SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
Amendment No. 1 to
FORM T-3
FOR APPLICATIONS FOR QUALIFICATION OF INDENTURES UNDER THE
TRUST INDENTURE ACT OF 1939
CAI WIRELESS SYSTEMS, INC.
(Name of applicant)
18 Corporate Woods Boulevard
Third Floor
Albany, New York 12211
(Address of principal executive offices)
<TABLE>
<CAPTION>
SECURITIES TO BE ISSUED UNDER THE INDENTURE TO BE QUALIFIED
<S> <C>
TITLE OF CLASS AMOUNT
13% Senior Notes $212,909,624
due 2004
</TABLE>
Approximate date of proposed public offering: On or promptly after the
Consummation Date (as defined in the Joint Reorganization Plan of CAI Wireless
Systems, Inc. and Philadelphia Choice Television, Inc., dated June 30, 1998, as
modified on September 9, 1998).
Name and address of agent for service: Jared E. Abbruzzese, Chief Executive
Officer, CAI Wireless Systems, Inc., 18 Corporate Woods Boulevard, Third Floor,
Albany, New York 12211.
The applicant hereby amends this application for qualification on such date or
dates as may be necessary to delay its effectiveness until (i) the 20th day
after the filing of a further amendment which specifically states that it shall
supersede this application, or (ii) such date as the Commission, acting
pursuant to Section 307(c) of the Act, may determine upon the written request
of the applicant.
<PAGE>
GENERAL
1. GENERAL INFORMATION. FURNISH THE FOLLOWING AS TO THE APPLICANT:
a. Form of organization: A corporation.
b. State or other sovereign power under the laws of which organized:
Connecticut
2. SECURITIES ACT EXEMPTION APPLICABLE. STATE BRIEFLY THE FACTS RELIED UPON
BY THE APPLICANT AS A BASIS FOR THE CLAIM THAT REGISTRATION OF THE INDENTURE
SECURITIES UNDER THE SECURITIES ACT OF 1933 IS NOT REQUIRED.
On July 30, 1998 (the "Filing Date"), the applicant, CAI Wireless Systems,
Inc. (the "Company" or the "Debtor"), together with its wholly-owned
subsidiary, Philadelphia Choice Television, Inc., a Delaware corporation
("PCT"), commenced a jointly administered case under Chapter 11 of the United
States Bankruptcy Code, 11 U.S.C. sections 101-1330, as amended (the
"Bankruptcy Code"), in the United States Bankruptcy Court for the District of
Delaware (the "Bankruptcy Court"). Since the Filing Date, the Debtor has
continued to operate as a debtor-in-possession subject to the supervision of
the Bankruptcy Court in accordance with the Bankruptcy Code.
The Company proposes to issue, as part of the Joint Reorganization Plan of
CAI Wireless Systems, Inc. and Philadelphia Choice Television, Inc., dated June
30, 1998, as modified on September 9, 1998 (the "Plan"), pursuant to section
1121(a) of the Bankruptcy Code, up to $212,908,624 of its 13% Senior Notes due
2004 (the "Senior Notes"). The Senior Notes will be issued to discharge, in
part, claims of certain existing creditors in the bankruptcy proceedings
described below.
The Senior Notes are proposed to be issued in reliance upon the exemption
from registration under the Securities Act of 1933, as amended (the "Securities
Act"), set forth in section 1145(a)(1) of the Bankruptcy Code. Section 1145 of
the Bankruptcy Code exempts the offer or sale of securities under a plan of
reorganization from registration under the Securities Act and state law. Under
section 1145, the issuance of securities is exempt from registration if three
principal requirements are satisfied: (1) the securities are issued by a
debtor, its successor, or an affiliate participating in a joint plan with the
debtor (provided that such entity is not an underwriter as defined in section
1145(b) of the Bankruptcy Code) under a plan of reorganization; (2) the
recipients of the securities hold a claim against the debtor or such affiliate,
an interest in the debtor or such affiliate, or a claim for an administrative
expense against the debtor or such affiliate; and (3) the securities are issued
entirely in exchange for the recipients' claims against or interests in the
debtor or such affiliate, or "principally" in such exchange and "partly" for
cash or property.
The Company believes that the issuance of the Senior Notes under the indenture
to be entered into by the Company and State Street Bank and Trust Company, as
Trustee (the "Indenture") to holders of prepetition senior notes under the Plan
will satisfy all three conditions of section 1145 of the Bankruptcy Code
because (a) the issuances are expressly contemplated under the Plan as part of
the reorganization; (b) the recipients are holders of "claims" against the
Debtor; and (c) the recipients would obtain the Senior Notes in exchange for
their claims.
<PAGE>
AFFILIATIONS
3. AFFILIATES. FURNISH A LIST OR DIAGRAM OF ALL AFFILIATES OF THE APPLICANT
AND INDICATE THE RESPECTIVE PERCENTAGES OF VOTING SECURITIES OR OTHER BASES OF
CONTROL.
AS OF SEPTEMBER 15, 1998:
(i) The Company owns 100% of the voting securities of the following entities:
<TABLE>
<CAPTION>
<S> <C>
AMI License Corp. Atlantic Microsystems, Inc.
Baltimore Choice Television, Inc. Buffalo Choice Television, Inc.
CAI/AMI Spectrum Management, Inc. CAI CT Holdings Corp.
CAI Data Systems, Inc. CAI Development, Inc.
CAI Satellite Communications, Inc. CAI Wireless Internet, Inc.
Chenango Associates, Inc. Commonwealth Choice Television, Inc.
Communications Transport, Inc. Connecticut Choice Television, Inc.
Eastern New England TV, Inc. Greater Albany Wireless Systems, Inc.
Greensboro Choice Television, Inc. Hampton Roads Wireless, Inc.
Housatonic Wireless, Inc. Long Island Choice Television, Inc.
Memphis Choice Television, Inc. MMDS Satellite Ventures, Inc.
New York Choice Television, Inc. Niskayuna Associates, Inc.
Onondaga Wireless, Inc. Onteo Associates, Inc.
Philadelphia Choice Television, Inc. Pittsburgh Choice Television, Inc.
Rochester Choice Television, Inc. Springfield Choice Television, Inc.
Springfield License, Inc. Syracuse Choice Television, Inc.
Washington Choice Television, Inc. Winston-Salem Choice Television, Inc.
</TABLE>
(II) ATLANTIC MICROSYSTEMS, INC., A CORPORATION 100% OF THE VOTING SECURITIES
OF WHICH ARE OWNED BY THE COMPANY, OWNS 100% OF THE VOTING SECURITIES OF THE
FOLLOWING ENTITIES:
<TABLE>
<CAPTION>
<S> <C>
Baltimore License, Inc. Buffalo License, Inc.
Commonwealth License, Inc. Connecticut License, Inc.
Eastern New England License, Inc. Greater Albany License, Inc.
Greensboro License, Inc. Hampton Roads License, Inc.
Long Island License, Inc. Memphis License, Inc.
New York License, Inc. PC License, Inc.
Pittsburgh License, Inc. Rochester License, Inc.
Syracuse License, Inc. Washington License, Inc.
Winston Choice License, Inc.
</TABLE>
(III) THE COMPANY OWNS APPROXIMATELY 60% OF THE VOTING SECURITIES OF CS
WIRELESS SYSTEMS, INC., A DELAWARE CORPORATION.
AS OF CONSUMMATION DATE:
On the Consummation Date, (a) the holders of prepetition debt of the
Debtor evidenced by the Debtor's (i) $275,000,000 aggregate principal amount of
12.25% Senior Notes due 2002 (the "Old Senior Notes"), (ii) 12% Subordinated
Note in the principal amount of $30,000,000 due October 1, 2005 (the "12%
Subordinated Note"), and (iii) subordinated promissory notes in the aggregate
principal amount of $2,793,000 due September 29, 2000, and (b) the purchasers
of post-petition debt of CAI (the "Exit Facility") evidenced by CAI's (i)
$30,000,000 aggregate principal amount of 10.5% Senior Secured A Notes due
2000, and (ii) $50,000,000 aggregate principal amount of 13% Senior Secured B
Notes, will own all of the originally issued shares of common stock of the
reorganized Company.
Merrill Lynch Global Allocation Fund, Inc. ("MLGAF"), the holder of
approximately $94,025,000 principal amount of Old Senior Notes and the 12%
Subordinated Note, will receive approximately 39% of the common stock issued by
the reorganized Company under the Plan. MLGAF has indicated to the Company that
it will provide the full amount of the Exit Facility, subject to the
participation in such credit facility of other current holders of Senior Notes,
which participation has not yet been determined. MLGAF and any other
participant in the Exit Facility will receive additional shares of common stock
of the reorganized Company. It is not practicable at this time to identify the
number of shares of common stock of the reorganized Company that will be issued
to MLGAF and such other Exit Facility participants, if any, until the level of
such participation is definitively determined. Additionally, in connection
with and as contemplated by the Plan, the Company will cause each of CAI Data
Systems, Inc., CAI Satellite Communications, Inc. and MMDS Satellite Ventures,
Inc. (collectively, the "Satellite Entities") to issue 1,000 shares of common
stock of each entity to Haig Capital LLC, such that, upon such issuances, each
of the Company and Haig Capital LLC will own 50% of each of the Satellite
Entities. Except as described in this paragraph, it is not anticipated that
the Company's affiliations will change as of the Consummation Date.
MANAGEMENT AND CONTROL
4. DIRECTORS AND EXECUTIVE OFFICERS. LIST THE NAMES AND COMPLETE MAILING
ADDRESSES OF ALL DIRECTORS AND EXECUTIVE OFFICERS OF THE APPLICANT AND ALL
PERSONS CHOSEN TO BECOME DIRECTORS OR EXECUTIVE OFFICERS. INDICATE ALL OFFICES
WITH THE APPLICANT HELD OR TO BE HELD BY EACH PERSON NAMED.
AS OF SEPTEMBER 15, 1998:
<TABLE>
<CAPTION>
NAME ADDRESS OFFICE
<S> <C> <C>
Jared E. Abbruzzese CAI Wireless Systems, Inc. Chairman, Chief Executive
18 Corporate Woods Blvd., 3{rd} Floor Officer and Director
Albany, NY 12211
John J. Prisco CAI Wireless Systems, Inc. President, Chief Operating
101 Ponds Edge Drive, Suite 300 Officer and Director
Chadds Ford, PA 19317
James P. Ashman CAI Wireless Systems, Inc. Executive Vice President,
18 Corporate Woods Blvd., 3{rd} Floor Chief Financial Officer and
Albany, NY 12211 Director
Arthur J. Miller CAI Wireless Systems, Inc. Vice President and Controller
101 Ponds Edge Drive, Suite 300
Chadds Ford, PA 19317
Arthur C. Belanger Three Bates Court Director
Williamsburg, VA 23188
George M. Williams CAI Wireless Systems, Inc. Director, Secretary and
18 Corporate Woods Blvd., 3{rd} Floor Treasurer
Albany, NY 12211
Harold A. Bouton 1831 Bobolink Lane Director
Charlotte, NC 28226
David M. Tallcott Three Loudonwood East Director
Loudonville, NY 12211
Robert D. Happ 20 Old Road Director
Weston, MA 02193
Gerald Stevens-Kittner CAI Wireless Systems, Inc. Senior Vice President -
2101 Wilson Boulevard, Suite 100 Spectrum Management
Arlington, VA 22201
Bruce W. Kostreski CAI Wireless Systems, Inc. Senior Vice President -
2101 Wilson Boulevard, Suite 100 Engineering and Chief Technical
Arlington, VA 22201 Officer
</TABLE>
AS OF CONSUMMATION DATE:
The following persons have been proposed by the Company to serve as
directors of the reorganized Company as of the Consummation Date:
<TABLE>
<CAPTION>
NAME ADDRESS OFFICE
<S> <C> <C>
Jared E. Abbruzzese CAI Wireless Systems, Inc. Chairman, Chief Executive
18 Corporate Woods Blvd., 3{rd} Floor Officer and Director
Albany, NY 12211
Harold A. Bouton 1831 Bobolink Lane Director
Charlotte, NC 28226
David M. Tallcott Three Loudonwood East Director
Loudonville, NY 12211
Robert D. Happ 20 Old Road Director
Weston, MA 02193
C. Vernon Fotheringham 14680 NE N Woodlinville Way Director
Suite 100
Woodlin, WA 98072
Paul Albert 135 Main Street Director
South Salem, NY 10590
John Newman One First Canadian Place Director
Suite 6330, P.O. Box 62
Toronto Ontario M5X 1B1
</TABLE>
The executive officers of the Company serving in such capacity prior to
the Consummation Date are expected to remain in such capacity from and after
the Consummation Date.
5. PRINCIPAL OWNERS OF VOTING SECURITIES. FURNISH THE FOLLOWING INFORMATION
AS TO EACH PERSON OWNING 10 PERCENT OR MORE OF THE VOTING SECURITIES OF THE
APPLICANT.
AS OF SEPTEMBER 15, 1998:
The Company is not aware of any person owning 10% or more of the voting
securities of the Company.
AS OF CONSUMMATION DATE:
On the Consummation Date, (a) the holders of prepetition debt of the
Debtor evidenced by CAI's (i) the Old Senior Notes, (ii) the 12% Subordinated
Note, and (iii) subordinated promissory notes in the aggregate principal amount
of $2,793,000 due September 29, 2000, and (b) the purchasers of the Exit
Facility will own all of the originally issued shares of common stock of the
reorganized Company. In anticipation thereof, the Company furnishes the
following information as to each person owning 10% or more of the voting
securities of the reorganized Company as of the Consummation Date:
<TABLE>
<CAPTION>
Name and Complete Percentage of Voting
MAILING ADDRESS TITLE OF CLASS OWNED AMOUNT OWNED(1) SECURITIES OWNED(1)
<S> <C> <C> <C>
Merrill Lynch Global
Allocation Fund, Inc.
800 Scudders Mill Road
Plainsboro, NJ 08536 Common Stock 5,901,915(2) 39%(2)
</TABLE>
__________________
(1) The Amount Owned and Percentage of Voting Securities Owned is based upon
the original issuance of 15,000,000 shares of common stock by the reorganized
Company on the Consummation Date. The originally issued shares are subject to
dilution by shares of common stock of the reorganized Company (i) reserved for
issuance upon the exercise of certain stock options granted to key employees of
the reorganized Company, (ii) reserved for issuance upon the exercise of
warrants issued to BT Alex. Brown Incorporated, the Company's financial
advisor, for prepetition services rendered to the Company, and (iii) issued to
the purchasers of the Exit Facility.
(2) The Amount Owned and Percentage of Voting Securities Owned identified for
MLGAF relates solely to the shares of common stock of the reorganized Company
received by MLGAF in exchange for the MLGAF's claims against or interests in
the Company derived from MLGAF's ownership of Old Senior Notes and the 12%
Subordinated Note. MLGAF has indicated to the Company that it will provide the
full amount of the Exit Facility, subject to the participation in such credit
facility of other current holders of Senior Notes, which participation has not
yet been determined. MLGAF and any other participant in the Exit Facility will
receive additional shares of common stock of the reorganized Company. It is
not practicable at this time to identify the number of shares of common stock
of the reorganized Company that will be issued to MLGAF and such other Exit
Facility participants, if any, until the level of such participation is
definitively determined.
<PAGE>
UNDERWRITERS
6. UNDERWRITERS. GIVE THE NAME AND COMPLETE MAILING ADDRESS OF (A) EACH
PERSON WHO, WITHIN THREE YEARS PRIOR TO THE DATE OF FILING THE APPLICATION,
ACTED AS AN UNDERWRITER OF ANY SECURITIES OF THE OBLIGOR WHICH WERE OUTSTANDING
ON THE DATE OF FILING THE APPLICATION, AND (B) EACH PROPOSED PRINCIPAL
UNDERWRITER OF THE SECURITIES PROPOSED TO BE OFFERED. AS TO EACH PERSON
SPECIFIED IN (A), GIVE THE TITLE OF EACH CLASS OF SECURITIES UNDERWRITTEN.
(A) Smith Barney Inc., 388 Greenwich Street, New York, NY 10013
Gerard Klauer Mattison & Co., LLC, 529 Fifth Avenue, New York, NY 10017
Donaldson, Lufkin & Jenrette Securities Corporation, 277 Park Avenue, New
York, NY 10172
Each of the above served as an underwriter for the Company's issuance in
September 1995 of its 12.25% Senior Notes due 2002.
(B) None
CAPITAL SECURITIES
7. CAPITALIZATION. (A) FURNISH THE FOLLOWING INFORMATION AS TO EACH
AUTHORIZED CLASS OF SECURITIES OF THE APPLICANT.
AS OF SEPTEMBER 15, 1998:
<TABLE>
<CAPTION>
TITLE OF CLASS AMOUNT AUTHORIZED AMOUNT OUTSTANDING
<S> <C> <C>
Common Stock, no par value 100,000,000 shares 40,543,039 shares
14% Senior Convertible Preferred 15,000 shares None
Stock, $10,000 par value
Cumulative Voting Preferred Stock, 5,000,000 shares None
no par value
12.25% Senior Notes due 2002 $275,000,000 $275,000,000
</TABLE>
AS OF CONSUMMATION DATE:
<TABLE>
<CAPTION>
TITLE OF CLASS AMOUNT AUTHORIZED AMOUNT OUTSTANDING
<S> <C> <C>
Common Stock, $.01 par value 25,000,000 shares 15,000,000 shares(1)
Preferred Stock, $0.01 par value 5,000,000 shares None
13% Senior Notes due 2004 $212,909,624 $212,909,624
</TABLE>
_______________
(1) Does not include shares of common stock of the reorganized Company
issuable in connection with the Exit Facility on the Consummation Date or
shares of common stock of the reorganized Company that are reserved for
issuance upon the exercise of options issued and outstanding on the
Consummation Date.
(B) GIVE A BRIEF OUTLINE OF THE VOTING RIGHTS OF EACH CLASS OF VOTING
SECURITIES REFERRED TO IN PARAGRAPH (A) ABOVE.
AS OF SEPTEMBER 15, 1998:
With respect to the voting rights of the common stock of the Company, each
holder of a share of such common stock is entitled to one vote on all matters
on which such stockholders are entitled to vote.
AS OF CONSUMMATION DATE:
With respect to the voting rights of the common stock of the Company, each
holder of a share of such common stock will be entitled to one vote on all
matters on which such shareholders are entitled to vote.
INDENTURE SECURITIES
8. ANALYSIS OF INDENTURE PROVISIONS. INSERT AT THIS POINT THE ANALYSIS OF
INDENTURE PROVISIONS REQUIRED UNDER SECTION 305(A)(2) OF THE ACT.
(a) Definition of Default: Events of Default under the Indenture include
the following:
(i) the failure to pay the principal or Accreted Value (as defined
in the Indenture) of any Senior Note when such principal or Accreted Value
becomes due and payable, at maturity, upon acceleration, redemption,
pursuant to a required offer to purchase or otherwise;
(ii) a default in the observance or performance of any other
covenant or agreement contained in the Senior Notes or the Indenture
(other than Events of Default specified in clause (i) above) and such
Event of Default continues for a period of 60 days after the Company
receives written notice thereof from the Trustee specifying the default
and stating that such notice is a "Notice of Default" under the Indenture,
or the Company and the Trustee receive such notice from holders of at
least 25% in aggregate principal amount of the outstanding Senior Notes;
(iii) default under any mortgage, indenture or instrument under
which there may be issued or by which there may be secured or evidenced
any Indebtedness (as defined in the Indenture) for money borrowed by the
Company or any Restricted Subsidiary (as defined in the Indenture) or
Permitted Joint Venture (as defined in the Indenture) (or the payment of
which is guaranteed by the Company or any Restricted Subsidiary or
Permitted Joint Venture), whether such Indebtedness or guarantee now
exists, or is created after the date of original
issuance of the Senior Notes, which default (A) is caused by a failure to
pay when due principal on such Indebtedness within the grace period
provided in such Indebtedness (which failure continues beyond any
applicable grace period) (a "Payment Default") or (B) results in the
acceleration of such Indebtedness prior to its express maturity and, in
each case, the principal amount of any such Indebtedness, together with
the principal amount of any other such Indebtedness under which there has
been a Payment Default or the maturity of which has been so accelerated,
aggregates $5,000,000 or more;
(iv) one or more judgments in an aggregate amount in excess of
$5,000,000 (unless covered by insurance by a reputable insurer as to which
the insurer has acknowledged coverage) being rendered against the Company
or any Restricted Subsidiary or Permitted Joint Venture and such judgments
remain undischarged or unstayed for a period of 60 days after such
judgment or judgments become final and non-appealable;
(v) the Company or any Subsidiary (as defined in the Indenture) of
the Company or Permitted Joint Venture pursuant to or under or within the
meaning of any Bankruptcy Law (as defined in the Indenture):
(A) commences a voluntary case or proceeding;
(B) consents to the entry of an order for relief against it
in an involuntary case or proceeding;
(C) consents to the appointment of a Custodian (as defined in
the Indenture) of it or for all or substantially all of its property;
(D) makes a general assignment for the benefit of its
creditors; or
(E) shall generally not pay its debts when such debts become
due or shall admit in writing its inability to pay its debts generally;
(vi) a court of competent jurisdiction enters an order or decree
under any Bankruptcy Law that:
(A) is for relief against the Company or any Subsidiary or
Permitted Joint Venture of the Company in an involuntary case or
proceeding,
(B) appoints a Custodian of the Company, any Subsidiary or
Permitted Joint Venture of the Company for all or substantially all of its
properties, or
(C) orders the liquidation of the Company, any Subsidiary or
Permitted Joint Venture of the Company,
and in each case the order or decree remains unstayed and in effect for 60
days; or
(vii) any holder of at least $5,000,000 in aggregate principal
amount of Indebtedness of the Company, any Restricted Subsidiary or
Permitted Joint Venture shall foreclose upon assets of the Company or any
Restricted Subsidiary or Permitted Joint Venture having an aggregate fair
market value, individually or in the aggregate, of at least $5,000,000 or
shall have exercised any right under applicable law or applicable security
documents to take ownership of any such assets in lieu of foreclosure.
The Indenture contains no provisions relating to the withholding of notice
to holders of Senior Notes of an Event of Default.
(b) Authentication and Delivery; Application of Proceeds.
The Indenture provides that, upon a written order of the Company signed by
two Officers (as defined in the Indenture), the Trustee shall authenticate
Senior Notes for original issue up to $212,908,624. The Senior Notes will be
signed for the Company by two Officers of the Company. A Senior Note shall not
be valid until authenticated by the manual signature of the Trustee. The
signature shall be conclusive evidence that the Senior Note has been
authenticated under the Indenture.
The Trustee may appoint an authenticating agent acceptable to the Company
to authenticate Senior Notes. An authenticating agent may authenticate Senior
Notes whenever the Trustee may do so. Each reference in the Indenture to
authentication by the Trustee includes authentication by such agent. An
authenticating agent has the same rights as the Trustee to deal with the
Company or an Affiliate (as defined in the Indenture). (Section 2.02)
The Senior Notes will be issued in exchange for claims against the Company
or its affiliates as provided in the Plan, and accordingly, the issuance of the
Senior Notes will not result in proceeds to the Company.
(c) Release and Substitution of Property Subject to the Lien of the
Indenture: Not Applicable.
(d) Satisfaction and Discharge.
The Company may terminate its obligations under the Indenture when all
outstanding Senior Notes theretofore authenticated and issued have been
delivered to the Trustee for cancellation. In addition, the Company shall be
discharged from its obligations with respect to the Senior Notes (except with
respect to (A) the rights of the holders of the Senior Notes to receive, from
the trust fund described in Section 8.01(b) of the Indenture, payment of the
Accreted Value of, and the interest, if any, on such Senior Notes when such
payments are due, (B) the Company's obligations under Sections 2.05, 2.06,
2.07, 2.08, 4.01, 4.02 and 7.08 of the Indenture and (C) the rights, powers,
trusts, duties and immunities of the Trustee under the Indenture) when the
Company deposits with the Trustee, in trust, (i) cash, (ii) U.S. Government
Obligations (as defined in the Indenture) which, through the payment of
interest thereon and principal thereof in accordance with their terms, will
provide money in an amount sufficient to pay all the Accreted Value of and
interest, if any, on the Senior Notes on the dates such payments are due in
accordance with the terms of the Senior Notes, or (iii) a combination of cash
and such U.S. Government Obligations. (Section 8.02)
(e) Evidence of Compliance.
The Company shall deliver to the Trustee, within 90 days after the end of
each fiscal year of the Company, a certificate signed by two Officers of the
Company (one of whom must be the principal executive, financial or accounting
officer of the Company), stating that a review of the activities of the Company
during the preceding fiscal year has been made and, as to each such Officer
signing such certificate, that to the best of his or her knowledge the Company
has kept, observed, performed and fulfilled each and every covenant contained
in the Indenture and is not in default in the performance or observance of any
of the terms, provisions and conditions thereof (or, if a Default or Event of
Default shall have occurred, describing all such Defaults or Events of Defaults
of which he or she may have knowledge and the status thereof).
The Company shall, as long as any of the Senior Notes are outstanding,
notify the Trustee within 10 days of any event which is, or after notice or
lapse of time or both, would become, an Event of Default, such notification
specifying such Default or Event of Default and the status thereof.
<PAGE>
9. OTHER OBLIGORS. GIVE THE NAME AND COMPLETE MAILING ADDRESS OF ANY PERSON,
OTHER THAN THE APPLICANT, WHO IS AN OBLIGOR UPON THE INDENTURE SECURITIES.
There are no other obligors with respect to the Senior Notes.
CONTENTS OF AMENDMENT NO. 1 TO APPLICATION FOR QUALIFICATION. This application
for qualification comprises:
a. Pages numbered 1 to 12, consecutively.
b. The statement of eligibility and qualification of the trustee under
the Indenture to be qualified.*
c. The following exhibits in addition to those filed as a part of the
statement of eligibility and qualification of the trustee.
<TABLE>
<CAPTION>
<S> <C> <C>
Exhibit T3A1 Amended and Restated Certificate of Incorporation of the
Company, incorporated by reference to Exhibit 3.1 to applicant's
Quarterly Report on Form 10-Q for September 30, 1995*
Exhibit T3A2 Proposed Certificate Amending the Amended and Restated
Certificate of Incorporation of the Company*
Exhibit T3B Amended and Restated By-Laws of the Company, incorporated by
reference to Exhibit 3.2 to applicant's Quarterly Report on Form
10-Q for September 30, 1995*
Exhibit T3C Form of Indenture
Exhibit T3E1 Disclosure Statement for Joint Reorganization Plan of CAI
Wireless Systems, Inc. and Philadelphia Choice Television, Inc.
dated June 30, 1998, as filed with the United States Bankruptcy
Court for the District of Delaware, incorporated by reference to
Exhibit 99.1 to applicant's Current Report on Form 8-K dated July
1, 1998*
Exhibit T3E2 Disclosure Statement Supplement dated as of July 15, 1998,
incorporated by reference to Exhibit 99.1 to applicant's Current
Report on Form 8-K dated July 16, 1998.*
Exhibit T3E3 Joint Reorganization Plan of CAI Wireless Systems, Inc. and
Philadelphia Choice Television, Inc. dated June 30, 1998, as
modified on September 9, 1998*
Exhibit T3E4 Notice of (i) Commencement of Cases under Chapter 11 of
Bankruptcy Code, Meeting of Creditors and Fixing Dates, (ii)
hearings on (a) adequacy of Disclosure Statements and Prepetition
Solicitation Procedures and (b) confirmation of the Joint
Reorganization Plan dated June 30, 1998 of CAI Wireless Systems,
Inc. and Philadelphia Choice Television, Inc. and (iii) Sale of
MDU Assets Free and Clear of Liens, Claims, Interests and
Encumbrances under 11 U.S.C. <section><section> 105, 363 and 365
Exhibit T3E5 Form of Ballot distributed to holders of Old Senior Notes
for voting on Joint Reorganization Plan dated June 30, 1998,
submitted by CAI Wireless Systems, Inc. and Philadelphia Choice
Television, Inc.*
Exhibit T3E6 Letter dated June 29, 1998 from Jared E. Abbruzzese,
Chairman and Chief Executive Officer of applicant to holders of
Old Senior Notes*
Exhibit T3F Cross Reference Sheet showing the location in the Indenture
of the provisions inserted therein pursuant to Section 310
through 318(a), inclusive, of the Trust Indenture Act of 1939
(included in Exhibit T3C hereof)
</TABLE>
*Previously filed.
<PAGE>
SIGNATURE
Pursuant to the requirements of the Trust Indenture Act of 1939, the
applicant, CAI Wireless Systems, Inc., a corporation organized and existing
under the laws of the State of Connecticut, has duly caused this application to
be signed on its behalf by the undersigned, thereunto duly authorized, and its
seal to be hereunto affixed and attested, all in the City of Albany, and State
of New York, on the 8th day of October, 1998.
CAI WIRELESS SYSTEMS, INC.
[SEAL]
BY: /S/ JARED E.ABBRUZZESE
Name: Jared E. Abbruzzese
Title: Chief Executive Officer
Attest:
/s/ Sabino Rodriguez III
Name: Sabino Rodriguez III
Title: Assistant Secretary
Exhibit T3C
CAI WIRELESS SYSTEMS, INC., as Issuer
and
STATE STREET BANK AND TRUST COMPANY, as Trustee
INDENTURE
Dated as of October ___, 1998
$212,909,624
13% Senior Notes due 2004
<PAGE>
Reconciliation and tie between Trust Indenture Act of 1939
and Indenture, dated as of [ ], 1998
<TABLE>
<CAPTION>
Trust Indenture Indenture
ACT SECTION SECTION
<S> <C>
310(a)(1) 7.11
(a)(2) 7.11
(a)(3) N.A.
(a)(4) N.A.
(a)(5) 7.11
(b) 7.09; 7.11; 11.02
(c) N.A.
311(a) 7.12
(b) 7.12
(c) N.A.
312(a) 2.05
(b) 11.03
(c) 11.03
313(a) 7.07
(b)(1) N.A.
(b)(2) 7.07
(c) 7.07; 11.02
(d) 7.07
314(a) 4.07; 11.02
(b) N.A.
(c)(1) 11.04
(c)(2) 11.04
(c)(3) N.A.
(d) N.A.
(e) 11.05
(f) N.A.
315(a) 7.01
(b) 7.05; 11.02
(c) 7.01
(d) 7.01
(e) 6.11
316(a) (last
sentence) 2.09
(a)(1)(A) 6.05
(a)(1)(B) 6.04
(a)(2) N.A.
(b) 6.07
(c) 9.04
317(a)(1) 6.08
(a)(2) 6.09
(b) 2.04
318(a) 11.01
(b) N.A.
(c) 11.01
________________________
Note: This reconciliation and tie shall not, for any purpose, be deemed to be a
part of the Indenture.
TABLE OF CONTENTS
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ARTICLE ONE. DEFINITIONS AND OTHER PROVISIONS OF GENERAL APPLICATION 1
1.01. Definitions 1
1.02. Incorporation by Reference of Trust Indenture Act 16
1.03. Rules of Construction 16
ARTICLE TWO. THE SECURITIES 17
2.01. Forms and Dating 17
2.02. Execution and Authentication 17
2.03. Registrar and Paying Agent 18
2.04. Paying Agent to Hold Money in Trust 18
2.05. Securityholder Lists 18
2.06. Transfer and Exchange 19
2.07. Replacement Securities 19
2.08. Outstanding Securities 19
2.09. Treasury Securities 20
2.10. Temporary Securities 20
2.11. Cancellation 20
2.12. Defaulted Interest 20
2.13. CUSIP Number 20
2.14. Deposit of Moneys 21
ARTICLE THREE. REDEMPTION OF SECURITIES 21
3.01. Notices to the Trustee 21
3.02. Selection of Securities To Be Redeemed 21
3.03. Notice of Redemption 21
3.04. Effect of Notice of Redemption 22
3.05. Deposit of Redemption Price 22
3.06. Securities Redeemed or Purchased in Part 22
ARTICLE FOUR. COVENANTS 23
4.01. Payment of Securities 23
4.02. Maintenance of Office or Agency 23
4.03. Corporate Existence 23
4.04. Payment of Taxes and Other Claims 24
4.05. Maintenance of Properties; Insurance; Books and Records; Compliance
with Law 24
4.06. Compliance certificate 24
4.07. SEC Reports 25
4.08. Limitation on Incurrence of Additional Indebtedness 25
4.09. Limitation on Restricted Payments 26
4.10. Limitation on Issuance and Sale of Capital Stock of Restricted
Subsidiaries and Permitted Joint Ventures 29
4.11. Limitations on Liens 29
4.12. Disposition of Proceeds of Asset Sales 29
4.13. Limitation on Transactions with Affiliates 32
4.14. Limitation on Restricted and Unrestricted Subsidiaries 33
4.15. Limitation on Dividend and Other Payment Restrictions
Affecting Restricted Subsidiaries and Permitted Joint Ventures 34
<PAGE>
4.16. Intentionally Omitted 34
4.17. Limitation on Sale and Leaseback Transactions 34
4.18. Limitation on Line of Business 35
4.19. Waiver of Stay, Extension or Usury Laws 35
ARTICLE FIVE. SUCCESSOR CORPORATION 35
5.01. When Company May Merge, etc. 35
5.02. Successor Substituted 36
ARTICLE SIX. REMEDIES 37
6.01. Events of Default 37
6.02. Acceleration 38
6.03. Other Remedies 39
6.04. Waiver of Past Defaults 39
6.05. Control by Majority 39
6.06. Limitation on Suits 39
6.07. Right of Holders To Receive Payment 40
6.08. Collection Suit by Trustee 40
6.09. Trustee May File Proofs of Claim 40
6.10. Priorities 40
6.11. Undertaking for Costs 41
6.12. Restoration of Rights and Remedies 41
ARTICLE SEVEN. TRUSTEE 41
7.01. Duties 41
7.02. Rights of Trustee 42
7.03. Individual Rights of Trustee 43
7.04. Trustee's Disclaimer 43
7.05. Notice of Default 43
7.06. Money Held in Trust 43
7.07. Reports by Trustee to Holders 43
7.08. Compensation and Indemnity 44
7.09. Replacement of Trustee 44
7.10. Successor Trustee by Merger, etc. 45
7.11. Eligibility; Disqualification 45
7.12. Preferential Collection of Claims Against Company 45
ARTICLE EIGHT. SATISFACTION AND DISCHARGE OF INDENTURE 46
8.01. Termination of the Company's Obligations 46
8.02. Legal Defeasance and Covenant Defeasance 47
8.03. Application of Trust Money 49
8.04 Repayment to Company 49
8.05. Reinstatement 50
ARTICLE NINE. AMENDMENTS, SUPPLEMENTS AND WAIVERS 50
9.01. Without Consent of Holders 50
9.02. With Consent of Holders 50
9.03. Compliance with Trust Indenture Act 51
9.04. Revocation and Effect of Consents 51
<PAGE>
9.05. Notation on or Exchange of Securities 52
9.06. Trustee May Sign Amendments, etc. 52
ARTICLE TEN. [RESERVED] 52
ARTICLE ELEVEN. MISCELLANEOUS 53
11.01. Trust Indenture Act of 1939 53
11.02. Notices 53
11.03. Communication by Holders with Other Holders 54
11.04. Certificate and Opinion as to Conditions Precedent 54
11.05. Statements Required in Certificate or Opinion 54
11.06. Rules by Trustee, Paying Agent, Registrar 55
11.07. Governing Law 55
11.08. No Interpretation of Other Agreements 55
11.09. No Recourse Against Others 55
11.10. Successors 55
11.11. Duplicate Originals 55
11.12. Separability 55
11.13. Table of Contents, Headings, etc. 55
11.14. Benefits of Indenture 55
11.15. Business Days 56
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SIGNATURES
EXHIBIT A Form of Security
<PAGE>
INDENTURE, dated as of October __, 1998, between CAI WIRELESS SYSTEMS, INC.,
a corporation incorporated under the laws of the State of Connecticut (the
"Company"), and STATE STREET BANK AND TRUST COMPANY, a national banking
association, as trustee (the "Trustee").
Each party hereto agrees as follows for the benefit of each other
party and for the equal and ratable benefit of the Holders of the Company's 13%
Senior Notes due 2004 (the "Securities").
ARTICLE ONE
DEFINITIONS AND OTHER PROVISIONS OF GENERAL APPLICATION
1.01. DEFINITIONS.
"Accreted Value" means, with respect to any Security, as of any
date of determination prior to maturity, the sum of (a) $469.68 per $1,000
principal amount at maturity and (b) the portion of the excess of the principal
amount of such Security that shall have been accreted thereon through such date
over $469.68, such amount to be so accreted on a daily basis at the rate of 13%
per annum, compounded semi-annually on each [April __] and [October __] from
the Issue Date through the date of determination.
"Acquired Indebtedness" means Indebtedness of a Person or any of
its Subsidiaries existing at the time such Person becomes a Restricted
Subsidiary or at the time it merges or consolidates with the Company, any
Restricted Subsidiary or a Permitted Joint Venture or assumed in connection
with the acquisition of assets from such Person, including any such
Indebtedness incurred by such Person in connection with, or in anticipation or
contemplation of, such Person's becoming a Restricted Subsidiary or such
acquisition, merger or consolidation.
"Affiliate" means a Person who, directly or indirectly, through one
or more intermediaries, controls, or is controlled by, or is under common
control with, the Company or any Restricted Subsidiary. The term "control"
means the possession, directly or indirectly, of the power to direct or cause
the direction of the management and policies of a Person, whether through the
ownership of voting securities, by contract or otherwise. Notwithstanding the
foregoing, the term "Affiliate" shall not, with respect to the Company, include
any Wholly Owned Restricted Subsidiary of the Company.
"Agent" means any Registrar or Paying Agent of the Securities.
"Asset Acquisition" means (a) an Investment by the Company or any
Restricted Subsidiary in any other Person pursuant to which such Person shall
become a Subsidiary of the Company, or shall be merged with or into the Company
or any Restricted Subsidiary, (b) the acquisition by the Company or any
Restricted Subsidiary of the assets of any Person which constitute all or
substantially all of the assets of such Person or (c) the acquisition by the
Company or any Restricted Subsidiary of any division or line of business of any
Person.
"Asset Sale" means any direct or indirect sale, issuance,
conveyance, transfer, lease (other than operating leases entered into in
the ordinary course of business pursuant to ordinary business terms),
assignment or other transfer or disposition for value (for purposes of this
definition, each, a "disposition") by the Company, a Restricted
Subsidiary or a Permitted Joint Venture (including, without limitation,
pursuant to any Sale and Leaseback Transaction or any merger or consolidation
of any Subsidiary of the Company with or into another Person (other than
the Company or any Wholly Owned Restricted Subsidiary of the Company)
whereby such Subsidiary shall cease to be a Restricted Subsidiary) to any
Person of (a) any Capital Stock of any Restricted Subsidiary (other than in
respect of directors' qualifying shares or investments by foreign
nationals mandated by applicable law) or any interest held by the
Company in any Permitted Joint Venture; (b) all or substantially all of the
properties and assets of any division or line of business of the Company, a
Restricted Subsidiary or a Permitted Joint Venture; or (c) any other
properties or assets of the Company, a Restricted Subsidiary or a Permitted
Joint Venture, other than in the ordinary course of business pursuant to
ordinary business terms; PROVIDED, HOWEVER, that for purposes of Section 4.12,
Asset Sales shall not include: (i) a transaction or series of related
transactions for which the Company or the applicable Restricted Subsidiary
or Permitted Joint Venture receives aggregate consideration of less than
$500,000 in any fiscal year; (ii) transactions complying with Section 5.01;
(iii) any disposition to the Company; (iv) any disposition to a Wholly
Owned Restricted Subsidiary or to a Permitted Joint Venture; PROVIDED,
HOWEVER that such Wholly Owned Restricted Subsidiary or Permitted Joint
Venture is not subject to any Payment Restriction; (v) any Lien securing
Indebtedness to the extent that such Lien is granted in compliance with
Section 4.11; (vi) any Restricted Payment (or Permitted Investment)
permitted by Section 4.09; (vii) any disposition of assets
or property in the ordinary course of business and on ordinary business
terms to the extent such property or assets are obsolete, worn out or no longer
useful in the Company's or the applicable Restricted Subsidiary's or Permitted
Joint Venture's business; (viii) if approved by a majority of the members of
the Board of Directors, the disposition or other transfer of shares of common
stock of CS Wireless held by the Company in the nature of a purchase price or
other adjustment for which the Company is obligated pursuant to the terms of
the Participation Agreement; and (ix) if approved by a majority of the members
of the Board of Directors, the lease or sublease, as applicable, of spectrum
rights owned or leased by the Company, a Restricted Subsidiary or a Permitted
Joint Venture to any Person (other than to the Company, any of its Restricted
Subsidiaries or any Permitted Joint Venture, which dispositions are permitted
under clauses (iii) and (iv) above); PROVIDED, HOWEVER, that (A) such lease or
sublease provides for lease payments and other conditions which are no less
favorable to the Company, such Restricted Subsidiary or Permitted Joint Venture
in any material respect than then prevailing market conditions, as evidenced by
a resolution of and determined in good faith by the Board of Directors, in the
case of the Company and the Restricted Subsidiaries, or other equivalent
governing body, in the case of a Permitted Joint Venture, and set forth in an
officer's certificate delivered to the Trustee, (B) the consideration received
by the Company or such Restricted Subsidiary in respect of such lease or
sublease consists of at least 100% cash or Cash Equivalents, and (C) the term
of such lease or sublease expires prior to the Stated Maturity.
"Asset Sale Offer" shall have the meaning set forth in Section
4.12.
"Asset Sale Offer Price" shall have the meaning set forth in
Section 4.12.
"Asset Sale Purchase Date" shall have the meaning set forth in
Section 4.12.
"Attributable Value" means, as to any particular lease under which
any Person is at the time liable other than a Capitalized Lease Obligation, and
at any date as of which the amount thereof is to be determined, the total net
amount of rent required to be paid by such Person under such lease during the
initial term thereof as determined in accordance with GAAP, discounted from the
last date of such initial term to the date of determination at a rate per annum
equal to the discount rate which would be applicable to a Capitalized Lease
Obligation with a like term in accordance with GAAP. The net amount of rent
required to be paid under any such lease for any such period shall be the
aggregate amount of rent payable by the lessee with respect to such period
after excluding amounts required to be paid on account of insurance, taxes,
assessments, utility, operating and labor costs and similar charges. In the
case of any lease which is terminable by the lessee upon the payment of a
penalty, such net amount shall also include the amount of such penalty, but no
rent shall be considered as required to be paid under such lease subsequent to
the first date upon which it may be so terminated. "Attributable Value" means,
as to a Capitalized Lease Obligation under which any Person is at the time
liable and at any date as of which the amount thereof is to be determined, the
capitalized amount thereof that would appear on the face of a balance sheet of
such Person in accordance with GAAP.
"Bankruptcy Law" means Title 11, United States Code or any similar
law for the relief of debtors.
"Board of Directors" means the board of directors of the Company or
any duly authorized committee of such board.
"Board Resolution" means a copy of a resolution certified by the
Secretary or an Assistant Secretary of the Company to have been duly adopted by
the Board of Directors and to be in full force and effect on the date of such
certification, and delivered to the Trustee.
"Business Day" means each Monday, Tuesday, Wednesday, Thursday and
Friday which is not a day on which banking institutions in The City of New
York, State of New York, are authorized or obligated by law, regulation or
executive order to close.
"Capital Stock" means (a) with respect to any Person that is a
corporation, any and all shares, interests, participations or other equivalents
(however designated) of capital stock, including each class of common stock and
Preferred Stock of such Person, and (b) with respect to any Person that is not
a corporation, any and all partnership or other equity interests of such
Person.
"Capitalized Lease Obligation" means any obligation under a lease
of (or other agreement conveying the right to use) any property (whether real,
personal or mixed) that is required to be classified and accounted for as a
capital lease obligation under GAAP, and, for the purpose of this Indenture,
the amount of any such obligation at any date shall be the capitalized amount
thereof at such date, determined in accordance with GAAP.
"Cash Equivalents" means, at any time, (a) any evidence of
Indebtedness with a maturity of 180 days or less issued or directly and fully
guaranteed or insured by the United States of America or any agency or
instrumentality thereof (provided that the full faith and credit of the United
States of America is pledged in support thereof); (b) certificates of deposit
or acceptances with a maturity of 180 days or less of any financial institution
that is a member of the Federal Reserve System having combined capital and
surplus and undivided profits of not less than $500,000,000; (c) certificates
of deposit with a maturity of 180 days or less of any financial institution
that is organized under the laws of the United States, any state thereof or the
District of Columbia that are rated at least A-1 by S&P or at least P-1 by
Moody's or at least an equivalent rating category of another nationally
recognized securities rating agency; and (d) repurchase agreements and reverse
repurchase agreements with a term of not more than seven days relating to
marketable direct obligations issued or unconditionally guaranteed by the
government of the United States of America or issued by any agency thereof and
backed by the full faith and credit of the United States of America, in each
case maturing within 180 days from the date of acquisition; PROVIDED that the
terms of such agreements comply with the guidelines set forth in the Federal
Financial Agreements of Depository Institutions With Securities Dealers and
Others, as adopted by the Comptroller of the Currency on October 31, 1985.
"Closing Price" means on any Trading Day with respect to the per
share price of any shares of Capital Stock 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, if not
listed or admitted to trading on any national securities exchange, on Nasdaq
or, if such shares are not listed or admitted to trading on any national
securities exchange or quoted on such automated quotation system 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 such
automated quotation system 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.
"Common Stock" means, with respect to any Person, any and all
shares, interests or other participations in, and other equivalents (however
designated and whether voting or nonvoting) of, such Person's common stock,
whether outstanding at the Issue Date or issued after the Issue Date, and
includes, without limitation, all series and classes of such common stock.
"Company" means the party named as such in this Indenture until a
successor replaces it (or any previous successor) pursuant to this Indenture,
and thereafter means such successor.
"Company Additional Debt Ratio" means, at any date of
determination, the ratio of (a) the aggregate principal amount of additional
Indebtedness that shall have been incurred by the Company, the Restricted
Subsidiaries and any Permitted Joint Venture pursuant to Section 4.08(a) and is
outstanding on such date, to (b) the aggregate amount of cash that shall have
been raised by the Company and the Restricted Subsidiaries as of such date in
one or more Qualified Transactions.
"Company Request" or "Company Order" means a written request or
order signed in the name of the Company by any one of its Chairman of the
Board, its Vice-Chairman, its President, an Executive Vice President or a Vice
President, and by any one of its Treasurer, an Assistant Treasurer, its
Secretary or an Assistant Secretary, and delivered to the Trustee.
"Consolidated Net Worth" means, with respect to the Company, at any
date, the consolidated stockholders' equity of the Company and its Restricted
Subsidiaries and any Permitted Joint Ventures, as determined on a consolidated
basis in accordance with GAAP, less any amounts attributable to Disqualified
Capital Stock of the Company, and any Preferred Stock of any of its Restricted
Subsidiaries or Permitted Joint Ventures (other than to the extent held by the
Company or any of its Wholly Owned Restricted Subsidiaries).
"consolidation" means, with respect to any Person, the
consolidation of the accounts of such Person and each of its Subsidiaries (or
its Restricted Subsidiaries, as the case may be) if and to the extent the
accounts of such Person and each of its Subsidiaries (or its Restricted
Subsidiaries, as the case may be) would normally be consolidated, all in
accordance with GAAP. The term "consolidated" shall have a meaning correlative
to the foregoing.
"control" means, with respect to any specified Person, the power to
direct the management and policies of such Person, directly or indirectly,
whether through the ownership of Voting Stock, by contract or otherwise; and
the terms "controlling" and "controlled" have meanings correlative to the
foregoing.
"Corporate Trust Office" means the corporate trust office of the
Trustee at which at any particular time its corporate trust business shall be
principally administered, which on the date hereof is located in Hartford,
Connecticut.
"covenant defeasance" has the meaning set forth in Section 8.02.
"CS Wireless" means CS Wireless Systems, Inc., a Delaware
corporation. Notwithstanding anything to the contrary contained in this
Indenture, for all purposes of this Indenture, CS Wireless, to the extent that
it is a Subsidiary of the Company, shall be deemed to be an Unrestricted
Subsidiary.
"CS Wireless Investment" means that certain Investment of the
Company in CS Wireless consisting of, collectively, all of the equity interest
in CS Wireless received by the Company as of the Issue Date.
"Custodian" means any receiver, trustee, assignee, liquidator,
sequestrator or similar official under any Bankruptcy Law.
"Default" means an event or condition the occurrence of which is,
or with the lapse of time or the giving of notice or both would be, an Event of
Default.
"Disqualified Capital Stock" means any Capital Stock which, by its
terms (or by the terms of any security into which it is convertible or for
which it is exchangeable), or upon the happening of any event, matures
(excluding any maturity as the result of an optional redemption by the issuer
thereof) or is mandatorily redeemable, pursuant to a sinking fund obligation or
otherwise, or is redeemable at the sole option of the holder thereof, in whole
or in part, on or prior to the Final Maturity Date.
"ERISA" means the Employee Retirement Income Security Act of 1974,
as amended from time to time.
"Event of Default" has the meaning set forth in Section 6.01.
"Exchange Act" means the Securities Exchange Act of 1934, as
amended.
"fair market value" means, with respect to any asset or property,
the price which could be negotiated in an arm's-length, free market
transaction, for cash, between an informed and willing seller and an informed
and willing and able buyer, neither of whom is under undue pressure or
compulsion to complete the transaction. Except as provided in the TIA, fair
market value shall be determined (a) with respect to any Asset Sale involving
consideration of less than $5,000,000, by management of the Company and (b) in
all other cases (whether or not involving an Asset Sale), by the Board of
Directors acting in good faith and shall be evidenced by a Board Resolution;
PROVIDED, HOWEVER, that if (i) the aggregate non-cash consideration to be
received by the Company or any Restricted Subsidiary from any Asset Sale shall
reasonably be expected to exceed $5,000,000 or (ii) if the net worth of any
Restricted Subsidiary to be designated as an Unrestricted Subsidiary shall
reasonably be expected to exceed $10,000,000, then fair market value shall be
determined by a nationally recognized investment banking firm.
"FCC" means the Federal Communications Commission, as from time to
time constituted, or if at any time after the execution of this Indenture such
Commission is not existing and performing the applicable duties now assigned to
it, then the body or bodies performing such duties at such time.
"Final Maturity Date" means October [ ], 2004.
"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 of America, which are applicable
from time to time and are consistently applied.
"guarantee" means any obligation, contingent or otherwise, of any
Person directly or indirectly guaranteeing any Indebtedness or other obligation
of any other Person and, without limiting the generality of the foregoing, any
obligation, direct or indirect, contingent or otherwise, of such Person (a) to
purchase or pay (or advance or supply funds for the purchase or payment of)
such Indebtedness or other obligation of such other Person (whether arising by
virtue of partnership arrangements, or by agreement to keep-well, to purchase
assets, goods, securities or services, to take-or-pay, or to maintain financial
statement conditions or otherwise) or (b) entered into for purposes of assuring
in any other manner the obligee of such Indebtedness or other obligation of the
payment thereof or to protect such obligee against loss in respect thereof (in
whole or in part) (but if in part, only to the extent thereof); PROVIDED,
HOWEVER, that the term "guarantee" shall not include (i) endorsements for
collection or deposit in the ordinary course of business and (ii) guarantees
(other than guarantees of Indebtedness) by the Company in respect of assisting
one or more Restricted Subsidiaries in the ordinary course of their respective
businesses, including without limitation guarantees of trade obligations and
operating leases, on ordinary business terms. The term "guarantee" used as a
verb has a corresponding meaning.
"Holder" or "Securityholder" means the Person in whose name a
Security is registered on the Registrar's books.
"incur" shall have the meaning set forth in Section 4.08; and
"incurrence" and "incurred" shall have meanings correlative to the foregoing.
"Indebtedness" means with respect to any Person, without
duplication, any liability of such Person or such Person's Restricted
Subsidiaries or Permitted Joint Ventures (a) for borrowed money, (b) evidenced
by bonds, debentures, notes or other similar instruments, (c) constituting
Capitalized Lease Obligations, (d) incurred or assumed as the deferred purchase
price of property (including, without limitation, obligations which constitute
wireless channel rights obligations as they have been calculated in the
financial statements of the Company on the Issue Date), or pursuant to
conditional sale obligations and title retention agreements (but excluding
trade accounts payable arising in the ordinary course of business), (e) for
the reimbursement of any obligor on any letter of credit, banker's acceptance
or similar credit transaction, (f) for Indebtedness of others guaranteed by
such Person, (g) for Interest Swap Obligations, (h) for the higher of the
voluntary liquidation preference, involuntary liquidation preference, fixed
redemption price or repurchase price of all Disqualified Capital Stock, (i) the
Attributable Value of any lease permitted under Section 4.17, and (j) for
Indebtedness of any other Person of the type referred to in clauses (a) through
(i) which is secured by any Lien on any property or asset of such first
referred to Person, whether or not such Indebtedness is assumed by such Person
or is not otherwise such Person's legal liability; PROVIDED, HOWEVER, that if
the obligations so secured have not been assumed by such Person or are
otherwise not such Person's legal liability, the amount of such Indebtedness
for the purposes of this definition shall be limited to the lesser of the
amount of such Indebtedness secured by such Lien or the fair market value of
the assets or property securing such Lien. The amount of Indebtedness of any
Person at any date shall be the outstanding principal amount of all
unconditional obligations described above, as such amount would be reflected on
a balance sheet prepared in accordance with GAAP, and the maximum liability at
such date of such Person for any contingent obligations described above.
"Indenture" means this Indenture, as amended, modified or
supplemented from time to time.
"interest" means, with respect to any Security, the amount of all
interest accruing on such Security, including all interest accruing subsequent
to the occurrence of any events specified in Sections 6.01(e) and (f) or which
would have accrued but for any such event, whether or not such claims are
allowable under applicable law.
"Interest Payment Date" means the Stated Maturity of an installment
of interest on the Securities, as set forth therein.
"Interest Swap Obligations" means the obligations of any Person
under any interest rate protection agreement, interest rate future, interest
rate option, interest rate swap, interest rate cap or other interest rate hedge
or agreement.
"Investment" by any Person means any direct or indirect (a) loan,
advance or other extension of credit or capital contribution (by means of
transfers of cash or other property (valued at the fair market value thereof as
of the date of transfer) to others or payments for property or services for the
account or use of others, or otherwise), (b) purchase or acquisition of Capital
Stock, bonds, notes, debentures or other securities or evidences of
Indebtedness issued by any other Person (whether by merger, consolidation,
amalgamation or otherwise and whether or not purchased directly from the issuer
of such securities or evidences of Indebtedness) and (c) guarantee or
assumption of the Indebtedness of any other Person (except for an assumption of
Indebtedness for which the assuming Person receives consideration with a fair
market value at least equal to the principal amount of the Indebtedness
assumed). Investments shall exclude extensions of trade credit and advances to
customers and suppliers to the extent made in the ordinary course of business
on ordinary business terms. The amount of any non-cash Investment shall be the
fair market value of such Investment, as determined conclusively in good faith
by management of the Company unless the fair market value of such Investment
exceeds $5,000,000, in which case the fair market value shall be determined
conclusively in good faith by the Board of Directors at the time such
Investment is made. Notwithstanding the foregoing, the purchase or acquisition
of any securities of any other Person to the extent effected with Qualified
Capital Stock of the Company shall not be deemed to be an Investment. The
amount of any Investment shall not be adjusted for increases or decreases in
value, or write-ups, write-downs or write-offs with respect to such Investment.
"Issue Date" means the actual date of original issuance of the
Securities.
"legal defeasance" shall have the meaning set forth in Section
8.02.
"Lien" means any lien, mortgage, deed of trust, pledge, security
interest, charge or encumbrance of any kind (including any conditional sale or
other title retention agreement, any lease in the nature thereof and any option
or other agreement to sell, and any filing of or any agreement to give, any
security interest).
"Maturity Date" means, with respect to any Security, the date on
which any principal of such Security becomes due and payable as therein or
herein provided, whether at the Final Maturity Date with respect to such
principal or by declaration of acceleration, call for redemption or purchase or
otherwise.
"Moody's" means Moody's Investors Service, Inc. and its successors.
"Net Cash Proceeds" means, with respect to any Asset Sale, the
proceeds in the form of cash or Cash Equivalents (including payments in respect
of deferred payment obligations when received in the form of cash or Cash
Equivalents) received by the Company, a Restricted Subsidiary or a Permitted
Joint Venture from such Asset Sale (including distributions of Net Cash
Proceeds by Restricted Subsidiaries and Permitted Joint Ventures to the
Company) net of (a) reasonable out-of-pocket expenses and fees relating to such
Asset Sale (including, without limitation, legal, accounting and investment
banking fees and sales commissions, recording fees, title insurance premiums,
appraisers fees and costs reasonably incurred in preparation of any asset or
property for sale), (b) taxes paid or reasonably estimated to be payable as a
result of such Asset Sale (calculated based on the combined state, federal and
foreign statutory tax rates applicable to the Company, the Restricted
Subsidiary or the Permitted Joint Venture consummating such Asset Sale),
(c) repayment of Indebtedness secured by assets subject to such Asset Sale, (d)
appropriate amounts to be provided by the Company or the applicable Restricted
Subsidiary or Permitted Joint Venture as a reserve, in accordance with GAAP
against any liabilities associated with such assets and retained by the
Company, such Restricted Subsidiary or Permitted Joint Venture after such Asset
Sale, including, without limitation, pension and other post-employment benefit
liabilities and liabilities related to environmental matters and the after-tax
cost of any indemnification payments (fixed or contingent) attributable to the
seller's indemnities to the purchaser undertaken by the Company, such
Restricted Subsidiary or Permitted Joint Venture in connection with any such
Asset Sale (but excluding any payments which, by the terms of the indemnities
will not, under any circumstances, be made during the term of the Securities)
and (e) all distributions and other payments required to be made to minority
interests holders in Restricted Subsidiaries or joint ventures (including
Permitted Joint Ventures) as a result of such Asset Sale; PROVIDED, HOWEVER,
that if the instrument or agreement governing such Asset Sale requires the
transferor to maintain a portion of the purchase price in escrow (whether as a
reserve for adjustment of the purchase price or otherwise) or to provide for
indemnification of the transferee for specified liabilities in a maximum
specified amount, the portion of the cash or Cash Equivalents that is actually
placed in escrow or segregated and set aside by the transferor for such
indemnification obligations shall not be deemed to be Net Cash Proceeds until
the escrow terminates or the transferor ceases to segregate and set aside such
funds, in whole or in part, and then only to the extent of the proceeds
released from escrow to the transferor or that are no longer segregated and set
aside by the transferor.
"Officer" means the Chairman of the Board, the President, any
Executive Vice President, any Vice President, the Chief Financial Officer, the
Treasurer, the Secretary or the Controller of the Company.
"Officers' Certificate" means a certificate signed by two Officers
or by an Officer and an Assistant Treasurer or Assistant Secretary of the
Company, and delivered to the Trustee.
"Opinion of Counsel" means a written opinion from legal counsel who
is reasonably acceptable to the Trustee. The counsel may be an employee of or
counsel to the Company.
"Participation Agreement" means that certain agreement dated as of
December 15, 1995 by and among the Company, CS Wireless Systems, Inc. and
Heartland Wireless Communications, Inc., as amended by Amendment No. 1 to
Participation Agreement dated as of February 22, 1996, as such agreement is in
effect on the Issue Date.
"Paying Agent" has the meaning set forth in Section 2.03, except
that, for the purposes of Section 4.12 and Articles Three and Eight, the Paying
Agent shall not be the Company or a Subsidiary of the Company or any of their
respective Affiliates.
"Payment Restriction" shall have the meaning set forth in
Section 4.15.
"Permitted Business" means the Wireless Broadband Business
conducted by the Company and its Restricted Subsidiaries as of the date of the
Indenture and any businesses that in the good faith judgment of the Board of
Directors are reasonably related thereto.
"Permitted Exchange" shall have the meaning set forth in
Section 4.12.
"Permitted Indebtedness" means, without duplication, each of the
following:
(a) the Securities;
(b) the Indebtedness of the Company under the Senior Secured
Facility (and the incurrence by any Restricted Subsidiary of guarantees
thereof) in an aggregate principal amount at any one time outstanding not
to exceed $80 million, less any amounts applied to the permanent
reduction of such credit facility pursuant to Section 4.12;
(c) Indebtedness of the Company and Permitted Subsidiary
Indebtedness outstanding on the Issue Date less any prepayments or
repayments in respect thereof, together with (subject to approval of a
majority of the Board of Directors) Indebtedness incurred by the Company
in satisfaction of any purchase price or other adjustments arising out of
the transactions contemplated by the Participation Agreement;
(d) Interest Swap Obligations; PROVIDED, HOWEVER, that such
Interest Swap Obligations are entered into to protect the Company from
fluctuations in interest rates of its Indebtedness, to the extent the
notional principal amount of such Interest Swap Obligation does not
exceed the principal amount of the Indebtedness to which such Interest
Swap Obligations relate;
(e) Refinancing Indebtedness;
(f) Indebtedness arising from the honoring by a bank or other
financial institution of a check, draft or similar instrument
inadvertently (except in the case of daylight overdrafts) drawn against
insufficient funds in the ordinary course of business; PROVIDED, HOWEVER,
that such Indebtedness is extinguished within two business days of
incurrence;
(g) Indebtedness of a Wholly Owned Restricted Subsidiary owed to
and held by the Company or another Wholly Owned Restricted Subsidiary, in
each case which is not subordinated in right of payment to any
Indebtedness of such Restricted Subsidiary, except that (i) any transfer
of such Indebtedness by the Company or a Wholly Owned Restricted
Subsidiary (other than to the Company or to a Wholly Owned Restricted
Subsidiary) and (ii) the sale, transfer or other disposition by the
Company or any Restricted Subsidiary of Capital Stock of a Wholly Owned
Restricted Subsidiary which is owed Indebtedness of another Wholly Owned
Restricted Subsidiary such that it ceases to be a Wholly Owned Restricted
Subsidiary shall, in each case, be an incurrence of Indebtedness by such
Restricted Subsidiary subject to the other provisions of Section 4.08;
(h) Indebtedness of the Company owed to and held by a Wholly
Owned Restricted Subsidiary which is unsecured and subordinated in right
of payment to the payment and performance of the Company's obligations
under this Indenture and the Securities, except that (i) any transfer of
such Indebtedness by a Wholly Owned Restricted Subsidiary (other than to
another Wholly Owned Restricted Subsidiary) and (ii) the sale, transfer
or other disposition by the Company or any Restricted Subsidiary of
Capital Stock of a Wholly Owned Restricted Subsidiary which holds
Indebtedness of the Company such that it ceases to be a Wholly Owned
Restricted Subsidiary shall, in each case, be an incurrence of
Indebtedness by the Company, subject to the other provisions of Section
4.08;
(i) Indebtedness of the Company, any Restricted Subsidiary or
Permitted Joint Venture represented by letters of credit for the account
of the Company, such Restricted Subsidiary or Permitted Joint Venture, as
the case may be, in order to provide security for workers' compensation
claims, payment obligations in connection with self-insurance or similar
requirements in the ordinary course of business pursuant to ordinary
business terms; and
(j) Indebtedness incurred by the Company or any Restricted
Subsidiary the proceeds of which are to be used to fund the operation of
the Wireless Broadband Business of the Company and its Restricted
Subsidiaries; PROVIDED, HOWEVER, that the aggregate principal amount of
Indebtedness incurred and outstanding pursuant to this clause (j) shall
not exceed $5 million in the aggregate at any time outstanding.
"Permitted Investments" means, without duplication, each of the
following:
(a) Investments by the Company or any Wholly Owned Restricted
Subsidiary to acquire the stock or assets of any Person (or Indebtedness
of such Person acquired in connection with a transaction in which such
Person becomes a Restricted Subsidiary) engaged in the Wireless Broadband
Business including related activities and services; PROVIDED, HOWEVER,
that the aggregate amount of Investments made and outstanding pursuant to
this clause (a) which at the time of determination has been made in
entities which are not Wholly Owned Restricted Subsidiaries or Permitted
Joint Ventures shall not at any time exceed $15,000,000 and each such
Investment must be approved by a majority of the Board of Directors;
(b) Investments arising as a result of the receipt by the Company
or any Restricted Subsidiary of non-cash consideration for an Asset Sale
effected in compliance with Section 4.12 (other than pursuant to a
Permitted Exchange);
(c) Investments by the Company or any Wholly Owned Restricted
Subsidiary in any Wholly Owned Restricted Subsidiary (whether existing on
the Issue Date or created thereafter) or any Person that after such
Investment and, as a result thereof, becomes a Wholly Owned Restricted
Subsidiary and Investments in the Company by any Subsidiary of the
Company;
(d) Cash and Cash Equivalents;
(e) Investments in securities of trade creditors, wholesalers or
customers received pursuant to any plan of reorganization or similar
arrangement;
(f) Investments by the Company or any Restricted Subsidiary made
after the Issue Date in Permitted Joint Ventures; and
(g) Investments, including the CS Wireless Investment, existing
on the Issue Date to the extent and in the manner so existing on the
Issue Date.
"Permitted Joint Venture" means any joint venture, partnership or
other Person designated by the Board of Directors, (i) at least a majority of
whose Capital Stock with voting power under ordinary circumstances to elect
directors (or Persons having similar or corresponding powers and
responsibilities) is at the time owned (beneficially or directly) by the
Company and/or by one or more Wholly Owned Restricted Subsidiaries of the
Company, (ii) all of whose Indebtedness, if any, is subject to Section 4.08,
(iii) which is engaged in a Permitted Business, and (iv) in which any
Investment made as a result of designating such Person a Permitted Joint
Venture will not violate the provisions of Section 4.09; PROVIDED, HOWEVER,
that if any participation in such Person requires the Company or any Wholly-
Owned Restricted Subsidiary to contribute or otherwise transfer to such Person
greater than 50% of the spectrum rights then held by the Company or any Wholly-
Owned Restricted Subsidiary in any market(s) in which the Permitted Business is
to be transacted by such Person, the Board of Directors may designate such
Person a "Permitted Joint Venture" only if such Person is a Strategic Partner.
Any such designation shall be evidenced to the Trustee by promptly filing with
the Trustee a copy of the resolution giving effect to such designation and an
officer=s certificate certifying that such designation complied with the
foregoing provisions.
"Permitted Joint Venture Additional Debt Ratio" means, at any date
of determination, the ratio of (a) the aggregate principal amount of additional
Indebtedness that shall have been incurred by a Permitted Joint Venture
pursuant to Section 4.08(b) and is outstanding on such date, to (b) the
aggregate amount of cash that shall have been raised by such Permitted Joint
Venture as of such date in one or more Qualified Transactions.
"Permitted Liens" means, without duplication, each of the
following:
(a) Liens in favor of the Trustee in its capacity as trustee for
the Holders;
(b) Liens existing on the Issue Date as in effect on such date;
(c) Liens to secure the Indebtedness permitted under clause (b)
of Permitted Indebtedness;
(d) Liens on property of the Company or its Restricted
Subsidiaries securing up to either $25,000,000 (in the case of the
Company) or $75,000,000 (in the case of the Restricted Subsidiaries)
aggregate principal amount of additional Indebtedness (other than
Permitted Indebtedness) incurred pursuant to Section 4.08, less the sum
of (A) any Indebtedness that is secured by Liens contemplated by clauses
(f) and (s) below, and (B) any unsecured Indebtedness (other than
Permitted Indebtedness) that is incurred by Restricted Subsidiaries
pursuant to Section 4.08;
(e) Liens on property existing on the date of acquisition
thereof; PROVIDED, HOWEVER, that such Liens are not incurred as a result
of, or in connection with or in anticipation of, such transaction and
such Liens relate solely to the property so acquired;
(f) Liens to secure additional Indebtedness incurred by the
Company or a Restricted Subsidiary pursuant to Section 4.08 in the form
of purchase money Indebtedness for all or a part of the purchase price of
Productive Assets or construction costs of acquired or constructed
property which is to be used by the Company or such Restricted Subsidiary
exclusively in the Wireless Broadband Business, including related
activities and services, after the Issue Date; PROVIDED, HOWEVER, that
(i) the Indebtedness secured by such Liens shall not exceed $75,000,000
less the sum of (A) any Indebtedness that is secured by Liens
contemplated by clause (d) above and clause (s) below, and (B) any
unsecured Indebtedness (other than Permitted Indebtedness) that is
incurred by Restricted Subsidiaries pursuant to Section 4.08, and (ii)
such Liens shall not extend to any other property or assets of the
Company or its Restricted Subsidiaries other than the property or assets
so acquired;
(g) Liens on assets of a Permitted Joint Venture to secure
additional Indebtedness incurred by such Permitted Joint Venture pursuant
to Section 4.08;
(h) Liens for taxes, assessments and governmental charges to the
extent not required to be paid under this Indenture;
(i) statutory Liens of landlords and carriers, warehousemen,
mechanics, suppliers, materialmen, repairmen or other like Liens to the
extent not required to be paid under this Indenture;
(j) pledges or deposits to secure lease obligations or
nondelinquent obligations under workers' compensation, unemployment
insurance or similar legislation (other than ERISA);
(k) Liens to secure the performance of public statutory
obligations that are not delinquent, performance bonds or other
obligations of a like nature (other than for borrowed money), in each
case incurred in the ordinary course of business pursuant to ordinary
business terms;
(l) easements, rights-of-way, restrictions, minor defects or
irregularities in title and other similar charges or encumbrances
incurred in the ordinary course of business pursuant to ordinary business
terms not interfering in any material respect with the business of the
Company, any Restricted Subsidiary or any Permitted Joint Venture;
(m) Liens upon specific items of inventory or other goods and
proceeds of any Person securing such Person's obligations in respect of
letters of credit or bankers' acceptances issued or created for the
account of such Person to facilitate the purchase, shipment or storage of
such inventory or other goods in the ordinary course of business pursuant
to ordinary business terms;
(n) judgment and attachment Liens not giving rise to an Event of
Default;
(o) leases or subleases granted to others in the ordinary course
of business pursuant to ordinary business terms and consistent with past
practice not interfering in any material respect with the business of the
Company, any Restricted Subsidiary or any Permitted Joint Venture;
(p) any interest or title of a lessor in the property subject to
any lease, whether characterized as capitalized or operating other than
any such interest or title resulting from or arising out of a default by
the Company, any Restricted Subsidiary or any Permitted Joint Venture of
its obligations under such lease;
(q) Liens arising from filing UCC financing statements for
precautionary purposes in connection with true leases of personal
property that are otherwise permitted under this Indenture and under
which the Company, any Restricted Subsidiary or any Permitted Joint
Venture is a lessee;
(r) Liens with respect to Acquired Indebtedness incurred by the
Company, the Restricted Subsidiaries or Permitted Joint Ventures in
accordance with Section 4.08; PROVIDED, HOWEVER, that (i) such Liens
secured such Acquired Indebtedness at the time of and prior to the
incurrence of such Acquired Indebtedness and were not granted as a result
of, in connection with, or in anticipation of, the incurrence of such
Acquired Indebtedness and (ii) such Liens do not extend to or cover any
property or assets of the Company, any Restricted Subsidiary or any
Permitted Joint Venture other than the property or assets that secured
the Acquired Indebtedness prior to the time such Indebtedness was
incurred and are no more favorable to the lienholders than those securing
the Acquired Indebtedness prior to the incurrence of such Acquired
Indebtedness by the Company;
(s) Liens to secure Capitalized Lease Obligations incurred by the
Company, a Restricted Subsidiary or a Permitted Joint Venture to the
extent arising from transactions consummated in compliance with
Section 4.08 and Section 4.17; PROVIDED, HOWEVER, that (i) such Liens do
not extend to or cover any property or assets of the Company, any
Restricted Subsidiary or any Permitted Joint Venture, other than the
property or assets subject to such Capitalized Lease Obligation, and
(ii), in the case of the Company and its Restricted Subsidiaries, the
Indebtedness that is secured by such Liens shall not exceed $75,000,000
less the sum of (A) any Indebtedness that is secured by Liens
contemplated by clauses (d) and (f) above, and (B) any unsecured
Indebtedness (other than Permitted Indebtedness) that is incurred by
Restricted Subsidiaries pursuant to Section 4.08; and
(s) subject to the provisions concerning Refinancing
Indebtedness, and without increasing the amount of Indebtedness permitted
to be secured hereunder, any Lien to secure the refinancing of any
Indebtedness described in the foregoing clauses; PROVIDED, HOWEVER, that
to the extent any such clause limits the amount secured or the asset
subject to such Liens, no refinancing shall increase the assets subject
to such Liens or the amount secured thereby beyond the assets or amounts
set forth in such clauses.
"Permitted Subsidiary Indebtedness" means, collectively, (i)
Indebtedness of Philadelphia Choice Television, Inc. evidenced by a promissory
note with an aggregate remaining principal balance of $9,303.48, and (ii)
Indebtedness of Washington Choice Television, Inc. evidenced by a promissory
note with an aggregate remaining principal balance of $28,657.67.
"Person" means an individual, partnership, corporation, limited
liability company, unincorporated organization, trust or joint venture, or a
governmental agency or political subdivision thereof.
"Philadelphia MDU Operation" means the assets relating to the
provision of video programming to certain multi-dwelling units located in and
around the Philadelphia, PA market.
"Predecessor Security" means, with respect to any particular
Security, every previous Security evidencing all or a portion of the same debt
as that evidenced by such particular Security; and, for the purposes of this
definition, any Security authenticated and delivered under Section 2.07 hereof
in exchange for a mutilated Security or in lieu of a lost, destroyed or stolen
Security shall be deemed to evidence the same debt as the mutilated, lost,
destroyed or stolen Security.
"Preferred Stock" of any Person means any Capital Stock of such
Person that has preferential rights to any other Capital Stock of such Person
with respect to dividends or redemptions or upon liquidation.
"principal" means, with respect to any debt security, the principal
of the security plus, when appropriate, the premium, if any, on the security
and any interest on overdue principal.
"Productive Assets" means assets of a kind used or usable by the
Company, the Restricted Subsidiaries and Permitted Joint Ventures in wireless
broadband businesses or businesses reasonably related thereto.
"Qualified Capital Stock" means any Capital Stock that is not
Disqualified Capital Stock.
"Qualified Transaction" means the sale of Qualified Capital Stock
of the Company by the Company, of a Restricted Subsidiary by such Restricted
Subsidiary (with the result that it becomes a Permitted Joint Venture), or of
an interest in a Permitted Joint Venture by such Permitted Joint Venture, to
any Person for cash.
"Redemption Date" means, with respect to any Security to be
redeemed, the date fixed by the Company for such redemption pursuant to this
Indenture and the Securities.
"refinance" means, in respect of any security or Indebtedness, to
refinance, extend, renew, refund, repay, prepay, redeem, defease or retire, or
to issue a security or Indebtedness in exchange or replacement for, such
security or Indebtedness in whole or in part; "refinanced" and "refinancing"
shall have correlative meanings.
"Refinancing Indebtedness" means any refinancing of Indebtedness of
the Company, any Restricted Subsidiary or any Permitted Joint Venture incurred
in accordance with Section 4.08 (other than pursuant to clauses (d), (e), (f),
(g), (h), (i) and (j) of the definition of Permitted Indebtedness); PROVIDED,
HOWEVER, that such Indebtedness so incurred to refinance such other
Indebtedness (the "Existing Indebtedness") (a) is not in an aggregate principal
amount as of the date of the consummation of such proposed refinancing in
excess of (or if such Indebtedness being incurred to refinance the Existing
Indebtedness is issued with original issue discount, at an original issue price
not in excess of) the sum of (i) the aggregate principal amount outstanding of
the Existing Indebtedness (provided that (A) if such Existing Indebtedness was
issued with original issue discount, in excess of the accreted amount of such
Existing Indebtedness (as determined in accordance with GAAP) as of the date of
such proposed refinancing, (B) if such Existing Indebtedness was incurred
pursuant to a revolving credit facility or any other agreement providing a
commitment for subsequent borrowings, with a maximum commitment under the
agreement governing the Indebtedness proposed to be incurred not in excess of
the maximum commitment amount under such Existing Indebtedness and (C) any
amount of such Existing Indebtedness owned or held by the Company, any of its
Wholly Owned Restricted Subsidiaries or any Permitted Joint Venture shall not
be deemed to be outstanding for the purposes hereof) as of the date of such
proposed refinancing, PLUS (ii) the amount of any premium required to be paid
under the terms of the instrument governing such Existing Indebtedness, PLUS
(iii) the amount of reasonable expenses incurred by the Company, a Restricted
Subsidiary or a Permitted Joint Venture in connection with such refinancing and
(b) does not have (i) a Weighted Average Life to Maturity that is less than the
Weighted Average Life to Maturity of the Existing Indebtedness or (ii) a final
maturity earlier than the final maturity of the Existing Indebtedness;
PROVIDED, FURTHER, HOWEVER, that (x) if such Existing Indebtedness is
subordinate or pari passu to the Securities, then such Indebtedness proposed to
be incurred to refinance the Existing Indebtedness shall be subordinate or pari
passu to the Securities at least to the same extent and in the same manner as
the Existing Indebtedness and (y) such Indebtedness proposed to be incurred to
refinance the Existing Indebtedness is not incurred more than three months
prior to the complete retirement or defeasance of the Existing Indebtedness
with the proceeds thereof.
"Registrar" has the meaning set forth in Section 2.03.
"Restricted Payment" shall have the meaning set forth in Section
4.09.
"Restricted Subsidiary" means any Subsidiary of the Company which,
as of the determination date, is not an Unrestricted Subsidiary.
"Sale and Leaseback Transaction" means any direct or indirect
arrangement with any Person or to which any such Person is a party providing
for the leasing to the Company, a Restricted Subsidiary or a Permitted Joint
Venture of any property, whether owned by the Company, any Restricted
Subsidiary or a Permitted Joint Venture at the Issue Date or later acquired,
which has been or is to be sold or transferred by the Company, such Restricted
Subsidiary or such Permitted Joint Venture to such Person or to any other
Person from whom funds have been or are to be advanced by such Person on the
security of such property.
"SEC" means the Securities and Exchange Commission, as from time to
time constituted, or if at any time after the execution of this Indenture such
Commission is not existing and performing the applicable duties now assigned to
it, then the body or bodies performing such duties at such time.
"Securities" means the securities that are issued under this
Indenture, as amended or supplemented from time to time pursuant to this
Indenture.
"Securities Act" means the Securities Act of 1933, as amended from
time to time.
"Senior Secured Facility" means the financing agreement to be
entered into on or prior to the Confirmation Date by the Company, the lenders
named therein, and the agent named therein, including any related notes,
guarantees, collateral documents, instruments and agreements executed in
connection therewith, as such facility may be amended, restated, supplemented,
refinanced, extended or otherwise modified from time to time.
"S&P" means Standard & Poor's Corporation, and its successors.
"Strategic Partner" means (i) any Person engaged in the
telecommunications business (including, without limitation, Wireless Broadband
Business) which, both as of the Trading Day immediately before the day of
determination and the Trading Day immediately after the day of determination,
has a Total Market Capitalization of at least $500 million (or, in the case of
a private company, a fair market equivalent value, as determined by a
nationally recognized investment bank), and (ii) any Person which is majority
owned and controlled by any Person or Persons referred to in clause (i) of this
definition. In calculating Total Market Capitalization for the purpose of
clause (i) of this definition, the consolidated Indebtedness of such Person,
solely when calculated as of the Trading Day immediately after the date of
determination, will be calculated after giving effect to the transactions to
occur on such date of determination (including any Indebtedness incurred in
connection with any sale of Capital Stock to such Person) and the Closing Price
of the Common Stock of such Person, solely when calculated as of the Trading
Day immediately after the day of determination, will be deemed to be the
Closing Price of such Common Stock on such succeeding Trading Day, subject to
the last sentence of the definition of ATotal Market Capitalization.@ For
purposes of this definition, the date of determination shall be the date on
which any transaction which requires a determination of whether a Person is a
Strategic Partner under this Indenture shall have been consummated.
"Subsidiary," with respect to any Person, means (a) any corporation
of which at least a majority of the outstanding Voting Stock shall at the time
be owned, directly or indirectly, by such Person or (b) any other Person of
which at least a majority of the outstanding Voting Stock is at the time,
directly or indirectly, owned by such Person.
"Surviving Entity" shall have the meaning set forth in Section
5.01.
"TIA" means the Trust Indenture Act of 1939 (15 U.S. Code
Sections 77aaa-77bbbb) as in effect on the Issue Date (other than with respect
to Section 9.03); PROVIDED, HOWEVER, that in the event the Trust Indenture Act
of 1939 is amended after such date, "TIA" means, to the extent required by
such amendment, the Trust Indenture Act of 1939 as so amended.
"Total Market Capitalization" of any Person means, as of any day of
determination (and as modified for purposes of the definition of "Strategic
Partner"), the sum of (1) the consolidated Indebtedness of such Person 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 by the Company's Board of Directors in good faith and evidenced by a
Board Resolution.
"Trading Day" means with respect to a securities exchange or
automated quotation system, a day on which such exchange or system is open for
a full day of trading.
"Trust Officer" means any officer in the Corporate Trustee
Administration Department 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.
"Trustee" means the party named as such in this Indenture until a
successor replaces such party (or any previous successor) in accordance with
the provisions of this Indenture, and thereafter means such successor.
"Unrestricted Subsidiary" means a Subsidiary of the Company created
after the Issue Date and so designated by a resolution adopted by the Board of
Directors in accordance with Section 4.14.
"U.S. Government Securities" means securities that are (a) direct
obligations of the United States of America for the payment of which its full
faith and credit is pledged or (b) obligations of a Person controlled or
supervised by and acting as an agency or instrumentality of the United States
of America, the payment of which is unconditionally guaranteed as a full faith
and credit obligation by the United States of America, which, in either case,
are not callable or redeemable at the option of the issuer thereof, and shall
also include a depository receipt issued by a bank (as defined in Section
3(a)(2) of the Securities Act) as custodian with respect to any such U.S.
Government obligation or a specific payment of principal of or interest on any
such U.S. Government obligation held by such custodian for the account of the
holder of such depository receipt; PROVIDED that (except as required by law)
such custodian is not authorized to make any deduction from the amount payable
to the holder of such depository receipt from any amount received by the
custodian in respect of the U.S. Government obligation or the specific payment
of principal of or interest on the U.S. Government obligation evidenced by such
depository receipt.
"Voting Stock" means, with respect to any Person, any class or
classes of Capital Stock in such Person entitling the holders thereof (whether
at all times or only so long as no senior class of Capital Stock has voting
power by reason of any contingency) to vote in the election of members of the
board of directors or other equivalent governing body of such Person.
"Weighted Average Life to Maturity" means, when applied to any
Indebtedness or Preferred Stock at any date, the number of years obtained by
dividing (a) the then outstanding aggregate principal amount or liquidation
preference of such Indebtedness or Preferred Stock into (b) the total of the
product obtained by multiplying (i) the amount of each then remaining
installment, sinking fund, serial maturity or other required payment of
principal or liquidation preference, including payment at final maturity, in
respect thereof, by (ii) the number of years (calculated to the nearest one-
twelfth) which will elapse between such date and the making of such payment.
"Wholly Owned Restricted Subsidiary" of any Person means any
Subsidiary of such Person of which all the outstanding Capital Stock (other
than directors' qualifying shares) are owned by such Person or any Wholly Owned
Restricted Subsidiary of such Person. Unless otherwise indicated, references
to "Wholly Owned Restricted Subsidiaries" shall mean Wholly Owned Restricted
Subsidiaries of the Company.
"Wireless Broadband Business" means transmitting and receiving
video, voice or data primarily through wireless broadband transmission
facilities, alone or in conjunction with satellite transmission services,
utilizing wireless channels for any commercial purpose permitted by the FCC and
other activities directly related thereto.
1.02. 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
(unless expressly excluded herefrom). The following TIA terms used in this
Indenture have the following meanings:
"COMMISSION" means the SEC;
"INDENTURE SECURITIES" means the Securities;
"INDENTURE SECURITY HOLDER" means a Securityholder or Holder;
"INDENTURE TO BE QUALIFIED" means this Indenture;
"INDENTURE TRUSTEE" or "INSTITUTIONAL TRUSTEE" means the Trustee;
and
"OBLIGOR" on the indenture securities means the Company or any
other obligor on the Securities.
All other TIA terms used in this Indenture that are defined by the
TIA, defined by TIA reference to another statute or defined by SEC rule and not
otherwise defined herein have the meanings assigned to them therein.
1.03. RULES OF CONSTRUCTION.
For all purposes of this Indenture, except as otherwise expressly
provided or unless the context otherwise requires:
(a) a term has the meaning assigned to it;
(b) words in the singular include the plural, and words in the
plural include the singular;
(c) "or" is not exclusive;
(d) provisions apply to successive events and transactions;
(e) all accounting terms not otherwise defined herein have the
meanings assigned to them in accordance with GAAP;
(f) the words "herein", "hereof" and "hereunder" and other words
of similar import refer to this Indenture as a whole and not to any
particular Article, Section or other subdivision; and
(g) all references to $ or dollars shall refer to the lawful
currency of the United States of America.
ARTICLE TWO
THE SECURITIES
2.01. FORMS AND DATING.
The Securities and the Trustee's certificate of authentication
thereon shall be in substantially the form of Exhibit A hereto, with such
appropriate insertions, omissions, substitutions and other variations as are
required or permitted by this Indenture and may have such letters, numbers or
other marks of identification and such legends or endorsements placed thereon
as may be required to comply with any applicable law or with the rules of any
securities exchange or as may, consistently herewith, be determined by the
Officers executing such Securities, as evidenced by their execution thereof.
The Securities shall be issuable only in registered form without coupons.
The definitive Securities shall be printed, typewritten,
lithographed or engraved or produced by any combination of these methods or may
be produced in any other manner permitted by the rules of any securities
exchange on which the Securities may be listed, all as determined by the
officers executing such Securities, as evidenced by their execution of such
Securities. Each Security shall be dated the date of its authentication.
The terms and provisions contained in the form of the Securities,
annexed hereto as EXHIBIT A shall constitute, and are hereby expressly made, a
part of this Indenture and, to the extent applicable, 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.
2.02. EXECUTION AND AUTHENTICATION.
Two Officers shall execute the Securities on behalf of the Company
by either manual or facsimile signature. The Company's seal shall be
impressed, affixed, imprinted or reproduced on the Securities.
If an Officer whose signature is on a Security no longer holds that
office at the time the Trustee authenticates the Security or at any time
thereafter, the Security shall be valid nevertheless.
A Security shall not be valid until an authorized officer of the
Trustee manually signs the certificate of authentication on the Security. Such
signature shall be conclusive evidence that the Security has been authenticated
under this Indenture.
The Trustee shall authenticate Securities for original issue in an
aggregate principal amount at maturity not to exceed $212,909,624 upon receipt
of an Officers' Certificate signed by two Officers of the Company directing the
Trustee to authenticate the Securities and certifying that all conditions
precedent to the issuance of the Securities contained herein have been complied
with. The aggregate Accreted value at maturity of Securities outstanding at
any time may not exceed $212,909,624, except as provided in Section 2.07.
With the prior written approval of the Company, the Trustee may
appoint an authenticating agent acceptable to the Company to authenticate
Securities. Unless limited by the terms of such appointment, an authenticating
agent may authenticate Securities whenever the Trustee may do so. Each
reference in this Indenture to authentication by the Trustee includes
authentication by such agent. Such authenticating agent shall have the same
rights as the Trustee in any dealings hereunder with the Company or with any of
the Company's Affiliates.
2.03. REGISTRAR AND PAYING AGENT.
The Company shall maintain an office or agency (which shall be
located in the Borough of Manhattan, The City of New York, State of New York)
where Securities may be presented for registration of transfer or for exchange
(the "Registrar"), an office or agency (which shall be located in the Borough
of Manhattan, The City of New York, State of New York) where Securities may be
presented for payment of principal and interest, if any , (the "Paying Agent"),
and an office or agency where notices and demands to or upon the Company in
respect of the Securities and this Indenture may be served. The Registrar
shall keep a register of the Securities and of their transfer and exchange.
The Company may have one or more co-Registrars and one or more additional
paying agents. The term "Paying Agent" includes any additional paying agent.
Except as otherwise expressly provided in this Indenture, the Company or any
Affiliate thereof may act as Paying Agent.
The Company shall enter into an appropriate agency agreement with
any Registrar or Paying 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 Registrar or Paying Agent or
agent for service of notices and demands. The Company shall notify the Trustee
of the name and address of any such Registrar or Paying Agent. If the Company
fails to maintain a Registrar, Paying Agent or agent for service of notices and
demands, or fails to give the foregoing notice, the Trustee shall act as such
and shall be entitled to appropriate compensation in accordance with
Section 7.08.
The Company initially appoints the Trustee as Registrar, Paying
Agent and agent for service of notices and demands in connection with the
Securities.
2.04. PAYING AGENT TO HOLD MONEY IN TRUST.
Each 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 the Accreted
Value of and interest, if any, on, the Securities (whether such money has been
distributed to it by the Company or any other obligor on the Securities), and
the Company (or any other obligor on the Securities) and the Paying Agent shall
notify the Trustee of any default by the Company (or any other obligor on the
Securities) in making any such payment. If the Company or an Affiliate of the
Company acts as Paying Agent, it shall segregate the money and hold it as a
separate trust fund. The Company at any time may require a Paying Agent to
distribute all money held by it to the Trustee and account for any funds
disbursed and the Trustee may at any time during the continuance of any default
in the payment of the Accreted Value of and interest, if any, on the
Securities, upon written request to a Paying Agent, require such Paying Agent
to pay all money held by it to the Trustee and to account for any funds
distributed. Upon doing so, the Paying Agent (other than an obligor on the
Securities) shall have no further liability for the money so paid over to the
Trustee.
2.05. SECURITYHOLDER LISTS.
The Trustee shall preserve in as current a form as is reasonably
practicable the most recent list available to it of the names and addresses of
Holders and shall otherwise comply with TIA ' 312(a). If the Trustee is not
the Registrar, the Company shall furnish to the Trustee at least ten 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 Holders, which list may be
conclusively relied upon by the Trustee.
2.06. TRANSFER AND EXCHANGE.
When Securities are presented to the Registrar or a co-Registrar
with a request to register the transfer of such Securities or to exchange such
Securities for an equal principal amount of Securities of other authorized
denominations, the Registrar or co-Registrar shall register the transfer or
make the exchange as requested if its requirements for such transaction are
met; PROVIDED, HOWEVER, that the Securities surrendered for transfer or
exchange shall be duly endorsed or accompanied by a written instrument of
transfer in form satisfactory to the Company and the Registrar or co-Registrar,
duly executed by the Holder thereof or his attorney duly authorized in writing.
To permit registrations of transfers and exchanges, the Company shall execute
and the Trustee shall authenticate Securities at the Registrar's or co-
Registrar's request. No service charge shall be made for any transfer,
exchange or redemption, 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 exchanges or transfers pursuant to Section 2.07, 2.10, 3.06, 4.12
or 9.05). The Registrar or co-Registrar shall not be required to register the
transfer of or exchange of any Security (a) during a period beginning at the
opening of business 15 days before the mailing of a notice of redemption of
Securities and ending at the close of business on the day of such mailing and
(b) selected for redemption in whole or in part pursuant to Article Three,
except the unredeemed portion of any Security being redeemed in part.
2.07. REPLACEMENT SECURITIES.
If a mutilated Security is surrendered to the Trustee or if the
Holder of a Security claims that the Security has been lost, destroyed or
wrongfully taken, the Company shall issue and the Trustee shall authenticate a
replacement Security if the Trustee's requirements are met. If required by the
Trustee or the Company, such Holder must provide an indemnity bond or other
indemnity, sufficient in the judgment of both the Company and the Trustee, to
protect the Company, the Trustee or any Paying Agent or Registrar from any loss
which any of them may suffer if a Security is replaced. The Company may charge
such Holder for its reasonable, out-of-pocket expenses in replacing a Security,
including reasonable fees and expenses of counsel. Every replacement Security
is an additional obligation of the Company.
In case any such mutilated, lost, destroyed or wrongfully taken
Security has become or is about to become due and payable within one year, the
Company in its discretion may, subject to compliance with the foregoing
conditions, instead of issuing a new Security, pay such Security.
The provisions of this Section are exclusive and shall preclude (to
the extent lawful) all other rights and remedies with respect to the
replacement or payment of mutilated, lost, destroyed or wrongfully taken
Securities.
2.08. OUTSTANDING SECURITIES.
Securities outstanding at any time are all the Securities that have
been authenticated by the Trustee except those canceled by it, those delivered
to it for cancellation and those described in this Section as not outstanding.
A Security does not cease to be outstanding because the Company or any of its
Affiliates holds the Security.
If a Security is replaced pursuant to Section 2.07 (other than a
mutilated Security surrendered for replacement), it ceases to be outstanding
unless the Trustee receives proof satisfactory to it that the replaced Security
is held by a BONA FIDE purchaser. A mutilated Security ceases to be
outstanding upon surrender of such Security and replacement thereof pursuant to
Section 2.07.
If on a Redemption Date or a Maturity Date the Paying Agent (other
than the Company or an Affiliate of the Company) holds cash or U.S. Government
Obligations sufficient to pay all of the Accreted Value and interest, if any,
due on the Securities and payable on that date, and is not prohibited from
paying such cash or U.S. Government Obligations to the Holders of such
Securities pursuant to the terms of this Indenture, then on and after that date
such Securities cease to be outstanding and interest on them shall cease to
accrue.
2.09. TREASURY SECURITIES.
In determining whether the Holders of the required principal amount
of Securities have concurred in any direction, waiver or consent, Securities
owned by the Company or any of its Affiliates shall be disregarded, except
that, for the purposes of determining whether the Trustee shall be protected in
relying on any such direction, waiver or consent, only Securities that the
Trustee knows or has reason to know are so owned shall be disregarded.
2.10. TEMPORARY SECURITIES.
Until definitive Securities are prepared and ready for delivery,
the Company may prepare and the Trustee shall authenticate temporary
Securities. Temporary Securities shall be substantially in the form of
definitive Securities but may have variations that the Company considers
appropriate for temporary Securities. Without unreasonable delay, the Company
shall prepare and the Trustee shall authenticate definitive Securities in
exchange for temporary Securities. Until such exchange, temporary Securities
shall be entitled to the same rights, benefits and privileges as definitive
Securities.
2.11. CANCELLATION.
The Company at any time may deliver Securities to the Trustee for
cancellation. The Registrar and the Paying Agent shall forward to the Trustee
any Securities surrendered to them for transfer, exchange or payment. The
Trustee, or at the direction of the Trustee, the Registrar or the Paying Agent
(other than the Company or an Affiliate of the Company), and no one else, shall
promptly cancel and, at the written direction of the Company, shall dispose of
all Securities surrendered for transfer, exchange, payment or cancellation.
Subject to Section 2.07, the Company may not issue new Securities to replace
Securities that it has paid or delivered to the Trustee for cancellation. If
the Company shall acquire any of the Securities, such acquisition shall not
operate as a redemption or satisfaction of the Indebtedness represented by such
Securities unless and until the same are surrendered to the Trustee for
cancellation pursuant to this Section 2.11.
2.12. DEFAULTED INTEREST.
If the Company defaults on a payment of the Accreted Value of any
Securities that become due prior to the Final Maturity Date or on the payment
of the Accreted Value of the Securities on the Final Maturity Date, it shall
pay interest from time to time on demand, plus (to the extent permitted by law)
interest on any overdue amounts of such interest, in accordance with the terms
hereof, to the persons who are Holders on a subsequent special record date,
which date shall be at least five Business Days prior to the payment date. The
Company shall fix such special record date and payment date in a manner
satisfactory to the Trustee. At least 15 days before such special record date,
the Company shall mail to each Holder a notice that states the special record
date, the payment date and the amount of such interest, if any, to be paid.
2.13. CUSIP NUMBER.
The Company in issuing the Securities may use a "CUSIP" number (if
then generally in use), and if so, the Trustee may use the CUSIP numbers in
notices of redemption or exchange as a convenience to Holders; PROVIDED,
HOWEVER, that any such notice may state that no representation is made as to
the correctness or accuracy of the CUSIP number printed in the notice or on the
Securities, and that reliance may be placed only on the other identification
numbers printed on the Securities. The Company will promptly notify the
Trustee of any change in the CUSIP number.
2.14. DEPOSIT OF MONEYS.
On or before each Maturity Date, the Company shall deposit with the
Trustee or Paying Agent in immediately available funds money sufficient to make
cash payments, if any, due on such Maturity Date in a timely manner which
permits the Paying Agent to remit payment to the Holders on such Maturity Date.
ARTICLE THREE
REDEMPTION OF SECURITIES
3.01. NOTICES TO THE TRUSTEE.
If the Company elects to redeem Securities pursuant to Paragraph
2(a) of the Securities, it shall notify the Trustee of the Redemption Date and
principal amount of Securities to be redeemed.
The Company shall notify the Trustee by an Officers' Certificate,
stating that such redemption will comply with the provisions hereof and of the
Securities, of any redemption at least 45 days before the Redemption Date.
3.02. SELECTION OF SECURITIES TO BE REDEEMED.
If less than all the Securities are to be redeemed at any time, the
particular Securities or portions thereof to be redeemed shall be selected from
the outstanding Securities not previously called for redemption pro rata, by
lot or by such other method as the Trustee considers to be fair and
appropriate. In any proration pursuant to this Section, the Trustee shall make
such adjustments, reallocations and eliminations as it shall deem proper to the
end that the principal amount at maturity of Securities so prorated shall be
$1,000 or a multiple thereof, by increasing or decreasing or eliminating the
amount which would be allocable to any Holder on the basis of exact proportion
by an amount not exceeding $1,000. The Trustee in its discretion may determine
the particular Securities (if there are more than one) registered in the name
of any Holder which are to be redeemed, in whole or in part. No Securities
with a principal amount at maturity of $1,000 or less shall be redeemed in
part.
The Trustee shall promptly notify the Company and the Registrar in
writing of the Securities selected for redemption and, in the case of any
Securities selected for partial redemption, the principal amount thereof to be
redeemed.
For all purposes of this Indenture, unless the context otherwise
requires, all provisions relating to redemption of Securities shall relate, in
the case of any Security redeemed or to be redeemed only in part, to the
portion of the Accreted Value of such Security which has been or is to be
redeemed.
3.03. NOTICE OF REDEMPTION.
Notice of redemption shall be given by first-class mail, postage
prepaid, mailed not less than 30 nor more than 60 days prior to the Redemption
Date, to each Holder of Securities to be redeemed, at the address of such
Holder appearing in the Security register maintained by the Registrar.
All notices of redemption shall identify the Securities to be
redeemed and shall state:
(a) the Redemption Date;
(b) the Accreted Value to be paid;
(c) that, unless the Company defaults in making the redemption
payment, Securities called for redemption cease to accrete in value on
and after the Redemption Date, and the only remaining right of the
Holders of such Securities is to receive payment of the Accreted Value
upon surrender to the Paying Agent of the Securities redeemed;
(d) if any Security is to be redeemed in part, the portion of the
Accreted Value (equal to $1,000 principal amount at maturity or any
integral multiple thereof) of such Security to be redeemed and that on
and after the Redemption Date, upon surrender for cancellation of such
original Security to the Paying Agent, a new Security or Securities in
the aggregate principal amount equal to the unredeemed portion thereof
will be issued without charge to the Holder;
(e) that Securities called for redemption must be surrendered to
the Paying Agent to collect the Redemption Price and the name and address
of the Paying Agent;
(f) the CUSIP number, if any, relating to such Securities, but no
representation is made as to the correctness or accuracy of any such
CUSIP numbers; and
(g) the paragraph of the Securities pursuant to which the
Securities are being redeemed.
Notice of redemption of Securities to be redeemed at the election
of the Company shall be given by the Company or, at the Company's written
request, by the Trustee in the name and at the expense of the Company.
3.04. EFFECT OF NOTICE OF REDEMPTION.
Once notice of redemption is mailed, Securities called for
redemption become due and payable on the Redemption Date at the Accreted Value.
Upon surrender to the Paying Agent, such Securities called for redemption shall
be paid at the Accreted Value on the Redemption Date.
3.05. DEPOSIT OF REDEMPTION PRICE.
On or prior to any Redemption Date, the Company shall deposit with
the Paying Agent an amount of money in same day funds sufficient to pay the
Accreted Value of all the Securities or portions thereof which are to be
redeemed on that date.
If the Company complies with the preceding paragraph, then, unless
the Company defaults in the payment of such Accreted Value, the Securities to
be redeemed will cease to accrete in value on and after the applicable
Redemption Date, whether or not such Securities are presented for payment. If
any Security called for redemption shall not be so paid upon surrender thereof
for redemption, the Accreted Value shall, until paid, bear interest from the
Redemption Date at the rate provided in the Securities.
3.06. SECURITIES REDEEMED OR PURCHASED IN PART.
Upon surrender to the Paying Agent of a Security which is to be
redeemed in part, the Company shall execute and the Trustee shall authenticate
and deliver to the Holder of such Security without service charge, a new
Security or Securities, of any authorized denomination as requested by such
Holder in aggregate principal amount equal to, and in exchange for, the
unredeemed portion of the principal amount of maturity of the Security so
surrendered that is not redeemed.
ARTICLE FOUR
COVENANTS
4.01. PAYMENT OF SECURITIES.
The Company shall pay, or cause to be paid, the Accreted Value of
and interest, if any, on the Securities on the dates and in the manner provided
in the Securities and this Indenture. A payment of the Accreted Value or
interest, if any, shall be considered paid on the date due if the Trustee or
Paying Agent (other than the Company, a Subsidiary of the Company or any
Affiliate thereof) holds on that date money designated and set aside for and
sufficient to pay such amount in a timely manner and is not prohibited from
paying such money to the Holders of the Securities pursuant to the terms of
this Indenture.
The Company shall pay interest from time to time on demand on the
Accreted Value of any Securities that is not paid when due and, to the extent
lawful, interest on overdue amounts of such interest, at the rate and in the
manner provided in the Securities.
4.02. MAINTENANCE OF OFFICE OR AGENCY.
The Company shall maintain in the Borough of Manhattan, The City of
New York, an office or agency where Securities may be surrendered for
registration of transfer or exchange or for presentation for payment and where
notices and demands to or upon the Company in respect of the Securities 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 address of the Trustee as set forth in Section 11.02.
The Company may also from time to time designate one or more other
offices or agencies where the Securities may be presented or surrendered for
any or all such purposes and may from time to time rescind such designations;
PROVIDED, HOWEVER, that no such designation or rescission shall in any manner
relieve the Company of its obligation to maintain an office or agency in the
Borough of Manhattan, The City of New York, for such purposes. The Company
shall give prompt written notice to the Trustee of any such designation or
rescission and of any change in the location of any such other office or
agency.
The Company hereby initially designates the office of the Trustee
located at [ADDRESS] in the Borough of Manhattan, City of New York [ZIP CODE],
as such office of the Company in accordance with this Section 4.02.
4.03. CORPORATE EXISTENCE.
Subject to Article Five, the Company shall do or cause to be done
all things necessary to and will cause each of the Restricted Subsidiaries and
any Permitted Joint Ventures to, preserve and keep in full force and effect the
corporate or partnership existence and rights (charter and statutory), licenses
and/or franchises of the Company and each of the Restricted Subsidiaries and
any Permitted Joint Ventures; PROVIDED, HOWEVER, that neither the Company nor
any of the Restricted Subsidiaries or any Permitted Joint Venture shall be
required to preserve any such rights, licenses or franchises if the Board of
Directors shall reasonably determine that (a) the preservation thereof is no
longer desirable in the conduct of the business of the Company and the
Restricted Subsidiaries and any Permitted Joint Ventures taken as a whole and
(b) the loss thereof is not materially adverse to either the Company and the
Restricted Subsidiaries or any Permitted Joint Venture taken as a whole or to
the ability of the Company to otherwise satisfy its obligations hereunder.
4.04. PAYMENT OF TAXES AND OTHER CLAIMS.
The Company shall pay or discharge or cause to be paid or
discharged, before the same shall become delinquent, (a) all taxes, assessments
and governmental charges levied or imposed upon the Company or any of the
Restricted Subsidiaries or any Permitted Joint Venture or upon the income,
profits or property of the Company or any of the Restricted Subsidiaries or any
Permitted Joint Venture, and (b) all lawful claims for labor, materials and
supplies which, if unpaid, might by law become a Lien upon the property of the
Company or any Restricted Subsidiary or any Permitted Joint Venture; PROVIDED,
HOWEVER, that the Company shall not be required to pay or discharge or cause to
be paid or discharged any such tax, assessment, charge or claim the amount,
applicability or validity of which is being contested in good faith by
appropriate proceedings promptly instituted and diligently conducted and which
stay the forfeiture of any property or assets of the Company and the Restricted
Subsidiaries or any Permitted Joint Venture and for which adequate provision
has been made or where the failure to effect such payment or discharge is not
adverse in any material respect to the Company.
4.05. MAINTENANCE OF PROPERTIES; INSURANCE; BOOKS AND RECORDS;
COMPLIANCE WITH LAW.
(a) The Company shall, and shall cause each of the Restricted
Subsidiaries and any Permitted Joint Ventures to, cause all properties and
assets to be maintained and kept in good condition, repair and working order
(reasonable wear and tear excepted) and supplied with all necessary equipment,
and shall cause to be made all necessary repairs, renewals, replacements,
additions, betterments and improvements thereto, as shall be reasonably
necessary for the proper conduct of its business; PROVIDED, HOWEVER, that
nothing in this Section 4.05(a) shall prevent the Company or any of the
Restricted Subsidiaries or any Permitted Joint Venture from discontinuing the
operation and maintenance of any of its properties or assets if such
discontinuance is, in the judgment of the Board of Directors or such Restricted
Subsidiary or Permitted Joint Venture, desirable in the conduct of its business
and if such discontinuance is not materially adverse to either the Company and
the Restricted Subsidiaries and any Permitted Joint Ventures taken as a whole
or the ability of the Company to otherwise satisfy its obligations hereunder.
(b) The Company shall, and shall cause each of the Restricted
Subsidiaries and any Permitted Joint Ventures to, maintain with financially
sound and reputable insurers such insurance as may be required by law (other
than with respect to any environmental impairment liability insurance not
commercially available) and such other insurance to such extent and against
such hazards and liabilities, as is customarily maintained by companies
similarly situated (which may include self-insurance in the same form as is
customarily maintained by companies similarly situated).
(c) The Company shall, and shall cause each of the Restricted
Subsidiaries and any Permitted Joint Ventures to, keep proper books of record
and account, in which full and correct entries shall be made of all business
and financial transactions of the Company and each Restricted Subsidiary and
Permitted Joint Venture and reflect on its financial statements adequate
accruals and appropriations to reserves, all in accordance with GAAP
consistently applied to the Company and the Restricted Subsidiaries and any
Permitted Joint Ventures taken as a whole.
(d) The Company shall and shall cause each of the Restricted
Subsidiaries and any Permitted Joint Ventures to comply with all statutes,
laws, ordinances, or government rules and regulations to which it is subject,
non-compliance with which would materially adversely affect the business,
earnings, properties, assets or condition (financial or otherwise) of the
Company and the Restricted Subsidiaries and any Permitted Joint Ventures taken
as a whole.
4.06. COMPLIANCE CERTIFICATE.
(a) The Company shall deliver to the Trustee within 60 days after
the end of each of the Company's first three fiscal quarters and within 90 days
after the end of the Company's fiscal year an Officers' Certificate stating
whether or not the signers know of any default in the performance by the
Company of its obligations under this Indenture. The Company shall also notify
the Trustee within 10 days of any event which is, or after notice or lapse of
time or both would become, an Event of Default under this Indenture. The
certificate shall describe any such Default, Event of Default or default and
its status. The first certificate to be delivered pursuant to this Section
4.06(a) shall be for the first fiscal quarter of the Company beginning after
the Issue Date. The Company shall also deliver within 90 days after the end of
the Company's fiscal year a certificate to the Trustee from its principal
executive, financial or accounting officer as to his or her knowledge of the
Company's compliance with all conditions and covenants under this Indenture,
such compliance to be determined without regard to any period of grace or
requirement of notice provided herein or therein.
(b) The Company shall deliver to the Trustee within 90 days after
the end of each fiscal year a written statement by the Company's independent
certified public accountants stating that their audit examination has included
a review of the terms of this Indenture and the Securities as they relate to
accounting matters.
4.07. SEC REPORTS.
The Company shall deliver to the Trustee, within 15 days after it
files them with the Commission, copies of its annual report and of the
information, documents and other reports (or copies of such portions of any of
the foregoing as the Commission may by rules and regulations prescribe) which
the Company is required to file with the Commission pursuant to Section 13 or
15(d) of the Exchange Act within the time periods prescribed under such rules
and regulations. Notwithstanding that the Company may not be required to
remain subject to the reporting requirements of Section 13 or 15(d) of the
Exchange Act or otherwise report on an annual and quarterly basis on forms
provided for such annual and quarterly reporting pursuant to rules and
regulations promulgated by the Commission, the Company shall continue to file
with the Commission and provide to the Trustee such annual and interim reports
on Forms 10-K and 10-Q, respectively, as the Company would be required to file
were it subject to such reporting requirements within the time periods
prescribed under such rules and regulations. The Company shall not be
obligated to file any such reports with the Commission if the Commission does
not permit such filings but shall remain obligated to provide such reports to
the Trustee and the holders within the periods of time referred to in the
preceding sentence. The Company also shall comply with the other provisions of
TIA ' 314(a). In addition, the Company shall cause its annual reports to
shareholders and any quarterly or other financial reports furnished by it to
shareholders generally to be filed with the Trustee and mailed no later than
the date such materials are mailed or made available to the Company's
shareholders, to the Holders at their addresses as set forth in the register of
Securities maintained by the Registrar.
4.08. LIMITATION ON INCURRENCE OF ADDITIONAL INDEBTEDNESS.
(a) The Company shall not, and shall not permit any Restricted
Subsidiary or Permitted Joint Venture to, directly or indirectly, create,
incur, assume, guarantee, acquire or become liable, contingently or otherwise,
for (collectively "incur") any Indebtedness other than Permitted Indebtedness
(it being expressly understood that no Restricted Subsidiary may incur
(pursuant to a guarantee or assumption thereof) any Permitted Indebtedness
which has been incurred by the Company) or issue any Disqualified Capital
Stock. Notwithstanding the foregoing limitations, the Company, its Restricted
Subsidiaries and any Permitted Joint Ventures may incur additional Indebtedness
(including, without limitation, Acquired Indebtedness) or issue Disqualified
Capital Stock from and after the date as of which the aggregate amount of cash
raised by the Company and/or the Restricted Subsidiaries in one or more
Qualified Transactions equals or exceeds $25 million, if after giving PRO FORMA
effect to the incurrence of such Indebtedness or the issuance of such
Disqualified Capital Stock, the Company Additional Debt Ratio would not exceed
2.00 to 1, PROVIDED, HOWEVER, that in no event may the aggregate principal
amount of such additional Indebtedness that is permitted under this clause (a)
(i) exceed $150,000,000 less the aggregate principal amount of additional
Indebtedness that is outstanding from time to time under clause (b), and (ii)
that is incurred by Restricted Subsidiaries and/or is secured by Liens pursuant
to clauses (d), (f) and (s) of the definition of "Permitted Liens", exceed
$75,000,000.
(b) The Company shall not permit any Permitted Joint Venture to
incur any Indebtedness other than Permitted Indebtedness (it being expressly
understood that no Permitted Joint Venture may incur (pursuant to a guaranty or
assumption thereof) any Permitted Indebtedness which has been incurred by the
Company or a Restricted Subsidiary) or issue any Disqualified Capital Stock.
Notwithstanding the foregoing limitations, a Permitted Joint Venture may incur
additional Indebtedness (including, without limitation, Acquired Indebtedness)
or issue Disqualified Capital Stock from and after the date as of which the
aggregate amount of cash raised by such Permitted Joint Venture in one or more
Qualified Transactions equals or exceeds $25,000,000, if after giving PRO FORMA
effect to the incurrence of such Indebtedness or the issuance of such
Disqualified Capital Stock, the Permitted Joint Venture Additional Debt Ratio
would not exceed 2.00 to 1, PROVIDED, HOWEVER, that in no event may the
aggregate principal amount of such additional Indebtedness that is permitted
under this clause (b) exceed $150,000,000 less the aggregate principal amount
of additional Indebtedness that may be outstanding from time to time under
clause (a).
(c) Any Indebtedness of an entity existing at the time it becomes
a Restricted Subsidiary (whether by merger, consolidation, acquisition of
Capital Stock or otherwise) or is merged with or into the Company or any
Restricted Subsidiary shall be deemed to be incurred as of the date such entity
becomes a Restricted Subsidiary or the date of such merger.
4.09. LIMITATION ON RESTRICTED PAYMENTS.
The Company shall not, and shall not permit any Restricted
Subsidiary or Permitted Joint Venture to, directly or indirectly:
(a) declare or pay any dividend or make any distribution (other
than dividends or distributions payable in Qualified Capital Stock of the
Company or payable by any Restricted Subsidiary to the Company or any
Wholly Owned Restricted Subsidiary or, in the case of a Permitted Joint
Venture, payable to the Company, its Wholly Owned Restricted Subsidiaries
and any other joint venture partner(s) in proportion to their respective
interests in the Permitted Joint Venture) on shares of Capital Stock of
the Company or any Restricted Subsidiary or Permitted Joint Venture;
(b) purchase, redeem or otherwise acquire or retire for value any
Capital Stock of the Company or any Restricted Subsidiary or Permitted
Joint Venture or any warrants, rights or options to acquire shares of any
class of such Capital Stock, other than (i) the exchange of such Capital
Stock or any warrants, rights or options to acquire shares of any class
of such Capital Stock for Qualified Capital Stock of the Company or
warrants, rights or options to acquire Qualified Capital Stock of the
Company or (ii) to the extent that such Capital Stock or warrants, rights
or options are owned by the Company or any Wholly Owned Restricted
Subsidiary or Permitted Joint Venture;
(c) make any principal payment on, or purchase, defease, redeem,
prepay, decrease or otherwise acquire or retire for value, prior to any
scheduled final maturity, scheduled repayment or scheduled sinking fund
payment, any Indebtedness that is subordinate or junior in right of
payment to the Securities (other than any such Indebtedness owing to the
Company or any Wholly Owned Restricted Subsidiary or Permitted Joint
Venture); or
(d) make any Investment (other than any Permitted Investments)
after the Issue Date.
(each of the foregoing prohibited actions set forth in clauses (a), (b), (c)
and (d) being referred to as a "Restricted Payment") if at the time of such
Restricted Payment or immediately after giving effect thereto (i) a Default or
an Event of Default under this Indenture shall have occurred and be continuing
or would result therefrom, (ii) the Company, the Restricted Subsidiaries or
Permitted Joint Ventures are not able to incur at least $1.00 of additional
Indebtedness (other than Permitted Indebtedness) in compliance with
Section 4.08, or (iii) the aggregate amount of Restricted Payments made
subsequent to the Issue Date (the amount expended for such purposes, if other
than in cash, being the fair market value of such property as determined by the
Board of Directors in good faith) exceeds or would exceed the sum of:
(A) 100% of the aggregate net cash proceeds received by the
Company from any Person (other than a Restricted Subsidiary) from the
issuance and sale subsequent to the Issue Date of Qualified Capital Stock
of the Company (excluding any net proceeds from any public offering of
any Qualified Capital Stock or any issuance or sale of Capital Stock
pursuant to a Qualified Transaction and excluding (i) any Qualified
Capital Stock of the Company paid as a dividend on any Capital Stock of
the Company or of any Restricted Subsidiary and (ii) any Qualified
Capital Stock of the Company with respect to which the purchase price
thereof has been financed directly or indirectly using funds (x) borrowed
from the Company or from any Restricted Subsidiary or Permitted Joint
Venture, unless and until and to the extent such borrowing is repaid, or
(y) contributed, extended, guaranteed or advanced by the Company or by
any Restricted Subsidiary or Permitted Joint Venture (including, without
limitation, in respect of any employee stock ownership or benefit plan)),
PLUS
(B) without duplication of any amounts included in the
immediately preceding subclause (A), 100% of the aggregate net proceeds
(determined pursuant to the penultimate paragraph of this Section 4.09)
received by the Company from the issuance and sale (other than to any
Restricted Subsidiary) of any Qualified Capital Stock of the Company upon
the conversion of, or in exchange for, any Indebtedness of the Company or
any Restricted Subsidiary (other than any Indebtedness outstanding
immediately after the Issue Date), PLUS
(C) an amount equal to the net reduction in Investments in
Unrestricted Subsidiaries resulting from cash dividends, repayments of
loans or advances in cash, or other transfers of cash, in each case to
the Company or to any Wholly Owned Restricted Subsidiary from
Unrestricted Subsidiaries, or from redesignations of Unrestricted
Subsidiaries as Restricted Subsidiaries (in each case valued as provided
in Section 4.14), not to exceed, in the case of any Unrestricted
Subsidiary, the amount of Investments previously made by the Company or
any Restricted Subsidiary in such Unrestricted Subsidiary and which was
treated as a Restricted Payment under this Indenture, PLUS
(D) without duplication of the immediately preceding subclause
(C), an amount equal to the lesser of the cost or net cash proceeds
received upon the sale or other disposition of any Investment made after
the Issue Date which had been treated as a Restricted Payment.
Notwithstanding the foregoing, these provisions do not prohibit:
(1) the payment of any dividend or the making of any distribution
within 60 days after the date of its declaration if the dividend or
distribution would have been permitted on the date of declaration; or
(2) other than out of the proceeds of a Qualified Transaction,
the acquisition of Capital Stock of the Company or any Restricted
Subsidiary or warrants, options or other rights to acquire such Capital
Stock through the application of the net proceeds of any capital
contribution (other than from a Restricted Subsidiary or Permitted Joint
Venture) or a substantially concurrent sale for cash (other than to a
Restricted Subsidiary or Permitted Joint Venture) of Qualified Capital
Stock of the Company or warrants, options or other rights to acquire
Qualified Capital Stock of the Company; or
(3) the acquisition of Indebtedness of the Company that is
subordinate or junior in right of payment to the Securities, either (i)
solely in exchange for shares of Qualified Capital Stock of the Company
(or warrants, options or other rights to acquire Qualified Capital Stock
of the Company) or for Indebtedness of the Company which is subordinate
or junior in right of payment to the Securities, at least to the extent
that the Indebtedness being acquired is subordinated to the Securities,
is not in an aggregate principal amount in excess of (or if such
Indebtedness is issued with original issue discount, at an original issue
price not in excess of) the aggregate principal amount of the
Indebtedness being acquired (or if such acquired Indebtedness was issued
with original issue discount, in excess of the accreted amount of such
Indebtedness (as determined in accordance with GAAP)) and has a Weighted
Average Life to Maturity and final maturity no less than that of the
Indebtedness being exchanged or (ii) other than out of the proceeds of a
Qualified Transaction, through the application of the net proceeds of any
capital contribution or a substantially concurrent sale for cash (other
than to or from a Restricted Subsidiary or Permitted Joint Venture) of
Qualified Capital Stock of the Company (or warrants, options or other
rights to acquire Qualified Capital Stock of the Company) or Indebtedness
of the Company which is subordinate or junior in right of payment to the
Securities, at least to the extent and in the manner that the
Indebtedness being acquired is subordinated to the Securities, is not in
an aggregate principal amount in excess of (or if such Indebtedness is
issued with original issue discount, at an original issue price not in
excess of) the aggregate principal amount of the Indebtedness being
acquired (or if such acquired Indebtedness was issued with original issue
discount, in excess of the accreted amount of such Indebtedness (as
determined in accordance with GAAP)) and has a Weighted Average Life to
Maturity and final maturity no less than that of the Indebtedness being
refinanced; or
(4) with the approval of a majority of the Board of Directors,
the repurchase of Capital Stock of the Company (including options,
warrants or other rights to acquire such Capital Stock) from employees or
former employees of the Company or any Restricted Subsidiary for
consideration which, when added to all loans made pursuant to clause (5)
below of this paragraph during the same fiscal year and then outstanding
(determined as provided in clause (5) below) does not exceed $250,000 in
the aggregate in any fiscal year; or
(5) with the approval of a majority of the Board of Directors,
the making of loans and advances to employees of the Company or any
Restricted Subsidiary in an aggregate amount at any time outstanding
(including as outstanding any such loan or advance written off or
forgiven) which, when added to the aggregate consideration paid pursuant
to clause (4) of this paragraph during the same fiscal year, does not
exceed $250,000 in any fiscal year; or
(6) with the approval of a majority of the Board of Directors,
the making of any payment in the nature of a purchase price or other
adjustment for which the Company is obligated pursuant to the terms of
the Participation Agreement;
PROVIDED, HOWEVER, that in the case of the immediately preceding clauses (2),
(3), (4) and (5), and in the case of Investments permitted under clauses (a)
and (f) of the definition of "Permitted Investment", no Default or Event of
Default shall have occurred or be continuing at the time of such Restricted
Payment or would occur as a result thereof.
In determining the aggregate amount of Restricted Payments made
subsequent to the Issue Date, amounts expended pursuant to clauses (1), (2),
(3) (but only to the extent that Indebtedness is acquired in exchange for, or
with the net proceeds from, the issuance of Qualified Capital Stock of the
Company or warrants, options or other rights to acquire Qualified Capital Stock
of the Company), (4) and (5) of the immediately preceding paragraph shall be
included in such calculation.
For purposes of calculating the net proceeds received by the
Company from the issuance or sale of its Capital Stock either upon the
conversion of, or exchange for, Indebtedness of the Company or any Restricted
Subsidiary, such amount will be deemed to be an amount equal to the difference
of (a) the sum of (i) the principal amount or accreted value (whichever is
less) of such Indebtedness on the date of such conversion or exchange and
(ii) the additional cash consideration, if any, received by the Company upon
such conversion or exchange, less any payment on account of fractional shares,
MINUS (b) all expenses incurred in connection with such issuance or sale. In
addition, for purposes of calculating the net proceeds received by the Company
from the issuance or sale of its Capital Stock upon the exercise of any options
or warrants of the Company, such amount will be deemed to be an amount equal to
the difference of (A) the additional cash consideration, if any, received by
the Company upon such exercise, MINUS (B) all expenses incurred in connection
with such issuance or sale.
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 4.09 were computed, which calculation may
be based on the Company's latest financial statements.
4.10. Limitation on Issuance and Sale of Capital Stock of
RESTRICTED SUBSIDIARIES AND PERMITTED JOINT VENTURES.
The Company (a) shall not permit any Restricted Subsidiary or
Permitted Joint Venture to issue any Capital Stock (other than to the Company
or a Wholly Owned Restricted Subsidiary) and (b) shall not, and shall not
permit any Restricted Subsidiary or Permitted Joint Venture to, transfer,
convey, sell, lease or otherwise dispose of any Capital Stock of any Restricted
Subsidiary or Permitted Joint Venture to any Person (other than the Company or
a Wholly Owned Restricted Subsidiary); PROVIDED, HOWEVER, that this Section
4.10 will not prohibit (i) the sale or other disposition of all, but not less
than all, of the issued and outstanding Capital Stock of a Restricted
Subsidiary owned by the Company and its Restricted Subsidiaries in compliance
with the other provisions of hereof, (ii) the sale or other disposition of a
portion of the issued and outstanding Capital Stock of an existing Wholly Owned
Restricted Subsidiary if as a result of such sale or disposition, such Wholly
Owned Restricted Subsidiary becomes a Permitted Joint Venture, (iii) the
ownership by directors of director's qualifying shares or the ownership by
foreign nationals of Capital Stock of any Restricted Subsidiary, to the extent
mandated by applicable law, or (iv) with respect to a Permitted Joint Venture,
the sale or other disposition of any Capital Stock so long as the Permitted
Joint Venture remains a Permitted Joint Venture as defined herein.
The Company shall not permit any Restricted Subsidiary to issue any
Preferred Stock.
4.11. LIMITATION ON LIENS.
The Company shall not, and shall not permit any Restricted
Subsidiary or Permitted Joint Venture to, directly or indirectly, create,
incur, assume or suffer to exist any Liens upon any of their respective
property or assets or on any income or profits therefrom, or assign or
otherwise convey any right to receive income or profits thereon, whether owned
on the date of this Indenture or thereafter acquired, unless (a) in the case of
Liens securing Indebtedness subordinate to the Securities, the Securities are
secured by a valid, perfected Lien on such property, assets or proceeds that is
senior in priority to such Liens and (b) in all other cases, the Securities are
equally and ratably secured; PROVIDED, HOWEVER, that the foregoing shall not
prohibit or restrict, and the Company need not equally and ratably secure the
Securities as a result of, Permitted Liens.
4.12. DISPOSITION OF PROCEEDS OF ASSET SALES.
The Company shall not, and shall not permit any Restricted
Subsidiary or Permitted Joint Venture to, directly or indirectly, consummate
any Asset Sale unless:
(a) the Company or the applicable Restricted Subsidiary or
Permitted Joint Venture, as the case may be, receives consideration at
the time of such Asset Sale at least equal to the fair market value of
the assets sold or otherwise disposed of;
(b) at least 80% of such consideration received by the Company,
the Restricted Subsidiary or Permitted Joint Venture, as the case may be,
from such Asset Sale is cash or Cash Equivalents (other than in the case
where the Company, a Restricted Subsidiary or a Permitted Joint Venture
is exchanging all or substantially all of the assets of one or more
geographic service areas operated by the Company, such Restricted
Subsidiary or a Permitted Joint Venture (including by way of the transfer
of Capital Stock) for all or substantially all the assets (including by
way of the transfer of Capital Stock) constituting one or more geographic
service areas operated by another Person (each, a "Permitted Exchange"),
in which event the foregoing requirement with respect to the receipt of
cash or Cash Equivalents shall not apply) and is received at the time of
such disposition; and
(c) upon the consummation of an Asset Sale (other than any
Permitted Exchange), the Company applies, or causes such Restricted
Subsidiary or Permitted Joint Venture to apply, or enters into, or causes
such Restricted Subsidiary or Permitted Joint Venture to enter into, a
binding commitment to apply, any Net Cash Proceeds within 180 days of
receipt thereof (it being understood that any binding commitment to so
apply must be consummated within 240 days of such receipt) either (i) to
reinvest in Productive Assets, or (ii) to repay or prepay permanently
Indebtedness (other than non-recourse Indebtedness) of any Restricted
Subsidiary or Permitted Joint Venture (which repayment or prepayment
shall be accompanied by a permanent reduction of the commitment to lend
the amount so repaid or prepaid in the case of any revolving credit
facility), or (iii) to repay or prepay permanently any Indebtedness of
the Company that is secured by a Lien permitted to be incurred pursuant
to Section 4.11 (which repayment or prepayment shall be accompanied by a
permanent reduction of the commitment to lend the amount so repaid or
prepaid in the case of any revolving credit facility), or (iv) to the
extent not applied pursuant to the immediately preceding clauses (i),
(ii) or (iii), pro rata (based on the aggregate Accreted Value at
maturity of the Securities and, if required by the terms thereof, such
other Indebtedness then outstanding) to (A) if required by the terms
thereof, the repayment or prepayment of any Indebtedness of the Company
(other than the Securities, and any Indebtedness subordinated to the
Securities) that is at the time redeemable or prepayable (and is so
redeemed or prepaid) and (B) to purchase Securities tendered to the
Company for purchase at a price equal to 100% of the Accreted Value
thereof on the date of repurchase, plus unpaid interest, if any, to the
date of purchase pursuant to an offer to purchase made by the Company as
set forth below (an "Asset Sale Offer"); PROVIDED, HOWEVER, that if at
any time any non-cash consideration received by the Company or any
Restricted Subsidiary or Permitted Joint Venture, as the case may be, in
connection with any Asset Sale is converted into or sold or otherwise
disposed of for cash, then such conversion or disposition shall be deemed
to constitute an Asset Sale hereunder and the Net Cash Proceeds thereof
shall be applied in accordance with this clause (C); PROVIDED, FURTHER,
HOWEVER, that the Company may defer making an Asset Sale Offer until the
aggregate Net Cash Proceeds from Asset Sales to be applied equal or
exceed $5,000,000; and PROVIDED, FURTHER, HOWEVER that the Net Cash
Proceeds received by the Company or a Restricted Subsidiary in connection
with the sale of the Philadelphia MDU Operation shall not be required to
be applied in accordance with this clause (c).
Each notice of an Asset Sale Offer shall be mailed, by first class
mail, by the Company to all Holders of Securities as shown on the applicable
register of holders of Securities, with a copy to the Trustee and the Paying
Agent (such copy to be accompanied by an Officers' Certificate stating that all
conditions precedent contained herein to such Asset Sale Offer have been
complied with). The notice, which shall govern the terms of the Asset Sale
Offer, shall include such disclosures as are required by law and shall state:
(i) that the Asset Sale Offer is being made pursuant to this
Section 4.12;
(ii) the purchase date, which shall be not less than 30 days nor
more than 45 days from the date such notice is mailed (the "Asset Sale
Purchase Date"), except as otherwise required by law;
(iii) the amount of Net Cash Proceeds available to repurchase
Securities and the purchase price per $1,000 principal amount at
maturity;
(iv) that any Security or portion thereof not tendered or accepted
for payment will continue to accrue interest in accordance with the terms
thereof;
(v) that, unless the Company shall default in the payment of the
Net Cash Proceeds, any Security or portion thereof accepted for payment
pursuant to the Asset Sale Offer shall cease to accrete in value after
the Asset Sale Purchase Date;
(vi) that Holders electing to have Securities purchased in whole
or in part in integral multiples of $1,000 in principal amount at
maturity, pursuant to an Asset Sale Offer will be required to surrender
their Securities to the Paying Agent at the address specified in the
notice prior to 5:00 p.m., New York City time, on the Asset Sale Purchase
Date and must complete any form of letter of transmittal proposed by the
Company and reasonably acceptable to the Trustee and the Paying Agent;
(vii) that Holders will be entitled to withdraw their election if
the Paying Agent receives, not later than 5:00 p.m., New York City time,
on the Asset Sale Purchase Date, a telex, facsimile transmission or
letter setting forth the name of the Holder, the principal amount at
maturity of Securities the Holder delivered for purchase, the Security
certificate number and a statement that such Holder is withdrawing its
election to have such Securities or portions thereof purchased;
(viii) that if the Accreted Value of Securities properly tendered
by Holders exceeds Net Cash Proceeds available to repurchase Securities
in the Asset Sale Offer, the Company shall repurchase Securities on a pro
rata basis (based upon the aggregate Accreted Value of Securities
tendered by each Holder, using the procedures set forth in Section 3.02);
(ix) that Holders whose Securities are purchased only in part will
be issued new Securities equal in principal amount at maturity to the
unpurchased portion of the Securities surrendered;
(x) the instructions that Holders must follow in order to tender
their Securities; and
(xi) information concerning the business of the Company, the most
recent annual and quarterly reports of the Company filed with the SEC
pursuant to the Exchange Act (or, if the Company is not permitted to file
any such reports with the Commission, the comparable reports prepared
pursuant to Section 4.07), a description of material developments in the
Company's business, information with respect to PRO FORMA historical
financial information after giving effect to such Asset Sale and Asset
Sale Offer and such other information concerning the circumstances and
relevant facts regarding such Asset Sale Offer as would be material to a
Holder of Securities in connection with the decision of such Holder as to
whether or not it should tender Securities pursuant to the Asset Sale
Offer.
Portions of Securities tendered for purchase shall be in principal amount at
maturity equal to $1,000 or integral multiples thereof.
On the Asset Sale Purchase Date, the Company shall (A) accept for
payment, on a pro rata basis, Securities or portions thereof tendered pursuant
to the Asset Sale Offer, (B) deposit with the Paying Agent money, in
immediately available funds, in an amount sufficient to pay the purchase price
of all Securities or portions thereof so tendered and accepted and (C) deliver
to the Trustee the Securities so accepted together with an Officers'
Certificate setting forth the Securities or portions thereof tendered to and
accepted for payment by the Company. The Paying Agent shall promptly mail or
deliver to Holders of Securities so accepted payment in an amount equal to the
purchase price, and the Trustee shall promptly authenticate and mail or deliver
to such Holders a new Security equal in principal amount to any unpurchased
portion of the Security surrendered. Any Securities not so accepted shall be
promptly mailed or delivered by the Company to the Holder thereof. The Company
will publicly announce the results of the Asset Sale Offer not later than the
first Business Day following the Asset Sale Purchase Date.
To the extent that the Accreted Value of Securities tendered
pursuant to an Asset Sale Offer is less than the amount of Net Cash Proceeds
available therefor, the Company may use any remaining portion of such available
Net Cash Proceeds not required to fund the repurchase of tendered Securities
for any purposes otherwise permitted by this Indenture. Upon consummation of
any Asset Sale Offer, the amount of Net Cash Proceeds from the Asset Sale in
question to be the subject of future Asset Sale Offers shall be deemed to be
zero. For purposes of this Section 4.12, the Trustee shall act as Paying
Agent.
In the event of the transfer of substantially all (but not all) of
the property and assets of the Company and the Restricted Subsidiaries as an
entirety to a Person in a transaction permitted under Section 5.01, the
successor Person shall be deemed to have sold the properties and assets of the
Company and the Restricted Subsidiaries not so transferred for purposes of this
Section 4.12 and shall comply with the provisions of this covenant with respect
to such deemed sale as if it were an Asset Sale. In addition, the fair market
value of such properties and assets of the Company or the Restricted
Subsidiaries deemed to be sold shall be deemed to be Net Cash Proceeds for
purposes of this Section 4.12.
The Company shall comply with the requirements of Rule 14e-1 of 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 Securities pursuant to an Asset Sale Offer. To the extent the
provisions of any such rule conflict with the provisions of this Indenture
relating to an Asset Sale Offer, the Company shall comply with the provisions
of such rule and be deemed not to have breached its obligations relating to
such Asset Sale Offer by virtue thereof.
4.13. LIMITATION ON TRANSACTIONS WITH AFFILIATES.
The Company shall not, and shall not permit any Restricted
Subsidiary or Permitted Joint Venture to, directly or indirectly, enter into,
amend or permit or suffer to exist any transaction (including, without
limitation, the purchase, sale, lease or exchange of any property, the
guaranteeing of any Indebtedness or the rendering of any service) with or for
the benefit of any of its Affiliates (an "Affiliate Transaction") other than
any Affiliate Transaction or Affiliate Transactions that are on terms that are
fair and reasonable to the Company and no less favorable to the Company than
those that might reasonably have been obtained at such time in a comparable
transaction by the Company on an arm's-length basis from a Person that is not
an Affiliate; PROVIDED, HOWEVER, that such determination shall be made in good
faith by a majority of the members of the Board of Directors and by a majority
of the disinterested members of the Board of Directors; PROVIDED, FURTHER,
HOWEVER, that for a transaction or series of related transactions involving
value of $5,000,000 or more, the Board of Directors shall have received, prior
to the consummation thereof, an opinion from a nationally recognized investment
banking firm that such Affiliate Transaction is fair, from a financial point of
view, to the Company, such Restricted Subsidiary or Permitted Joint Venture.
The foregoing provisions shall not prohibit or restrict (a)
transactions between the Company and a Wholly Owned Restricted Subsidiary or
among Wholly Owned Restricted Subsidiaries, (b) Restricted Payments and
Permitted Investments made in accordance with Section 4.09, (c) the payment of
reasonable and customary fees to directors of the Company who are not employees
of the Company and the payment of reasonable and customary compensation for
director and Board of Director observer fees, meeting expenses, insurance
premiums and indemnities, to the extent permitted by law, (d) any employment or
option agreement entered into by the Company or any Restricted Subsidiary in
the ordinary course of business that is approved by the Compensation Committee
of the Board of Directors, (e) Affiliate Transactions in existence, or for
which rights or agreements are in existence, on the Issue Date, in each case as
in effect on the Issue Date; PROVIDED, HOWEVER, that no additional payments
shall be made with respect thereto without the approval of a majority of the
members of the Board of Directors and a majority of the disinterested members
of the Board of Director, (f) channel leases and options with Affiliates
entered into after the Issue Date provided such leases are no less beneficial
to the Company or the applicable Subsidiary than any such leases in effect on
the Issue Date, and are approved by a majority of the Board of Directors, (g)
amendments to or renewals of the agreements and leases referred to in clause
(f) of this sentence; PROVIDED, HOWEVER, that any such amendments or renewals
are no less beneficial to the Company or applicable Restricted Subsidiary than
the agreement or lease being amended or renewed and are approved by a majority
of the Board of Directors and (h) the issuance of stock options (and shares of
stock upon the exercise thereof) pursuant to any stock option plan approved by
the Board of Directors and shareholders of the Company.
4.14. LIMITATION ON RESTRICTED AND UNRESTRICTED SUBSIDIARIES.
The Board of Directors may, if no Default or Event of Default shall
have occurred and be continuing or would arise therefrom, designate an
Unrestricted Subsidiary to be a Restricted Subsidiary; PROVIDED, HOWEVER, that
(a) any such redesignation shall be deemed to be an incurrence as of the date
of such redesignation by the Company and the Restricted Subsidiaries of the
Indebtedness (if any) of such redesignated Subsidiary for purposes of
Section 4.08; and (b) unless such redesignated Subsidiary shall not have any
Indebtedness outstanding, other than Indebtedness which would be Permitted
Indebtedness, no such designation shall be permitted (i) if immediately after
giving effect to such redesignation and the incurrence of any such additional
Indebtedness, the Company could not incur $1.00 of additional Indebtedness
(other than Permitted Indebtedness) pursuant to Section 4.08, and (ii) unless
the Indebtedness of such redesignated Subsidiary is assumed by the Company such
that such Subsidiary is no longer the obligor thereunder. The Board of
Directors also may, if no Default or Event of Default shall have occurred and
be continuing or would arise therefrom, designate any Restricted Subsidiary to
be an Unrestricted Subsidiary if (A) such designation is at that time permitted
under Section 4.09 and (B) immediately after giving effect to such designation,
the Company could incur $1.00 of additional Indebtedness (other than Permitted
Indebtedness) pursuant to Section 4.08. Any such designation by the Board of
Directors shall be evidenced to the Trustee by the filing with the Trustee of a
Board Resolution giving effect to such designation or redesignation and an
Officers' Certificate certifying that such designation or redesignation
complied with the foregoing conditions and setting forth in reasonable detail
the underlying calculations.
For purposes of the covenant described in Section 4.09, (A) an
"Investment" shall be deemed to have been made at the time any Restricted
Subsidiary is designated as an Unrestricted Subsidiary in an amount
(proportionate to the Company's equity interest in such Subsidiary) equal to
the net worth of such Restricted Subsidiary at the time that such Restricted
Subsidiary is designated as an Unrestricted Subsidiary; (B) at any date the
aggregate of all Restricted Payments made as Investments since the Issue Date
shall exclude and be reduced by an amount (proportionate to the Company's
equity interest in such Subsidiary) equal to the lesser of (I) the amount of
Investments made since the Issue Date in any Unrestricted Subsidiary that
becomes a Restricted Subsidiary after the date of such Investment and (II) the
net worth of any Unrestricted Subsidiary at the time that such Unrestricted
Subsidiary is designated a Restricted Subsidiary, not to exceed, in the case of
any such redesignation of an Unrestricted Subsidiary as a Restricted
Subsidiary, the amount of Investments previously made by the Company and the
Restricted Subsidiaries in such Unrestricted Subsidiary since the Issue Date
(in each case (I) and (II) "net worth" to be calculated based upon the fair
market value of the assets of such Subsidiary as of any such date of
designation); and (III) any property transferred to or from an Unrestricted
Subsidiary shall be valued at its fair market value at the time of such
transfer.
Notwithstanding the foregoing, the Board of Directors may not
designate any Subsidiary of the Company to be an Unrestricted Subsidiary if,
after such designation, (x) the Company or any other Restricted Subsidiary
(1) provides credit support for, or a guarantee of, any Indebtedness of such
Subsidiary (including any undertaking, agreement or instrument evidencing such
Indebtedness) or (2) is directly or indirectly liable for any Indebtedness of
such Subsidiary, (y) a default with respect to any Indebtedness of such
Subsidiary (including any right which the holders thereof may have to take
enforcement action against such Subsidiary) would permit (upon notice, lapse of
time or both) any holder of any other Indebtedness of the Company or any
Restricted Subsidiary to declare a default on such other Indebtedness or cause
the payment thereof to be accelerated or payable prior to its final scheduled
maturity or (z) such Subsidiary owns any Capital Stock of, or owns or holds any
Lien on any property of, any Restricted Subsidiary which is not a Subsidiary of
the Subsidiary to be so designated.
Subsidiaries of the Company that are not designated by the Board of
Directors as Restricted or Unrestricted Subsidiaries will be deemed to be
Restricted Subsidiaries. Notwithstanding any provisions of this covenant, all
Subsidiaries of a Restricted Subsidiary will be Restricted Subsidiaries and all
Subsidiaries of an Unrestricted Subsidiary will be Unrestricted Subsidiaries.
The Board of Directors may not change the designation of a Subsidiary of the
Company more than twice in any period of five years.
4.15. Limitation on Dividend and Other Payment Restrictions
AFFECTING RESTRICTED SUBSIDIARIES AND PERMITTED JOINT
VENTURES.
The Company shall not, and shall not permit any Restricted
Subsidiary or Permitted Joint Venture to, directly or indirectly, create or
otherwise cause or permit to exist or become effective any encumbrance or
restriction on the ability of any Restricted Subsidiary or Permitted Joint
Venture to: (a) pay dividends or make any other distributions on its Capital
Stock, (b) make loans or advances or to pay any Indebtedness or other
obligation owed to the Company or any Restricted Subsidiary or Permitted Joint
Venture, (c) guarantee any Indebtedness or any other obligation of the Company
or any Restricted Subsidiary or Permitted Joint Venture, or (d) transfer any of
its property or assets to the Company or any Restricted Subsidiary or Permitted
Joint Venture (each of the foregoing restrictions, a "Payment Restriction"),
except for such encumbrances or restrictions existing under or by reason of (i)
applicable law, (ii) this Indenture, (iii) customary non-assignment provisions
of any lease governing a leasehold interest of the Company or any Restricted
Subsidiary, (iv) any instrument governing Acquired Indebtedness, which
encumbrance or restriction was not incurred in connection with, as a result of,
or in anticipation of the incurrence of such Indebtedness and 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, (v) agreements
existing on the Issue Date and agreements governing additional Indebtedness
that may be incurred under Section 4.08, as such agreements are from time to
time in effect; PROVIDED, HOWEVER, that any amendments or modifications of such
agreements which affect the encumbrances or restrictions of the types subject
to this covenant shall not result in such encumbrances or restrictions being
less favorable to the Company, a Restricted Subsidiary or a Permitted Joint
Venture in any material respect, as determined in good faith by the Board of
Directors, than the provisions as in effect before giving effect to the
respective amendment or modification, (vi) an agreement effecting a
refinancing, replacement or substitution of Indebtedness issued, assumed or
incurred pursuant to an agreement described in clause (iv) or (v) of this
Section 4.15; PROVIDED, HOWEVER, that the provisions relating to such
encumbrance or restriction contained in any such refinancing, replacement or
substitution agreement are not less favorable to the Company in any material
respect as determined in good faith by the Board of Directors than the
provisions relating to such encumbrance or restriction contained in agreements
referred to in such clause (iv) or (v) of this Section 4.15, (vii) Liens
permitted under this Indenture to the extent that such Liens restrict the
transfer of the asset or assets subject thereto, and (viii) with respect to
clause (d) above, purchase money obligations for property acquired in the
ordinary course of business pursuant to ordinary business terms.
4.16. INTENTIONALLY OMITTED.
4.17. LIMITATION ON SALE AND LEASEBACK TRANSACTIONS.
The Company shall not, and shall not permit any Restricted
Subsidiary or Permitted Joint Venture to, directly or indirectly, enter into
any Sale and Leaseback Transaction, except that the Company or any Restricted
Subsidiary or Permitted Joint Venture may enter into a Sale and Leaseback
Transaction if (a) immediately prior thereto, and after giving effect to such
Sale and Leaseback Transaction (the Indebtedness thereunder being equivalent to
the Attributable Value thereof) the Company, such Restricted Subsidiary or
Permitted Joint Venture could incur at least $1.00 of additional Indebtedness
(other than Permitted Indebtedness) in compliance with Section 4.08 and (b) the
Sale and Leaseback Transaction constitutes an Asset Sale effected in accordance
with the requirements of Section 4.12.
4.18. LIMITATION ON LINE OF BUSINESS.
For so long as any Securities are outstanding, the Company shall,
and shall cause any Restricted Subsidiary and Permitted Joint Venture to,
engage solely in (a) the Permitted Business, and (b) evaluating, participating
or pursuing any other activity or opportunity that is related to the Permitted
Business (including pursuant to acquisitions of entities or divisions or lines
of business of entities in the foregoing business).
4.19. WAIVER OF STAY, EXTENSION OR USURY LAWS.
The Company covenants (to the extent that it may lawfully do so)
that it shall not at any time insist upon, or plead, or in any manner
whatsoever claim or take the benefit or advantage of, any stay or extension law
or any usury law or other law which would prohibit or forgive the Company from
paying all or any portion of the Accreted Value of, the principal of, or
interest, if any, or interest on the Securities as contemplated herein,
wherever enacted, now or at any time hereafter in force, or which may affect
the covenants or the performance of this Indenture; and (to the extent that it
may lawfully do so) the Company hereby expressly waives all benefit or
advantage of any such law, and covenants that it will not hinder, delay or
impede the execution of any power herein granted to the Trustee, but will
suffer and permit the execution of every such power as though no such law had
been enacted.
ARTICLE FIVE
SUCCESSOR CORPORATION
5.01. WHEN COMPANY MAY MERGE, ETC.
The Company shall not, in any transaction or series of
transactions, merge or consolidate with or into, or sell, assign, convey,
transfer, lease or otherwise dispose of all or substantially all of its
properties and assets as an entirety to, any Person or Persons (other than a
Permitted Joint Venture), and the Company shall not permit any Restricted
Subsidiary or Permitted Joint Venture to enter into any such transaction or
series of transactions if such transaction or series of transactions, in the
aggregate, would result in a sale, assignment, conveyance, transfer, lease or
other disposition of all or substantially all of the properties and assets of
the Company or the Company and the Restricted Subsidiaries and Permitted Joint
Ventures, taken as a whole, to any other Person or Persons (other than a
Permitted Joint Venture), unless at the time of and after giving effect thereto
(a) either (i) if the transaction or series of transactions is a merger or
consolidation involving the Company or a Restricted Subsidiary or a Permitted
Joint Venture, the Company or such Restricted Subsidiary or Permitted Joint
Venture shall be the surviving Person of such merger or consolidation, or (ii)
the Person formed by such consolidation or into which the Company or a
Restricted Subsidiary or a Permitted Joint Venture is merged or to which the
properties and assets of the Company or such Restricted Subsidiary or Permitted
Joint Venture, as the case may be, are sold, assigned, conveyed, transferred,
leased or otherwise disposed of (including, with respect to the Restricted
Subsidiaries, by merger or consolidation) (any such surviving Person or Persons
of such merger or consolidation or to whom such sale, assignment, conveyance,
lease or other disposition has been made being the "Surviving Entity") shall be
a corporation organized and existing under the laws of the United States of
America, any state thereof or the District of Columbia and shall expressly
assume by a supplemental indenture executed and delivered to the Trustee, in
form reasonably satisfactory to the Trustee, all the obligations of the Company
under the Securities and this Indenture and, in each case, this Indenture shall
remain in full force and effect; (b) immediately before and immediately after
giving effect to such transaction or series of transactions on a PRO FORMA
basis (including, without limitation, any Indebtedness incurred or anticipated
to be incurred in connection with or in respect of such transaction or series
of transactions), no Default or Event of Default shall have occurred and be
continuing and the Company, such Restricted Subsidiary or Permitted Joint
Venture or the Surviving Entity, as the case may be, after giving effect to
such transaction or series of transactions on a PRO FORMA basis (including,
without limitation, any Indebtedness incurred or anticipated to be incurred in
connection with or in respect of such transaction or series of transactions),
could incur $1.00 of additional Indebtedness (other than Permitted
Indebtedness) under Section 4.08 (assuming a market rate of interest with
respect to such additional Indebtedness); and (c) immediately after giving
effect to such transaction or series of transactions on a PRO FORMA basis
(including, without limitation, any Indebtedness incurred or anticipated to be
incurred in connection with or in respect of such transaction or series of
transactions), the Consolidated Net Worth of the Company or the Surviving
Entity, as the case may be, is at least equal to the Consolidated Net Worth of
the Company immediately before such transaction or series of transactions;
PROVIDED, HOWEVER, that any Restricted Subsidiary may merge or consolidate with
the Company if (A) the Company is the surviving Person of such merger or
consolidation and (B) immediately before and immediately after giving effect to
such transaction or series of transactions on a PRO FORMA basis (including,
without limitation, any Indebtedness incurred or anticipated to be incurred in
connection with or in respect of such transaction or series of transactions),
no Default or Event of Default shall have occurred and be continuing.
In connection with any transaction contemplated by this Section
5.01, the Company or the Surviving Entity, as the case may be, shall have
delivered to the Trustee an Officers' Certificate and an Opinion of Counsel,
each in form reasonably satisfactory to the Trustee, each stating that such
consolidation, merger, sale, assignment, conveyance, transfer, lease or other
disposition and, if a supplemental indenture is required in connection with
such transaction or series of transactions, such supplemental indenture comply
with this Indenture.
For the purposes of the foregoing and of Section 5.02, the transfer
(by lease, assignment, sale or otherwise, in a single transaction or series of
related transactions) of all or substantially all of the properties and assets
of one or more Restricted Subsidiaries or Permitted Joint Ventures, the Capital
Stock of which constitutes all or substantially all of the properties and
assets of the Company, shall be deemed to be the transfer of all or
substantially all of the properties and assets of the Company.
For all purposes of this Indenture and the Securities (including
the provisions of this Section 5.01 and Section 5.02 and the covenants
described in Sections 4.08, 4.11 and 4.14), Subsidiaries of any Surviving
Entity will, upon such transaction or series of transactions, become Restricted
Subsidiaries or Unrestricted Subsidiaries as provided pursuant to the covenant
described in Section 4.14 and all Indebtedness, and all Liens on property or
assets, of the Company and the Restricted Subsidiaries immediately prior to
such transaction or series of transactions shall be deemed to have been
incurred upon such transaction or series of transactions.
5.02. SUCCESSOR SUBSTITUTED.
Upon any consolidation or merger or any sale, assignment,
conveyance, transfer, lease or other disposition of all or substantially all of
the assets of the Company in accordance with Section 5.01 hereof in which the
Company is not the continuing corporation, the successor corporation formed by
such a consolidation or into which the Company is merged or to which such sale,
assignment, conveyance, transfer, lease or other disposition is made shall
succeed to, and be substituted for, and may exercise every right and power of,
the Company under this Indenture with the same effect as if such successor
corporation had been named as the Company herein, and thereafter, except in the
case of a lease, the predecessor corporation shall be relieved of all
obligations and covenants under this Indenture and the Securities.
ARTICLE SIX
REMEDIES
6.01. EVENTS OF DEFAULT.
An "Event of Default" means any of the following events:
(a) the failure to pay the principal or Accreted Value of any
Security when such principal or Accreted Value becomes due and payable,
at maturity, upon acceleration, redemption, pursuant to a required offer
to purchase or otherwise;
(b) a default in the observance or performance of any other
covenant or agreement contained in the Securities or this Indenture
(other than Defaults specified in clause (a) above) and such Default
continues for a period of 60 days after the Company receives written
notice thereof from the Trustee specifying the default and stating that
such notice is a "Notice of Default" hereunder or the Company and the
Trustee receive such notice from Holders of at least 25% in aggregate
principal amount of the outstanding Securities;
(c) 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 Restricted
Subsidiary or Permitted Joint Venture (or the payment of which is
guaranteed by the Company or any Restricted Subsidiary or Permitted Joint
Venture), whether such Indebtedness or guarantee now exists, or is
created after the Issue Date, which default (i) is caused by a failure to
pay when due principal on such Indebtedness within the grace period
provided in such Indebtedness (which failure continues beyond any
applicable grace period) (a "Payment Default") or (ii) results in the
acceleration of such Indebtedness prior to its express maturity and, in
each case, the principal amount of any such Indebtedness, together with
the principal amount of any other such Indebtedness under which there has
been a Payment Default or the maturity of which has been so accelerated,
aggregates $5,000,000 or more;
(d) one or more judgments in an aggregate amount in excess of
$5,000,000 (unless covered by insurance by a reputable insurer as to
which the insurer has acknowledged coverage) being rendered against the
Company or any Restricted Subsidiary or Permitted Joint Venture and such
judgments remain undischarged or unstayed for a period of 60 days after
such judgment or judgments become final and non-appealable;
(e) the Company or any Subsidiary of the Company or Permitted
Joint Venture pursuant to or under or within the meaning of any
Bankruptcy Law:
(i) commences a voluntary case or proceeding;
(ii) consents to the entry of an order for relief against it
in an involuntary case or proceeding;
(iii) consents to the appointment of a Custodian of it or
for all or substantially all of its property;
(iv) makes a general assignment for the benefit of its
creditors; or
(v) shall generally not pay its debts when such debts
become due or shall admit in writing its inability to pay its debts
generally;
(f) a court of competent jurisdiction enters an order or decree
under any Bankruptcy Law that:
(i) is for relief against the Company or any Subsidiary or
Permitted Joint Venture of the Company in an involuntary case or
proceeding,
(ii) appoints a Custodian of the Company, any Subsidiary or
Permitted Joint Venture of the Company for all or substantially all
of its properties, or
(iii) orders the liquidation of the Company, any Subsidiary
or Permitted Joint Venture of the Company,
and in each case the order or decree remains unstayed and in effect for
60 days; or
(g) any holder of at least $5,000,000 in aggregate principal
amount of Indebtedness of the Company, any Restricted Subsidiary or
Permitted Joint Venture shall foreclose upon assets of the Company or any
Restricted Subsidiary or Permitted Joint Venture having an aggregate fair
market value, individually or in the aggregate, of at least $5,000,000 or
shall have exercised any right under applicable law or applicable
security documents to take ownership of any such assets in lieu of
foreclosure.
6.02. ACCELERATION.
Upon the happening of any Event of Default (other than as specified
in Section 6.01(e) or (f) with respect to the Company), the Trustee, by written
notice to the Company, or the Holders of not less than 25% in aggregate
principal amount of the Securities then outstanding, by written notice to the
Trustee and the Company, in each case specifying the respective Event of
Default and that it is a "notice of acceleration", may declare the Accreted
Value of all of the Securities to be due and payable immediately, upon which
declaration, all amounts payable in respect of the Securities shall become
immediately due and payable, notwithstanding anything contained in the
Securities or this Indenture to the contrary. If an Event of Default specified
in Section 6.01(e) or (f) with respect to the Company occurs and is continuing,
then such amount shall IPSO FACTO become and be immediately due and payable
without any declaration or other act on the part of the Trustee or any Holder
of Securities.
At any time after a declaration of acceleration with respect to the
Securities as described in the preceding paragraph, but before a judgment or
decree of money due in respect of the Securities has been obtained, the Holders
of not less than a majority in aggregate principal amount at maturity of the
Securities then outstanding, by written notice to the Company and the Trustee,
may rescind such declaration and its consequences if (a) the Company has paid
or deposited with the Trustee a sum sufficient to pay (i) all sums paid or
advanced by the Trustee under this Indenture and the reasonable compensation,
expenses, disbursements and advances of the Trustee, its agents and counsel,
(ii) interest, if any, at the rate of 15% per annum that has accrued on the
Accreted Value of all Securities from the date of such declaration to the date
of such payment or deposit with the Trustee, (iii) the Accreted Value of any
Securities which have become due otherwise than by such declaration of
acceleration, and (iv) to the extent that payment of such interest is lawful,
interest, if any, at the rate of 15% per annum that has accrued on the Accreted
Value of any Securities which have become due otherwise than by such
declaration of acceleration; (b) the rescission would not conflict with any
judgment or decree of a court of competent jurisdiction; and (c) all Events of
Default, other than the non-payment of principal of, and interest, if any, on
the Securities that have become due solely by such declaration of acceleration,
have been cured or waived.
No such rescission shall affect any subsequent Default or Event of
Default or impair any right subsequent therein.
6.03. OTHER REMEDIES.
If an Event of Default occurs and is continuing, the Trustee may
pursue any available remedy by proceeding at law or in equity to collect the
payment of the Accreted Value of, or interest, if any, on the Securities or to
enforce the performance of any provision of the Securities or this Indenture.
All rights of action and claims under this Indenture or the
Securities may be enforced by the Trustee even if it does not possess any of
the Securities or does not produce any of them in the proceeding. A delay or
omission by the Trustee or any Holder 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. No remedy is
exclusive of any other remedy. All available remedies are cumulative to the
extent permitted by law.
6.04. WAIVER OF PAST DEFAULTS.
Prior to the declaration of acceleration of the Securities, the
Holders of not less than a majority in principal amount of the Securities by
notice to the Trustee may, on behalf of the Holders of all the Securities,
waive any existing Default or Event of Default and its consequences under this
Indenture, except a Default or Event of Default specified in Section 6.01(a) or
in respect of any provision hereof which cannot be modified or amended without
the consent of the Holder so affected pursuant to Section 9.02. When a Default
or Event of Default is so waived, it shall be deemed cured and shall cease to
exist. This paragraph of this Section 6.04 shall be in lieu of ' 316(a)(1)(B)
of the TIA and such ' 316(a)(1)(B) of the TIA is hereby expressly excluded from
this Indenture and the Securities, as permitted by the TIA.
6.05. CONTROL BY MAJORITY.
The Holders of not less than a majority in aggregate principal
amount at maturity of the outstanding Securities shall have the right to direct
the time, method and place of conducting any proceeding for any remedy
available to the Trustee, or exercising any trust or power conferred on the
Trustee, PROVIDED, HOWEVER, that the Trustee may refuse to follow any direction
(a) that conflicts with any rule of law or this Indenture, (b) that the Trustee
determines may be unduly prejudicial to the rights of another Securityholder,
or (c) that may expose the Trustee to personal liability for which reasonable
indemnity provided to the Trustee against such liability shall be inadequate;
PROVIDED, FURTHER, HOWEVER, that the Trustee may take any other action deemed
proper by the Trustee that is not inconsistent with such direction. This
Section 6.05 shall be in lieu of Section 316(a)(1)(A) of the TIA, and such
Section 316(a)(1)(A) of the TIA is hereby expressly excluded from this Indenture
and the Securities, as permitted by the TIA.
6.06. LIMITATION ON SUITS.
No Holder of any Securities shall have any right to institute any
proceeding with respect to this Indenture or the Securities or any remedy
hereunder unless such Holder has previously given written notice to the Trustee
of a continuing Event of Default, the Holders of at least 25% in aggregate
principal amount at maturity of the outstanding Securities have made written
request, and offered reasonable indemnity, to the Trustee to institute such
proceeding as Trustee under the Securities and this Indenture, the Trustee has
failed to institute such proceeding within 30 days after receipt of such
notice, request and offer of indemnity and the Trustee, within such 30-day
period, has not received directions inconsistent with such written request by
Holders of not less than a majority in aggregate principal amount of the
outstanding Securities.
The foregoing limitations shall not apply to a suit instituted by a
Holder of a Security for the enforcement of the payment of the Accreted Value
of, or interest, if any, on such Security on or after the respective due dates
expressed or provided for in such Security.
A Holder may not use this Indenture to prejudice the rights of any
other Holders or to obtain priority or preference over such other Holders.
6.07. RIGHT OF HOLDERS TO RECEIVE PAYMENT.
Notwithstanding any other provision in this Indenture, the right of
any Holder of a Security to receive payment of the Accreted Value of, and
interest, if any, on such Security, on or after the respective due dates
expressed or provided for in such Security, or to bring suit for the
enforcement of any such payment on or after the respective due dates, is
absolute and unconditional and shall not be impaired or affected without the
consent of the Holder.
6.08. COLLECTION SUIT BY TRUSTEE.
If an Event of Default specified in clause (a) of Section 6.01
occurs and is continuing, the Trustee may recover judgment in its own name and
as trustee of an express trust against the Company, or any other obligor on the
Securities, for the whole amount of the Accreted Value of, and interest, if
any, remaining unpaid, together with interest on overdue Accreted Value and, to
the extent that payment of such interest is lawful, interest on overdue amounts
of such interest, in each case at the rate per annum provided for by the
Securities 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.
6.09. TRUSTEE MAY FILE PROOFS OF CLAIM.
The Trustee may 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 allowed in any judicial proceedings relative to the Company, the
Subsidiaries of the Company or any Permitted Joint Venture (or any obligor upon
the Securities), their creditors or their property and shall be entitled and
empowered to collect and receive any monies or other property payable or
deliverable on any such claims and to distribute the same, and any Custodian in
any such judicial proceedings is hereby authorized by each Holder to make such
payments to the Trustee and, in the event that the Trustee shall consent to the
making of such payments directly to the Holders, to pay to the Trustee any
amount due to it for the reasonable compensation, expenses, disbursements and
advances of the Trustee, its agent and counsel, and any other amounts due the
Trustee under Section 7.08. Nothing herein contained shall be deemed to
authorize the Trustee to authorize or consent to or accept or adopt on behalf
of any Holder any plan of reorganization, arrangement, adjustment or
composition affecting the Securities or the rights of any Holder thereof, or to
authorize the Trustee to vote in respect of the claim of any Holder in any such
proceeding.
6.10. PRIORITIES.
If the Trustee collects any money pursuant to this Article Six, it
shall pay out such money in the following order:
First: to the Trustee for amounts due under Section 7.08;
Second: to Holders for interest, if any, on overdue Accreted Value
of the Securities, and, to the extent that payment of such interest is
lawful, interest on overdue amounts of such interest, ratably, without
preference or priority of any kind, according to the amounts due and
payable on the Securities for such interest;
Third: to Holders for the Accreted Value owing under the
Securities, ratably, without preference or priority of any kind,
according to the amounts due and payable on the Securities for such
Accreted Value; and
Fourth: the balance, if any, to the Company.
The Trustee, upon prior written notice to the Company, may fix a
record date and payment date for any payment to Security holders pursuant to
this Section 6.10.
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 Trustee, a court may in its discretion 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 any suit by the Trustee, any suit by a
Holder pursuant to Section 6.07, or a suit by a Holder or Holders of more than
10% in aggregate principal amount at maturity of the outstanding Securities.
6.12. RESTORATION OF RIGHTS AND REMEDIES.
If the Trustee or any Holder has instituted any proceeding to
enforce any right or remedy under this Indenture or any Security and such
proceeding has been discontinued or abandoned for any reason, or has been
determined adversely to the Trustee or to such Holder, then and in every such
case the Company, the Trustee and the Holders shall, subject to any
determination in such proceeding, be restored severally and respectively to
their former positions hereunder, and thereafter all rights and remedies of the
Trustee and the Holders shall continue as though no such proceeding had been
instituted.
ARTICLE SEVEN
TRUSTEE
7.01. DUTIES.
(a) In case an Event of Default has occurred and is continuing,
the Trustee shall exercise such rights and powers vested in it under this
Indenture, and use the same degree of care and skill in its exercise thereof,
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 Trustee need perform only such duties as are
specifically set forth in this Indenture, and no implied covenants or
obligations shall be read into this Indenture against the Trustee; and
(ii) in the absence of bad faith on its part, the Trustee
may conclusively rely, as to the truth of the statements and the
correctness of the opinions expressed therein, upon certificates or
opinions furnished to the Trustee and conforming to the requirements of
this Indenture; but in the case of any such certificates or opinions
which by any provision hereof are specifically required to be furnished
to the Trustee, the Trustee shall be under a duty to examine the same to
determine whether or not they conform to the requirements of this
Indenture.
(c) No provision of this Indenture shall be construed to relieve
the Trustee from liability for its own negligent action, its own negligent
failure to act, or its own willful misconduct, except that
(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 Trust 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.
(d) No provision of this Indenture shall require the Trustee to
expend or risk its own funds or otherwise incur any financial liability in the
performance of any of its duties hereunder or in the exercise of any of its
rights or powers if it shall have reasonable grounds for believing that
repayment of such funds or adequate indemnity against such risk or liability is
not reasonably assured to it.
(e) Every provision of this Indenture that in any way relates to
the Trustee is subject to paragraphs (a), (b), (c) and (d) of this
Section 7.01.
7.02. RIGHTS OF TRUSTEE.
Subject to Section 7.01 hereof and the provisions of TIA Section
315:
(a) The Trustee may rely on any document reasonably 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
consult with counsel and may require an Officers' Certificate or an
Opinion of Counsel, which shall conform to Sections 11.04 and 11.05. The
Trustee shall not be liable for any action it takes or omits to take in
good faith in reliance on such certificate or opinion.
(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 taken or
omitted by it in good faith and reasonably believed by it to be
authorized or within the discretion, rights or powers conferred upon it
by this Indenture other than any liabilities arising out of its own
negligence.
(e) The Trustee may consult with counsel of its own choosing and
the advice or opinion of such counsel as to matters of law shall be full
and complete authorization and protection in respect of any action taken,
omitted or suffered by it hereunder in good faith and in accordance with
the advice or opinion of such counsel.
(f) The Trustee shall not be bound to make any investigation into
the facts or matters stated in any resolution, certificate, statement,
instrument, opinion, notice, request, direction, consent, order, bond,
debenture, or other paper or document, but the Trustee, in its
discretion, may make such further inquiry or investigation into such
facts or matters as it may see fit.
(g) The Trustee shall be under no obligation to exercise any of
the rights or powers vested in it by this Indenture at the request, order
or direction of any of the Holders pursuant to the provisions of this
Indenture, unless such Holders shall have offered to the Trustee
reasonable security or indemnity against the costs, expenses and
liabilities which may be incurred therein or thereby.
(h) The Trustee shall not be charged with knowledge of any
Default or Event of Default unless (i) a Trust Officer shall have actual
knowledge thereof or (ii) the Trustee shall have received written notice
thereof pursuant to Section 11.02 from the Company or any Holder.
7.03. INDIVIDUAL RIGHTS OF TRUSTEE.
The Trustee, any Paying Agent, Registrar or any other agent of the
Company, in its individual or any other capacity, may become the owner or
pledgee of Securities and, subject to Sections 7.11 and 7.12 and TIA '' 310 and
311, may otherwise deal with the Company and its Subsidiaries with the same
rights it would have if it were not the Trustee, Paying Agent, Registrar or
such other agent.
7.04. TRUSTEE'S DISCLAIMER.
The Trustee makes no representations as to the validity or
sufficiency of this Indenture or the Securities, it shall not be accountable
for the Company's use or application of the proceeds from the Securities, 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 in the Securities other than the Trustee's certificate of
authentication.
7.05. NOTICE OF DEFAULT.
If a Default or an Event of Default occurs and is continuing and is
known to the Trustee, the Trustee shall mail to each Holder of the Securities
notice of the Default or Event of Default within 30 days after obtaining
knowledge thereof; PROVIDED, HOWEVER, that, except in the case of a Default or
an Event of Default in the payment of the Accreted Value of, principal of, or
interest, if any, on any Security, or a failure to comply with Sections 4.12 or
5.01, the Trustee shall be protected in withholding such notice if and so long
as the board of directors, the executive committee of the board of directors or
a committee of the directors of the Trustee and/or Trust Officers in good faith
determines that the withholding of such notice is in the interest of the
Holders. This Section 7.05 shall be in lieu of the proviso to Section 315(b)
of the TIA and such proviso to Section 315(b) of the TIA is hereby expressly
excluded from this Indenture and the Securities, as permitted by the TIA.
7.06. MONEY HELD IN TRUST.
All moneys received by the Trustee shall, until used or applied as
herein provided, be held in trust for the purposes for which they were
received, but need not be segregated from other funds except to the extent
required herein or by law. The Trustee shall not be under any liability for
interest on any moneys received by it hereunder, except as the Trustee may
agree with the Company.
7.07. REPORTS BY TRUSTEE TO HOLDERS.
Within 60 days after each May 15 beginning with the May 15
following the date of this Indenture, the Trustee shall, to the extent that any
of the events described in TIA Section 313(a) shall have occurred within the
previous twelve months, but not otherwise, mail to each Holder a brief report
dated as of such May 15 that complies with TIA Section 313(a). The Trustee also
shall comply with TIA Sections 313(b) and 313(c).
A copy of each report at the time of its mailing to Holders shall
be mailed to the Company and filed with the SEC and each securities exchange,
if any, on which the Securities are listed.
The Company shall notify the Trustee in writing if the Securities
become listed on any securities exchange.
7.08. COMPENSATION AND INDEMNITY.
The Company covenants and agrees to pay the Trustee from time to
time reasonable compensation for its services. 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 upon request for all reasonable
disbursements, expenses and advances incurred or made by it. Such expenses
shall include the reasonable compensation, disbursements and expenses of the
Trustee's agents and counsel.
The Company shall indemnify the Trustee for, and hold it harmless
against, any loss or liability incurred by it arising out of or in connection
with the administration of this trust and its rights or duties hereunder,
including the costs and expenses of defending itself against any claim or
liability in connection with the exercise or performance of any of its powers
or duties hereunder or thereunder. The Trustee shall notify the Company
promptly of any claim asserted against the Trustee for which it may seek
indemnity. The Company shall defend the claim and the Trustee shall cooperate
in the defense. The Trustee may have separate counsel and the Company shall
pay the reasonable fees and expenses of such counsel. The Company need not pay
for any settlement made without its prior written consent. The Company need
not reimburse any expense or indemnify against any loss or liability to the
extent incurred by the Trustee through its negligence, bad faith or willful
misconduct.
To secure the Company's payment obligations in this Section 7.08,
the Trustee shall have a Lien prior to the Securities on all assets held or
collected by the Trustee, in its capacity as Trustee, except assets held in
trust to pay the Accreted Value of, principal of, or interest, if any, on
particular Securities.
Without limiting any other rights available to the Trustee under
applicable law, when the Trustee incurs expenses or renders services in
connection with an Event of Default specified in Section 6.01(e) or (f), the
expenses and the compensation for the services are intended to constitute
expenses of administration under any Bankruptcy Law.
The Company's obligations under this Section 7.08 and any Lien
arising hereunder shall survive the resignation or removal of any trustee, the
discharge of the Company's obligations pursuant to Article Eight and/or the
termination of this Indenture.
7.09. REPLACEMENT OF TRUSTEE.
The Trustee may resign by so notifying the Company. The Holders of
a majority in principal amount of the outstanding Securities may remove the
Trustee by so notifying the Company and the Trustee and may appoint a successor
trustee with the Company's prior written consent. The Company may remove the
Trustee if:
(a) the Trustee fails to comply with Section 7.11;
(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 receiver or other 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 notify each Holder of such
event and shall promptly appoint a successor Trustee. The Trustee shall be
entitled to payment of its fees and reimbursement of its expenses while acting
as Trustee, and to the extent such amounts remain unpaid, the Trustee that has
resigned or has been removed shall retain the Lien afforded by Section 7.08.
Within one year after the successor Trustee takes office, the Holders of a
majority in principal amount of the outstanding Securities may, with the
Company's prior written consent, appoint a successor Trustee to replace the
successor Trustee appointed by the Company.
A successor Trustee shall deliver a written acceptance of its
appointment to the retiring Trustee and to the Company. Immediately after
that, the retiring Trustee shall transfer all property held by it as Trustee to
the successor Trustee, subject to the Lien provided in Section 7.08, 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. A successor Trustee shall mail notice of its succession
to each Securityholder.
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 at least 10% in principal amount at maturity of the
outstanding Securities may petition any court of competent jurisdiction for the
appointment of a successor Trustee.
If the Trustee fails to comply with Section 7.11, any Holder
permitted to do so by the TIA may petition any court of competent jurisdiction
for the removal of the Trustee and the appointment of a successor Trustee.
Notwithstanding replacement of the Trustee pursuant to this Section
7.09, the Company's obligations under Section 7.08 shall continue for the
benefit of the retiring Trustee.
7.10. SUCCESSOR TRUSTEE BY MERGER, ETC.
If the Trustee consolidates with, merges or converts into, or
transfers all or substantially all of its corporate trust business to, another
corporation or national banking association, the resulting, surviving or
transferee corporation or national banking association without any further act
shall, if such resulting, surviving or transferee corporation or national
banking association is otherwise eligible hereunder, be the successor Trustee.
7.11. ELIGIBILITY; DISQUALIFICATION.
There shall at all times be a Trustee hereunder which shall be
eligible to act as Trustee under TIA Sections 310(a)(1) and 310(a)(5) and which
shall have a combined capital and surplus of at least $50,000,000. If such
corporation publishes reports of condition at least annually, pursuant to law
or to the requirements of federal, state, territorial or District of Columbia
supervising or examining authority, then for the purposes of this Section, the
combined capital and surplus of such corporation shall be deemed to be its
combined capital and surplus as set forth in its most recent report of
condition so published. If at any time the Trustee shall cease to be eligible
in accordance with the provisions of this Section, the Trustee shall resign
immediately in the manner and with the effect hereinafter specified in this
Article. The Trustee shall comply with TIA Section 310(b) (subject to the
penultimate paragraph thereof) and the Company shall comply with TIA Section
310.
7.12. PREFERENTIAL COLLECTION OF CLAIMS AGAINST COMPANY.
The Trustee shall comply with TIA Section 311(a), excluding any
creditor relationship listed in TIA Section 311(b). If the present or any
future Trustee shall resign or be removed, it shall be subject to TIA Section
311(a) to the extent provided therein.
ARTICLE EIGHT
SATISFACTION AND DISCHARGE OF INDENTURE
8.01. TERMINATION OF THE COMPANY'S OBLIGATIONS.
The Company may terminate its obligations under the Securities and
this Indenture, except those obligations referred to in the penultimate
paragraph of this Section 8.01, if all Securities previously authenticated and
delivered (other than destroyed, lost or stolen Securities which have been
replaced or paid or Securities for whose payment money has theretofore been
deposited with the Trustee or the Paying Agent in trust or segregated and held
in trust by the Company and thereafter repaid to the Company, as provided in
Section 8.04) have been delivered to the Trustee for cancellation and the
Company has paid all sums payable by it hereunder, or if:
(a) either (i) pursuant to Article Three, the Company shall have
given notice to the Trustee and mailed a notice of redemption to each
Holder of the redemption of all of the Securities under arrangements
satisfactory to the Trustee for the giving of such notice or (ii) all
Securities have otherwise become due and payable hereunder;
(b) the Company shall have irrevocably deposited or caused to be
deposited with the Trustee, under the terms of an irrevocable trust
agreement in form satisfactory to the Trustee, as trust funds in trust
solely for the benefit of the Holders for that purpose, money in such
amount as is sufficient without consideration of reinvestment of such
interest, to pay the Accreted Value of, and interest, if any, on the
outstanding Securities to maturity or redemption, as certified in a
certificate of a nationally recognized firm of independent public
accountants; PROVIDED that the Trustee shall have been irrevocably
instructed to apply such money to the payment of said Accreted Value and
interest, if any, with respect to the Securities;
(c) no Default or Event of Default with respect to this Indenture
or the Securities shall have occurred and be continuing on the date of
such deposit or shall occur as a result of such deposit and such deposit
will not result in a breach or violation of, or constitute a default
under, any other instrument to which the Company is a party or by which
it is bound;
(d) the Company shall have paid all other sums payable by it
hereunder; and
(e) the Company shall have delivered to the Trustee an Officers'
Certificate and an Opinion of Counsel, each stating that all conditions
precedent providing for the termination of the Company's obligation under
the Securities and this Indenture have been complied with.
Notwithstanding the foregoing paragraph, the Company's obligations
in Sections 2.05, 2.06, 2.07, 2.08, 4.01, 4.02 and 7.08 shall survive until
the Securities are no longer outstanding pursuant to the last paragraph of
Section 2.08. After the Securities are no longer outstanding, the Company's
obligations in Sections 7.08, 8.04 and 8.05 shall survive.
After such delivery or irrevocable deposit the Trustee upon request
shall acknowledge in writing the discharge of the Company's obligations under
the Securities and this Indenture except for those surviving obligations
specified above.
8.02. LEGAL DEFEASANCE AND COVENANT DEFEASANCE.
(a) The Company may, at its option by Board Resolution, at any
time, with respect to the Securities, elect to have either paragraph (b) or
paragraph (c) below be applied to the outstanding Securities upon compliance
with the conditions set forth in paragraph (d).
(b) Upon the Company's exercise under paragraph (a) of the option
applicable to this paragraph (b), the Company shall be deemed to have been
released and discharged from its obligations with respect to the outstanding
Securities on the date the conditions set forth below 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 Securities, which shall thereafter
be deemed to be "outstanding" only for the purposes of paragraph (e) below and
the other Sections of and matters under this Indenture referred to in (i) and
(ii) below, and to have satisfied all its other obligations under such
Securities and this Indenture insofar as such Securities are concerned (and the
Trustee, at the expense of the Company, shall execute proper instruments
acknowledging the same), except for the following which shall survive until
otherwise terminated or discharged hereunder: (i) the rights of Holders of
outstanding Securities to receive solely from the trust fund described in
paragraph (d) below and as more fully set forth in such paragraph, payments in
respect of the Accreted Value of, and interest, if any, on such Securities when
such payments are due, (ii) the Company's obligations with respect to such
Securities under Sections 2.05, 2.06, 2.07 and 4.02, and, with respect to the
Trustee, under Section 7.08, (iii) the rights, powers, trusts, duties and
immunities of the Trustee hereunder and (iv) this Article Eight. Subject to
compliance with this Section 8.02, the Company may exercise its option under
this paragraph (b) notwithstanding the prior exercise of its option under
paragraph (c) below with respect to the Securities.
(c) Upon the Company's exercise under paragraph (a) of the option
applicable to this paragraph (c), the Company shall be released and discharged
from its obligations under any covenant contained in Article Five and in
Sections 4.07 (except to the extent required to be complied with by the TIA)
through 4.18 with respect to the outstanding Securities on and after the date
the conditions set forth below are satisfied (hereinafter, "covenant
defeasance"), and the Securities shall thereafter be deemed to be not
"outstanding" for the purpose 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. For this purpose, such covenant defeasance means that, with respect
to the outstanding Securities, the Company may omit to comply with and shall
have no liability in respect of any term, condition or limitation set forth in
any such 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(c), but, except as specified above, the remainder of this
Indenture and such Securities shall be unaffected thereby.
(d) The following shall be the conditions to application of
either paragraph (b) or paragraph (c) above to the outstanding Securities:
(i) the Company shall irrevocably have deposited or caused
to be deposited with the Trustee as trust funds in trust for the purpose
of making the following payments, specifically pledged as security for,
and dedicated solely to, the benefit of the Holders of such Securities,
(A) cash, in United States dollars, in an amount or (B) direct
non-callable obligations of, or non-callable obligations guaranteed by,
the United States of America for the payment of which guarantee or
obligation the full faith and credit of the United States is pledged
("U.S. Government Obligations") maturing as to principal, premium, if
any, and interest in such amounts of cash, in United States dollars, and
at such times as are sufficient without consideration of any reinvestment
of such interest, to pay the Accreted Value of, and interest, if any, on
the outstanding Securities not later than one day before the due date of
any payment, or (C) a combination thereof, sufficient, in the opinion of
a nationally recognized firm of independent public accountants expressed
in a written certification thereof delivered to the Trustee, to pay and
discharge and which shall be applied by the Trustee to pay and discharge
the Accreted Value of, and interest, if any, on the outstanding
Securities on the Final Maturity Date or on an earlier redemption date in
accordance with the terms of this Indenture and of such Securities;
PROVIDED, HOWEVER, that the Trustee shall have received an irrevocable
written order from the Company instructing the Trustee to apply such
money or the proceeds of such U.S. Government Obligations to said
payments with respect to the Securities; PROVIDED, FURTHER, that if the
Securities are to be redeemed, either notice of such redemption shall
have been given or the Company shall have given the Trustee irrevocable
directions to give notice of such redemption in the name, and at the
expense of the Company, under arrangements satisfactory to the Trustee;
(ii) no Default or Event of Default or event which with
notice or lapse of time or both would become a Default or an Event of
Default with respect to the Securities shall have occurred and be
continuing on the date of such deposit or, insofar as Section 6.01(e) or
(f) is concerned, at any time during the period ending on the 91st day
after the date of such deposit (it being understood that this condition
shall not be deemed satisfied until the expiration of such period);
(iii) such legal defeasance or covenant defeasance shall not
cause the Trustee to have a conflicting interest with respect to any
securities of the Company;
(iv) such legal defeasance or covenant defeasance shall not
result in a breach or violation of, or constitute a Default or Event of
Default under, this Indenture or any other material agreement or
instrument to which the Company is a party or by which it is bound;
(v) in the case of an election under paragraph (b) above,
the Company shall have delivered to the Trustee an Opinion of Counsel
stating that (A) the Company has received from, or there has been
published by, the Internal Revenue Service a ruling or (B) since the date
of this Indenture, there has been a change in the applicable Federal
income tax law, in either case to the effect that, and based thereon such
opinion shall confirm that, the Holders of the outstanding Securities
will not recognize income, gain or loss for Federal income tax purposes
as a result of such 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;
(vi) in the case of an election under paragraph (c) above,
the Company shall have delivered to the Trustee an Opinion of Counsel to
the effect that the Holders of the outstanding Securities will not
recognize income, gain or loss for Federal income tax purposes as a
result of such covenant defeasance and will be subject to Federal income
tax on the same amounts, in the same manner and at the same times as
would have been the case if such covenant defeasance had not occurred;
(vii) in the case of an election under either paragraph (b)
or (c) above, an Opinion of Counsel to the effect that, (A) the trust
funds will not be subject to any rights of any other holders of
Indebtedness of the Company, and (B) after the 91st day following the
deposit, the trust funds will not be subject to the effect of any
applicable Bankruptcy Law; PROVIDED, HOWEVER, that if a court were to
rule under any such law in any case or proceeding that the trust funds
remained property of the Company, no opinion needs to be given as to the
effect of such laws on the trust funds except the following:
(I) assuming such trust funds remained in the Trustee's possession prior
to such court ruling to the extent not paid to Holders of Securities, the
Trustee will hold, for the benefit of the Holders of Securities, a valid
and enforceable security interest in such trust funds that is not
avoidable in bankruptcy or otherwise, subject only to principles of
equitable subordination, (II) the Holders of Securities will be entitled
to receive adequate protection of their interests in such trust funds if
such trust funds are used, and (III) no property, rights in property or
other interests granted to the Trustee or the Holders of Securities in
exchange for or with respect to any of such funds will be subject to any
prior rights of any other person, subject only to prior Liens granted
under Section 364 of Title 11 of the U.S. Bankruptcy Code (or any section
of any other Bankruptcy Law having the same effect), but still subject to
the foregoing clause (II); and
(viii) the Company shall have delivered to the Trustee an
Officers' Certificate and an Opinion of Counsel, each stating that
(A) all conditions precedent provided for relating to either the legal
defeasance under paragraph (b) above or the covenant defeasance under
paragraph (c) above, as the case may be, have been complied with and
(B) if any other Indebtedness of the Company shall then be outstanding or
committed, such legal defeasance or covenant defeasance will not violate
the provisions of the agreements or instruments evidencing such
Indebtedness.
(e) All money and U.S. Government Obligations (including the
proceeds thereof) deposited with the Trustee pursuant to paragraph (d) above in
respect of the outstanding Securities shall be held in trust and applied by the
Trustee, in accordance with the provisions of such Securities and this
Indenture, to the payment, either directly or through any Paying Agent (other
than the Company or any Affiliate of the Company) as the Trustee may determine,
to the Holders of such Securities of all sums due and to become due thereon in
respect of the Accreted Value of, and interest, if any, on the Securities, but
such money need not be segregated from other funds except to the extent
required by law.
The Company shall pay and indemnify the Trustee against any tax,
fee or other charge imposed on or assessed against the U.S. Government
Obligations deposited pursuant to paragraph (d) above or the principal,
premium, if any, and interest received in respect thereof other than any such
tax, fee or other charge which by law is for the account of the Holders of the
outstanding Securities.
Anything in this Section 8.02 to the contrary notwithstanding, the
Trustee shall deliver or pay to the Company from time to time upon the request,
in writing, by the Company any money or U.S. Government Obligations held by it
as provided in paragraph (d) above which, in the opinion of a nationally
recognized firm of independent public accountants expressed in a written
certification thereof delivered to the Trustee, are in excess of the amount
thereof which would then be required to be deposited to effect an equivalent
legal defeasance or covenant defeasance.
8.03. APPLICATION OF TRUST MONEY.
The Trustee shall hold in trust money or U.S. Government
Obligations deposited with it pursuant to Sections 8.01 and 8.02, and shall
apply the deposited money and the money from U.S. Government Obligations in
accordance with this Indenture to the payment of the Accreted Value of, and
interest, if any, on the Securities.
8.04. REPAYMENT TO COMPANY.
Subject to Sections 7.08, 8.01 and 8.02, the Trustee shall promptly
pay to the Company upon receipt by the Trustee of an Officers' Certificate, any
excess money, determined in accordance with Section 8.02, held by it at any
time. The Trustee and the Paying Agent shall pay to the Company, upon receipt
by the Trustee or the Paying Agent, as the case may be, of an Officers'
Certificate, any money held by it for the payment of the Accreted Value of, and
interest, if any, on the Securities that remains unclaimed for two years after
payment to the Holders is required; PROVIDED, HOWEVER, that the Trustee and the
Paying Agent before being required to make any payment may, but need not, at
the expense of the Company cause to be published once in a newspaper of general
circulation in The City of New York or mail to each Holder entitled to such
money notice that such money remains unclaimed and that after a date specified
therein, which shall be at least 30 days from the date of such publication or
mailing, any unclaimed balance of such money then remaining will be repaid to
the Company. After payment to the Company, Holders entitled to money must look
solely to the Company for payment as general creditors unless an applicable
abandoned property law designates another person, and all liability of the
Trustee or Paying Agent with respect to such money shall thereupon cease.
8.05. REINSTATEMENT.
If the Trustee or Paying Agent is unable to apply any money or U.S.
Government Obligations in accordance with this Indenture by reason of any legal
proceeding or by reason of any order or judgment of any court or governmental
authority enjoining, restraining or otherwise prohibiting such application,
then and only then the Company's obligations under this Indenture and the
Securities shall be revived and reinstated as though no deposit had been made
pursuant to this Indenture until such time as the Trustee is permitted to apply
all such money or U.S. Government Obligations in accordance with this
Indenture; PROVIDED, HOWEVER, that if the Company has made any payment of the
Accreted Value of, or interest, if any, on any Securities because of the
reinstatement of its obligations, the Company shall be subrogated to the rights
of the Holders of such Securities to receive such payment from the money or
U.S. Government Obligations held by the Trustee or Paying Agent.
ARTICLE NINE
AMENDMENTS, SUPPLEMENTS AND WAIVERS
9.01. WITHOUT CONSENT OF HOLDERS.
The Company, when authorized by a Board Resolution, and the Trustee
may amend, waive or supplement this Indenture or the Securities without notice
to or consent of any Holder:
(a) to cure any ambiguity, defect or inconsistency;
(b) to comply with Article Five;
(c) to provide for uncertificated Securities in addition to
certificated Securities;
(d) to comply with any requirements of the SEC in order to effect
or maintain the qualification of this Indenture under the TIA; or
(e) to make any change that would provide any additional benefit
or rights to the Holders or that does not adversely affect the rights of
any Holder.
Notwithstanding the above, the Trustee and the Company may not make
any change that adversely affects the rights of any Holders hereunder or under
the Securities. The Company shall be required to deliver to the Trustee an
Opinion of Counsel stating that any such change made pursuant to paragraph (a)
or (e) of this Section 9.01 does not adversely affect the rights of any Holder.
9.02. WITH CONSENT OF HOLDERS.
Subject to Section 6.04, the Company, when authorized by a Board
Resolution, and the Trustee may amend this Indenture or the Securities with the
written consent of the Holders of not less than a majority in aggregate
principal amount of the Securities then outstanding, and the Holders of not
less than a majority in aggregate principal amount of the Securities then
outstanding by written notice to the Trustee may waive future compliance by the
Company with any provision of this Indenture or the Securities.
Notwithstanding the provisions of this Section 9.02, without the
consent of each Holder affected, an amendment or waiver, including a waiver
pursuant to Section 6.04, may not:
(a) reduce the percentage in outstanding aggregate principal
amount at maturity of Securities the Holders of which must consent to an
amendment, supplement or waiver of any provision of this Indenture or the
Securities;
(b) reduce the rate or change the time for payment of interest on
the Accreted Value of any Security after the same shall have become due
and payable;
(c) reduce the principal amount at maturity (or rate of
accretion) of, or extend the fixed maturity of any Security, or change
the date on which any Security may be subject to redemption or
repurchase, or reduce the redemption or repurchase price therefor;
(d) waive a default in the payment of the Accreted Value of, or
interest, if any, on, or redemption or an offer to purchase required
hereunder with respect to, any Security;
(e) make the Accreted Value of, or interest, if any, on any
Security payable in money other than that stated in the Security;
(f) modify this Section 9.02 or Section 6.04 or Section 6.07;
(g) subordinate in right of payment, or otherwise subordinate,
the Securities to any other Indebtedness or obligation of the Company; or
(h) impair the right to institute suit for the enforcement of any
payment on or with respect to the Securities.
It shall not be necessary for the consent of the Holders under this
Section 9.02 to approve the particular form of any proposed amendment,
supplement 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 Holder of each Security
affected thereby, with a copy to the Trustee, 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 amendment, supplement or waiver.
9.03. COMPLIANCE WITH TRUST INDENTURE ACT.
Every amendment of or supplement to this Indenture or the
Securities shall comply with the TIA as then in effect.
9.04. REVOCATION AND EFFECT OF CONSENTS.
Until an amendment, supplement or waiver becomes effective, a
consent to it by a Holder is a continuing consent by such Holder and every
subsequent Holder of that Security or portion of that Security that evidences
the same debt as the consenting Holder's Security, even if notation of the
consent is not made on any Security. However, any such Holder or subsequent
Holder may revoke the consent as to his Security or portion of a Security prior
to such amendment, supplement or waiver becoming effective. Such revocation
shall be effective only if the Trustee receives the notice of revocation before
the date the amendment, supplement or waiver becomes effective.
Notwithstanding the above, nothing in this paragraph shall impair the right of
any Holder under ' 316(b) of the TIA.
The Company may, but shall not be obligated to, fix a record date
for the purpose of determining the Holders entitled to consent to any
amendment, supplement or waiver. If a record date is fixed, then
notwithstanding the second and third sentences of the immediately preceding
paragraph, those persons who were Holders at such record date (or their duly
designated proxies), and only those persons, shall be entitled to consent to
such amendment, supplement or waiver or to revoke any consent previously given,
whether or not such persons continue to be Holders after such record date.
Such consent shall be effective only for actions taken within 90 days after
such record date.
After an amendment, supplement or waiver becomes effective, it
shall bind every Holder unless it makes a change described in any of clauses
(a) through (h) of Section 9.02; if it makes such a change, the amendment,
supplement or waiver shall bind every subsequent Holder of a Security or
portion of a Security that evidences the same debt as the consenting Holder's
Security.
9.05. NOTATION ON OR EXCHANGE OF SECURITIES.
If an amendment, supplement or waiver changes the terms of a
Security, the Trustee shall (in accordance with the specific direction of the
Company) request the Holder of the Security to deliver it to the Trustee. The
Trustee shall (in accordance with the specific direction of the Company) place
an appropriate notation on the Security about the changed terms and return it
to the Holder. Alternatively, if the Company or the Trustee so determines, the
Company in exchange for the Security shall issue and the Trustee shall
authenticate a new Security that reflects the changed terms. Failure to make
the appropriate notation or issue a new Security shall not affect the validity
and effect of such amendment, supplement or waiver.
9.06. TRUSTEE MAY SIGN AMENDMENTS, ETC.
The Trustee shall sign any amendment, supplement or waiver
authorized pursuant to this Article Nine if the amendment, supplement or waiver
does not adversely affect the rights, duties, liabilities or immunities of the
Trustee. If it does, the Trustee may, but need not, sign it. In signing or
refusing to sign such amendment, supplement or waiver, the Trustee shall be
entitled to receive, and shall be fully protected in relying upon, an Officers'
Certificate and an Opinion of Counsel stating that the execution of any
amendment, supplement or waiver is authorized or permitted by this Indenture,
that it is not inconsistent herewith and that it will be valid and binding upon
the Company in accordance with its terms.
ARTICLE TEN
[RESERVED]
ARTICLE ELEVEN
MISCELLANEOUS
11.01. TRUST INDENTURE ACT OF 1939.
This Indenture is subject to the provisions of the TIA that are
required to be a part of this Indenture, and shall, to the extent applicable,
be governed by such provisions.
If any provision of this Indenture modifies or excludes any
provision of the TIA that may be so modified or excluded, the latter provision
shall be deemed to apply to this Indenture as so modified or excluded, as the
case may be.
The provisions of Sections 310 through 317 of the TIA that impose
duties on any person (including the provisions automatically deemed included
unless expressly excluded by this Indenture) are a part of and govern this
Indenture, whether or not physically contained herein.
11.02. NOTICES.
Any notice or communication shall be sufficiently given if in
writing and delivered in person or mailed by first class mail, postage prepaid,
addressed as follows:
If to the Company to:
CAI Wireless Systems, Inc.
18 Corporate Woods Blvd., Third Floor
Albany, New York 12211
Attention: Chief Financial Officer
With a copy to:
Day, Berry & Howard LLP
One Canterbury Green
Stamford, Connecticut 06901
Attention: Sabino Rodriguez III, Esq.
If to the Trustee to:
STATE STREET BANK AND TRUST COMPANY
_________________________________
_________________________________
ATTENTION: CORPORATE TRUSTEE ADMINISTRATION DEPARTMENT
The parties hereto by notice to the other parties may designate
additional or different addresses for subsequent notices or communications.
Any notice or communication mailed, postage prepaid, to a Holder,
including any notice delivered in connection with TIA Section 310(b), TIA
Section 313(c)313(c), TIA Section 314(a) and TIA Section 315(b), shall be
mailed by first class mail to such Holder at the address of such Holder as it
appears on the Securities register maintained by the Registrar and shall be
sufficiently given to such Holder if so mailed within the time prescribed.
Copies of any such communication or notice to a Holder shall also be mailed
to the Trustee. Any notice or communication shall also be mailed to any
other persons described in TIA Section 313(c) to the extent and in the
manner required by the TIA.
Failure to mail a notice or communication to a Securityholder or
any defect in it shall not affect its sufficiency with respect to other
Holders. Except for a notice to the Trustee, which is deemed given only when
received, if a notice or communication is mailed in the manner provided above,
it is duly given, whether or not the addressee receives it.
11.03. COMMUNICATION BY HOLDERS WITH OTHER HOLDERS.
Holders may communicate pursuant to TIA Section 312(b) with other
Holders with respect to their rights under this Indenture or the Securities.
The obligor, the Trustee, the Registrar and any other person shall have the
protection of TIA Section 312(c).
11.04. CERTIFICATE AND OPINION AS TO CONDITIONS PRECEDENT.
Upon any request or application by the Company to the Trustee to
take any action under this Indenture, such obligor shall furnish to the
Trustee:
(a) an Officers' Certificate stating that, in the opinion of the
signers, all conditions precedent, if any, provided for in this Indenture
relating to the proposed action have been complied with; and
(b) an Opinion of Counsel stating that, in the opinion of such
counsel, all such conditions precedent have been complied with.
11.05. STATEMENTS REQUIRED IN CERTIFICATE OR OPINION.
Each certificate or opinion with respect to compliance with a
condition or covenant provided for in this Indenture 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 statement 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 opinion as to whether or not such covenant or condition has
been complied with; and
(d) a statement as to whether or not, in the opinion of such
person, such condition or covenant has been complied with; PROVIDED,
HOWEVER, that with respect to matters of fact an Opinion of Counsel may
rely on an Officers' Certificate or certificates of public officials.
11.06. RULES BY TRUSTEE, PAYING AGENT, REGISTRAR.
The Trustee may make reasonable rules for action by or at a meeting
of Securityholders. The Paying Agent or Registrar may make reasonable rules
for its functions.
11.07. GOVERNING LAW.
The laws of the State of New York shall govern this Indenture and
the Securities without regard to principles of conflicts of law. The Trustee,
the Company and the Holders agree to submit to the jurisdiction of the courts
of the State of New York in any action or proceeding arising out of or relating
to this Indenture or the Securities.
11.08. NO INTERPRETATION OF OTHER AGREEMENTS.
This Indenture may not be used to interpret another indenture, loan
or debt agreement of the Company or any of its Subsidiaries. Any such
indenture, loan or debt agreement may not be used to interpret this Indenture.
11.09. NO RECOURSE AGAINST OTHERS.
A director, officer, employee, stockholder or Affiliate, as such,
of the Company shall not have any liability for any obligations of the Company
under the Securities or this Indenture or for any claim based on, in respect of
or by reason of, such obligations or their creation. Each Holder by accepting
a Security waives and releases all such liability.
11.10. SUCCESSORS.
All agreements of the Company in this Indenture and the Securities
shall bind its successors. All agreements of the Trustee in this Indenture
shall bind its successors.
11.11. DUPLICATE ORIGINALS.
The parties may sign any number of copies of this Indenture. Each
signed copy shall be an original, but all such executed copies together
represent the same agreement.
11.12. SEPARABILITY.
In case any provision in this Indenture or the Securities shall be
invalid, illegal or unenforceable, the validity, legality and enforceability of
the remaining provisions shall not in any way be affected or impaired thereby,
and a Holder shall have no claim therefor against any party hereto.
11.13. TABLE OF CONTENTS, HEADINGS, ETC.
The Table of Contents, Cross-Reference Table and headings of the
Articles and Sections of this Indenture have been inserted for convenience of
reference only, are not to be considered a part hereof, and shall in no way
modify or restrict any of the terms or provisions hereof.
11.14. BENEFITS OF INDENTURE.
Nothing in this Indenture or in the Securities, express or implied,
shall give to any person, other than the parties hereto and their successors
hereunder, and the Holders, any benefit or any legal or equitable right, remedy
or claim under this Indenture.
11.15. BUSINESS DAYS.
If a payment date is not a Business Day, payment shall be made on
the next succeeding day that is a Business Day, and no interest shall accrue
for the intervening period.
IN WITNESS WHEREOF, the parties hereto have caused this Indenture
to be duly executed, and their respective corporate seals to be hereunto
affixed and attested, all as of the day and year first above written.
CAI WIRELESS SYSTEMS, INC.
By:
Name:
Title:
Attest: _________________________
Name:
Title:
[Seal]
[STATE STREET BANK AND TRUST COMPANY],
as Trustee
By:
Name:
Title:
Attest: _________________________
Name:
Title:
[Seal]
<PAGE>
EXHIBIT A
[FORM OF SECURITY]
[FOR PURPOSES OF SECTIONS 1272, 1273 AND 1275 OF THE INTERNAL REVENUE
CODE OF 1986, AS AMENDED, AND THE RULES AND REGULATIONS THEREUNDER, THIS
SECURITY IS BEING ISSUED WITH ORIGINAL ISSUE DISCOUNT; FOR EACH $1,000
PRINCIPAL AMOUNT OF THIS SECURITY, (1) THE "ISSUE PRICE" IS $[469.68];
(2) THE "STATED REDEMPTION PRICE AT MATURITY" IS $[1,000.00]; (3) THE
AMOUNT OF ORIGINAL ISSUE DISCOUNT (THE EXCESS OF THE "STATED REDEMPTION PRICE
AT MATURITY" OVER THE "ISSUE PRICE") IS $[530.32]; (4) THE ISSUE DATE IS
October [ ], 1998; AND (5) THE YIELD TO MATURITY (COMPOUNDED SEMI-
ANNUALLY) IS [13]%.]
CAI WIRELESS SYSTEMS, INC.
13% SENIOR NOTE DUE 2004
No. __________ $__________
CAI WIRELESS SYSTEMS, INC., a corporation incorporated under the
laws of the State of Connecticut (herein called the "Company", which term
includes any successor corporation under the Indenture hereinafter referred
to), for value received, hereby promises to pay to _______________ or
registered assigns, the Accreted Value (as defined below) of _______________
Dollars on October [ ], 2004, at the office or agency of the Company
referred to below. This Security shall accrete in value from the date of issue
to October [ ], 2004, at a rate of 13% per annum, compounded semi-
annually (the "Accreted Value"). Cash interest on this Security shall neither
accrue nor be payable prior to maturity. The Company shall pay interest on the
Accreted Value in the event this Security becomes due prior to maturity and on
the Accreted Value after final maturity and, to the extent lawful, interest on
any overdue amounts of such interest, from time to time on demand, at the rate
of 15% per annum. Interest shall be computed on the basis of a 360-day year of
twelve 30-day months and, in the case of a partial month, the actual number of
days elapsed.
The interest, if any, so payable will, as provided in the Indenture
referred to on the reverse hereof, be paid to the person in whose name this
Security (or one or more Predecessor Securities) is registered at the close of
business [ON THE DATE OF EACH SUCH DEMAND.]
Payment of the Accreted Value of, and interest, if any, on this
Security will be made at the office or agency of the Company maintained for
that purpose in the Borough of Manhattan in The City of New York, or at such
other office or agency of the Company as may be maintained for such purpose, in
such coin or currency of the United States of America as at the time of payment
is legal tender for payment of public and private debts; PROVIDED, HOWEVER,
that payment of interest, if any, may be made at the option of the Company by
check mailed to the address of the person entitled thereto as such address
shall appear on the security register maintained by the Registrar.
Reference is hereby made to the further provisions of this Security
set forth on the reverse hereof.
Unless the certificate of authentication hereon has been duly
executed by the Trustee referred to on the reverse hereof by manual signature,
and a seal has been affixed hereon, this Security shall not be entitled to any
benefit under the Indenture, or be valid or obligatory for any purpose.
IN WITNESS WHEREOF, the Company has caused this instrument to be
duly executed under its corporate seal.
CAI WIRELESS SYSTEMS, INC.
By:
Name:
Title:
By:
Name:
Title:
[SEAL]
TRUSTEE'S CERTIFICATE OF AUTHENTICATION
This is one of the Securities referred to in the within-mentioned Indenture.
[STATE STREET BANK AND TRUST COMPANY],
as Trustee
By:
Authorized Officer
Dated: ,
<PAGE>
(Reverse of Security)
CAI WIRELESS SYSTEMS, INC.
13% SENIOR NOTE DUE 2004
1. INDENTURE. CAI Wireless Systems, Inc., a Connecticut
corporation (the "Company"), issued the Securities (as defined below) under an
Indenture, dated as of October [ ], 1998 (the "Indenture"), between
the Company and [State Street Bank and Trust Company], a national banking
association, as trustee (herein called the "Trustee," which term includes any
successor Trustee under the Indenture). This Security is one of a duly
authorized issue of Securities of the Company designated as its 13% Senior
Notes due 2004 (the "Securities"). The Securities are limited (except as
otherwise provided in the Indenture) in aggregate principal amount at maturity
to
$212,909,624. Reference is hereby made to the Indenture and all indentures
supplemental thereto, for a statement of the respective rights, limitations of
rights, duties, obligations and immunities thereunder of the Company, the
Trustee and the Holders of the Securities, and of the terms upon which the
Securities are, and are to be, authenticated and delivered.
All capitalized terms used in this Security which are defined in
the Indenture and not otherwise defined herein shall have the meanings assigned
to them in the Indenture.
No reference herein to the Indenture and no provisions of this
Security or of the Indenture shall alter or impair the obligation of the
Company, which is absolute and unconditional, to pay the principal of, and
interest, if any, on this Security at the times, place and rate, and in the
coin or currency, herein prescribed.
2. REDEMPTION.
(a) OPTIONAL REDEMPTION. The Securities are subject to
redemption, at the option of the Company, in whole or in part, upon not less
than 30 nor more than 60 days' prior notice, at a redemption price equal to the
Accreted Value.
(b) PARTIAL REDEMPTION. In the event of redemption of this
Security in part only, a new Security or Securities for the unredeemed portion
hereof shall be issued in the name of the Holder hereof upon the cancellation
hereof.
3. OFFERS TO PURCHASE. Sections 4.12 of the Indenture provides
that following certain Asset Sales, and subject to further limitations
contained therein, the Company shall make an offer to purchase certain amounts
of the Securities in accordance with the procedures set forth in the Indenture.
4. DEFAULTS AND REMEDIES. If an Event of Default shall occur
and be continuing, the Accreted Value of all of the outstanding Securities may
be declared due and payable in the manner and with the effect provided in the
Indenture.
5. DEFEASANCE. The Indenture contains provisions (which
provisions apply to this Security) for defeasance at any time of (a) the entire
indebtedness of the Company under this Security and (b) certain restrictive
covenants and related Defaults and Events of Default, in each case upon
compliance by the Company with certain conditions set forth therein.
6. AMENDMENTS AND WAIVERS. The Indenture permits, with certain
exceptions as therein provided, the amendment thereof and the modification of
the rights and obligations of the Company and the rights of the Holders under
the Indenture at any time by the Company and the Trustee with the consent of the
Holders of not less than a majority in aggregate principal amount of the
Securities at the time outstanding. The Indenture also contains provisions
permitting the Holders of specified percentages in aggregate principal amount
of the Securities at the time outstanding, on behalf of the Holders of all the
Securities, to waive compliance by the Company with certain provisions of the
Indenture and certain past Defaults under the Indenture and this Security and
their consequences. Any such consent or waiver by or on behalf of the Holder
of this Security shall be conclusive and binding upon such Holder and upon all
future Holders of this Security and of any Security issued upon the
registration of transfer hereof or in exchange therefor or in lieu hereof
whether or not notation of such consent or waiver is made upon this Security.
7. DENOMINATIONS, TRANSFER AND EXCHANGE. The Securities
are issuable only in registered form without coupons. As provided in the
Indenture and subject to certain limitations therein set forth, the Securities
are exchangeable only in denominations of $1,000 or any integral multiple
thereof (or such total lesser principal amount as may be outstanding in the
aggregate), for an aggregate principal amount of Securities of a different
authorized denomination, as requested by the Holder surrendering the same.
As provided in the Indenture and subject to certain limitations
therein set forth, the transfer of this Security is registrable on the security
register of the Company, upon surrender of this Security for registration of
transfer at the office or agency of the Company maintained for such purpose in
the Borough of Manhattan in The City of New York or at such other office or
agency of the Company as may be maintained for such purpose, duly endorsed by,
or accompanied by a written instrument of transfer in form satisfactory to the
Company and the Registrar duly executed by, the Holder hereof or his attorney
duly authorized in writing, and thereupon one or more new Securities, of
authorized denominations and for the same aggregate principal amount, will be
issued to the designated transferee or transferees.
No service charge shall be made for any registration of transfer or
exchange or redemption of Securities, but the Company may require payment of a
sum sufficient to cover any tax or other governmental charge payable in
connection therewith.
8. PERSONS DEEMED OWNERS. Prior to and at the time of due
presentment of this Security for registration of transfer, the Company, the
Trustee and any agent of the Company or the Trustee may treat the person in
whose name this Security is registered as the owner hereof for all purposes,
whether or not this Security shall be overdue, and neither the Company, the
Trustee nor any agent shall be affected by notice to the contrary.
9. GOVERNING LAW. This Security shall be governed by and
construed in accordance with the laws of the State of New York, without regard
to conflicts of law principles.
<PAGE>
OPTION OF HOLDER TO ELECT PURCHASE
If you wish to have this Security purchased by the Company pursuant
to Section 4.12 of the Indenture, check the box below:
I wish to have this Security purchased [ ]
If you wish to have a portion of this Security purchased by the
Company pursuant to Section 4.12 of the Indenture, state the amount:
$__________
Date:______________ Your Signature:____________________________
(Sign exactly as your name
appears on the other side
of this Security)
Signature Guarantee:___________________
The holder's signature must be guaranteed by an eligible guarantor institution
which is a member of one of the following recognized signature guarantee
programs:
1) The Securities Transfer Agents Medallion Program;
2) The NYSE Medallion Signature Program; and
3) The Stock Exchanges Medallion Program.
<PAGE>
ASSIGNMENT FORM
If you the holder want to assign this Security, fill in the form below and have
your signature guaranteed:
I or we assign and transfer this Security to
(Insert assignee's social security or tax ID number)
(Print or type assignee's name, address and zip code) and irrevocably appoint
agent to transfer this Security 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 other side of this Security)
Signature Guarantee: ____________________________________________________
The holder's signature must be guaranteed by an eligible
guarantor institution which is a member of one of the
following recognized signature guarantee programs:
1) The Securities Transfer Agents Medallion Program;
2) The NYSE Medallion Signature Program; and
3) The Stock Exchanges Medallion Program.
