor the
Company assumes any obligations or shall be subject to any liability under this
Deposit Agreement to holders of Receipts other than that each of them agrees to
use its best judgment and good faith in the performance of such duties as are
specifically set forth in this Deposit Agreement.
(b) Neither the Depositary nor any Depositary's Agent nor the
Company shall be under any obligation to appear in, prosecute or defend any
action, suit or other proceeding with respect to Preferred Stock, Depositary
Shares or Receipts, which in its opinion may involve it in expense or liability,
unless indemnity satisfactory to it against all expense and liability be
furnished as often as may be required.
(c) Neither the Depositary nor any Depositary's Agent nor the
Company shall be liable for any action or any failure to act by it in reliance
upon the advice of or information from legal counsel, accountants, any Person
presenting Preferred Stock for deposit, any holder of a Receipt or any other
Person believed by it in good faith to be competent to give such advice or
information. The Depositary, any Depositary's Agent and the Company may each
rely and shall each be protected in acting upon any written notice, request,
direction or other document believed by it to be genuine and to have been signed
or presented by the proper party or parties.
(d) The Depositary and the Depositary's Agents may own and deal
in any class of securities of the Company and its affiliates and in Receipts.
The Depositary may also act as transfer agent or registrar of any of the
securities of the Company and its affiliates.
SECTION 5.4 RESIGNATION AND REMOVAL OF THE DEPOSITARY, APPOINTMENT
OF SUCCESSOR DEPOSITARY. (a) The Depositary may at any time resign as
Depositary hereunder by notice of its election to do so delivered to the
Company, such resignation to take effect upon the appointment of a successor
depositary and its acceptance of such appointment as hereinafter provided.
(b) The Depositary may at any time be removed by the Company by
notice of such removal delivered to the Depositary, such removal to take effect
upon the appointment of a successor depositary and its acceptance of such
appointment as hereinafter provided.
(c) In case at any time the Depositary acting hereunder shall
resign or be removed, the Company shall, within 45 days after the delivery of
the notice of resignation or
20
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removal, as the case may be, appoint a successor depositary, which shall be a
bank or trust company having its principal office in the United States of
America. Each successor depositary shall execute and deliver to its predecessor
and to the Company an instrument in writing accepting its appointment hereunder,
and thereupon such successor depositary, without any further act or deed, shall
become fully vested with all the rights, powers, duties and obligations of its
predecessor and for all purposes shall be the Depositary under this Deposit
Agreement, and such predecessor, upon payment of all sums due it and on the
written request of the Company, shall promptly execute and deliver an instrument
transferring to such successor all rights and powers of such predecessor
hereunder, shall duly assign, transfer and deliver all rights, title and
interest in the stock and any moneys or property held hereunder to such
successor, and shall deliver to such successor a list of the Record Holders of
all outstanding Receipts. Any successor depositary shall promptly mail notice
of its appointment to the Record Holders of Receipts.
(d) Any corporation into or with which the Depositary may be
merged, consolidated or converted shall be the successor of such Depositary
without the execution or filing of any document or any further act. Such
successor depositary may authenticate the Receipts in the name of the
predecessor depositary or in the name of the successor depositary.
SECTION 5.5 CORPORATE NOTICES AND REPORTS. The Company agrees that
it will deliver to the Depositary, and the Depositary will, promptly after
receipt thereof, transmit to the Record Holders of Receipts, in each case at the
address recorded in the Depositary's books, copies of all notices and reports
(including, without limitation, financial statements) required by law, by the
rules of any national securities exchange or the Nasdaq National Market upon
which the Preferred Stock, the Depositary Shares or the Receipts are listed or
by the Certificate of Incorporation and the Authorizing Resolution to be
furnished by the Company to holders of Preferred Stock. Such transmission will
be at the Company's expense and the Company will provide the Depositary with
such number of copies of such documents as the Depositary may reasonably
request. In addition, the Depositary will transmit to the holders of Receipts
(at the Company's expense) such other documents as may be requested by the
Company.
SECTION 5.6 INDEMNIFICATION BY THE COMPANY. (a) The Company agrees
to indemnify the Depositary and its directors, employees and agents (including
any Depositary's Agent and any Registrar) against, and hold each of them
harmless from, any loss, liability or expense (including reasonable costs of
investigation, court costs, and attorneys' fees and disbursements) which may
arise out of acts performed or omitted
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in accordance with the provisions of this Deposit Agreement, as the same may be
amended, modified or supplemented from time to time, and of the Receipts (i) by
the Depositary, and Registrar or any of their respective officers, employees or
agents (including any Depositary's Agent), except for any loss, liability or
expense arising out of negligence, bad faith or willful misconduct on the part
of any such Person or Persons, or (ii) by the Company or any of its agents.
(b) Any Person seeking indemnification hereunder (an "indemnified
person") shall notify the Company of the commencement of any indemnifiable
action or claim promptly after such indemnified person becomes aware of such
commencement (provided that the failure to make such notification shall not
affect such indemnified person's rights otherwise than under this Section 5.6)
and shall consult in good faith with the Company as to the conduct of the
defense of such action or claim, which shall be reasonable in the circumstances.
No indemnified person shall compromise or settle any action or claim without the
consent of the Company, which consent shall not be unreasonably withheld.
(c) The obligations provided in this Section 5.6 shall survive the
termination of this Deposit Agreement and the succession or substitution of any
person indemnified hereby.
SECTION 5.7 CHARGES AND EXPENSES. The Company shall pay all
transfer and other taxes and governmental charges arising solely from the
existence of the depositary arrangements. The Company shall pay any and all
fees of the Depositary as shall be agreed to between the Company and the
Depositary, and all charges of the Depositary in connection with the initial
deposit of the Preferred Stock and the initial issuance of the Depositary
Receipts, distribution of information to the holders of Receipts with respect to
matters on which holders of Preferred Stock are entitled to vote, withdrawals of
the Preferred Stock by holders of the Receipts and any redemption or conversion
of the Depositary Receipts. All other transfer and other taxes and governmental
charges shall be at the expense of holders of Depositary Shares. If, at the
request of a holder of Receipts, the Depositary incurs charges or expenses for
which it is not otherwise liable hereunder, such holder will be liable for such
charges and expenses. All other reasonable charges and expenses of the
Depositary and any Depositary's Agent hereunder and of any Registrar (including,
in each case, reasonable fees and expenses of counsel) incident to the
performance of their respective obligations hereunder will be paid upon
consultation and agreement between the Depositary and the Company as to the
amount and nature of such charges and expenses. The Depositary shall present
its statement for charges and expenses to the Company monthly or at such other
intervals as the Company and the Depositary may agree.
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ARTICLE VI
AMENDMENT AND TERMINATION
SECTION 6.1 AMENDMENT. The form of the Receipts and any provision
of this Deposit Agreement may at any time and from time to time be amended by
agreement between the Company and the Depositary in any respect which they may
deem necessary or desirable. Any amendment which shall impose any fees, taxes
or charges (other than fees and charges provided for herein), or which shall
otherwise prejudice any substantial existing right of holders of Receipts, shall
not become effective as to outstanding Receipts until the expiration of 90 days
after notice of such amendment shall have been given to the Record Holders of
outstanding Receipts. Every holder of an outstanding Receipt at the time any
such amendment so becomes effective shall be deemed, by continuing to hold such
Receipt, to consent and agree to such amendment and to be bound by this Deposit
Agreement as amended thereby. In no event shall any amendment impair the right,
subject to the provisions of Sections 2.8 and 2.9 and Article III, of any owner
of any Receipts to instruct the Depositary to deliver to the holder of Receipts
representing whole shares of Preferred Stock the whole shares of Preferred Stock
represented by such Receipts and all money and other property, if any,
represented by such Receipts, except in order to comply with mandatory
provisions of applicable law.
SECTION 6.2 TERMINATION. (a) Whenever so directed by the Company,
the Depositary will terminate this Deposit Agreement by mailing notice of such
termination to the Record Holders of all Receipts then outstanding at least 30
days prior to the date fixed in such notice for such termination. The
Depositary may likewise terminate this Deposit Agreement if at any time 45 days
shall have expired after the Depositary shall have delivered to the Company
written notice of its election to resign and a successor depositary shall not
have been appointed and accepted its appointment as provided in Section 5.4.
(b) If any Receipts shall remain outstanding after the date of
termination of this Deposit Agreement, the Depository thereafter shall
discontinue the transfer of Receipts, shall suspend the distribution of
dividends to the holders thereof, and shall not give any further notices (other
than notice of such termination) or perform any further acts under this Deposit
Agreement, except that the Depositary shall continue to (i) collect dividends
and other distributions pertaining to the Preferred Stock, (ii) sell rights,
preferences or privileges as provided in this Deposit Agreement, and (iii)
deliver the Preferred Stock and any money and other property, without liability
for interest thereon, represented by Receipts upon surrender thereof by the
holders thereof. At any time after the expiration of two years from the date of
termination, the
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Depositary shall sell the Preferred Stock then held hereunder at public or
private sale, at such places and upon such terms as the Depositary deems proper
and may thereafter hold the net proceeds of any such sale, together with any
money and other property held by it hereunder, without liability for interest,
for the benefit, pro rata in accordance with their holdings, of the holders of
Receipts which have not theretofore been surrendered. After making such sale,
the Depositary shall be discharged from all obligations under this Deposit
Agreement, except to account for such net proceeds and money and other property.
Upon the termination of this Deposit Agreement, the Company shall be discharged
from all obligations under this Deposit Agreement except for its obligations to
the Depositary, any Depositary's Agent and any Registrar under Sections 5.6 and
5.7.
ARTICLE VII
MISCELLANEOUS
SECTION 7.1 COUNTERPARTS. This Deposit Agreement may be executed
in any number of counterparts, and by each of the parties hereto on separate
counterparts, each of which counterparts, when so executed and delivered, shall
be deemed an original, but all such counterparts taken together shall constitute
one and the same instrument. Copies of this Deposit Agreement shall be filed
with the Depositary and the Depositary's Agents and shall be open to inspection
during business hours at the Depositary's Corporate Trust Office and the
respective offices of the Depositary's Agents, if any, by any holder of a
Receipt.
SECTION 7.2 EXCLUSIVE BENEFITS OF PARTIES. This Deposit Agreement
is for the exclusive benefit of the parties hereto, and their respective
successors hereunder, and shall not be deemed to give any legal or equitable
right, remedy or claim to any other Person whatsoever.
SECTION 7.3 INVALIDITY OF PROVISIONS. In case any one or more of
the provisions contained in this Deposit Agreement or in the Receipts should be
or become invalid, illegal or unenforceable in any respect, the validity,
legality and enforceability of the remaining provisions contained herein or
therein shall in no way be affected, prejudiced or disturbed thereby.
SECTION 7.4 NOTICES. (a) Any and all notices to be given to the
Company hereunder or under the Depositary Receipts shall be in writing and shall
be deemed to have been duly given if personally delivered or sent by mail or
telecopy confirmed by letter, addressed to the Company at 3625 Queen Palm Drive,
Tampa, Florida 33619-1309, Attention: Chief Financial Officer,
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Telecopy: (813) 829-2390, or at any other place to which the Company may specify
in writing to the Depositary.
(b) Any and all notices to be given to the Depositary hereunder
or under the Depositary Receipts shall be in writing and shall be deemed to have
been duly given if personally delivered or sent by mail or by telecopy confirmed
by letter, addressed to the Depositary, at 2 Broadway, 19th Floor, New York, New
York 10004, Attention: Compliance Department, Telecopy: (212) 509-5150, or at
any other place to which the Depositary may specify in writing to the Company.
(c) Any and all notices given to a Record Holder of a Receipt
hereunder or under the Depositary Receipts shall be in writing and shall be
deemed to have been duly given if personally delivered or sent by mail or by
telecopy confirmed by letter, addressed to such Record Holder at the address of
such Record Holder as it appears on the books of the Depositary, or if such
holder shall have filed with the Depositary a written request that notices
intended for such holder be mailed to some other address, at the address
designated in such request.
(d) Delivery of a notice sent by mail or by telecopy shall be
deemed to be effected at the time when a duly addressed letter containing the
same (or a confirmation thereof in the case of a telecopy message) is deposited,
postage prepaid, in a post office letter box. The Depositary or the Company,
may, however, act upon any telecopy message received by it from the other or
from any holder of a Receipt, notwithstanding that such telecopy message shall
not subsequently be confirmed by letter as aforesaid.
SECTION 7.5 DEPOSITARY'S AGENTS. The Depositary may from time to
time appoint Depositary's Agents to act in any respect or the Depositary for the
purposes of this Deposit Agreement and may at any time appoint additional
Depositary's Agents. The Depositary will notify the Company of any such action.
SECTION 7.6 HOLDERS OF RECEIPTS ARE PARTIES. The holders of
Receipts from time to time shall be deemed to be parties to this Deposit
Agreement and shall be bound by all of the terms and conditions hereof and of
the Receipts by acceptance of delivery thereof.
SECTION 7.7 GOVERNING LAW. The Deposit Agreement and the Receipts
and all rights hereunder and thereunder and provisions hereof and thereof shall
be governed by, and construed in accordance with, the internal laws of the State
of New York without reference to the principles of conflicts of law thereof. The
Company and the Depositary agree that the federal courts in the State of New
York for the Southern District of New York shall
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have jurisdiction to hear and determine any suit, action or proceeding and to
settle any dispute between them that may arise out of or in connection with this
Deposit Agreement and, for such purposes, each irrevocably submits to the non-
exclusive jurisdiction of such courts.
SECTION 7.8 WAIVER OF JURY TRIAL. EACH OF THE COMPANY AND THE
--------------------
DEPOSITARY HEREBY WAIVES TRIAL BY JURY IN ANY ACTION, PROCEEDING OR COUNTERCLAIM
BROUGHT BY OR AGAINST IT BY THE OTHER PARTY ON ANY MATTERS WHATSOEVER, IN
CONTRACT OR IN TORT, ARISING OUT OF OR IN ANY WAY CONNECTED WITH THIS AGREEMENT.
SECTION 7.9 ASSIGNMENT. This Deposit Agreement may not be assigned
by either the Company or the Depositary without the consent of the other party.
SECTION 7.10 HEADINGS. The headings of articles and sections in
this Deposit Agreement and in the form of a Receipt set forth in Exhibit A
hereto have been inserted for convenience only and are not to be regarded as a
part of this Deposit Agreement or to have any bearing upon the meaning or
interpretation of any provision contained herein or in the Receipts.
[SIGNATURE PAGE FOLLOWS]
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IN WITNESS WHEREOF, INTERMEDIA COMMUNICATIONS INC. and CONTINENTAL
STOCK TRANSFER & TRUST COMPANY have duly executed this Agreement as of the day
and year first above set forth and all holders of Receipts shall become parties
hereto by and upon acceptance by them of delivery of Receipts issued in
accordance with the terms hereof.
INTERMEDIA COMMUNICATIONS INC.
Attest: By: /s/ Robert M. Manning
--------------------- ------------------------------
Name: Robert M. Manning
Title: Senior Vice President and
Chief Financial Officer
CONTINENTAL STOCK TRANSFER & TRUST
COMPANY
Attest: /s/ Thomas Jennings By: /s/ William F. Seegraber
--------------------- ------------------------------
Assistant Secretary Name: William F. Seegraber
Title: Vice President
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EXHIBIT A
---------
FORM OF DEPOSITARY RECEIPT
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EXHIBIT 99.1
NEWS RELEASE
[LOGO]
[LETTERHEAD OF INTERMEDIA COMMUNICATIONS]
INTERMEDIA COMMUNICATIONS COMPLETES
CONCURRENT PRIVATE OFFERINGS
TAMPA, FL (October 31, 1997) - Intermedia Communications Inc. (Nasdaq/NM:
ICIX) today announced the completion of two concurrent private offerings of
its securities. The Company sold 7,000,000 Depositary Shares with a $175
million liquidation preference, and $250 million principal amount of Senior
Notes, resulting in gross proceeds to the Company of $425 million.
Each of the 7,000,000 Depositary Shares represents a one-hundredth
interest in a share of 7% Series E Junior Convertible Preferred Stock,
liquidation preference $2,500 per share (equivalent to $25.00 per Depositary
Share) of Intermedia Communications Inc. Dividends on the Series E Preferred
Stock will accrue at a rate per annum equal to 7% of the liquidation preference
per share of Series E Preferred Stock and will be payable in cash or, at the
option of the Company, in shares of Common Stock or a combination thereof. The
Depositary Shares will be convertible, subject to prior redemption, at any time
after December 29, 1997, at the option of the holder thereof into the Company's
Common Stock at a conversion price of $60.47, subject to certain adjustments.
The 8 7/8% Senior Notes are due on November 1, 2007, with interest
accruing from October 30, 1997, and payable semi-annually in arrears on May 1
and November 1 of each year commencing May 1, 1998. The Notes will be
redeemable, at the option of Intermedia, in whole or in part, on or after
November 1, 2002, and are ranked pari pasu with all other senior indebtedness.
-MORE-
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ICIX Completes Private Offerings
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October 31, 1997
The net proceeds from the offering of the Depositary Shares will be used by
the Company to finance the continued expansion of the Company's
telecommunications networks, including but not limited to, network electronics,
such as local/long distance voice and data switches, and for general corporate
purposes, including working capital. The net proceeds from the offering of the
Senior Notes will be used to fund up to 80% of the cost of acquisition or
construction by the Company of telecommunications-related assets. A portion of
the Company's expansion may occur through acquisitions (utilizing cash or
securities of the Company) as an alternative to direct investments in the assets
required to implement the expansion.
Intermedia Communications is one of the nation's fastest growing
telecommunications companies, providing integrated telecommunications solutions
to business and government customers. These solutions include voice and data,
local and long distance, and advanced network access services in cities
throughout the eastern United States. Intermedia's enhanced data portfolio,
including frame relay networking, ATM, and a full range of business internet
connectivity and web hosting services, offers seamless end-to-end service
virtually anywhere in the world.
Intermedia, headquartered in Tampa, Florida, with sales offices in over 40
cities in the eastern U.S., trades on the Nasdaq Stock Market's National Market
under the symbol ICIX. Intermedia is on the world Wide Web at
http://www.icix.net.
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