<PAGE>
AS FILED WITH THE SECURITIES AND EXCHANGE COMMISSION ON JULY 28, 1997
REGISTRATION NO. 333-27647
================================================================================
SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
----------------
AMENDMENT NO. 3
TO
FORM S-4
REGISTRATION STATEMENT
UNDER
THE SECURITIES ACT OF 1933
----------------
MCLEODUSA INCORPORATED
(EXACT NAME OF REGISTRANT AS SPECIFIED IN ITS CHARTER)
DELAWARE 4813 42-1407240
(STATE OR OTHER (PRIMARY STANDARD (I.R.S. EMPLOYER
JURISDICTION OF INDUSTRIAL IDENTIFICATION NUMBER)
INCORPORATION OR CLASSIFICATION CODE
ORGANIZATION) NUMBER)
MCLEODUSA TECHNOLOGY PARK
6400 C STREET, SW, P.O. BOX 3177
CEDAR RAPIDS, IA 52406-3177
(319) 364-0000
(ADDRESS, INCLUDING ZIP CODE, AND TELEPHONE NUMBER,
INCLUDING AREA CODE, OF REGISTRANT'S PRINCIPAL EXECUTIVE OFFICES)
----------------
CLARK E. MCLEOD
CHAIRMAN AND CHIEF EXECUTIVE OFFICER
MCLEODUSA INCORPORATED
MCLEODUSA TECHNOLOGY PARK
6400 C STREET, SW, P.O. BOX 3177
CEDAR RAPIDS, IA 52406-3177
(319) 364-0000
(NAME, ADDRESS, INCLUDING ZIP CODE, AND TELEPHONE NUMBER,
INCLUDING AREA CODE, OF AGENT FOR SERVICE)
----------------
COPIES TO:
JOSEPH G. CONNOLLY, JR., ESQ.
NANCY J. KELLNER, ESQ.
HOGAN & HARTSON L.L.P.
555 THIRTEENTH STREET, N.W.
WASHINGTON, D.C. 20004
(202) 637-5600
----------------
APPROXIMATE DATE OF COMMENCEMENT OF PROPOSED SALE TO THE PUBLIC:
As soon as practicable after this Registration Statement becomes effective.
----------------
If the securities being registered on this Form are being offered in
connection with the formation of a holding company and there is compliance
with General Instruction G, check the following box. [_]
----------------
<TABLE>
<CAPTION>
CALCULATION OF REGISTRATION FEE
=================================================================================================
PROPOSED PROPOSED
MAXIMUM MAXIMUM
TITLE OF EACH CLASS OF AMOUNT TO BE OFFERING AGGREGATE AMOUNT OF
SECURITIES TO BE REGISTERED REGISTERED PRICE PER UNIT(1) OFFERING PRICE(1) REGISTRATION FEE(2)
- -------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C>
10 1/2% Senior Discount
Notes Due March 1,
2007.................. $500,000,000 61.386% $306,931,616 $93,010
=================================================================================================
</TABLE>
(1) Estimated solely for purposes of calculating the registration fee in
accordance with Rule 457(f) under the Securities Act of 1933, as amended.
(2) Calculated pursuant to Rule 457(f) based on the book value, calculated as
of May 20, 1997, of the outstanding 10 1/2% Senior Discount Notes Due 2007
of McLeodUSA Incorporated to be cancelled in the exchange transaction
hereunder. Such amount was previously paid.
----------------
THE REGISTRANT HEREBY AMENDS THIS REGISTRATION STATEMENT ON SUCH DATE OR
DATES AS MAY BE NECESSARY TO DELAY ITS EFFECTIVE DATE UNTIL THE REGISTRANT
SHALL FILE A FURTHER AMENDMENT WHICH SPECIFICALLY STATES THAT THIS
REGISTRATION STATEMENT SHALL THEREAFTER BECOME EFFECTIVE IN ACCORDANCE WITH
SECTION 8(A) OF THE SECURITIES ACT OF 1933, OR UNTIL THE REGISTRATION
STATEMENT SHALL BECOME EFFECTIVE ON SUCH DATE AS THE COMMISSION, ACTING
PURSUANT TO SAID SECTION 8(A), MAY DETERMINE.
================================================================================
<PAGE>
EXPLANATORY NOTE
This Amendment No. 3 is being submitted to file: as Exhibit 4.9 the
Indenture dated July 21, 1997 between McLeodUSA Incorporated and United States
Trust Company of New York, as Trustee, relating to the 9 1/4% Senior Notes Due
2007 of McLeodUSA Incorporated; as Exhibit 4.10 the Form of Initial Global 9
1/4% Senior Note Due 2007 of McLeodUSA Incorporated (contained in Indenture
filed as Exhibit 4.9); and as Exhibit 4.11 the Registration Agreement dated
July 21, 1997 among McLeodUSA Incorporated, Salomon Brothers Inc, Morgan
Stanley & Co. Incorporated and Bear, Stearns & Co. Inc.
<PAGE>
PART II
INFORMATION NOT REQUIRED IN PROSPECTUS
ITEM 20. INDEMNIFICATION OF DIRECTORS AND OFFICERS
Under Section 145 of the Delaware General Corporation Law ("DGCL"), a
corporation may indemnify its directors, officers, employees and agents and
its former directors, officers, employees and agents and those who serve, at
the corporation's request, in such capacities with another enterprise, against
expenses (including attorneys' fees), as well as judgments, fines and
settlements in nonderivative lawsuits, actually and reasonably incurred in
connection with the defense of any action, suit or proceeding in which they or
any of them were or are made parties or are threatened to be made parties by
reason of their serving or having served in such capacity. The DGCL provides,
however, that such person must have acted in good faith and in a manner such
person reasonably believed to be in (or not opposed to) the best interests of
the corporation and, in the case of a criminal action, such person must have
had no reasonable cause to believe his or her conduct was unlawful. In
addition, the DGCL does not permit indemnification in an action or suit by or
in the right of the corporation, where such person has been adjudged liable to
the corporation, unless, and only to the extent that, a court determines that
such person fairly and reasonably is entitled to indemnity for costs the court
deems proper in light of liability adjudication. Indemnity is mandatory to the
extent a claim, issue or matter has been successfully defended.
The Restated Certificate contains provisions that provide that no director
of the Company shall be liable for breach of fiduciary duty as a director
except for (1) any breach of the directors' duty of loyalty to the Company or
its stockholders; (2) acts or omissions not in good faith or which involve
intentional misconduct or a knowing violation of the law; (3) liability under
Section 174 of the DGCL; or (4) any transaction from which the director
derived an improper personal benefit. The Restated Certificate contains
provisions that further provide for the indemnification of directors and
officers to the fullest extent permitted by the DGCL. Under the Bylaws of the
Company, the Company is required to advance expenses incurred by an officer or
director in defending any such action if the director or officer undertakes to
repay such amount if it is determined that the director or officer is not
entitled to indemnification. In addition, the Company has entered into
indemnity agreements with each of its directors pursuant to which the Company
has agreed to indemnify the directors as permitted by the DGCL. The Company
has obtained directors and officers liability insurance against certain
liabilities, including liabilities under the Securities Act.
ITEM 21. EXHIBITS AND FINANCIAL STATEMENT SCHEDULES
(A) EXHIBITS
<TABLE>
<CAPTION>
EXHIBIT
NUMBER EXHIBIT DESCRIPTION
------- -------------------
<C> <S>
*1.1 Purchase Agreement, dated as of February 26, 1997 among Salomon
Brothers Inc, Morgan Stanley & Co. Incorporated and McLeod, Inc.
2.1 Agreement and Plan of Reorganization dated April 28, 1995 among
Midwest Capital Group Inc., MWR Telecom, Inc. and McLeod, Inc. (Filed
as Exhibit 2.1 to Registration Statement on Form S-1, File No. 333-
3112 ("Initial Form S-1"), and incorporated herein by reference).
2.2 Agreement and Plan of Reorganization dated as of July 12, 1996 among
Ruffalo, Cody & Associates, Inc., certain shareholders of Ruffalo,
Cody & Associates, Inc. and McLeod, Inc. (Filed as Exhibit 2 to
Current Report on Form 8-K, File No. 0-20763, filed with the
Commission on July 29, 1996 and incorporated herein by reference).
</TABLE>
II-1
<PAGE>
<TABLE>
<CAPTION>
EXHIBIT
NUMBER EXHIBIT DESCRIPTION
------- -------------------
<C> <S>
2.3 Agreement and Plan of Reorganization dated as of August 15, 1996 among
Telecom*USA Publishing Group, Inc. and McLeod, Inc. (Filed as Exhibit
2 to Current Report on Form 8-K, File No. 0-20763, filed with the
Commission on August 26, 1996 and incorporated herein by reference).
2.4 Agreement and Plan of Reorganization dated as of January 27, 1997
among McLeod, Inc., Digital Communications of Iowa, Inc., Clark E.
McLeod and Mary E. McLeod. (Filed as Exhibit 2 to Current Report on
Form 8-K, File No. 0-20763, filed with the Commission on February 24,
1997 and incorporated herein by reference).
2.5 Asset Purchase Agreement dated as of May 30, 1997 by and among
McLeodUSA Incorporated, ESI/McLeodUSA, Inc., and ESI Communications,
Inc., ESI Communications/
SW, Inc., ESI Communications/West, Inc., ESI Communications Downtown,
Inc., ESI Communications North, Inc., and Michael Reichert, Peter
Jones, John Pupkes and Jeff Meehan. (Filed as Exhibit 2.1 to Current
Report on Form 8-K, File No. 0-20763, filed with the Commission on
June 26, 1997 and incorporated herein by reference).
2.6 Agreement and Plan of Reorganization dated as of June 14, 1997 among
McLeodUSA Incorporated, Eastside Acquisition Co. and Consolidated
Communications Inc. (Filed as Exhibit 2.2 to Current Report on Form 8-
K, File No. 0-20763, filed with the Commission on June 26, 1997 and
incorporated herein by reference).
3.1 Amended and Restated Certificate of Incorporation of McLeod, Inc.
(Filed as Exhibit 3.1 to Initial Form S-1 and incorporated herein by
reference).
3.2 Amended and Restated Bylaws of McLeod, Inc. (Filed as Exhibit 3.2 to
Registration Statement on Form S-1, File No. 333-13885 ("November Form
S-1"), and incorporated herein by reference).
*3.3 Certificate of Amendment of Amended and Restated Certificate of
Incorporation of McLeod Inc.
4.1 Form of Class A Common Stock Certificate of McLeod, Inc. (Filed as
Exhibit 4.1 to Initial Form S-1 and incorporated herein by reference).
4.2 Indenture dated March 4, 1997 between McLeod, Inc. and United States
Trust Company of New York, as Trustee, relating to the 10 1/2% Senior
Discount Notes Due 2007 of McLeod, Inc. (Filed as Exhibit 4.2 to
Annual Report on Form 10-K, File No. 0-20763, filed with the
Commission on March 31, 1997 and incorporated herein by reference).
4.3 Initial Global 10 1/2% Senior Discount Note Due March 1, 2007 of
McLeod, Inc., dated March 4, 1997. (Filed as Exhibit 4.3 to Annual
Report on Form 10-K, File No. 0-20763, filed with the Commission on
March 31, 1997 and incorporated herein by reference).
4.4 Form of Certificated 10 1/2% Senior Discount Note Due March 1, 2007 of
McLeod, Inc. (Filed as Exhibit 4.4 to Annual Report on Form 10-K, File
No. 0-20763, filed with the Commission on March 31, 1997 and
incorporated herein by reference).
4.5 Registration Agreement dated March 4, 1997 among McLeod, Inc., Salomon
Brothers Inc and Morgan Stanley & Co. Incorporated. (Filed as Exhibit
4.5 to Annual Report on Form 10-K, File No. 0-20763, filed with the
Commission on March 31, 1997 and incorporated herein by reference).
4.6 Investor Agreement dated as of April 1, 1996 among McLeod, Inc., IES
Investments Inc., Midwest Capital Group Inc., MWR Investments Inc.,
Clark and Mary McLeod, and certain other stockholders. (Filed as
Exhibit 4.8 to Initial Form S-1 and incorporated herein by reference).
</TABLE>
II-2
<PAGE>
<TABLE>
<CAPTION>
EXHIBIT
NUMBER EXHIBIT DESCRIPTION
------- -------------------
<C> <S>
4.7 Amendment No. 1 to Investor Agreement dated as of October 23, 1996 by
and among McLeod, Inc., IES Investments Inc., Midwest Capital Group
Inc., MWR Investments Inc., Clark E. McLeod and Mary E. McLeod. (Filed
as Exhibit 4.3 to November Form S-1 and incorporated herein by
reference).
4.8 Form of Exchange Note (contained in Indenture filed as Exhibit 4.2).
4.9 Indenture dated July 21, 1997 between McLeodUSA Incorporated and
United States Trust Company of New York, as Trustee, relating to the 9
1/4% Senior Notes Due 2007 of McLeodUSA Incorporated.
4.10 Form of Initial Global 9 1/4% Senior Note Due 2007 of McLeodUSA
Incorporated (contained in Indenture filed as Exhibit 4.9).
4.11 Registration Agreement dated July 21, 1997 among McLeodUSA
Incorporated, Salomon Brothers Inc, Morgan Stanley & Co. Incorporated
and Bear, Stearns & Co. Inc.
*4.12 Stockholders' Agreement dated June 14, 1997 among McLeodUSA
Incorporated, IES Investments Inc., Midwest Capital Group, Inc., MWR
Investments Inc., Clark E. McLeod, Mary E. McLeod and Richard A.
Lumpkin on behalf of each of the shareholders of Consolidated
Communications Inc. listed on Schedule I of the Stockholders'
Agreement.
*5.1 Opinion of Hogan & Hartson L.L.P.
*8.1 Tax Opinion of Hogan & Hartson L.L.P.
10.1 Credit Agreement dated as of May 16, 1994 among McLeod, Inc., McLeod
Network Services, Inc., McLeod Telemanagement, Inc., McLeod
Telecommunications, Inc. and The First National Bank of Chicago.
(Filed as Exhibit 10.1 to Initial Form S-1 and incorporated herein by
reference).
10.2 First Amendment to Credit Agreement dated as of June 17, 1994 among
McLeod, Inc., McLeod Network Services, Inc., McLeod Telemanagement,
Inc., McLeod Telecommunications, Inc. and The First National Bank of
Chicago. (Filed as Exhibit 10.2 to Initial Form S-1 and incorporated
herein by reference).
10.3 Second Amendment to Credit Agreement dated as of December 1, 1994
among McLeod, Inc., McLeod Network Services, Inc., McLeod
Telemanagement, Inc., McLeod Telecommunications, Inc. and The First
National Bank of Chicago. (Filed as Exhibit 10.3 to Initial Form S-1
and incorporated herein by reference).
10.4 Third Amendment to Credit Agreement dated as of May 31, 1995 among
McLeod, Inc., McLeod Network Services, Inc., McLeod Telemanagement,
Inc., McLeod Telecommunications, Inc., MWR Telecom, Inc. and The First
National Bank of Chicago. (Filed as Exhibit 10.4 to Initial Form S-1
and incorporated herein by reference).
10.5 Fourth Amendment to Credit Agreement dated as of July 28, 1995 among
McLeod, Inc., McLeod Network Services, Inc., McLeod Telemanagement,
Inc., McLeod Telecommunications, Inc., MWR Telecom, Inc. and The First
National Bank of Chicago. (Filed as Exhibit 10.5 to Initial Form S-1
and incorporated herein by reference).
10.6 Fifth Amendment to Credit Agreement dated as of October 18, 1995 among
McLeod, Inc., McLeod Network Services, Inc., McLeod Telemanagement,
Inc., McLeod Telecommunications, Inc., MWR Telecom, Inc. and The First
National Bank of Chicago. (Filed as Exhibit 10.6 to Initial Form S-1
and incorporated herein by reference).
</TABLE>
II-3
<PAGE>
<TABLE>
<CAPTION>
EXHIBIT
NUMBER EXHIBIT DESCRIPTION
------- -------------------
<C> <S>
10.7 Sixth Amendment to Credit Agreement dated as of March 29, 1996 among
McLeod, Inc., McLeod Network Services, Inc., McLeod
Telecommunications, Inc., MWR Telecom, Inc. and The First National
Bank of Chicago. (Filed as Exhibit 10.7 to Initial Form S-1 and
incorporated herein by reference).
10.8 Security Agreement dated as of May 16, 1994 among McLeod, Inc., McLeod
Network Services, Inc., McLeod Telemanagement, Inc., McLeod
Telecommunications, Inc. and The First National Bank of Chicago.
(Filed as Exhibit 10.8 to Initial Form S-1 and incorporated herein by
reference).
10.9 First Amendment to Security Agreement dated as of December 1, 1994
among McLeod, Inc., McLeod Network Services, Inc., McLeod
Telemanagement, Inc., McLeod Telecommunications, Inc. and The First
National Bank of Chicago. (Filed as Exhibit 10.9 to Initial Form S-1
and incorporated herein by reference).
10.10 Support Agreement dated as of December 1, 1994 among IES Diversified
Inc., McLeod, Inc., McLeod Network Services, Inc., McLeod
Telemanagement, Inc., McLeod Telecommunications, Inc. and The First
National Bank of Chicago. (Filed as Exhibit 10.10 to Form S-1 and
incorporated herein by reference).
10.11 Agreement Regarding Support Agreement dated December 1994 between
McLeod, Inc. and IES Diversified Inc. (Filed as Exhibit 10.11 to
Initial Form S-1 and incorporated herein by reference).
10.12 Agreement Regarding Guarantee dated May 16, 1994 between McLeod, Inc.
and IES Diversified Inc. (Filed as Exhibit 10.12 to Initial Form S-1
and incorporated herein by reference).
10.13 Joinder to and Assumption of Credit Agreement dated as of April 28,
1995 between McLeod Merging Co. and The First National Bank of
Chicago. (Filed as Exhibit 10.13 to Initial Form S-1 and incorporated
herein by reference).
10.14 Joinder to and Assumption of Security Agreement dated as of April 28,
1995 between McLeod Merging Co. and The First National Bank of
Chicago. (Filed as Exhibit 10.14 to Initial Form S-1 and incorporated
herein by reference).
10.15 Letter from The First National Bank of Chicago to James L. Cram dated
April 28, 1995 regarding extension of the termination date under the
Credit Agreement. (Filed as Exhibit 10.15 to Initial Form S-1 and
incorporated herein by reference).
10.16 Credit Agreement dated as of March 29, 1996 among McLeod, Inc., McLeod
Network Services, Inc., McLeod Telemanagement, Inc., McLeod
Telecommunications, Inc. MWR Telecom, Inc. and The First National Bank
of Chicago. (Filed as Exhibit 10.16 to Initial Form S-1 and
incorporated herein by reference).
10.17 Agreement for Construction Related Services dated as of October 17,
1995 between City Signal Fiber Services, Inc. and McLeod Network
Services, Inc. (Filed as Exhibit 10.17 to Initial Form S-1 and
incorporated herein by reference).
10.18 Construction Services Agreement dated March 27, 1996 between City
Signal Fiber Services, Inc. and McLeod Network Services, Inc. (Filed
as Exhibit 10.18 to Initial Form S-1 and incorporated herein by
reference).
10.19 Fiber Optic Use Agreement dated as of February 14, 1996 between McLeod
Network Services, Inc. and Galaxy Telecom, L.P. (Filed as Exhibit
10.19 to Initial Form S-1 and incorporated herein by reference).
</TABLE>
II-4
<PAGE>
<TABLE>
<CAPTION>
EXHIBIT
NUMBER EXHIBIT DESCRIPTION
------- -------------------
<C> <S>
10.20 Agreement dated as of July 11, 1994 between McLeod Network Services,
Inc. and KLK Construction. (Filed as Exhibit 10.20 to Initial Form S-1
and incorporated herein by reference).
10.21 Lease Agreement dated September 5, 1995 between State of Iowa and MWR
Telecom, Inc. (Filed as Exhibit 10.21 to Initial Form S-1 and
incorporated herein by reference).
10.22 Lease Agreement dated September 5, 1995 between State of Iowa and
McLeod Network Services, Inc. (Filed as Exhibit 10.22 to Initial Form
S-1 and incorporated herein by reference).
10.23 Contract dated September 5, 1995 between Iowa Telecommunications and
Technology Commission and MWR Telecom, Inc. (Filed as Exhibit 10.23 to
Initial Form S-1 and incorporated herein by reference).
10.24 Contract dated June 27, 1995 between Iowa National Guard and McLeod
Network Services, Inc. (Filed as Exhibit 10.24 to Initial Form S-1 and
incorporated herein by reference).
10.25 Addendum Number One to Contract dated September 5, 1995 between Iowa
National Guard and McLeod Network Services, Inc. (Filed as Exhibit
10.25 to Initial Form S-1 and incorporated herein by reference).
10.26 U S WEST Centrex Plus Service Rate Stability Plan dated October 15,
1993 between McLeod Telemanagement, Inc. and U S WEST Communications,
Inc. (Filed as Exhibit 10.26 to Initial Form S-1 and incorporated
herein by reference).
10.27 U S WEST Centrex Plus Service Rate Stability Plan dated July 17, 1993
between McLeod Telemanagement, Inc. and U S WEST Communications, Inc.
(Filed as Exhibit 10.27 to Initial Form S-1 and incorporated herein by
reference).
10.28 Ameritech Centrex Service Confirmation of Service Orders dated various
dates in 1994, 1995 and 1996 between McLeod Telemanagement, Inc. and
Ameritech Information Industry Services. (Filed as Exhibit 10.28 to
Initial Form S-1 and incorporated herein by reference).
10.29 Lease Agreement dated as of December 28, 1993 between 2060 Partnership
and McLeod Telemanagement, Inc., as amended by Amendments First to
Ninth dated as of July 3, 1994, March 25,1994, June 22, 1994, August
12, 1994, September 12, 1994, September 20, 1994, November 16, 1994,
September 20, 1995 and January 6, 1996, respectively. (Filed as
Exhibit 10.29 to Initial Form S-1 and incorporated herein by
reference).
10.30 Lease Agreement dated as of May 24, 1995 between 2060 Partnership and
McLeod Telemanagement, Inc. (Filed as Exhibit 10.30 to Initial Form S-
1 and incorporated herein by reference).
10.31 Lease Agreement dated October 31, 1995 between I.R.F.B. Joint Venture
and McLeod Telemanagement, Inc. (Filed as Exhibit 10.31 to Initial
Form S-1 and incorporated herein by reference).
10.32 First Amendment to Lease Agreement dated as of November 20, 1995
between I.R.F.B. Joint Venture and McLeod Telemanagement, Inc. (Filed
as Exhibit 10.32 to Initial Form S-1 and incorporated herein by
reference).
10.33 Uniform Purchase Agreement dated July 22, 1993 between McLeod, Inc.
and Hill's Maple Crest Farms Partnership. (Filed as Exhibit 10.33 to
Initial Form S-1 and incorporated herein by reference).
10.34 Master Right-of-Way Agreement dated July 27, 1994 between McLeod
Network Services, Inc. and IES Industries Inc. (Filed as Exhibit 10.34
to Initial Form S-1 and incorporated herein by reference).
</TABLE>
II-5
<PAGE>
<TABLE>
<CAPTION>
EXHIBIT
NUMBER EXHIBIT DESCRIPTION
------- -------------------
<C> <S>
10.35 Master Right-of-Way and Tower Use Agreement dated February 13, 1996
between IES Industries Inc. and McLeod, Inc. (Filed as Exhibit 10.35
to Initial Form S-1 and incorporated herein by reference).
10.36 Master Pole, Duct and Tower Use Agreement dated February 20, 1996
between MidAmerican Energy Company and McLeod, Inc. (Iowa and South
Dakota). (Filed as Exhibit 10.36 to Initial Form S-1 and incorporated
herein by reference).
10.37 Master Pole, Duct and Tower Use Agreement dated February 20, 1996
between MidAmerican Energy Company and McLeod, Inc. (Illinois). (Filed
as Exhibit 10.37 to Initial Form S-1 and incorporated herein by
reference).
10.38 Settlement Agreement dated March 18, 1996 between U S WEST
Communications, Inc. and McLeod Telemanagement, Inc. (Filed as Exhibit
10.38 to Initial Form S-1 and incorporated herein by reference).
10.39 Agreement dated August 4, 1995 between Vadacom, Inc. and McLeod
Telemanagement, Inc. (Filed as Exhibit 10.39 to Initial Form S-1 and
incorporated herein by reference).
10.40 McLeod Telecommunications, Inc. 1992 Incentive Stock Option Plan.
(Filed as Exhibit 10.40 to Initial Form S-1 and incorporated herein by
reference).
10.41 McLeod, Inc. 1993 Incentive Stock Option Plan. (Filed as Exhibit 10.41
to Initial Form S-1 and incorporated herein by reference).
10.42 McLeod, Inc. 1995 Incentive Stock Option Plan. (Filed as Exhibit 10.42
to Initial Form S-1 and incorporated herein by reference).
10.43 McLeod Telecommunications, Inc. Director Stock Option Plan. (Filed as
Exhibit 10.43 to Initial Form S-1 and incorporated herein by
reference).
10.44 Promissory Note dated July 18, 1995 between Kirk E. Kaalberg and
McLeod, Inc. (Filed as Exhibit 10.44 to Initial Form S-1 and
incorporated herein by reference).
10.45 Promissory Note dated March 29, 1996 between Stephen K. Brandenburg
and McLeod, Inc. (Filed as Exhibit 10.45 to Initial Form S-1 and
incorporated herein by reference).
10.46 Agreement dated April 28, 1995 among McLeod, Inc., McLeod
Telecommunications, Inc., McLeod Telemanagement, Inc., McLeod Network
Services, Inc. and Clark E. McLeod. (Filed as Exhibit 10.46 to Initial
Form S-1 and incorporated herein by reference).
+10.47 Telecommunications Services Agreement dated March 14, 1994 between
WiITeI, Inc. and McLeod Telemanagement, Inc., as amended. (Filed as
Exhibit 10.47 to Initial Form S-1 and incorporated herein by
reference).
10.48 Amendment to Contract Addendum A to Contract No. 2102 dated March 31,
1993 between the Iowa Department of General Services and McLeod
Telecommunications, Inc. (Filed as Exhibit 10.48 to Initial Form S-1
and incorporated herein by reference).
10.49 Construction Services Agreement dated June 30, 1995 between MFS
Network Technologies, Inc. and MWR Telecom, Inc. (Filed as Exhibit
10.49 to Initial Form S-1 and incorporated herein by reference).
10.50 First Amendment to Agreement Regarding Support Agreement dated May 14,
1996 among McLeod, Inc., IES Diversified Inc. and IES Investments Inc.
(Filed as Exhibit 10.50 to Initial Form S-1 and incorporated herein by
reference).
</TABLE>
II-6
<PAGE>
<TABLE>
<CAPTION>
EXHIBIT
NUMBER EXHIBIT DESCRIPTION
------- -------------------
<C> <S>
10.51 First Amendment to Agreement Regarding Guarantee dated May 14, 1996
among McLeod, Inc., IES Diversified Inc. and IES Investments Inc.
(Filed as Exhibit 10.51 to Initial Form S-1 and incorporated herein by
reference).
10.52 Amended and Restated Directors Stock Option Plan of McLeod, Inc.
(Filed as Exhibit 10.52 to Initial Form S-1 and incorporated herein by
reference).
10.53 Forms of Employment, Confidentiality and Non-Competition Agreement
between McLeod, Inc. and certain employees of McLeod, Inc. (Filed as
Exhibit 10.53 to Initial Form S-1 and incorporated herein by
reference).
10.54 Form of Change-of-Control Agreement between McLeod, Inc. and certain
employees of McLeod, Inc. (Filed as Exhibit 10.54 to Initial Form S-1
and incorporated herein by reference).
10.55 McLeod, Inc. 1996 Employee Stock Option Plan, as amended. (Filed as
Exhibit 10.55 to November Form S-1 and incorporated herein by
reference).
10.56 McLeod, Inc. Employee Stock Purchase Plan, as amended. (Filed as
Exhibit 10.56 to Annual Report on Form 10-K, File No. 0-20763, filed
with the Commission on March 31, 1997 and incorporated herein by
reference).
10.57 Form of Indemnity Agreement between McLeod, Inc. and certain officers
and directors of McLeod, Inc. (Filed as Exhibit 10.57 to Initial Form
S-1 and incorporated herein by reference).
10.58 License Agreement dated April 24, 1996 between PageMart, Inc. and MWR
Telecom, Inc. (Filed as Exhibit 10.58 to Initial Form S-1 and
incorporated herein by reference).
10.59 Assignment of Purchase Agreement dated August 15, 1996 between Ryan
Properties, Inc. and McLeod, Inc. (Filed as Exhibit 10.59 to November
Form S-1 and incorporated herein by reference).
10.60 Assignment of Purchase Agreement dated August 14, 1996 between Ryan
Properties, Inc. and McLeod, Inc. (Filed as Exhibit 10.60 to November
Form S-1 and incorporated herein by reference).
10.61 Asset Purchase Agreement dated September 4, 1996 between Total
Communication Services, Inc. and McLeod Telemanagement, Inc. (Filed as
Exhibit 10.61 to November Form S-1 and incorporated herein by
reference).
10.62 First Amendment to Asset Purchase Agreement dated September 30, 1996
between Total Communication Services, Inc. and McLeod Telemanagement,
Inc. (Filed as Exhibit 10.62 to November Form S-1 and incorporated
herein by reference).
10.63 McLeod, Inc. Incentive Plan. (Filed as Exhibit 10.63 to November Form
S-1 and incorporated herein by reference).
10.64 Amended and Restated Credit Agreement dated as of May 5, 1996 among
Telecom*USA Publishing Group, Inc., TelecomwUSA Publishing Company and
Telecom*USA Neighborhood Directories, Inc. and Norwest Bank Iowa,
National Association. (Filed as Exhibit 10.64 to November Form S-1 and
incorporated herein by reference).
10.65 First Amendment to Amended and Restated Credit Agreement dated as of
January 31, 1996 by and between Telecom*USA Publishing Group, Inc.,
Telecom*USA Publishing Company and Telecom*USA Neighborhood
Directories, Inc. and Norwest Bank Iowa, National Association. (Filed
as Exhibit 10.65 to November Form S-1 and incorporated herein by
reference).
</TABLE>
II-7
<PAGE>
<TABLE>
<CAPTION>
EXHIBIT
NUMBER EXHIBIT DESCRIPTION
------- -------------------
<C> <S>
10.66 Lease Agreement dated as of September 26, 1994 between Ryan
Properties, Inc. and Ruffalo, Cody & Associates, Inc. (Filed as
Exhibit 10.66 to November Form S-1 and incorporated herein by
reference).
10.67 First Lease Amendment dated as of April 12, 1995 between Ryan
Properties, Inc. and Ruffalo, Cody & Associates, Inc. (Filed as
Exhibit 10.67 to November Form S-1 and incorporated herein by
reference).
10.68 Lease Agreement dated as of July 18, 1995 between 2060 Partnership,
L.P. and Telecom*USA Publishing Company. (Filed as Exhibit 10.68 to
November Form S-1 and incorporated herein by reference).
10.69 Lease Agreement dated April 26, 1995 by and between A.M. Henderson and
Telecom*USA Publishing Company. (Filed as Exhibit 10.69 to November
Form S-1 and incorporated herein by reference).
10.70 License Agreement dated as of April 19, 1994, between Ameritech
Information Industry Services and Telecom*USA Publishing Company.
(Filed as Exhibit 10.70 to November Form S-1 and incorporated herein
by reference).
10.71 License Agreement dated September 13, 1993 between U S WEST
Communications, Inc. and Telecom*USA Publishing Company. (Filed as
Exhibit 10.71 to November Form S-1 and incorporated herein by
reference).
10.72 Form of McLeod, Inc. Directors Stock Option Plan Option Agreement.
(Filed as Exhibit 10.72 to November Form S-1 and incorporated herein
by reference).
10.73 Forms of McLeod, Inc. 1996 Employee Stock Option Plan Incentive Stock
Option Agreement. (Filed as Exhibit 10.73 to November Form S-1 and
incorporated herein by reference).
10.74 Forms of McLeod, Inc. 1996 Employee Stock Option Plan Non-Incentive
Stock Option Agreement. (Filed as Exhibit 10.74 to November Form S-1
and incorporated herein by reference).
10.75 Option Agreement dated April 27, 1995 between Fronteer Directory
Company, Inc. and Telecom*USA Publishing Company. (Filed as Exhibit
10.75 to November Form S-1 and incorporated herein by reference).
10.76 Promissory Note dated May 5, 1995 between Telecom*USA Publishing
Company and Fronteer Directory Company, Inc. (Filed as Exhibit 10.76
to November Form S-1 and incorporated herein by reference).
10.77 Security Agreement dated May 5, 1995 between Telecom*USA Publishing
Company and Fronteer Directory Company, Inc. (Filed as Exhibit 10.77
to November Form S-1 and incorporated herein by reference).
10.78 Design/Build Construction Contract dated September 17, 1996 between
Ryan Construction Company of Minnesota, Inc. and McLeod, Inc. (Filed
as Exhibit 10.78 to November Form S-1 and incorporated herein by
reference).
10.79 Guaranty Agreement dated as of October 17, 1996 by McLeod, Inc. in
favor of Kirkwood Community College. (Filed as Exhibit 10.79 to
November Form S-1 and incorporated herein by reference).
10.80 Industrial New Jobs Training Agreement dated as of October 31, 1996
between Kirkwood Community College and McLeod Telemanagement, Inc.
(Filed as Exhibit 10.80 to November Form S-1 and incorporated herein
by reference).
</TABLE>
II-8
<PAGE>
<TABLE>
<CAPTION>
EXHIBIT
NUMBER EXHIBIT DESCRIPTION
------- -------------------
<C> <S>
10.81 Industrial New Jobs Training Agreement dated as of October 31, 1996
between Kirkwood Community College and McLeod Telecommunications, Inc.
(Filed as Exhibit 10.81 to November Form S-1 and incorporated herein
by reference).
10.82 Industrial New Jobs Training Agreement dated as of October 31, 1996
between Kirkwood Community College and McLeod Network Services, Inc.
(Filed as Exhibit 10.82 to November Form S-1 and incorporated herein
by reference).
10.83 Industrial New Jobs Training Agreement dated as of October 31, 1996
between Kirkwood Community College and McLeod, Inc. (Filed as Exhibit
10.83 to November Form S-1 and incorporated herein by reference).
10.84 Change Order No. 1 to the Construction Services Agreement dated
November 22, 1995 by and between MWR TeIecom, Inc. and MFS Network
Technologies, Inc. (Filed as Exhibit 10.84 to November Form S-1 and
incorporated herein by reference).
10.85 Change Order No. 2 to the Construction Services Agreement dated August
14, 1996 between MWR Telecom, Inc. and MFS Network Technologies, Inc.
(Filed as Exhibit 10.85 to November Form S-1 and incorporated herein
by reference).
10.86 Change Order No. 3 to the Construction Services Agreement dated
October 31, 1996 between MWR Telecom, Inc. and MFS Network
Technologies, Inc. (Filed as Exhibit 10.86 to November Form S-1 and
incorporated herein by reference).
10.87 Independent Contractor Sales Agreement dated May, 1995 between Sprint
Communications Company L.P. and Ruffalo, Cody & Associates, Inc.
(Filed as Exhibit 10.87 to November Form S-1 and incorporated herein
by reference).
10.88 Second Amendment to Asset Purchase Agreement dated October 31, 1996
between Total Communication Services, Inc. and McLeod Telemanagement,
Inc. (Filed as Exhibit 10.88 to November Form S-1 and incorporated
herein by reference)
10.89 Escrow Agreement dated July 15, 1996 among McLeod, Inc., certain
shareholders of Ruffalo, Cody & Associates, Inc., Albert P. Ruffalo
and Norwest Bank N.A. (Filed as Exhibit 10.89 to November Form S-1 and
incorporated herein by reference).
10.90 Sale and Purchase Agreement dated January 27, 1997 among McLeodUSA
Publishing Company, Fronteer Financial Holdings, Ltd., Classified
Directories, Inc., Larry A. Scott, James Greff, Randall L. Gowin and
Edwin Dressler and certain directors, officers and shareholders of
Fronteer Financial Holdings, Ltd. (Filed as Exhibit 10.90 to Annual
Report on Form 10-K, File No. 0-20763, filed with the Commission on
March 31, 1997 and incorporated herein by reference).
10.91 Sale and Purchase Agreement dated February 27, 1997 among McLeodUSA
Publishing Company, Indiana Directories, Inc., John Morgan, Hank
Meijer, Jack Hendricks, Brad Nelson and Talking Directories, Inc.
(Filed as Exhibit 10.91 to Annual Report on Form 10-K, File No. 0-
20763, filed with the Commission on March 31, 1997 and incorporated
herein by reference).
10.92 Amendment to Sale and Purchase Agreement dated February 28, 1997
between McLeodUSA Publishing Company and Indiana Directories, Inc.
(Filed as Exhibit 10.92 to Annual Report on Form 10-K, File No. 0-
20763, filed with the Commission on March 31, 1997 and incorporated
herein by reference).
10.93 Ameritech Centrex Service Confirmation of Service Orders dated August
21, 1996 between McLeod Telemanagement, Inc. and Ameritech Information
Industry Services. (Filed as Exhibit 10.93 to Annual Report on Form
10-K, File No. 0-20763, filed with the Commission on March 31, 1997
and incorporated herein by reference).
</TABLE>
II-9
<PAGE>
<TABLE>
<CAPTION>
EXHIBIT
NUMBER EXHIBIT DESCRIPTION
------- -------------------
<C> <S>
+10.94 Amended and Restated Program Enrollment Terms dated November 1, 1996
between WorldCom Network Services, Inc. d/b/a WilTel and McLeod
Telemanagement, Inc. (Filed as Exhibit 10.94 to Annual Report on Form
10-K/A, File No. 0-20763, filed with the Commission on April 8, 1997
and incorporated herein by reference).
10.95 Letter Agreement dated April 15, 1997 between U S WEST Communications
and McLeodUSA Network Services, Inc. (Filed as Exhibit 10.1 to
Quarterly Report on
Form 10-Q, File No. 0-20763, filed with the Commission on May 14, 1997
and incorporated herein by reference).
*10.96 Network Agreement dated April 7, 1997, between Wisconsin Power and
Light Company and McLeodUSA Telecommunications Services, Inc.
*10.97 Agreement dated July 7, 1997 between McLeodUSA Telecommunications
Services, Inc. and U S WEST Communications, Inc.
*11.1 Statement regarding Computation of Per Share Earnings.
*16.1 Letter regarding Change in Certifying Accountant.
21.1 Subsidiaries of McLeod, Inc. (Filed as Exhibit 21.1 to Annual Report
on Form 10-K,
File No. 0-20763, filed with the Commission on March 31, 1997 and
incorporated herein by reference).
*23.1 Consents of McGladrey & Pullen, LLP.
23.2 Consent of Hogan & Hartson L.L.P. (included in Exhibit 5.1).
*23.3 Consent of Arthur Andersen LLP.
24.1 Power of attorney (included on signature page).
*24.2 Statement on Form T-1 of Eligibility of Trustee.
27.1 Financial Data Schedule. (Filed as Exhibit 27.1 to Quarterly Report on
Form 10-Q, File No. 0-20763, filed with the Commission on May 14, 1997
and incorporated herein by reference).
99.1 Purchase Agreement dated as of August 15, 1996 between Iowa Land and
Building Company and Ryan Properties, Inc. (Filed as Exhibit 99.1 to
November Form S-1 and incorporated herein by reference).
99.2 Purchase Agreement dated as of June 28, 1996 between Donald E. Zvacek,
Dennis E. Zvacek and Robert J. Zvacek and Ryan Properties, Inc. (Filed
as Exhibit 99.2 to November Form S-1 and incorporated herein by
reference).
*99.3 Form of Letter of Transmittal.
*99.4 Form of Notice of Guaranteed Delivery.
*99.5 Form of Letter to Brokers, Dealers, Commercial Banks, Trust Companies
and other Nominees.
*99.6 Form of Letter to Clients.
</TABLE>
- --------
* Previously filed.
+ Confidential treatment has been granted. The copy filed as an exhibit omits
the information subject to the confidential treatment request.
II-10
<PAGE>
(B) FINANCIAL STATEMENT SCHEDULES.
The following financial statement schedule is filed herewith:
Schedule II--Valuation and Qualifying Accounts
Schedules not listed above have been omitted because they are inapplicable
or the information required to be set forth therein is provided in the
Consolidated Financial Statements of the Company or notes thereto.
ITEM 22. UNDERTAKINGS
Insofar as indemnification for liabilities arising under the Securities Act
may be permitted to directors, officers and controlling persons of the
registrant pursuant to the foregoing provisions, or otherwise, the registrant
has been advised that in the opinion of the Securities and Exchange Commission
such indemnification is against public policy as expressed in the Securities
Act and is, therefore, unenforceable. In the event that a claim for
indemnification against such liabilities (other than the payment by the
registrant of expenses incurred or paid by a director, officer or controlling
person of the registrant in the successful defense of any action, suit or
proceeding) is asserted by such director, officer or controlling person in
connection with the securities being registered, the registrant will, unless
in the opinion of its counsel the matter has been settled by controlling
precedent, submit to a court of appropriate jurisdiction the question whether
such indemnification by it is against public policy as expressed in the
Securities Act and will be governed by the final adjudication of such issue.
The undersigned registrant hereby undertakes to respond to requests for
information that is incorporated by reference into the prospectus pursuant to
Items 4, 10(b), 11 or 13 of this Form, within one business day of receipt of
such request, and to send the incorporated documents by first class mail or
other equally prompt means. This includes information contained in documents
filed subsequent to the effective date of this Registration Statement through
the date of responding to the request.
The undersigned registrant hereby undertakes to supply by means of a post-
effective amendment all information concerning a transaction, and the company
being acquired involved therein, that was not the subject of and included in
this Registration Statement when it became effective.
The undersigned registrant hereby undertakes that for purposes of
determining any liability under the Securities Act, the information omitted
from the form of prospectus filed as part of this Registration Statement in
reliance upon Rule 430A and contained in a form of prospectus filed by the
registrant pursuant to Rule 424(b)(1) or (4) or 497(h) under the Securities
Act shall be deemed to be part of this Registration Statement as of the time
it was declared effective.
The undersigned registrant hereby undertakes that for the purpose of
determining any liability under the Securities Act, each post-effective
amendment that contains a form of prospectus shall be deemed to be a new
registration statement relating to the securities offered therein, and the
offering of such securities at that time shall be deemed to be the initial
bona fide offering thereof.
The undersigned registrant hereby undertakes to file, during any period in
which offers or sales are being made, a post-effective amendment to this
Registration Statement;
(i) to include any prospectus required by Section 10(a)(3) of the
Securities Act of 1933 (the "Securities Act");
(ii) to reflect in the prospectus any facts or events arising after the
effective date of this Registration Statement (or the most recent post-
effective amendment hereof) which, individually or in the aggregate,
represents a fundamental change in the information set forth in this
II-11
<PAGE>
Registration Statement. Notwithstanding the foregoing, any increase or
decrease in volume of securities offered (if the total dollar value of
securities offered would not exceed that which was registered) and any
deviation from the low or high end of the estimated maximum offering range
may be reflected in the form of prospectus filed with the Securities and
Exchange Commission pursuant to Rule 424(b) if, in the aggregate, the
changes in volume and price represent no more than a 20% change in the
maximum aggregate offering price set forth in the "Calculation of
Registration Fee" table in this Registration Statement when it becomes
effective; and
(iii) to include any material information with respect to the plan of
distribution not previously disclosed in this Registration Statement or any
material change to such information in this Registration Statement.
The undersigned registrant hereby undertakes to remove from registration by
means of a post-effective amendment any of the securities being registered
which remain unsold at the termination of the offering.
II-12
<PAGE>
SIGNATURES
Pursuant to the requirements of Securities Act, the Company has duly caused
this Registration Statement to be signed on its behalf by the undersigned,
thereunto duly authorized, in the City of Cedar Rapids, Iowa, on this 25th day
of July, 1997.
McLeodUSA Incorporated
/s/ Clark E. McLeod
By: _________________________________
CLARK E. MCLEOD CHAIRMAN AND CHIEF
EXECUTIVE OFFICER
Pursuant to the requirements of the Securities Act, this Registration
Statement has been signed below by the following persons, in the capacities
indicated below, on this 25th day of July, 1997.
SIGNATURE TITLE
/s/ Clark E. McLeod Chairman, Chief Executive
- ------------------------------------- Officer and Director (Principal
CLARK E. MCLEOD Executive Officer)
* President, Chief Operating
- ------------------------------------- Officer and Director
STEPHEN C. GRAY
* Chief Financial Officer,
- ------------------------------------- Executive Vice President,
BLAKE O. FISHER, JR. Corporate Administration,
Treasurer and Director
(Principal Financial Officer)
* Vice President, Finance,
- ------------------------------------- Corporate Controller and
JOSEPH H. CERYANEC Principal Accounting Officer
(Principal Accounting Officer)
* Director
- -------------------------------------
RUSSELL E. CHRISTIANSEN
* Director
- -------------------------------------
THOMAS M. COLLINS
* Director
- -------------------------------------
PAUL D. RHINES
* Director
- -------------------------------------
LEE LIU
/s/ Clark E. McLeod
*By: ________________________________
Clark E. McLeod
Attorney-in-Fact
II-13
<PAGE>
INDEX TO EXHIBITS
<TABLE>
<CAPTION>
EXHIBIT
NUMBER EXHIBIT DESCRIPTION
------- -------------------
<C> <S>
*1.1 Purchase Agreement, dated as of February 26, 1997 among Salomon
Brothers Inc, Morgan Stanley & Co. Incorporated and McLeod, Inc.
2.1 Agreement and Plan of Reorganization dated April 28, 1995 among
Midwest Capital Group Inc., MWR Telecom, Inc. and McLeod, Inc. (Filed
as Exhibit 2.1 to Registration Statement on Form S-1, File No. 333-
3112 ("Initial Form S-1"), and incorporated herein by reference).
2.2 Agreement and Plan of Reorganization dated as of July 12, 1996 among
Ruffalo, Cody & Associates, Inc., certain shareholders of Ruffalo,
Cody & Associates, Inc. and McLeod, Inc. (Filed as Exhibit 2 to
Current Report on Form 8-K, File No. 0-20763, filed with the
Commission on July 29, 1996 and incorporated herein by reference).
2.3 Agreement and Plan of Reorganization dated as of August 15, 1996 among
Telecom*USA Publishing Group, Inc. and McLeod, Inc. (Filed as Exhibit
2 to Current Report on Form 8-K, File No. 0-20763, filed with the
Commission on August 26, 1996 and incorporated herein by reference).
2.4 Agreement and Plan of Reorganization dated as of January 27, 1997
among McLeod, Inc., Digital Communications of Iowa, Inc., Clark E.
McLeod and Mary E. McLeod. (Filed as Exhibit 2 to Current Report on
Form 8-K, File No. 0-20763, filed with the Commission on February 24,
1997 and incorporated herein by reference).
2.5 Asset Purchase Agreement dated as of May 30, 1997 by and among
McLeodUSA Incorporated, ESI/McLeodUSA, Inc., and ESI Communications,
Inc., ESI Communications/SW, Inc., ESI Communications/West, Inc., ESI
Communications Downtown, Inc., ESI Communications North, Inc., and
Michael Reichert, Peter Jones, John Pupkes and Jeff Meehan. (Filed as
Exhibit 2.1 to Current Report on Form 8-K, File No. 0-20763, filed
with the Commission on June 26, 1997 and incorporated herein by
reference).
2.6 Agreement and Plan of Reorganization dated as of June 14, 1997 among
McLeodUSA Incorporated, Eastside Acquisition Co. and Consolidated
Communications Inc. (Filed as Exhibit 2.2 to Current Report on Form
8-K, File No. 0-20763, filed with the Commission on June 26, 1997 and
incorporated herein by reference).
3.1 Amended and Restated Certificate of Incorporation of McLeod, Inc.
(Filed as Exhibit 3.1 to Initial Form S-1 and incorporated herein by
reference).
3.2 Amended and Restated Bylaws of McLeod, Inc. (Filed as Exhibit 3.2 to
Registration Statement on Form S-1, File No. 333-13885 ("November Form
S-1"), and incorporated herein by reference).
*3.3 Certificate of Amendment of Amended and Restated Certificate of
Incorporation of McLeod Inc.
4.1 Form of Class A Common Stock Certificate of McLeod, Inc. (Filed as
Exhibit 4.1 to Initial Form S-1 and incorporated herein by reference).
4.2 Indenture dated March 4, 1997 between McLeod, Inc. and United States
Trust Company of New York, as Trustee, relating to the 10 1/2% Senior
Discount Notes Due 2007 of McLeod, Inc. (Filed as Exhibit 4.2 to
Annual Report on Form 10-K, File No. 0-20763, filed with the
Commission on March 31, 1997 and incorporated herein by reference).
4.3 Initial Global 10 1/2% Senior Discount Note Due March 1, 2007 of
McLeod, Inc., dated March 4, 1997. (Filed as Exhibit 4.3 to Annual
Report on Form 10-K, File No. 0-20763, filed with the Commission on
March 31, 1997 and incorporated herein by reference).
</TABLE>
1
<PAGE>
<TABLE>
<CAPTION>
EXHIBIT
NUMBER EXHIBIT DESCRIPTION
------- -------------------
<C> <S>
4.4 Form of Certificated 10 1/2% Senior Discount Note Due March 1, 2007 of
McLeod, Inc. (Filed as Exhibit 4.4 to Annual Report on Form 10-K, File
No. 0-20763, filed with the Commission on March 31, 1997 and
incorporated herein by reference).
4.5 Registration Agreement dated March 4, 1997 among McLeod, Inc., Salomon
Brothers Inc and Morgan Stanley & Co. Incorporated. (Filed as Exhibit
4.5 to Annual Report on Form 10-K, File No. 0-20763, filed with the
Commission on March 31, 1997 and incorporated herein by reference).
4.6 Investor Agreement dated as of April 1, 1996 among McLeod, Inc., IES
Investments Inc., Midwest Capital Group Inc., MWR Investments Inc.,
Clark and Mary McLeod, and certain other stockholders. (Filed as
Exhibit 4.8 to Initial Form S-1 and incorporated
4.7 Amendment No. 1 to Investor Agreement dated as of October 23, 1996 by
and among McLeod, Inc., IES Investments Inc., Midwest Capital Group
Inc., MWR Investments Inc., Clark E. McLeod and Mary E. McLeod. (Filed
as Exhibit 4.3 to November Form S-1 and incorporated herein by
reference).
4.8 Form of Exchange Note (contained in Indenture filed as Exhibit 4.2).
4.9 Indenture dated July 21, 1997 between McLeodUSA Incorporated and
United States Trust Company of New York, as Trustee, relating to the 9
1/4% Senior Notes Due 2007 of McLeodUSA Incorporated.
4.10 Form of Initial Global 9 1/4% Senior Note Due 2007 of McLeodUSA
Incorporated (contained in Indenture filed as Exhibit 4.9).
4.11 Registration Agreement dated July 21, 1997 among McLeodUSA
Incorporated, Salomon Brothers Inc., Morgan Stanley & Co. Incorporated
and Bear, Stearns & Co. Inc.
*4.12 Stockholders' Agreement dated June 14, 1997 among McLeodUSA
Incorporated, IES Investments Inc., Midwest Capital Group, Inc., MWR
Investments Inc., Clark E. McLeod, Mary E. McLeod and Richard A.
Lumpkin on behalf of each of the shareholders of Consolidated
Communications Inc., listed on Schedule I of the Stockholders'
Agreement.
*5.1 Opinion of Hogan & Hartson L.L.P.
*8.1 Tax Opinion of Hogan & Hartson L.L.P.
10.1 Credit Agreement dated as of May 16, 1994 among McLeod, Inc., McLeod
Network Services, Inc., McLeod Telemanagement, Inc., McLeod
Telecommunications, Inc. and The First National Bank of Chicago.
(Filed as Exhibit 10.1 to Initial Form S-1 and incorporated herein by
reference).
10.2 First Amendment to Credit Agreement dated as of June 17, 1994 among
McLeod, Inc., McLeod Network Services, Inc., McLeod Telemanagement,
Inc., McLeod Telecommunications, Inc. and The First National Bank of
Chicago. (Filed as Exhibit 10.2 to Initial Form S-1 and incorporated
herein by reference).
10.3 Second Amendment to Credit Agreement dated as of December 1, 1994
among McLeod, Inc., McLeod Network Services, Inc., McLeod
Telemanagement, Inc., McLeod Telecommunications, Inc. and The First
National Bank of Chicago. (Filed as Exhibit 10.3 to Initial Form S-1
and incorporated herein by reference).
10.4 Third Amendment to Credit Agreement dated as of May 31, 1995 among
McLeod, Inc., McLeod Network Services, Inc., McLeod Telemanagement,
Inc., McLeod Telecommunications, Inc., MWR Telecom, Inc. and The First
National Bank of Chicago. (Filed as Exhibit 10.4 to Initial Form S-1
and incorporated herein by reference).
</TABLE>
2
<PAGE>
<TABLE>
<CAPTION>
EXHIBIT
NUMBER EXHIBIT DESCRIPTION
------- -------------------
<C> <S>
10.5 Fourth Amendment to Credit Agreement dated as of July 28, 1995 among
McLeod, Inc., McLeod Network Services, Inc., McLeod Telemanagement,
Inc., McLeod Telecommunications, Inc., MWR Telecom, Inc. and The First
National Bank of Chicago. (Filed as Exhibit 10.5 to Initial Form S-1
and incorporated herein by reference).
10.6 Fifth Amendment to Credit Agreement dated as of October 18, 1995 among
McLeod, Inc., McLeod Network Services, Inc., McLeod Telemanagement,
Inc., McLeod Telecommunications, Inc., MWR Telecom, Inc. and The First
National Bank of Chicago. (Filed as Exhibit 10.6 to Initial Form S-1
and incorporated herein by reference).
10.7 Sixth Amendment to Credit Agreement dated as of March 29, 1996 among
McLeod, Inc., McLeod Network Services, Inc., McLeod
Telecommunications, Inc., MWR Telecom, Inc. and The First National
Bank of Chicago. (Filed as Exhibit 10.7 to Initial Form S-1 and
incorporated herein by reference).
10.8 Security Agreement dated as of May 16, 1994 among McLeod, Inc., McLeod
Network Services, Inc., McLeod Telemanagement, Inc., McLeod
Telecommunications, Inc. and The First National Bank of Chicago.
(Filed as Exhibit 10.8 to Initial Form S-1 and incorporated herein by
reference).
10.9 First Amendment to Security Agreement dated as of December 1, 1994
among McLeod, Inc., McLeod Network Services, Inc., McLeod
Telemanagement, Inc., McLeod Telecommunications, Inc. and The First
National Bank of Chicago. (Filed as Exhibit 10.9 to Initial Form S-1
and incorporated herein by reference).
10.10 Support Agreement dated as of December 1, 1994 among IES Diversified
Inc., McLeod, Inc., McLeod Network Services, Inc., McLeod
Telemanagement, Inc., McLeod Telecommunications, Inc. and The First
National Bank of Chicago. (Filed as Exhibit 10.10 to Initial Form S-1
and incorporated herein by reference).
10.11 Agreement Regarding Support Agreement dated December 1994 between
McLeod, Inc. and IES Diversified Inc. (Filed as Exhibit 10.11 to
Initial Form S-1 and incorporated herein by reference).
10.12 Agreement Regarding Guarantee dated May 16, 1994 between McLeod, Inc.
and IES Diversified Inc. (Filed as Exhibit 10.12 to Initial Form S-1
and incorporated herein by reference).
10.13 Joinder to and Assumption of Credit Agreement dated as of April 28,
1995 between McLeod Merging Co. and The First National Bank of
Chicago. (Filed as Exhibit 10.13 to Initial Form S-1 and incorporated
herein by reference).
10.14 Joinder to and Assumption of Security Agreement dated as of April 28,
1995 between McLeod Merging Co. and The First National Bank of
Chicago. (Filed as Exhibit 10.14 to Initial Form S-1 and incorporated
herein by reference).
10.15 Letter from The First National Bank of Chicago to James L. Cram dated
April 28, 1995 regarding extension of the termination date under the
Credit Agreement. (Filed as Exhibit 10.15 to Initial Form S-1 and
incorporated herein by reference).
10.16 Credit Agreement dated as of March 29, 1996 among McLeod, Inc., McLeod
Network Services, Inc., McLeod Telemanagement, Inc., McLeod
Telecommunications, Inc. MWR Telecom, Inc. and The First National Bank
of Chicago. (Filed as Exhibit 10.16 to Initial Form S-1 and
incorporated herein by reference).
</TABLE>
3
<PAGE>
<TABLE>
<CAPTION>
EXHIBIT
NUMBER EXHIBIT DESCRIPTION
------- -------------------
<C> <S>
10.17 Agreement for Construction Related Services dated as of October 17,
1995 between City Signal Fiber Services, Inc. and McLeod Network
Services, Inc. (Filed as Exhibit 10.17 to Initial Form S-1 and
incorporated herein by reference).
10.18 Construction Services Agreement dated March 27, 1996 between City
Signal Fiber Services, Inc. and McLeod Network Services, Inc. (Filed
as Exhibit 10.18 to Initial Form S-1 and incorporated herein by
reference).
10.19 Fiber Optic Use Agreement dated as of February 14, 1996 between McLeod
Network Services, Inc. and Galaxy Telecom, L.P. (Filed as Exhibit
10.19 to Initial Form S-1 and incorporated herein by reference).
10.20 Agreement dated as of July 11, 1994 between McLeod Network Services,
Inc. and KLK Construction. (Filed as Exhibit 10.20 to Initial Form S-1
and incorporated herein by reference).
10.21 Lease Agreement dated September 5, 1995 between State of Iowa and MWR
Telecom, Inc. (Filed as Exhibit 10.21 to Initial Form S-1 and
incorporated herein by reference).
10.22 Lease Agreement dated September 5, 1995 between State of Iowa and
McLeod Network Services, Inc. (Filed as Exhibit 10.22 to Initial Form
S-1 and incorporated herein by reference).
10.23 Contract dated September 5, 1995 between Iowa Telecommunications and
Technology Commission and MWR Telecom, Inc. (Filed as Exhibit 10.23 to
Initial Form S-1 and incorporated herein by reference).
10.24 Contract dated June 27, 1995 between Iowa National Guard and McLeod
Network Services, Inc. (Filed as Exhibit 10.24 to Initial Form S-1 and
incorporated herein by reference).
10.25 Addendum Number One to Contract dated September 5, 1995 between Iowa
National Guard and McLeod Network Services, Inc. (Filed as Exhibit
10.25 to Initial Form S-1 and incorporated herein by reference).
10.26 U S WEST Centrex Plus Service Rate Stability Plan dated October 15,
1993 between McLeod Telemanagement, Inc. and U S WEST Communications,
Inc. (Filed as Exhibit 10.26 to Initial Form S-1 and incorporated
herein by reference).
10.27 U S WEST Centrex Plus Service Rate Stability Plan dated July 17, 1993
between McLeod Telemanagement, Inc. and U S WEST Communications, Inc.
(Filed as Exhibit 10.27 to Initial Form S-1 and incorporated herein by
reference).
10.28 Ameritech Centrex Service Confirmation of Service Orders dated various
dates in 1994, 1995 and 1996 between McLeod Telemanagement, Inc. and
Ameritech Information Industry Services. (Filed as Exhibit 10.28 to
Initial Form S-1 and incorporated herein by reference).
10.29 Lease Agreement dated as of December 28, 1993 between 2060 Partnership
and McLeod Telemanagement, Inc., as amended by Amendments First to
Ninth dated as of July 3, 1994, March 25, 1994, June 22, 1994, August
12, 1994, September 12, 1994, September 20, 1994, November 16, 1994,
September 20, 1995 and January 6, 1996, respectively. (Filed as
Exhibit 10.29 to Initial Form S-1 and incorporated herein by
reference).
10.30 Lease Agreement dated as of May 24, 1995 between 2060 Partnership and
McLeod Telemanagement, Inc. (Filed as Exhibit 10.30 to Initial Form S-
1 and incorporated herein by reference).
10.31 Lease Agreement dated October 31, 1995 between I.R.F.B. Joint Venture
and McLeod Telemanagement, Inc. (Filed as Exhibit 10.31 to Initial
Form S-1 and incorporated herein by reference).
</TABLE>
4
<PAGE>
<TABLE>
<CAPTION>
EXHIBIT
NUMBER EXHIBIT DESCRIPTION
------- -------------------
<C> <S>
10.32 First Amendment to Lease Agreement dated as of November 20, 1995
between I.R.F.B. Joint Venture and McLeod Telemanagement, Inc. (Filed
as Exhibit 10.32 to Initial Form S-1 and incorporated herein by
reference).
10.33 Uniform Purchase Agreement dated July 22, 1993 between McLeod, Inc.
and Hill's Maple Crest Farms Partnership. (Filed as Exhibit 10.33 to
Initial Form S 1 and incorporated herein by reference).
10.34 Master Right-of-Way Agreement dated July 27, 1994 between McLeod
Network Services, Inc. and IES Industries Inc. (Filed as Exhibit 10.34
to Initial Form S-1 and incorporated herein by reference).
10.35 Master Right-of-Way and Tower Use Agreement dated February 13, 1996
between IES Industries Inc. and McLeod, Inc. (Filed as Exhibit 10.35
to Initial Form S-1 and incorporated herein by reference).
10.36 Master Pole, Duct and Tower Use Agreement dated February 20, 1996
between MidAmerican Energy Company and McLeod, Inc. (Iowa and South
Dakota). (Filed as Exhibit 10.36 to Initial Form S-1 and incorporated
herein by reference).
10.37 Master Pole, Duct and Tower Use Agreement dated February 20, 1996
between MidAmerican Energy Company and McLeod, Inc. (Illinois). (Filed
as Exhibit 10.37 to Initial Form S-1 and incorporated herein by
reference).
10.38 Settlement Agreement dated March 18, 1996 between U S WEST
Communications, Inc. and McLeod Telemanagement, Inc. (Filed as Exhibit
10.38 to Initial Form S-1 and incorporated herein by reference).
10.39 Agreement dated August 4, 1995 between Vadacom, Inc. and McLeod
Telemanagement, Inc. (Filed as Exhibit 10.39 to Initial Form S-1 and
incorporated herein by reference).
10.40 McLeod Telecommunications, Inc. 1992 Incentive Stock Option Plan.
(Filed as Exhibit 10.40 to Initial Form S-1 and incorporated herein by
reference).
10.41 McLeod, Inc. 1993 Incentive Stock Option Plan. (Filed as Exhibit 10.41
to Initial Form S-1 and incorporated herein by reference).
10.42 McLeod, Inc. 1995 Incentive Stock Option Plan. (Filed as Exhibit 10.42
to Initial Form S-1 and incorporated herein by reference).
10.43 McLeod Telecommunications, Inc. Director Stock Option Plan. (Filed as
Exhibit 10.43 to Initial Form S-1 and incorporated herein by
reference).
10.44 Promissory Note dated July 18, 1995 between Kirk E. Kaalberg and
McLeod, Inc. (Filed as Exhibit 10.44 to Initial Form S-1 and
incorporated herein by reference).
10.45 Promissory Note dated March 29, 1996 between Stephen K. Brandenburg
and McLeod, Inc. (Filed as Exhibit 10.45 to Initial Form S-1 and
incorporated herein by reference).
10.46 Agreement dated April 28, 1995 among McLeod, Inc., McLeod
Telecommunications, Inc., McLeod Telemanagement, Inc., McLeod Network
Services, Inc. and Clark E. McLeod. (Filed as Exhibit 10.46 to Initial
Form S-1 and incorporated herein by reference).
+10.47 Telecommunications Services Agreement dated March 14, 1994 between
WiITeI, Inc. and McLeod Telemanagement, Inc., as amended. (Filed as
Exhibit 10.47 to Initial Form S-1 and incorporated herein by
reference).
</TABLE>
5
<PAGE>
<TABLE>
<CAPTION>
EXHIBIT
NUMBER EXHIBIT DESCRIPTION
------- -------------------
<C> <S>
10.48 Amendment to Contract Addendum A to Contract No. 2102 dated March 31,
1993 between the Iowa Department of General Services and McLeod
Telecommunications, Inc. (Filed as Exhibit 10.48 to Initial Form S-1
and incorporated herein by reference).
10.49 Construction Services Agreement dated June 30, 1995 between MFS
Network Technologies, Inc. and MWR Telecom, Inc. (Filed as Exhibit
10.49 to Initial Form S-1 and incorporated herein by reference).
10.50 First Amendment to Agreement Regarding Support Agreement dated May 14,
1996 among McLeod, Inc., IES Diversified Inc. and IES Investments Inc.
(Filed as Exhibit 10.50 to Initial Form S-1 and incorporated herein by
reference).
10.51 First Amendment to Agreement Regarding Guarantee dated May 14, 1996
among McLeod, Inc., IES Diversified Inc. and IES Investments Inc.
(Filed as Exhibit 10.51 to Initial Form S-1 and incorporated herein by
reference).
10.52 Amended and Restated Directors Stock Option Plan of McLeod, Inc.
(Filed as Exhibit 10.52 to Initial Form S-1 and incorporated herein by
reference).
10.53 Forms of Employment, Confidentiality and Non-Competition Agreement
between McLeod, Inc. and certain employees of McLeod, Inc. (Filed as
Exhibit 10.53 to Initial Form S-1 and incorporated herein by
reference).
10.54 Form of Change-of-Control Agreement between McLeod, Inc. and certain
employees of McLeod, Inc. (Filed as Exhibit 10.54 to Initial Form S-1
and incorporated herein by reference).
10.55 McLeod, Inc. 1996 Employee Stock Option Plan, as amended. (Filed as
Exhibit 10.55 to November Form S-1 and incorporated herein by
reference).
10.56 McLeod, Inc. Employee Stock Purchase Plan, as amended. (Filed as
Exhibit 10.56 to Annual Report on Form 10 K, File No. 0-20763, filed
with the Commission on March 31, 1997 and incorporated herein by
reference).
10.57 Form of Indemnity Agreement between McLeod, Inc. and certain officers
and directors of McLeod, Inc. (Filed as Exhibit 10.57 to Initial Form
S-1 and incorporated herein by reference).
10.58 License Agreement dated April 24, 1996 between PageMart, Inc. and MWR
Telecom, Inc. (Filed as Exhibit 10.58 to Initial Form S-1 and
incorporated herein by reference).
10.59 Assignment of Purchase Agreement dated August 15, 1996 between Ryan
Properties, Inc. and McLeod, Inc. (Filed as Exhibit 10.59 to November
Form S-1 and incorporated herein by reference).
10.60 Assignment of Purchase Agreement dated August 14, 1996 between Ryan
Properties, Inc. and McLeod, Inc. (Filed as Exhibit 10.60 to November
Form S-1 and incorporated herein by reference).
10.61 Asset Purchase Agreement dated September 4, 1996 between Total
Communication Services, Inc. and McLeod Telemanagement, Inc. (Filed as
Exhibit 10.61 to November Form S-1 and incorporated herein by
reference).
10.62 First Amendment to Asset Purchase Agreement dated September 30, 1996
between Total Communication Services, Inc. and McLeod Telemanagement,
Inc. (Filed as Exhibit 10.62 to November Form S-1 and incorporated
herein by reference).
10.63 McLeod, Inc. Incentive Plan. (Filed as Exhibit 10.63 to November Form
S-1 and incorporated herein by reference).
</TABLE>
6
<PAGE>
<TABLE>
<CAPTION>
EXHIBIT
NUMBER EXHIBIT DESCRIPTION
------- -------------------
<C> <S>
10.64 Amended and Restated Credit Agreement dated as of May 5, 1996 among
Telecom*USA Publishing Group, Inc., Telecom*USA Publishing Company and
Telecom*USA Neighborhood Directories, Inc. and Norwest Bank Iowa,
National Association. (Filed as Exhibit 10.64 to November Form S-1 and
incorporated herein by reference).
10.65 First Amendment to Amended and Restated Credit Agreement dated as of
January 31, 1996 by and between Telecom*USA Publishing Group, Inc.,
Telecom*USA Publishing Company and Telecom*USA Neighborhood
Directories, Inc. and Norwest Bank Iowa, National Association. (Filed
as Exhibit 10.65 to November Form S-1 and incorporated herein by
reference).
10.66 Lease Agreement dated as of September 26, 1994 between Ryan
Properties, Inc. and Ruffalo, Cody & Associates, Inc. (Filed as
Exhibit 10.66 to November Form S-1 and incorporated herein by
reference).
10.67 First Lease Amendment dated as of April 12, 1995 between Ryan
Properties, Inc. and Ruffalo, Cody & Associates, Inc. (Filed as
Exhibit 10.67 to November Form S-1 and incorporated herein by
reference).
10.68 Lease Agreement dated as of July 18, 1995 between 2060 Partnership,
L.P. and Telecom*USA Publishing Company. (Filed as Exhibit 10.68 to
November Form S-1 and incorporated herein by reference).
10.69 Lease Agreement dated April 26, 1995 by and between A.M. Henderson and
Telecom*USA Publishing Company. (Filed as Exhibit 10.69 to November
Form S-1 and incorporated herein by reference).
10.70 License Agreement dated as of April 19, 1994, between Ameritech
Information Industry Services and Telecom*USA Publishing Company.
(Filed as Exhibit 10.70 to November Form S-1 and incorporated herein
by reference).
10.71 License Agreement dated September 13, 1993 between U S WEST
Communications, Inc. and Telecom*USA Publishing Company. (Filed as
Exhibit 10.71 to November Form S-1 and incorporated herein by
reference).
10.72 Form of McLeod, Inc. Directors Stock Option Plan Option Agreement.
(Filed as Exhibit 10.72 to November Form S-1 and incorporated herein
by reference).
10.73 Forms of McLeod, Inc. 1996 Employee Stock Option Plan Incentive Stock
Option Agreement. (Filed as Exhibit 10.73 to November Form S-1 and
incorporated herein by reference).
10.74 Forms of McLeod, Inc. 1996 Employee Stock Option Plan Non-Incentive
Stock Option Agreement. (Filed as Exhibit 10.74 to November Form S-1
and incorporated herein by reference).
10.75 Option Agreement dated April 27, 1995 between Fronteer Directory
Company, Inc. and Telecom*USA Publishing Company. (Filed as Exhibit
10.75 to November Form S-1 and incorporated herein by reference).
10.76 Promissory Note dated May 5, 1995 between Telecom*USA Publishing
Company and Fronteer Directory Company, Inc. (Filed as Exhibit 10.76
to November Form S-1 and incorporated herein by reference).
10.77 Security Agreement dated May 5, 1995 between Telecom*USA Publishing
Company and Fronteer Directory Company, Inc. (Filed as Exhibit 10.77
to November Form S-1 and incorporated herein by reference).
</TABLE>
7
<PAGE>
<TABLE>
<CAPTION>
EXHIBIT
NUMBER EXHIBIT DESCRIPTION
------- -------------------
<C> <S>
10.78 Design/Build Construction Contract dated September 17, 1996 between
Ryan Construction Company of Minnesota, Inc. and McLeod, Inc. (Filed
as Exhibit 10.78 to November Form S-1 and incorporated herein by
reference).
10.79 Guaranty Agreement dated as of October 17, 1996 by McLeod, Inc. in
favor of Kirkwood Community College. (Filed as Exhibit 10.79 to
November Form S-1 and incorporated herein by reference).
10.80 Industrial New Jobs Training Agreement dated as of October 31, 1996
between Kirkwood Community College and McLeod Telemanagement, Inc.
(Filed as Exhibit 10.80 to November Form S-1 and incorporated herein
by reference).
10.81 Industrial New Jobs Training Agreement dated as of October 31, 1996
between Kirkwood Community College and McLeod Telecommunications, Inc.
(Filed as Exhibit 10.81 to November Form S-1 and incorporated herein
by reference).
10.82 Industrial New Jobs Training Agreement dated as of October 31, 1996
between Kirkwood Community College and McLeod Network Services, Inc.
(Filed as Exhibit 10.82 to November Form S-1 and incorporated herein
by reference).
10.83 Industrial New Jobs Training Agreement dated as of October 31, 1996
between Kirkwood Community College and McLeod, Inc. (Filed as Exhibit
10.83 to November Form S-1 and incorporated herein by reference).
10.84 Change Order No. 1 to the Construction Services Agreement dated
November 22, 1995 by and between MWR TeIecom, Inc. and MFS Network
Technologies, Inc. (Filed as Exhibit 10.84 to November Form S-1 and
incorporated herein by reference).
10.85 Change Order No. 2 to the Construction Services Agreement dated August
14, 1996 between MWR Telecom, Inc. and MFS Network Technologies, Inc.
(Filed as Exhibit 10.85 to November Form S-1 and incorporated herein
by reference).
10.86 Change Order No. 3 to the Construction Services Agreement dated
October 31, 1996 between MWR Telecom, Inc. and MFS Network
Technologies, Inc. (Filed as Exhibit 10.86 to November Form S-1 and
incorporated herein by reference).
10.87 Independent Contractor Sales Agreement dated May, 1995 between Sprint
Communications Company L.P. and Ruffalo, Cody & Associates, Inc.
(Filed as Exhibit 10.87 to November Form S-1 and incorporated herein
by reference).
10.88 Second Amendment to Asset Purchase Agreement dated October 31, 1996
between Total Communication Services, Inc. and McLeod Telemanagement,
Inc. (Filed as Exhibit 10.88 to November Form S-1 and incorporated
herein by reference).
10.89 Escrow Agreement dated July 15, 1996 among McLeod, Inc., certain
shareholders of Ruffalo, Cody & Associates, Inc., Albert P. Ruffalo
and Norwest Bank N.A. (Filed as Exhibit 10.89 to November Form S-1 and
incorporated herein by reference).
10.90 Sale and Purchase Agreement dated January 27, 1997 among McLeodUSA
Publishing Company, Fronteer Financial Holdings, Ltd., Classified
Directories, Inc., Larry A. Scott, James Greff, Randall L. Gowin and
Edwin Dressler and certain directors, officers and shareholders of
Fronteer Financial Holdings, Ltd. (Filed as Exhibit 10.90 to Annual
Report on Form 10-K, File No. 0-20763, filed with the Commission on
March 31, 1997 and incorporated herein by reference).
</TABLE>
8
<PAGE>
<TABLE>
<CAPTION>
EXHIBIT
NUMBER EXHIBIT DESCRIPTION
------- -------------------
<C> <S>
10.91 Sale and Purchase Agreement dated February 27, 1997 among McLeodUSA
Publishing Company, Indiana Directories, Inc., John Morgan, Hank
Meijer, Jack Hendricks, Brad Nelson and Talking Directories, Inc.
(Filed as Exhibit 10.91 to Annual Report on Form 10-K, File No. 0-
20763, filed with the Commission on March 31, 1997 and incorporated
herein by reference).
10.92 Amendment to Sale and Purchase Agreement dated February 28, 1997
between McLeodUSA Publishing Company and Indiana Directories, Inc.
(Filed as Exhibit 10.92 to Annual Report on Form 10-K, File No. 0-
20763, filed with the Commission on March 31, 1997 and incorporated
herein by reference).
10.93 Ameritech Centrex Service Confirmation of Service Orders dated August
21, 1996 between McLeod Telemanagement, Inc. and Ameritech Information
Industry Services. (Filed as Exhibit 10.93 to Annual Report on Form
10-K, File No. 0-20763, filed with the Commission on March 31, 1997
and incorporated herein by reference).
+10.94 Amended and Restated Program Enrollment Terms dated November 1, 1996
between WorldCom Network Services, Inc. d/b/a WilTel and McLeod
Telemanagement, Inc. (Filed as Exhibit 10.94 to Annual Report on Form
10-K/A, File No. 0-20763, filed with the Commission on April 8, 1997
and incorporated herein by reference).
10.95 Letter Agreement dated April 15, 1997 between U S WEST Communications
and McLeodUSA Network Services, Inc. (Filed as Exhibit 10.1 to
Quarterly Report on
Form 10-Q, File No. 0-20763, filed with the Commission on May 14, 1997
and incorporated herein by reference).
*10.96 Network Agreement dated April 7, 1997, between Wisconsin Power and
Light Company and McLeodUSA Telecommunications Services, Inc.
*10.97 Agreement dated July 7, 1997 between McLeodUSA Telecommunications
Services, Inc. and U S WEST Communications, Inc.
*11.1 Statement regarding Computation of Per Share Earnings.
*16.1 Letter regarding Change in Certifying Accountant.
21.1 Subsidiaries of McLeod, Inc. (Filed as Exhibit 21.1 to Annual Report
on Form 10-K, File No. 0-20763, filed with the Commission on March 31,
1997 and incorporated herein by reference).
*23.1 Consents of McGladrey & Pullen, LLP.
23.2 Consent of Hogan & Hartson L.L.P. (included in Exhibit 5.1).
*23.3 Consent of Arthur Andersen LLP.
24.1 Power of attorney (included on signature page).
*24.2 Statement on Form T-1 of Eligibility of Trustee.
27.1 Financial Data Schedule. (Filed as Exhibit 27.1 to Quarterly Report on
Form 10-Q, File No. 0-20763, filed with the Commission on May 14, 1997
and incorporated herein by reference).
99.1 Purchase Agreement dated as of August 15, 1996 between Iowa Land and
Building Company and Ryan Properties, Inc. (Filed as Exhibit 99.1 to
November Form S-1 and incorporated herein by reference).
99.2 Purchase Agreement dated as of June 28, 1996 between Donald E. Zvacek,
Dennis E. Zvacek and Robert J. Zvacek and Ryan Properties, Inc. (Filed
as Exhibit 99.2 to November Form S-1 and incorporated herein by
reference).
</TABLE>
9
<PAGE>
<TABLE>
<CAPTION>
EXHIBIT
NUMBER EXHIBIT DESCRIPTION
------- -------------------
<C> <S>
*99.3 Form of Letter of Transmittal.
*99.4 Form of Notice of Guaranteed Delivery.
*99.5 Form of Letter to Brokers, Dealers, Commercial Banks, Trust Companies
and other Nominees.
*99.6 Form of Letter to Clients.
</TABLE>
- --------
* Previously filed.
+ Confidential treatment has been granted. The copy filed as an exhibit omits
the information subject to the confidential treatment request.
10
<PAGE>
Exhibit 4.9
===============================================================================
McLeodUSA Incorporated
$225,000,000
9-1/4% SENIOR NOTES DUE 2007
----------------
INDENTURE
Dated as of July 21, 1997
----------------
United States Trust Company of New York,
Trustee
===============================================================================
<PAGE>
CROSS-REFERENCE TABLE
Reconciliation and tie between the Trust Indenture Act of 1939, as amended, and
the Indenture, dated as of July 21, 1997
<TABLE>
<CAPTION>
Trust
Indenture
Act Indenture
Section Section
- --------- ---------
<S> <C>
(S)310(a)(1).......................................................... 7.10
(a)(2)....................................................... 7.10
(a)(3)....................................................... N.A.
(a)(4)....................................................... N.A.
(a)(5)....................................................... 7.10
(b).....................................................7.08; 7.10
(c).......................................................... N.A.
(S)311(a)............................................................. 7.11
(b).......................................................... 7.11
(c).......................................................... N.A.
(S)312(a)..................................................7.06(a); 7.06(b)
(b)....................................................... 7.06(c)
(c)....................................................... 7.06(d)
(S)313(a).......................................................... 7.06(e)
(b).......................................................... N.A.
(c)...............................................7.06(e); 7.06(f)
(d).......................................................... 7.06
(S)314(a)....................................................... 4.19; 4.20
(b).......................................................... N.A.
(c)(1).......................................................10.03
(c)(2).......................................................10.03
(c)(3)....................................................... N.A.
(d).......................................................... N.A.
(e)..........................................................10.04
(f).......................................................... 4.20
(S)315(a)...........................................................7.01(b)
(b)........................................................7.05(a)
(c)....................................................... 7.01(a)
(d)....................................................... 7.01(c)
(e).......................................................... 6.10
(S)316(a)............................................................. 2.10
(a)(1)(A).................................................... 6.05
(a)(1)(B).................................................... 6.04
(a)(2)....................................................... N.A.
(b).......................................................... 6.07
(c).......................................................... 9.05
(S)317(a)(1)N.A.
(a)(2)....................................................... 6.08
(b).......................................................... 2.07
(S)318(a).............................................................10.01
</TABLE>
Note: This reconciliation and tie shall not, for any purpose, be deemed to be
part of the Indenture.
<PAGE>
TABLE OF CONTENTS
ARTICLE I.
DEFINITIONS AND OTHER PROVISIONS
OF GENERAL APPLICATION
<TABLE>
<CAPTION> Page
----
<S> <C> <C>
SECTION 1.01. Definitions............................................. 1
SECTION 1.02. Incorporation by Reference of Trust Indenture Act....... 23
SECTION 1.03. Rules of Construction................................... 23
SECTION 1.04. Form of Documents Delivered to Trustee.................. 24
SECTION 1.05. Acts of Holders......................................... 24
SECTION 1.06. Satisfaction and Discharge.............................. 25
ARTICLE II.
THE NOTES
SECTION 2.01. Form and Dating......................................... 26
SECTION 2.02. Form of Face of Note.................................... 27
SECTION 2.03. Form of Reverse of Note................................. 31
SECTION 2.04. Form of Trustee's Certificate of Authentication......... 38
SECTION 2.06. Note Registrar and Paying Agent......................... 39
SECTION 2.07. Paying Agent to Hold Money in Trust..................... 40
SECTION 2.08. Registration, Registration of Transfer and Exchange..... 40
SECTION 2.09. Replacement Notes....................................... 46
SECTION 2.10. Outstanding Notes....................................... 47
SECTION 2.11. Temporary Notes......................................... 48
SECTION 2.12. Cancellation............................................ 48
SECTION 2.13. Payment of Interest; Interest Rights Preserved.......... 48
SECTION 2.14. Authorized Denominations................................ 49
SECTION 2.15. Computation of Interest................................. 49
SECTION 2.16. Persons Deemed Owners................................... 49
SECTION 2.17. CUSIP Numbers........................................... 50
SECTION 2.18. Holder Lists............................................ 50
ARTICLE III.
REDEMPTION
SECTION 3.01. Notice to Trustee....................................... 50
SECTION 3.02. Selection of Notes to be Redeemed....................... 50
SECTION 3.03. Notice of Redemption.................................... 51
SECTION 3.04. Effect of Notice of Redemption.......................... 52
SECTION 3.05. Deposit of Redemption Price............................. 52
SECTION 3.06. Notes Redeemed in Part.................................. 52
</TABLE>
i
<PAGE>
ARTICLE IV.
COVENANTS
<TABLE>
<S> <C> <C>
SECTION 4.01. Payment of Notes........................................ 52
SECTION 4.02. Maintenance of Office or Agency......................... 53
SECTION 4.03. Money for the Note Payments to be Held in Trust......... 53
SECTION 4.04. Corporate Existence..................................... 54
SECTION 4.05. Maintenance of Property................................. 54
SECTION 4.06. Payment of Taxes and Other Claims....................... 54
SECTION 4.07. Repurchase at the Option of Holders upon a Change of
Control................................................. 54
SECTION 4.08. Repurchase at the Option of Holders upon Failure to
Consummate the CCI Transaction.......................... 56
SECTION 4.09. Limitation on Asset Sales............................... 59
SECTION 4.10. Limitation on Consolidated Indebtedness................. 62
SECTION 4.11. Limitation on Indebtedness and Preferred Stock of
Restricted Subsidiaries................................. 65
SECTION 4.12. Limitation on Restricted Payments....................... 66
SECTION 4.13 Limitation on Liens..................................... 69
SECTION 4.14. Limitation on Sale and Leaseback Transactions........... 70
SECTION 4.15. Limitation on Dividends and Other Payment Restrictions
Affecting Subsidiaries.................................. 71
SECTION 4.16. Limitation on Issuance and Sale of Capital
Stock of Restricted Subsidiaries........................ 72
SECTION 4.17. Transactions with Affiliates............................ 73
SECTION 4.18. Restricted and Unrestricted Subsidiaries................ 74
SECTION 4.19. Reports................................................. 75
SECTION 4.20. Compliance Certificate; Notice of Default or Event
of Default.............................................. 75
ARTICLE V.
CONSOLIDATION, MERGER, CONVEYANCE, LEASE OR TRANSFER
SECTION 5.01. Merger, Consolidation or Sale of Assets................. 75
SECTION 5.02. Successor Corporation Substituted....................... 77
ARTICLE VI.
DEFAULTS AND REMEDIES
SECTION 6.01. Events of Default....................................... 77
SECTION 6.02. Acceleration............................................ 79
SECTION 6.03. Other Remedies.......................................... 80
SECTION 6.04. Waiver of Past Defaults................................. 81
SECTION 6.05. Control by Majority..................................... 81
SECTION 6.06. Limitation on Suits..................................... 81
</TABLE>
ii
<PAGE>
<TABLE>
<S> <C> <C>
SECTION 6.07. Rights of Holders to Receive Payment.................... 82
SECTION 6.08. Trustee May File Proofs of Claim........................ 82
SECTION 6.09. Priorities.............................................. 83
SECTION 6.10. Undertaking for Costs................................... 83
SECTION 6.11. Waiver of Stay or Extension Laws........................ 84
SECTION 6.12. Trustee May Enforce Claims Without Possession of
the Notes............................................... 84
SECTION 6.13. Restoration of Rights and Remedies...................... 84
SECTION 6.14. Rights and Remedies Cumulative.......................... 84
SECTION 6.15. Delay or Omission Not Waiver............................ 85
ARTICLE VII.
TRUSTEE
SECTION 7.01. Duties of Trustee....................................... 85
SECTION 7.02. Rights of Trustee....................................... 86
SECTION 7.03. Individual Rights of Trustee............................ 87
SECTION 7.04. Trustee's Disclaimer.................................... 87
SECTION 7.05. Notice of Defaults...................................... 87
SECTION 7.06. Preservation of Information; Reports by Trustee
to Holders.............................................. 87
SECTION 7.07. Compensation and Indemnity.............................. 88
SECTION 7.08. Replacement of Trustee.................................. 89
SECTION 7.09. Successor Trustee by Merger............................. 91
SECTION 7.10. Eligibility; Disqualification........................... 92
SECTION 7.11. Preferential Collection of Claims Against Company....... 92
ARTICLE VIII.
DEFEASANCE
SECTION 8.01. Company's Option to Effect Legal Defeasance or
Covenant Defeasance..................................... 93
SECTION 8.02. Legal Defeasance and Discharge.......................... 93
SECTION 8.03. Covenant Defeasance..................................... 93
SECTION 8.04. Conditions to Defeasance or Covenant Defeasance......... 94
SECTION 8.05. Deposited Money and U.S. Government Obligations to be
Held in Trust; Miscellaneous Provisions................. 95
ARTICLE IX.
AMENDMENTS
SECTION 9.01. Without Consent of Holders.............................. 96
SECTION 9.02. With Consent of Holders................................. 97
SECTION 9.03. Effect of Supplemental Indentures....................... 98
SECTION 9.04. Compliance with Trust Indenture Act..................... 98
SECTION 9.05. Revocation and Effect of Consents and Waivers........... 98
</TABLE>
iii
<PAGE>
<TABLE>
<S> <C> <C>
SECTION 9.06. Notation on or Exchange of Notes........................ 99
SECTION 9.07. Trustee to Execute Supplemental Indentures.............. 99
ARTICLE X.
MISCELLANEOUS
SECTION 10.01. Trust Indenture Act Controls........................... 99
SECTION 10.02. Notices................................................ 99
SECTION 10.03. Certificate and Opinion as to Conditions Precedent..... 100
SECTION 10.04. Statements Required in Certificate or Opinion.......... 100
SECTION 10.05. Rules by Trustee, Paying Agent and Note Registrar...... 100
SECTION 10.06. Payments on Business Days.............................. 100
SECTION 10.07. Governing Law.......................................... 100
SECTION 10.08. No Recourse Against Others............................. 101
SECTION 10.09. Successors............................................. 101
SECTION 10.10. Counterparts........................................... 101
SECTION 10.11. Table of Contents; Headings............................ 101
SECTION 10.12. Severability........................................... 101
SECTION 10.13. Further Instruments and Acts........................... 101
</TABLE>
ANNEX A FORM OF REGULATION S CERTIFICATE
ANNEX B FORM OF RESTRICTED SECURITIES CERTIFICATE
ANNEX C FORM OF UNRESTRICTED SECURITIES CERTIFICATE
iv
<PAGE>
INDENTURE, dated as of July 21, 1997, between MCLEODUSA INCORPORATED, a
Delaware corporation (the "Company"), having its principal office at 6400 C
Street, S.W., Cedar Rapids, Iowa 52406, and UNITED STATES TRUST COMPANY OF NEW
YORK, a bank and trust company organized under the New York banking law, as
trustee hereunder (the "Trustee"), having its Corporate Trust Office at 114 West
47th Street, New York, New York 10031.
RECITALS OF THE COMPANY
The Company has duly authorized the creation and issue of its 9-1/4% Senior
Notes Due 2007 (the "Notes") of substantially the tenor and amount hereinafter
set forth, and to provide therefor the Company has duly authorized the execution
and delivery of this Indenture.
All things necessary to make the Notes, when executed by the Company and
authenticated and delivered by the Trustee hereunder and duly issued by the
Company, the valid obligations of the Company, and to make this Indenture a
valid instrument of the Company, in accordance with their respective terms, have
been done.
NOW, THEREFORE, THIS INDENTURE WITNESSETH, that, for and in consideration of
the premises and the purchase of the Original Notes by the Holders thereof, it
is mutually covenanted and agreed, for the equal and proportionate benefit of
all Holders of the Notes, as follows:
ARTICLE I.
DEFINITIONS AND OTHER PROVISIONS OF GENERAL APPLICATION
SECTION 1.01. Definitions. For all purposes of this Indenture, except as
-----------
otherwise expressly provided or unless the context otherwise requires:
(a) the terms defined in this Article have the meanings assigned to them
in this Article, and include the plural as well as the singular; and
(b) all accounting terms not otherwise defined herein have the meanings
assigned to them in accordance with GAAP.
"Acquired Indebtedness" means, with respect to any specified Person,
---------------------
Indebtedness of any other Person existing at the time such other Person merged
with or into or became a Subsidiary of such specified Person; provided that such
Indebtedness was not incurred in connection with, or in anticipation or
contemplation of, such other Person merging with or into or becoming a
Subsidiary of such specified Person, but excluding Indebtedness which is
extinguished, retired or repaid in connection with such other Person merging
with or into or becoming a Subsidiary of such specified Person.
<PAGE>
"Act" when used with respect to any Holder, has the meaning set forth in
---
Section 1.05 hereof.
"Affiliate" means, as to any Person, any other Person which directly or
---------
indirectly controls, or is under common control with, or is controlled by, such
Person; provided that each Unrestricted Subsidiary shall be deemed to be an
Affiliate of the Company and of each other Subsidiary of the Company; provided,
further, that neither the Company nor any of its Restricted Subsidiaries shall
be deemed to be Affiliates of each other. For purposes of this definition,
"control" (including, with correlative meanings, the terms "controlling," "under
common control with" and "controlled by"), as used with respect to any Person,
shall mean the possession, directly or indirectly, of the power to direct or
cause the direction of the management or policies of such Person, whether
through the ownership of Voting Stock, by agreement or otherwise.
"Affiliate Transaction" has the meaning set forth in Section 4.17 hereof.
---------------------
"Agent Member" means any member of, or participant in, the Depositary.
------------
"Applicable Procedures" means, with respect to any transfer or transaction
---------------------
involving a Global Security or beneficial interest therein, the rules and
procedures of the Depositary for such Note, Euroclear and Cedel, in each case to
the extent applicable to such transaction and as in effect from time to time.
"Asset Sale" by any Person means any transfer, conveyance, sale, lease or
----------
other disposition by such Person or any of its Restricted Subsidiaries
(including a consolidation or merger or other sale of any such Restricted
Subsidiary with, into or to another Person in a transaction in which such
Restricted Subsidiary ceases to be a Restricted Subsidiary of the specified
Person, but excluding a disposition by a Restricted Subsidiary of such Person to
such Person or a Wholly-Owned Restricted Subsidiary of such Person or by such
Person to a Wholly-Owned Restricted Subsidiary of such Person) of (i) shares of
Capital Stock or other ownership interests of a Restricted Subsidiary of such
Person (other than as permitted by the provisions of Section 4.11 hereof), (ii)
substantially all of the assets of such Person or any of its Restricted
Subsidiaries representing a division or line of business (other than as part of
a Permitted Investment) or (iii) other assets or rights of such Person or any of
its Restricted Subsidiaries outside of the ordinary course of business and, in
each case, that is not governed by Article V hereof; provided that "Asset Sale"
shall not include (i) sales or other dispositions of inventory, receivables and
other current assets in the ordinary course of business, (ii) simultaneous
exchanges by the Company or any Restricted Subsidiary of Telecommunications
Assets for other Telecommunications Assets in the ordinary course of business;
provided that the applicable Telecommunications Assets received by the Company
or such Restricted Subsidiary have at least substantially equal Fair Market
Value to the Company or such Restricted Subsidiary (as determined by the Board
of Directors whose good faith determination shall be conclusive and evidenced by
a Board Resolution), and (iii) sales
2
<PAGE>
or other dispositions of assets with a Fair Market Value (as certified in an
Officers' Certificate) not in excess of $1 million.
"Asset Sale Offer" has the meaning set forth in Section 4.09(c) hereof.
----------------
"Asset Sale Payment Date" has the meaning set forth in Section 4.09(d)(ii)
-----------------------
hereof.
"Asset Sale Purchase Price" has the meaning set forth in Section 4.09(c)
-------------------------
hereof.
"Attributable Indebtedness" means, with respect to any Sale and Leaseback
-------------------------
Transaction of any Person, as at the time of determination, the greater of (i)
the capitalized amount in respect of such transaction that would appear on the
balance sheet of such Person in accordance with GAAP and (ii) the present value
(discounted at a rate consistent with accounting guidelines, as determined in
good faith by the responsible accounting officer of such Person) of the payments
during the remaining term of the lease (including any period for which such
lease has been extended or may, at the option of the lessor, be extended) or
until the earliest date on which the lessee may terminate such lease without
penalty or upon payment of a penalty (in which case the rental payments shall
include such penalty).
"Average Life" means, as of any date, with respect to any debt security or
------------
Disqualified Stock, the quotient obtained by dividing (i) the sum of the
products of (x) the number of years from such date to the dates of each
scheduled principal payment or redemption payment (including any sinking fund or
mandatory redemption payment requirements) of such debt security or Disqualified
Stock multiplied in each case by (y) the amount of such principal or redemption
payment, by (ii) the sum of all such principal or redemption payments.
"Board of Directors" means the Board of Directors of the Company or any
------------------
committee thereof duly authorized to act on behalf of the Board of Directors.
"Board Resolution" means a duly adopted resolution of the Board of Directors
----------------
in full force and effect at the time of determination.
"Business Day" means each Monday, Tuesday, Wednesday, Thursday and Friday
------------
that is not a day on which banking institutions in The City of New York are
authorized or obligated by law, executive order or regulation to close.
"CCI" means Consolidated Communications Inc., an Illinois corporation.
---
"CCI Transaction" means the transaction contemplated by that certain
---------------
Agreement and Plan of Reorganization, dated as of June 14, 1997 by and among the
Company, Eastside Acquisition Co., a wholly-owned subsidiary of the Company, and
CCI, pursuant to which the Company agreed, subject to certain conditions, to
acquire CCI for an aggregate of 8,448,613 shares of Class A Common Stock and
$155 million in cash.
3
<PAGE>
"CCI Transaction Purchase Price" has the meaning set forth in Section
------------------------------
4.08(a) hereof.
"CCI Transaction Put Option" has the meaning set forth in Section 4.08(a)
--------------------------
hereof.
"CCI Transaction Put Option Exercise Date" has the meaning set forth in
----------------------------------------
Section 4.08(b) hereof.
"CCI Transaction Put Option Offer" has the meaning set forth in Section
--------------------------------
4.08(a) hereof.
"Capital Lease Obligation" of any Person means the obligation to pay rent or
------------------------
other payment amounts under a lease of (or other Indebtedness arrangement
conveying the right to use) real or personal property of such Person which is
required to be classified and accounted for as a capital lease or a liability on
the face of a balance sheet of such Person prepared in accordance with GAAP, and
the stated maturity thereof shall be the date of the last payment of rent or any
amount due under such lease prior to the first date upon which such lease may be
terminated by the lessee without payment of a penalty.
"Capital Stock" in any Person means any and all shares, interests,
-------------
participations or other equivalents in the equity interest (however designated)
in such Person and any rights (other than Indebtedness convertible into an
equity interest), warrants or options to subscribe for or acquire an equity
interest in such Person.
"Cash Proceeds" means, with respect to any Asset Sale or issuance or sale of
-------------
Capital Stock by any Person, the aggregate consideration received in respect of
such sale or issuance by such Person in the form of cash and Eligible Cash
Equivalents.
"Cedel" means Cedel Bank, S.A. (or any successor securities clearing
-----
agency).
"Change of Control shall be deemed to occur if (i) the sale, conveyance,
-----------------
transfer or lease of all or substantially all of the assets of the Company to
any "Person" or "group" (within the meaning of Sections 13(d)(3) and 14(d)(2) of
the Exchange Act or any successor provision to either of the foregoing,
including any group acting for the purpose of acquiring, holding or disposing of
securities within the meaning of Rule 13d-5(b)(i) under the Exchange Act), other
than any Permitted Holder or any Restricted Subsidiary of the Company, shall
have occurred; or (ii) any "Person" or "group" (within the meaning of Sections
13(d)(3) and 14(d)(2) of the Exchange Act or any successor provision to either
of the foregoing, including any group acting for the purpose of acquiring,
holding or disposing of securities within the meaning of Rule 13d-5(b)(i) under
the Exchange Act), other than any Permitted Holder, becomes the "beneficial
owner" (as defined in Rule 13d-3 under the Exchange Act) of more than 35 percent
of the total voting power of all classes of the Voting Stock of the Company
(including any warrants, options or rights to acquire such Voting Stock),
calculated on a fully diluted basis, and such voting power percentage is greater
than or equal to the total voting power percentage then beneficially owned by
the Permitted Holders in the aggregate; or (iii)
4
<PAGE>
during any period of two consecutive years, individuals who at the beginning of
such period constituted the Board of Directors (together with any directors
whose election or appointment by the Board of Directors or whose nomination for
election by the stockholders of the Company was approved by a vote of a majority
of the directors then still in office who were either directors at the beginning
of such period or whose election or nomination for election was previously so
approved) cease for any reason to constitute a majority of the Board of
Directors then in office.
"Change of Control Offer" has the meaning set forth in Section 4.07(a)
-----------------------
hereof.
"Change of Control Payment Date" has the meaning set forth in Section
------------------------------
4.07(b)(ii) hereof.
"Change of Control Purchase Price" has the meaning set forth in Section
--------------------------------
4.07(a) hereof.
"clearing agency" has the meaning set forth in Section 3(a)(23) of the
---------------
Exchange Act.
"Code" means the Internal Revenue Code of 1986, as amended.
----
"Commission" means the United States Securities and Exchange Commission, as
----------
from time to time constituted, created under the Exchange Act, or, if at any
time after the execution of this Indenture such commission is not existing and
performing the duties now assigned to it under the Trust Indenture Act, the body
performing such duties at such time.
"Common Stock" means Capital Stock other than Preferred Stock.
------------
"Company" means the party named as such in the preamble to this Indenture
-------
until a successor replaces it pursuant to the applicable provisions hereof and,
thereafter, means such successor.
"Company Order" means a written order signed in the name of the Company by
-------------
(i) its Chairman of the Board, President, a Vice Chairman or a Vice President,
and (ii) its Treasurer, an Assistant Treasurer, its Secretary or an Assistant
Secretary.
"Consolidated Capital Ratio" of any Person as of any date means the ratio of
--------------------------
(i) the aggregate consolidated principal amount of Indebtedness of such Person
then outstanding to (ii) the aggregate consolidated paid-in capital of such
Person as of such date.
"Consolidated Cash Flow Available for Fixed Charges" for any period means
--------------------------------------------------
the Consolidated Net Income of the Company and its Restricted Subsidiaries for
such period increased by the sum of (i) Consolidated Interest Expense of the
Company and its Restricted Subsidiaries for such period, plus (ii) Consolidated
Income Tax Expense of the Company and its Restricted Subsidiaries for such
period, plus (iii) the consolidated depreciation and
5
<PAGE>
amortization expense included in the income statement of the Company and its
Restricted Subsidiaries for such period, plus (iv) any non-cash expense related
to the issuance to employees of the Company or any Restricted Subsidiary of the
Company of options to purchase Capital Stock of the Company or such Restricted
Subsidiary, plus (v) any charge related to any premium or penalty paid in
connection with redeeming or retiring any Indebtedness prior to its stated
maturity; and plus (vi) any non-cash expense related to a purchase accounting
adjustment not requiring an accrual or reserve and separately disclosed in the
Company's Consolidated Income Statement, and decreased by the amount of any non-
cash item that increases such Consolidated Net Income, all as determined on a
consolidated basis in accordance with GAAP; provided that there shall be
excluded therefrom the Consolidated Cash Flow Available for Fixed Charges (if
positive) of any Restricted Subsidiary of the Company (calculated separately for
such Restricted Subsidiary in the same manner as provided above for the Company)
that is subject to a restriction which prevents the payment of dividends or the
making of distributions to the Company or another Restricted Subsidiary of the
Company to the extent of such restriction.
"Consolidated Income Tax Expense" for any period means the aggregate amounts
-------------------------------
of the provisions for income taxes of the Company and its Restricted
Subsidiaries for such period calculated on a consolidated basis in accordance
with GAAP.
"Consolidated Interest Expense" means for any period the interest expense
-----------------------------
included in a consolidated income statement (excluding interest income) of the
Company and its Restricted Subsidiaries for such period in accordance with GAAP,
including without limitation or duplication (or, to the extent not so included,
with the addition of), (i) the amortization of Indebtedness discount; (ii) any
payments or fees with respect to letters of credit, bankers' acceptances or
similar facilities; (iii) fees with respect to interest rate swap or similar
agreements or foreign currency hedge, exchange or similar agreements; (iv)
Preferred Stock dividends of the Company and its Restricted Subsidiaries (other
than dividends paid in shares of Preferred Stock that is not Disqualified Stock)
declared and paid or payable; (v) accrued Disqualified Stock dividends of the
Company and its Restricted Subsidiaries, whether or not declared or paid; (vi)
interest on Indebtedness guaranteed by the Company and its Restricted
Subsidiaries; and (vii) the portion of any Capital Lease Obligation paid during
such period that is allocable to interest expense in accordance with GAAP.
"Consolidated Net Income" of any Person means, for any period, the aggregate
-----------------------
net income (or net loss) of such Person and its Restricted Subsidiaries for such
period on a consolidated basis determined in accordance with GAAP; provided that
there shall be excluded therefrom, without duplication (i) all items classified
as extraordinary, (ii) any net income (or net loss) of any Person other than
such Person and its Restricted Subsidiaries, except to the extent of the amount
of dividends or other distributions actually paid to such Person or its
Restricted Subsidiaries by such other Person during such period, (iii) the net
income of any Person acquired by such Person or any of its Restricted
Subsidiaries in a pooling-of-interests transaction for any period prior to the
date of the related acquisition, (iv)
6
<PAGE>
any gain or loss, net of taxes, realized on the termination of any employee
pension benefit plan, (v) net gains (or net losses) in respect of Asset Sales by
such Person or its Restricted Subsidiaries, (vi) the net income (or net loss) of
any Restricted Subsidiary of such Person to the extent that the payment of
dividends or other distributions to such Person is restricted by the terms of
its charter or any agreement, instrument, contract, judgment, order, decree,
statute, rule, governmental regulation or otherwise, except for any dividends or
distributions actually paid by such Restricted Subsidiary to such Person, (vii)
with regard to a non-wholly owned Restricted Subsidiary, any aggregate net
income (or loss) in excess of such Person's or such Restricted Subsidiary's pro
rata share of such non-wholly owned Restricted Subsidiary's net income (or loss)
and (viii) the cumulative effect of changes in accounting principles.
"Consolidated Net Worth" of any Person means, at any date of determination,
----------------------
the consolidated stockholders' equity or partners' capital (excluding
Disqualified Stock) of such Person and its subsidiaries, as determined in
accordance with GAAP.
"Consolidated Tangible Assets" of any Person means the total amount of
----------------------------
assets (less applicable reserves and other properly deductible items) which
under GAAP would be included on a consolidated balance sheet of such Person and
its Subsidiaries after deducting therefrom all goodwill, trade names,
trademarks, patents, unamortized debt discount and expense and other like
intangibles, which in each case under GAAP would be included on such
consolidated balance sheet.
"Corporate Trust Office" means the principal office of the Trustee in the
----------------------
Borough of Manhattan, The City of New York, New York which at any particular
time its corporate trust business shall be principally administered, which at
the date hereof is located at 114 West 47th Street, New York, New York 10031.
"Covenant Defeasance" has the meaning set forth in Section 8.03 hereof.
-------------------
"Default" means any event, act or condition, the occurrence of which is, or
-------
after notice or the passage of time or both would be, an Event of Default.
"Default Amount" means an amount equal to one hundred percent (100%) of the
--------------
originally issued principal amount of the Notes.
"Defaulted Interest" has the meaning set forth in Section 2.13 hereof.
------------------
"Defeasance" has the meaning set forth in Section 8.02 hereof.
----------
"Depositary" means, with respect to the Notes issuable or issued in whole or
----------
in part in the form of one or more Global Securities, The Depository Trust
Company for so long as it shall be a clearing agency registered under the
Exchange Act, or such successor as the
7
<PAGE>
Company shall designate from time to time in an Officers' Certificate delivered
to the Trustee.
"Disqualified 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, or otherwise, matures or is
mandatorily redeemable, pursuant to a sinking fund obligation or otherwise, or
is redeemable at the option of the holder thereof, or is exchangeable for
Indebtedness at any time, in whole or in part, on or prior to the Stated
Maturity of the Notes.
"Eligible Cash Equivalents" means (i) securities 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; (ii) time deposits and
certificates of deposit of any commercial bank organized in the United States
having capital and surplus in excess of $500,000,000 with a maturity date not
more than one year from the date of acquisition; (iii) repurchase obligations
with a term of not more than seven days for underlying securities of the types
described in clause (i) above entered into with any bank meeting the
qualifications specified in clause (ii) above; (iv) direct obligations issued by
any state of the United States of America or any political subdivision of any
such state or any public instrumentality thereof maturing, or subject to tender
at the option of the holder thereof within 270 calendar days after the date of
acquisition thereof and, at the time of acquisition, having a rating of A or
better from Standard & Poor's or A-2 or better from Moody's; (v) commercial
paper issued by the parent corporation of any commercial bank organized in the
United States having capital and surplus in excess of $500,000,000 and
commercial paper issued by others having one of the two highest ratings
obtainable from either Standard & Poor's or Moody's and in each case maturing
within 270 calendar days after the date of acquisition; (vi) overnight bank
deposits and bankers' acceptances at any commercial bank organized in the United
States having capital and surplus in excess of $500,000,000; (vii) deposits
available for withdrawal on demand with a commercial bank organized in the
United States having capital and surplus in excess of $500,000,000; and (viii)
investments in money market funds substantially all of whose assets comprise
securities of the types described in clauses (i) through (vi).
"Euroclear" means the Euroclear Clearance System (or any successor
---------
securities clearing agency).
"Event of Default" has the meaning set forth in Section 6.01 hereof.
----------------
"Excess Proceeds" has the meaning set forth in Section 4.09(b) hereof.
---------------
"Exchange Act" means the Securities Exchange Act of 1934, as amended, and
------------
the rules and regulations promulgated thereunder.
8
<PAGE>
"Exchange Note" means any Note issued in exchange for an Original Note or
-------------
Original Notes pursuant to the Registered Exchange Offer or otherwise registered
under the Securities Act and any Note with respect to which the next preceding
Predecessor Note of such Note was an Exchange Note.
"Exchange Offer Registration Statement" has the meaning set forth in the
-------------------------------------
form of the Notes contained in Section 2.02.
"Existing Indebtedness" means Indebtedness outstanding on the date of this
---------------------
Indenture (other than under the Senior Credit Facility).
"Fair Market Value" means, with respect to any asset or Property, the sale
-----------------
value that would be obtained in an arm's-length transaction between an informed
and willing seller under no compulsion to sell and an informed and willing buyer
under no compulsion to buy, as determined in good faith by the Board of
Directors.
"GAAP" means United States generally accepted accounting principles,
----
consistently applied, as 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, that are applicable to the circumstances as of the date of
determination; provided that, except as otherwise specifically provided herein,
--------
all calculations made for purposes of determining compliance with Article IV or
Section 5.01 hereof shall utilize GAAP as in effect on the Issue Date.
"Global Security" or "Global Securities" means the Note or Notes that
--------------- -----------------
evidences all or part of the Notes and bears the legend set forth in Section
2.02.
"Guarantee" means any direct or indirect obligation, contingent or
---------
otherwise, of a Person guaranteeing or having the economic effect of
guaranteeing any Indebtedness of any other Person in any manner. The terms
"Guaranteed," "Guaranteeing" and "Guarantor" shall have correlative meanings.
"Holder" means (i) in the case of any Certificated Note, the Person in whose
------
name such Certificated Note is registered in the Note Register and (ii) in the
case of any Global Security, the Depositary.
"Incur" means, with respect to any Indebtedness or other obligation of any
-----
Person, to create, issue, incur (by conversion, exchange or otherwise), assume,
Guarantee or otherwise become liable in respect of such Indebtedness or other
obligation including by acquisition of Subsidiaries or the recording, as
required pursuant to GAAP or otherwise, of any such Indebtedness or other
obligation on the balance sheet of such Person (and "Incurrence," "Incurred,"
"Incurrable" and "Incurring" shall have meanings correlative to the foregoing);
9
<PAGE>
provided that a change in GAAP that results in an obligation of such Person that
exists at such time becoming Indebtedness shall not be deemed an Incurrence of
such Indebtedness and that neither the accrual of interest nor the accretion of
original issue discount shall be deemed an Incurrence of Indebtedness.
Indebtedness otherwise incurred by a Person before it becomes a Subsidiary of
the Company (whether by merger, consolidation, acquisition or otherwise) shall
be deemed to have been incurred at the time at which such Person becomes a
Subsidiary of the Company.
"Indebtedness" means, at any time (without duplication), with respect to any
------------
Person, whether recourse as to all or a portion of the assets of such Person,
and whether or not contingent, (i) any obligation of such Person for money
borrowed, (ii) any obligation of such Person evidenced by bonds, debentures,
notes, Guarantees or other similar instruments, including, without limitation,
any such obligations incurred in connection with the acquisition of Property,
assets or businesses, excluding trade accounts payable made in the ordinary
course of business, (iii) any reimbursement obligation of such Person with
respect to letters of credit, bankers' acceptances or similar facilities issued
for the account of such Person, (iv) any obligation of such Person issued or
assumed as the deferred purchase price of Property or services (but excluding
trade accounts payable or accrued liabilities arising in the ordinary course of
business, which in either case are not more than 60 days overdue or which are
being contested in good faith), (v) any Capital Lease Obligation of such Person,
(vi) the maximum fixed redemption or repurchase price of Disqualified Stock of
such Person and, to the extent held by Persons other than such Person or its
Restricted Subsidiaries, the maximum fixed redemption or repurchase price of
Disqualified Stock of such Person's Restricted Subsidiaries, at the time of
determination, (vii) every obligation under Interest Rate and Currency
Protection Agreements of such Person, (viii) any Attributable Indebtedness with
respect to any Sale and Leaseback Transaction to which such Person is a party
and (ix) any obligation of the type referred to in clauses (i) through (viii) of
this definition of another Person and all dividends and distributions of another
Person the payment of which, in either case, such Person has Guaranteed or is
responsible or liable, directly or indirectly, as obligor, Guarantor or
otherwise. For purposes of the preceding sentence, the maximum fixed repurchase
price of any Disqualified Stock that does not have a fixed repurchase price
shall be calculated in accordance with the terms of such Disqualified Stock as
if such Disqualified Stock were repurchased on any date on which Indebtedness
shall be required to be determined pursuant to this Indenture; provided that, if
such Disqualified Stock is not then permitted to be repurchased, the repurchase
price shall be the book value of such Disqualified Stock. The amount of
Indebtedness of any Person at any date shall be the outstanding balance at such
date of all unconditional obligations as described above and, with respect to
contingent obligations, the maximum liability upon the occurrence of the
contingency giving rise to the obligation; provided that the amount outstanding
at any time of any Indebtedness issued with original issue discount (including,
without limitation, the Senior Discount Notes) is the face amount of such
Indebtedness less the remaining unamortized portion of the original issue
discount of such Indebtedness at such time as determined in conformity with
GAAP.
10
<PAGE>
"Indenture" means this instrument as originally executed or as it may from
---------
time to time be supplemented or amended by one or more indentures supplemental
hereto entered into pursuant to the applicable provisions hereof, including, for
all purposes of this instrument and any such supplemental indenture, the
provisions of the Trust Indenture Act that are deemed to be a part of and govern
this instrument, and any such supplemental indenture, respectively.
"Interest Payment Date" means the Stated Maturity of an installment of
---------------------
interest on the Notes.
"Interest Rate or Currency Protection Agreement" of any Person means any
----------------------------------------------
forward contract, futures contract, swap, option, future option or other
financial agreement or arrangement (including, without limitation, caps, floors,
collars and similar agreements) relating to, or the value of which is dependent
upon, interest rates or currency exchange rates or indices.
"Investment" in any Person means any direct, indirect or contingent (i)
----------
advance or loan to, Guarantee of any Indebtedness of, extension of credit or
capital contribution to such Person, (ii) the acquisition of any shares of
Capital Stock, bonds, notes, debentures or other securities of such Person, or
(iii) the acquisition, by purchase or otherwise, of all or substantially all of
the business, assets or stock or other evidence of beneficial ownership of such
Person; provided that Investments shall exclude commercially reasonable
--------
extensions of trade credit. The amount of any Investment shall be the original
cost of such Investment, plus the cost of all additions thereto and minus the
---- -----
amount of any portion of such Investment repaid to such Person in cash as a
repayment of principal or a return of capital, as the case may be, but without
any other adjustments for increases or decreases in value, or write-ups, write-
downs or write-offs with respect to such Investment. In determining the amount
of any Investment involving a transfer of any Property other than cash, such
Property or asset shall be valued at its Fair Market Value at the time of such
transfer.
"Issue Date" means the date on which the Notes are first authenticated and
----------
delivered under this Indenture.
"Lien" means, with respect to any Property or other asset, any mortgage or
----
deed of trust, pledge, hypothecation, assignment, deposit arrangement, security
interest, lien (statutory or other), charge, easement, encumbrance, preference,
priority or other security or similar agreement or preferential arrangement of
any kind or nature whatsoever on or with respect to such Property or other asset
(including, without limitation, any conditional sale or title retention
agreement having substantially the same economic effect as any of the
foregoing).
"Maturity" means, when used with respect to a Note, the date on which the
--------
principal of such Note becomes due and payable as provided therein or in this
Indenture, whether on the date specified in such Note as the fixed date on which
the principal of such Note is due
11
<PAGE>
and payable, on a Change of Control Payment Date, a CCI Transaction Put Option
Exercise Date or an Asset Sale Payment Date, or by declaration of acceleration,
call for redemption or otherwise.
"Moody's" means Moody's Investors Service, Inc., or, if Moody's Investors
-------
Service, Inc. shall cease rating the specified debt securities and such ratings
business with respect thereto shall have been transferred to a successor Person,
such successor Person; provided that if Moody's Investors Service, Inc. ceases
rating the specified debt securities and its ratings business with respect
thereto shall not have been transferred to any successor Person or such
successor Person is Standard & Poor's, then "Moody's" shall mean any other
nationally recognized rating agency (other than Standard & Poor's) that rates
the specified debt securities and that shall have been designated by the Company
in an Officers' Certificate.
"NASD" means the National Association of Securities Dealers, Inc.
----
"Net Cash Proceeds" means, with respect to the sale of any Property or
-----------------
assets by any Person or any of its Restricted Subsidiaries, Cash Proceeds
received net of (i) all reasonable out-of-pocket expenses of such Person or such
Restricted Subsidiary incurred in connection with such sale, including, without
limitation, all legal, title and recording tax expenses, commissions and other
fees and expenses incurred (but excluding any finder's fee or broker's fee
payable to any Affiliate of such Person) and all federal, state, foreign and
local taxes arising in connection with such sale that are paid or required to be
accrued as a liability under GAAP by such Person or its Restricted Subsidiaries;
(ii) all payments made or required to be made by such Person or its Restricted
Subsidiaries on any Indebtedness which is secured by such Properties or other
assets in accordance with the terms of any Lien upon or with respect to such
Properties or other assets or which must, by the terms of such Lien, or in order
to obtain a necessary consent to such transaction or by applicable law, be
repaid in connection with such sale; (iii) all contractually required
distributions and other payments made to minority interest holders (but
excluding distributions and payments to Affiliates of such Person) in Restricted
Subsidiaries of such Person as a result of such transaction; and (iv)
appropriate amounts to be provided by such Person or any Restricted Subsidiary
thereof, as the case may be, as a reserve in accordance with GAAP against any
liabilities associated with such assets and retained by such Person or any
Restricted Subsidiary thereof, as the case may be, after such transaction,
including, without limitation, liabilities under any indemnification obligations
and severance and other employee termination costs associated with such
transaction, in each case as determined by the Board of Directors of such
Person, in its reasonable good faith judgment evidenced by a resolution of the
Board of Directors filed with the Trustee; provided that, in the event that any
--------
consideration for a transaction (which would otherwise constitute Net Cash
Proceeds) is required to be held in escrow pending determination of whether a
purchase price adjustment will be made, such consideration (or any portion
thereof) shall become Net Cash Proceeds only at such time as it is released to
such Person or its Restricted Subsidiaries from escrow; and provided, further,
-------- -------
that any non-cash consideration received in connection with any transaction,
which is
12
<PAGE>
subsequently converted to cash, shall be deemed to be Net Cash Proceeds at such
time, and shall thereafter be applied in accordance with the applicable
provisions of this Indenture.
"Note Register" and "Note Registrar" have the respective meanings specified
------------- --------------
in Section 2.06.
"Notes" has the meaning set forth in the Recitals of the Company and more
-----
particularly means any of the Notes authenticated and delivered under this
Indenture, including the Original Notes and the Registered Notes, as the context
may require.
"Officer" means the Chairman of the Board of Directors, a Vice Chairman of
-------
the Board of Directors, the President, a Vice President, the Chief Financial
Officer, the Chief Accounting Officer, the Treasurer, an Assistant Treasurer,
the Secretary or an Assistant Secretary.
"Officers' Certificate" means a certificate signed by (i) the Chairman of
---------------------
the Board of Directors, a Vice Chairman of the Board of Directors, the
President, the Chief Executive Officer or a Vice President, and (ii) the Chief
Financial Officer, the Chief Accounting Officer, the Treasurer, an Assistant
Treasurer, the Secretary or an Assistant Secretary, and delivered to the
Trustee, which certificate shall comply with the provisions of Section 10.04
hereof; provided that any Officers' Certificate delivered pursuant to the first
paragraph of Section 4.20 hereof shall be signed by the Chief Executive Officer,
the Chief Financial Officer or the Chief Accounting Officer.
"Opinion of Counsel" means a written opinion from legal counsel (who may be
------------------
counsel to the Company or the Trustee) who is acceptable to the Trustee, which
opinion shall comply with the provisions of Section 10.04 hereof.
"Original Notes" means all Notes other than Exchange Notes.
--------------
"Other Notes" means the Notes sold by the Purchasers in the initial offering
-----------
contemplated by the Purchase Agreement in reliance on an exemption from the
registration requirements of the Securities Act other than Rule 144A and
Regulation S.
"Paying Agent" means any Person authorized by the Company to make payments
------------
of principal, premium or interest with respect to the Notes on behalf of the
Company.
"Permitted Holders" means IES Industries Inc. and MidAmerican Energy
-----------------
Holdings Company and their respective successors and assigns, and Clark E. and
Mary E. McLeod and foundations and trusts controlled by them or either of them,
and Affiliates (other than the Company and the Restricted Subsidiaries) of each
of the foregoing.
"Permitted Interest Rate or Currency Protection Agreement" of any Person
--------------------------------------------------------
means any Interest Rate or Currency Protection Agreement entered into with one
or more financial
13
<PAGE>
institutions in the ordinary course of business that is designed to protect such
Person against fluctuations in interest rates or currency exchange rates with
respect to Indebtedness Incurred and which shall have a notional amount no
greater than the payments due with respect to the Indebtedness being hedged
thereby and not for purposes of speculation.
"Permitted Investments" means:
---------------------
(i) Eligible Cash Equivalents;
(ii) Investments in Property used in the ordinary course of business;
(iii) Investments in any Person as a result of which such Person
becomes a Restricted Subsidiary in compliance with Section 4.18 hereof;
(iv) Investments pursuant to agreements or obligations of the Company
or a Restricted Subsidiary, in effect on the Issue Date, to make such
Investments;
(v) Investments in prepaid expenses, negotiable instruments held for
collection and lease, utility and workers' compensation, performance and other
similar deposits;
(vi) Permitted Interest Rate or Currency Protection Agreements with
respect to any floating rate Indebtedness that is permitted under Section 4.10
or Section 4.11 hereof to be outstanding;
(vii) bonds, notes, debentures or other debt securities received as a
result of Asset Sales permitted under Section 4.08 hereof;
(viii) Investments in existence at the Issue Date;
(ix) commission, payroll, travel and similar advances to employees in
the ordinary course of business to cover matters that are expected at the time
of such advances ultimately to be treated as expenses in accordance with GAAP;
and
(x) stock, obligations or securities received in satisfaction of
judgments.
"Permitted Joint Ventures" means Investments in an aggregate amount not to
------------------------
exceed $25 million at any time outstanding in Persons who are not Subsidiaries
engaged in the Telecommunications Business.
"Permitted Liens" means (i) Liens for taxes, assessments, governmental
---------------
charges or claims which are not yet delinquent or which are being contested in
good faith by appropriate proceedings, if a reserve or other appropriate
provision, if any, as shall be required in conformity with GAAP shall have been
made therefor; (ii) other Liens incidental to the
14
<PAGE>
conduct of the Company's and its Restricted Subsidiaries' business or the
ownership of its property and assets not securing any Indebtedness, and which do
not in the aggregate materially detract from the value of the Company's and its
Restricted Subsidiaries' property or assets when taken as a whole, or materially
impair the use thereof in the operation of its business; (iii) Liens with
respect to assets of a Restricted Subsidiary granted by such Restricted
Subsidiary to the Company to secure Indebtedness owing to the Company; (iv)
pledges and deposits made in the ordinary course of business in connection with
workers' compensation and unemployment insurance, statutory Liens of landlords,
carriers, warehousemen, mechanics, materialmen, repairmen and other types of
statutory obligations; (v) deposits made to secure the performance of tenders,
bids, leases, and other obligations of like nature incurred in the ordinary
course of business (exclusive of obligations for the payment of borrowed money);
(vi) zoning restrictions, servitudes, easements, rights-of-way, restrictions and
other similar charges or encumbrances incurred in the ordinary course of
business which, in the aggregate, do not materially detract from the value of
the property subject thereto or interfere with the ordinary conduct of the
business of the Company or its Restricted Subsidiaries; (vii) Liens arising out
of judgments or awards against the Company or any Restricted Subsidiary with
respect to which the Company or such Restricted Subsidiary is prosecuting an
appeal or proceeding for review and the Company or such Restricted Subsidiary is
maintaining adequate reserves in accordance with GAAP; (viii) any interest or
title of a lessor in the property subject to any lease other than a Capital
Lease; (ix) Liens (including extensions and renewals thereof) upon real or
personal property acquired after the Issue Date; provided that (a) such Lien is
created solely for the purpose of securing Indebtedness Incurred, in accordance
with Section 4.10 hereof, (1) to finance the cost (including the cost of
improvement or construction) of the item of property or assets subject thereto
and such Lien is created prior to, at the time of or within six months after the
later of the acquisition, the completion of construction or the commencement of
full operation of such property or (2) to refinance any Indebtedness previously
so secured, (b) the principal amount of the Indebtedness secured by such Lien
does not exceed 100% of such cost and (c) any such Lien shall not extend to or
cover any property or assets other than such item of property or assets and any
improvements on such item; (x) leases or subleases granted to others that do not
materially interfere with the ordinary course of business of the Company and its
Restricted Subsidiaries; (xi) Liens encumbering property or assets under
construction arising from progress or partial payments by a customer of the
Company or its Restricted Subsidiaries relating to such property or assets;
(xii) Liens arising from filing precautionary Uniform Commercial Code financing
statements regarding leases; (xiii) Liens on property of, or on shares of stock
or Indebtedness of, any corporation existing at the time such corporation
becomes, or becomes a part of, any Restricted Subsidiary; provided that such
Liens do not extend to or cover any property or assets of the Company or any
Restricted Subsidiary other than the property or assets acquired; (xiv) Liens in
favor of the Company or any Restricted Subsidiary; (xv) Liens securing
reimbursement obligations with respect to letters of credit that encumber
documents and other property relating to such letters of credit and the products
and proceeds thereof; (xvi) Liens in favor of customs and revenue authorities
arising as a matter of law to secure payment of customs duties in connection
with the importation of goods; (xvii) Liens encumbering customary initial
deposits and margin
15
<PAGE>
deposits, and other Liens that are either within the general parameters
customary in the industry and incurred in the ordinary course of business, in
each case, securing Indebtedness under Permitted Interest Rate Agreements and
Currency Agreements; and (xviii) Liens arising out of conditional sale, title
retention, consignment or similar arrangements for the sale of goods entered
into by the Company or any of its Restricted Subsidiaries in the ordinary course
of business in accordance with the past practices of the Company and its
Restricted Subsidiaries prior to the Issue Date.
"Person" means any individual, corporation, limited liability company,
------
partnership, limited liability partnership, joint venture, trust, unincorporated
organization or government or any agency or political subdivision thereof.
"Predecessor Note" of any particular Note means every previous Note
----------------
evidencing all or a portion of the same Indebtedness as that evidenced by such
particular Note; and, for the purposes of this definition, any Note
authenticated and delivered under Section 2.09 in exchange for or in lieu of a
mutilated, destroyed, lost or stolen Note shall be deemed to evidence the same
debt as the mutilated, destroyed, lost or stolen Note.
"Preferred Stock" of any Person means Capital Stock of such Person of any
---------------
class or classes (however designated) that ranks prior, as to the payment of
dividends or as to the distribution of assets upon any voluntary or involuntary
liquidation, dissolution or winding up of such Person, to shares of Capital
Stock of any other class of such Person.
"pro forma" means, with respect to any calculation made or required to be
---------
made pursuant to the terms hereof, a calculation in accordance with Article 11
of Regulation S-X promulgated under the Securities Act (to the extent
applicable), as interpreted in good faith by the Board of Directors, or
otherwise, a calculation made in good faith by the Board of Directors, as the
case may be.
"Property" means, with respect to any Person, any interest of such Person in
--------
any kind of property or asset, whether real, personal or mixed, or tangible or
intangible, excluding Capital Stock in any other Person.
"Purchase Agreement" means the Purchase Agreement, dated as of July 15,
------------------
1997, between the Company and the Purchasers, as such agreement may be amended
from time to time.
"Purchase Money Indebtedness" means Indebtedness of the Company (including
---------------------------
Acquired Indebtedness and Capital Lease Obligations, mortgage financings and
purchase money obligations) incurred for the purpose of financing all or any
part of the cost of construction, acquisition, development or improvement by the
Company or any Restricted Subsidiary of any Telecommunications Assets of the
Company or any Restricted Subsidiary and including any related notes,
Guarantees, collateral documents, instruments and
16
<PAGE>
agreements executed in connection therewith, as the same may be amended,
supplemented, modified or restated from time to time.
"Purchasers" means Salomon Brothers Inc, Bear, Stearns & Co., Inc. and
----------
Morgan Stanley Dean Witter.
"Qualified Receivable Facility" means Indebtedness of the Company or any
-----------------------------
Subsidiary Incurred from time to time pursuant to either (x) credit facilities
secured by Receivables or (y) receivable purchase facilities, and including any
related notes, Guarantees, collateral documents, instruments and agreements
executed in connection therewith, as the same may be amended, supplemented,
modified or restated from time to time.
"Qualified Receivable Subsidiary" means a Restricted Subsidiary formed
-------------------------------
solely for the purpose of obtaining a Qualified Receivable Facility and
substantially all of the Property of which is Receivables.
"Qualified Stock" of any Person means a class of Capital Stock other than
---------------
Disqualified Stock.
"Receivables" means receivables, chattel paper, instruments, documents or
-----------
intangibles evidencing or relating to the right to payment of money and proceeds
and products thereof in each case generated in the ordinary course of business.
"Redemption Date" means, when used with respect to any Note or part thereof
---------------
to be redeemed hereunder, the date fixed for redemption of such Notes pursuant
to the terms of the Notes and this Indenture.
"Redemption Price" means, when used with respect to any Note or part thereof
----------------
to be redeemed hereunder, the price fixed for redemption of such Note pursuant
to the terms of the Notes and this Indenture, plus accrued and unpaid interest
thereon, if any, to the Redemption Date.
"Registered Exchange Offer" has the meaning set forth in the form of the
-------------------------
Notes contained in Section 2.02 hereof.
"Registered Notes" means the Exchange Notes and all other Notes sold or
----------------
otherwise disposed of pursuant to an effective registration statement under the
Securities Act, together with their respective Successor Notes.
"Regular Record Date" means, for the interest payable on any Interest
-------------------
Payment Date, the date specified in Section 2.13 hereof.
"Regulation S" means Regulation S under the Securities Act (or any successor
------------
provision), as it may be amended from time to time.
17
<PAGE>
"Regulation S Certificate" means a certificate substantially in the form set
------------------------
forth in Annex A hereof.
"Regulation S Global Security" has the meaning specified in Section 2.01
----------------------------
hereof.
"Regulation S Legend" means a legend substantially in the form of the legend
-------------------
required in the form of Note set forth in Section 2.02 hereof to be placed upon
each Regulation S Note.
"Regulation S Notes" means all Notes required pursuant to Section 2.08(c)
------------------
hereof to bear a Regulation S Legend. Such term includes the Regulation S
Global Security.
"Restricted Global Security" has the meaning specified in Section 2.01
--------------------------
hereof.
"Restricted Notes" means all Notes required pursuant to Section 2.08(c)
----------------
hereof to bear any Restricted Notes Legend. Such term includes the Restricted
Global Security.
"Restricted Notes Certificate" means a certificate substantially in the form
----------------------------
set forth in Annex B hereof.
"Restricted Notes Legend" means, collectively, the legends substantially in
-----------------------
the forms of the legends required in the form of Note set forth in Section 2.02
hereof to be placed upon each Restricted Note.
"Restricted Payment" means (i) a dividend or other distribution declared or
------------------
paid on the Capital Stock of the Company or to the Company's stockholders (in
their capacity as such), or declared or paid to any Person other than the
Company or a Restricted Subsidiary of the Company on the Capital Stock of any
Restricted Subsidiary, in each case, other than dividends, distributions or
payments made solely in Qualified Stock of the Company or such Restricted
Subsidiary, (ii) a payment made by the Company or any of its Restricted
Subsidiaries (other than to the Company or any Restricted Subsidiary) to
purchase, redeem, acquire or retire any Capital Stock of the Company or of a
Restricted Subsidiary, (iii) a payment made by the Company or any of its
Restricted Subsidiaries (other than a payment made solely in Qualified Stock of
the Company) to redeem, repurchase, defease (including an in-substance or legal
defeasance) or otherwise acquire or retire for value (including pursuant to
mandatory repurchase covenants), prior to any scheduled maturity, scheduled
sinking fund or mandatory redemption payment, Indebtedness of the Company or
such Restricted Subsidiary which is subordinate (whether pursuant to its terms
or by operation of law) in right of payment to the Notes and which was scheduled
to mature on or after the maturity of the Notes or (iv) an Investment in any
Person, including an Unrestricted Subsidiary or the designation of a Subsidiary
as an Unrestricted Subsidiary, other than (a) a Permitted Investment or a
Permitted Joint Venture, (b) an Investment by the Company in a Wholly-Owned
Restricted Subsidiary of the Company or (c) an Investment by a Restricted
Subsidiary in the Company or a Wholly-Owned Restricted Subsidiary of the
Company.
18
<PAGE>
"Restricted Period" means the period of 41 consecutive days beginning on and
-----------------
including the later of (i) the day on which Notes are first offered to persons
other than distributors (as defined in Regulation S) in reliance on Regulation S
and (ii) the original issuance date of the Notes.
"Restricted Subsidiary" means any Subsidiary of the Company that has not
---------------------
been designated as an Unrestricted Subsidiary pursuant to Section 4.18 hereof.
"Rule 144" means Rule 144 under the Securities Act (or any successor
--------
provision), as it may be amended from time to time.
"Rule 144A" means Rule 144A under the Securities Act (including any
---------
successor regulation thereto), as it may be amended from time to time.
"Rule 144A Notes" means the Notes purchased by the Purchasers from the
---------------
Company pursuant to the Purchase Agreement, other than the Other Notes and the
Regulation S Notes.
"Sale and Leaseback Transaction" means, with respect to any Person, any
------------------------------
direct or indirect arrangement pursuant to which Property is sold or transferred
by such Person or a Restricted Subsidiary of such Person and is thereafter
leased back from the purchaser or transferee thereof by such Person or one of
its Restricted Subsidiaries.
"Securities Act" means the Securities Act of 1933, as amended, and the rules
--------------
and regulations promulgated thereunder.
"Securities Act Legend" means a Restricted Note Legend or a Regulation S
---------------------
Legend.
"Senior Credit Facility" means Indebtedness of the Company and its
----------------------
Subsidiaries Incurred from time to time pursuant to one or more credit
agreements or similar facilities made available from time to time to the Company
and its Subsidiaries, whether or not secured, and including any related notes,
Guarantees, collateral documents, instruments and agreements executed in
connection therewith, as the same may be amended, supplemented, modified or
restated from time to time.
"Senior Discount Notes" means the Company's 10 1/2% Senior Discount Notes
---------------------
due March 1, 2007.
"Shelf Registration Statement" has the meaning set forth in the form of the
----------------------------
Notes contained in Section 2.02 hereof.
"Special Interest" has the meaning set forth in the form of Note contained
----------------
in Section 2.02 hereof. Unless the context otherwise requires, references
herein to "interest" on the Notes shall include Special Interest.
19
<PAGE>
"Special Record Date" means a date fixed by the Trustee pursuant to Section
-------------------
2.13 hereof for the payment of Defaulted Interest.
"Standard & Poor's" means Standard & Poor's Ratings Group, a division of
-----------------
McGraw Hill Corporation, or, if Standard & Poor's Ratings Group shall cease
rating the specified debt securities and such ratings business with respect
thereto shall have been transferred to a successor Person, such successor
Person; provided that if Standard & Poor's Ratings Group ceases rating the
specified debt securities and its ratings business with respect thereto shall
not have been transferred to any successor Person or such successor Person is
Moody's, then "Standard & Poor's" shall mean any other nationally recognized
rating agency (other than Moody's) that rates the specified debt securities and
that shall have been designated by the Company in an Officers' Certificate.
"Stated Maturity" means, with respect to any security, the date specified in
---------------
such security as the fixed date on which the payment of principal of such
security is due and payable, including pursuant to any mandatory redemption
provision (but excluding any provision providing for the repurchase of such
security at the option of the holder thereof upon the happening of any
contingency unless such contingency has occurred), and, when used with respect
to any installment of interest on such security, the fixed date on which such
installment of interest is due and payable.
"Step-Up" has the meaning set forth in the form of the Note contained in
-------
Section 2.02 hereof.
"Strategic Equity Investment" means an equity investment made by a Strategic
---------------------------
Investor in the Company in an aggregate amount of not less than $25 million.
"Strategic Investor" means a Person (other than the Permitted Holders)
------------------
engaged in one or more Telecommunications Businesses that has, or 80% or more of
the Voting Stock of which is owned by a Person that has, an equity market
capitalization at the time of its initial Investment in the Company in excess of
$2.0 billion.
"Subordinated Indebtedness" means Indebtedness of the Company as to which
-------------------------
the payment of principal of (and premium, if any) and interest and other payment
obligations in respect of such Indebtedness shall be subordinate to the prior
payment in full of the Notes to at least the following extent: (i) no payments
of principal of (or premium, if any) or interest on or otherwise due in respect
of such Indebtedness may be permitted for so long as any default in the payment
of principal (or premium, if any) or interest on the Notes exists; (ii) in the
event that any other default that with the passing of time or the giving of
notice, or both, would constitute an event of default exists with respect to the
Notes, upon notice by 25% or more in principal amount of the Notes to the
Trustee, the Trustee shall give notice to the Company and the holders of such
Indebtedness (or trustees or agents therefor) of a payment blockage, and
thereafter no payments of principal of (or premium, if any) or interest on or
otherwise due in respect of such Indebtedness may be made for a period of 179
20
<PAGE>
days from the date of such notice; and (iii) such Indebtedness may not (x)
provide for payments of principal of such Indebtedness at the stated maturity
thereof or by way of a sinking fund applicable thereto or by way of any
mandatory redemption, defeasance, retirement or repurchase thereof by the
Company (including any redemption, retirement or repurchase which is contingent
upon events or circumstances, but excluding any retirement required by virtue of
acceleration of such Indebtedness upon an event of default thereunder), in each
case prior to the final Stated Maturity of the Notes or (y) permit redemption or
other retirement (including pursuant to an offer to purchase made by the
Company) of such other Indebtedness at the option of the holder thereof prior to
the final Stated Maturity of the Notes, other than a redemption or other
retirement at the option of the holder of such Indebtedness (including pursuant
to an offer to purchase made by the Company) which is conditioned upon a change
of control of the Company pursuant to provisions substantially similar to those
contained in Section 4.07 hereof (and which shall provide that such Indebtedness
will not be repurchased pursuant to such provisions prior to the Company's
repurchase of the Notes required to be repurchased by the Company pursuant to
Section 4.07 hereof).
"Subsidiary" means, with respect to any Person, (i) any corporation more
----------
than 50 percent of the outstanding shares of Voting Stock of which is owned,
directly or indirectly, by such Person, or by one of more other Subsidiaries of
such Person, or by such Person and one or more other Subsidiaries of such
Person, (ii) any general partnership, joint venture or similar entity, more than
50 percent of the outstanding partnership or similar interests of which are
owned, directly or indirectly, by such Person, or by one or more other
Subsidiaries of such Person, or by such Person and one or more other
Subsidiaries of such Person and (iii) any limited partnership of which such
Person or any Subsidiary of such Person is a general partner.
"Successor Note" of any particular Note means every Note issued after, and
--------------
evidencing all or a portion of the same Indebtedness as that evidenced by, such
particular Note; and, for the purposes of this definition, any Note
authenticated and delivered under Section 2.09 in exchange for or in lieu of a
mutilated, destroyed, lost or stolen Note shall be deemed to evidence the same
debt as the mutilated, destroyed, lost or stolen Note.
"Surviving Entity" has the meaning set forth in Section 5.01(a) hereof.
----------------
"Telecommunications Assets" means all assets, rights (contractual or
-------------------------
otherwise) and properties, whether tangible or intangible, used or intended for
use in connection with a Telecommunications Business.
"Telecommunications Business" means the business of (i) transmitting, or
---------------------------
providing services relating to the transmission of, voice, video or data through
owned or leased wireline or wireless transmission facilities, (ii) creating,
developing, constructing, installing, repairing, maintaining or marketing
communications-related systems, network equipment and facilities, software and
other products, (iii) creating, developing, producing or marketing
21
<PAGE>
audiotext or videotext, (iv) publishing or distributing telephone (including
Internet) directories, whether in paper, electronic, audio or video format, (v)
marketing (including direct marketing and telemarketing), or (vi) evaluating,
participating in or pursuing any other business that is primarily related to
those identified in the foregoing clauses (i), (ii), (iii), (iv) or (v) above
(in the case of clauses (iii), (iv) and (v), however, in a manner consistent
with the Company's manner of business on the Issue Date), and shall, in any
event, include all businesses in which the Company or any of its Subsidiaries
are engaged on the Issue Date; provided that the determination of what
constitutes a Telecommunications Business shall be made in good faith by the
Board of Directors.
"Temporary Notes" has the meaning set forth in Section 2.11 hereof.
---------------
"Termination Date" has the meaning set forth in Section 4.08(a) hereof.
----------------
"Trading Day" means, with respect to a security traded on a securities
-----------
exchange, automated quotation system or market, a day on which such exchange,
system or market is open for a full day of trading.
"Trust Indenture Act" means the Trust Indenture Act of 1939 (15 U.S.C.
-------------------
(S)(S)77aaa-77bbbb) as in effect on the date of this Indenture except as
required by Section 9.04 hereof; provided that in the event the Trust Indenture
Act of 1939 is amended after such date, "Trust Indenture Act" means, to the
extent required by any such amendment, the Trust Indenture Act of 1939, as so
amended.
"Trust Officer" means any officer assigned to the Corporate Trust Division
-------------
(or any successor thereto), including any Vice President, Assistant Vice
President, Trust Officer, any Assistant Secretary, any trust officer or any
other officer of the Trustee customarily performing functions similar to those
performed by any of the above designated officers and having direct
responsibility for the administration of this Indenture.
"Trustee" means the party named as such in this Indenture until a successor
-------
replaces it in accordance with the provisions of this Indenture and, thereafter,
means such successor.
"Unrestricted Notes Certificate" means a certificate substantially in the
------------------------------
form set forth in Annex C hereof.
"Unrestricted Subsidiary" means any Subsidiary of the Company that the
-----------------------
Company has classified as an "Unrestricted Subsidiary" and that has not been
reclassified as a Restricted Subsidiary, pursuant to Section 4.18 hereof.
"U.S. Government Obligations" means (x) securities that are (i) direct
---------------------------
obligations of the United States of America for the payment of which the full
faith and credit of the United States of America is pledged or (ii) 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
22
<PAGE>
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 (y) depository receipts issued by a
bank (as defined in Section 3(a)(2) of the Securities Act) as custodian with
respect to any U.S. Government Obligation which is specified in clause (x) above
and held by such Bank for the account of the holder of such depository receipt,
or with respect to any specific payment of principal or interest on any U.S.
Government Obligation which is so specified and held, 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 or interest of the U.S. Government Obligation evidenced by
such depository receipt.
"Voting Stock" means, with respect to any Person, securities of any class or
------------
classes of Capital Stock in such Person entitling the holders thereof (whether
at all times or at the times that such class of Capital Stock has voting power
by reason of the happening of any contingency) to vote in the election of
members of the board of directors or comparable body of such Person.
"Wholly-Owned Restricted Subsidiary" of any Person means a Subsidiary of
----------------------------------
such Person all of the outstanding Capital Stock or other ownership interests
(other than director's qualifying shares) of which shall at the time be owned by
such Person or by one or more other Wholly-Owned Restricted Subsidiary of such
Person or by such Person and one or more other Wholly-Owned Restricted
Subsidiary of such Person.
SECTION 1.02. Incorporation by Reference of Trust Indenture Act.
-------------------------------------------------
Whenever this Indenture refers to a provision of the Trust Indenture Act,
the provision is incorporated by reference in and made a part of this Indenture.
The following Trust Indenture Act terms incorporated by reference in this
Indenture have the following meanings:
"indenture securities" means the Notes.
"indenture security holder" means a Holder.
"indenture to be qualified" means this Indenture.
"indenture trustee" or "institutional trustee" means the Trustee.
"obligor" on the indenture securities means the Company or other obligor on
the Notes, if any.
All other Trust Indenture Act terms used or incorporated by reference in
this Indenture that are defined by the Trust Indenture Act, defined by Trust
Indenture Act
23
<PAGE>
reference to another statute or defined by Commission rule have the meanings
assigned to them therein.
SECTION 1.03. Rules of Construction. Unless the context otherwise
---------------------
requires:
(a) 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;
(b) "or" is not exclusive;
(c) "including" means including without limitation;
(d) the principal amount of any noninterest bearing or other discount
security, at any date shall be the principal amount thereof that would be
shown on a balance sheet of the issuer dated such date prepared in
accordance with GAAP;
(e) when used with respect to the Notes, the term "principal amount"
shall mean the principal amount thereof that would be shown on a balance
sheet of the issuer dated such date prepared in accordance with GAAP; and
(f) unless otherwise expressly provided herein, the principal amount of
any Preferred Stock shall be the greater of (i) the maximum liquidation
value of such Preferred Stock or (ii) the maximum mandatory redemption or
mandatory repurchase price with respect to such Preferred Stock.
SECTION 1.04. Form of Documents Delivered to Trustee. In any case where
--------------------------------------
several matters are required to be certified by, or covered by an opinion of,
any specified Person, it is not necessary that all such matters be certified by,
or covered by the opinion of, only one such Person, or that they be so certified
or covered by only one document, but one such Person may certify or give an
opinion with respect to some matters and one or more other such Persons as to
other matters, and any such Person may certify or give an opinion as to such
matters in one or several documents.
Any certificate or opinion of an officer of the Company may be based,
insofar as it relates to legal matters, upon a certificate or opinion of, or
representations by, counsel, unless such officer knows, or in the exercise of
reasonable care should know, that the certificate or opinion or representations
with respect to the matters upon which his certificate or opinion is based are
erroneous. Any such certificate or Opinion of Counsel may be based, insofar as
it relates to factual matters, upon a certificate or opinion of, or
representations by, an officer or officers of the Company stating that the
information with respect to such factual matters is in the possession of the
Company, unless such counsel knows, or in the exercise of reasonable care should
know, that the certificate or opinion or representations with respect to such
matters are erroneous. Where any Person is required to
24
<PAGE>
make, give or execute two or more applications, requests, consents,
certificates, statements, opinions or other instruments under this Indenture,
they may, but need not, be consolidated and form one instrument.
SECTION 1.05. Acts of Holders. (a) Any request, demand, authorization,
---------------
direction, notice, consent, waiver or other action provided by this Indenture to
be given or taken by Holders may be embodied in and evidenced by one or more
instruments of substantially similar tenor signed by such Holders in person or
by an agent duly appointed in writing; and, except as herein otherwise expressly
provided, such action shall become effective when such instrument or instruments
are delivered to the Trustee and, where it is hereby expressly required, to the
Company. Such instrument or instruments (and the action embodied therein and
evidenced thereby) are herein sometimes referred to as the "Act" of the Holders
signing such instrument or instruments. Proof of execution of any such
instrument or of a writing appointing any such agent shall be sufficient for any
purpose of this Indenture and (subject to Section 7.01 hereof) conclusive in
favor of the Trustee and the Company, if made in the manner provided in this
Section.
(b) The fact and date of the execution by any Person of any such instrument
or writing may be proved by the affidavit of a witness of such execution or by
an acknowledgment of a notary public or other officer authorized by law to take
acknowledgments of deeds, certifying that the individual signing such instrument
or writing acknowledged to him the execution thereof. Where such execution is
by a signer acting in a capacity other than such signer's individual capacity,
such certificate or affidavit shall also constitute sufficient proof of the
signer's authority. The fact and date of the execution of any such instrument
or writing, or the authority of the person executing the same, may also be
proved in any other manner which the Trustee deems sufficient.
SECTION 1.06. Satisfaction and Discharge. This Indenture shall cease to be
--------------------------
of further effect (except as to the rights of Holders under Sections 2.09, 2.11,
4.02, 4.03 and 4.04 hereof) and the Trustee, on receipt of a Company Order
requesting such action, shall execute proper instruments acknowledging
satisfaction and discharge of this Indenture, when (a) either (i) all
outstanding Notes have been delivered to the Trustee for cancellation or (ii)
all such Notes not theretofore delivered to the Trustee for cancellation (A)
have become due and payable, (B) will become due and payable at their Stated
Maturity within one year or (C) are to be called for redemption within one year
under irrevocable arrangements satisfactory to the Trustee for the giving of
notice of redemption by the Trustee in the name, and at the expense, of the
Company, and the Company, in the case of (A), (B) or (C) above, has irrevocably
deposited or caused to be deposited with the Trustee as trust funds in trust for
the purpose an amount sufficient to pay and discharge the entire indebtedness on
such Notes, for principal (and premium, if any) and interest to the date of such
deposit (in the case of Notes which have become due and payable) or to the
Stated Maturity or Redemption Date, as the case may be, together with
irrevocable instructions from the Company in form and substance satisfactory to
the Trustee directing the Trustee to apply such funds to the payment thereof;
(b) the Company has paid or caused to be paid all other sums payable hereunder
by the
25
<PAGE>
Company; and (c) the Company has delivered to the Trustee an Officers'
Certificate and an Opinion of Counsel, each stating that all conditions
precedent herein provided for relating to the satisfaction and discharge of this
Indenture have been complied with. Notwithstanding the satisfaction and
discharge of this Indenture pursuant to this Section 1.06, the obligations of
the Company to the Trustee under Section 7.07 hereof, and, if money shall have
been deposited with the Trustee in trust for the Holders pursuant to this
Section 1.06, the obligations of the Trustee under this Section 1.06 and Section
4.03 hereof shall survive.
All money deposited with the Trustee pursuant to this Section 1.06 shall be
held in trust and applied by it, in accordance with the provisions of the Notes
and this Indenture, to the payment, either directly or through any Paying Agent,
to the Persons entitled thereto, of the principal (and premium, if any) and
interest for the payment of which such money has been deposited with the
Trustee. If the Trustee or Paying Agent is unable to apply any money or U.S.
Government Obligations in accordance with this Section 1.06 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, the Company's obligations under this Indenture and the Notes shall
be revived and reinstated as though no deposit had occurred pursuant to this
Section 1.06 until such time as the Trustee or Paying Agent is permitted to
apply all such money or U.S. Government Obligations in accordance with this
Section 1.06; provided that, if the Company has made any payment of interest on
or principal of any Notes because of the reinstatement of its obligations, the
Company shall be subrogated to the rights of the Holders of such Notes to
receive such payment from the cash or U.S. Government Obligations held by the
Trustee or Paying Agent.
ARTICLE II.
THE NOTES
SECTION 2.01. Form and Dating. (a) The Notes and the certificate of
---------------
authentication of the Trustee thereon shall be substantially in the form
contained in this Article II, with such appropriate insertions, substitutions
and other variations as are required or permitted under this Indenture. Upon
issuance, any such Note shall be duly executed by the Company and authenticated
by the Trustee as hereinafter provided.
(b) The Notes may have such letters, numbers or other marks of
identification and such legends and endorsements, stamped, printed, lithographed
or engraved thereon, (i) as the Company may deem appropriate and as are not
inconsistent with the provisions of this Indenture, (ii) as may be required to
comply with this Indenture, any law or any rule of any securities exchange on
which the Notes may be listed and (iii) as may be necessary to conform to
customary usage. Each Note shall be dated the date of its authentication by the
Trustee.
(c) Upon their original issuance, Rule 144A Notes shall be issued in the
form of one or more Global Securities registered in the name of the Depositary
or its nominee and
26
<PAGE>
deposited with the Trustee, as custodian for the Depositary, for credit by the
Depositary to the respective accounts of beneficial owners of the Notes
represented thereby (or such other accounts as they may direct). Such Global
Securities, together with their Successor Notes which are Global Securities
other than the Regulation S Global Security, are collectively herein called the
"Restricted Global Security". Upon their original issuance, Regulation S Notes
shall be issued in the form of one or more Global Securities registered in the
name of the Depositary, or its nominee and deposited with the Trustee, as
custodian for the Depositary, for credit to the respective accounts of the
beneficial owners of the Notes represented thereby (or such other accounts as
they may direct), provided that upon such deposit all such Notes shall be
credited to or through accounts maintained at the Depositary by or on behalf of
Euroclear or Cedel. Such Global Securities, together with their Successor Notes
which are Global Securities other than the Restricted Global Security, are
collectively herein called the "Regulation S Global Security".
Upon their original issuance, Other Notes shall not be issued in the form of
a Global Note or in any other form intended to facilitate book-entry trading in
beneficial interests in such Notes.
SECTION 2.02. Form of Face of Note.
--------------------
[If a Global Security, then insert -- THIS NOTE IS A GLOBAL SECURITY WITHIN
THE MEANING OF THE INDENTURE HEREINAFTER REFERRED TO AND IS REGISTERED IN THE
NAME OF A DEPOSITARY OR A NOMINEE THEREOF. THIS NOTE MAY NOT BE EXCHANGEABLE IN
WHOLE OR IN PART FOR A NOTE REGISTERED, AND NO TRANSFER OF THIS NOTE IN WHOLE OR
IN PART MAY BE REGISTERED, IN THE NAME OF ANY PERSON OTHER THAN SUCH DEPOSITARY
OR A NOMINEE THEREOF, EXCEPT IN THE LIMITED CIRCUMSTANCES DESCRIBED IN THE
INDENTURE.]
[If a Global Security to be held by the Depository, then insert -- UNLESS
THIS CERTIFICATE IS PRESENTED BY AN AUTHORIZED REPRESENTATIVE OF THE DEPOSITORY
TRUST COMPANY, A NEW YORK CORPORATION ("DTC"), TO THE ISSUER OR ITS AGENT FOR
REGISTRATION OF TRANSFER, EXCHANGE OR PAYMENT, AND ANY CERTIFICATE ISSUED IS
REGISTERED IN THE NAME OF CEDE & CO. OR IN SUCH OTHER NAME AS IS REQUESTED BY AN
AUTHORIZED REPRESENTATIVE OF DTC (AND ANY PAYMENT IS MADE TO CEDE & CO. OR TO
SUCH OTHER ENTITY AS IS REQUESTED BY AN AUTHORIZED REPRESENTATIVE OF DTC), ANY
TRANSFER, PLEDGE, OR OTHER USE HEREOF FOR VALUE OR OTHERWISE BY OR TO ANY PERSON
IS WRONGFUL INASMUCH AS THE REGISTERED OWNER HEREOF, CEDE & CO., HAS AN INTEREST
HEREIN.]
[If Restricted Notes, then insert -- THIS SECURITY HAS NOT BEEN REGISTERED
UNDER THE SECURITIES ACT OF 1933, AS AMENDED (THE
27
<PAGE>
"SECURITIES ACT"). THE HOLDER HEREOF, BY PURCHASING THIS SECURITY, AGREES FOR
THE BENEFIT OF THE COMPANY AND THE INITIAL PURCHASERS OF THIS SECURITY THAT THIS
SECURITY MAY NOT BE RESOLD, PLEDGED OR OTHERWISE TRANSFERRED (X) PRIOR TO THE
SECOND ANNIVERSARY OF THE ISSUANCE HEREOF (OR A PREDECESSOR SECURITY HERETO) OR
(Y) BY ANY HOLDER THAT WAS AN AFFILIATE OF THE COMPANY AT ANY TIME DURING THE
THREE MONTHS PRECEDING THE DATE OF SUCH TRANSFER, IN EITHER CASE OTHER THAN (1)
TO THE COMPANY, (2) SO LONG AS THIS SECURITY IS ELIGIBLE FOR RESALE PURSUANT TO
RULE 144A, UNDER THE SECURITIES ACT ("RULE 144A"), TO A PERSON WHOM THE SELLER
REASONABLY BELIEVES IS A QUALIFIED INSTITUTIONAL BUYER WITHIN THE MEANING OF
RULE 144A PURCHASING FOR ITS OWN ACCOUNT OR FOR THE ACCOUNT OF A QUALIFIED
INSTITUTIONAL BUYER TO WHOM NOTICE IS GIVEN THAT THE RESALE, PLEDGE OR OTHER
TRANSFER IS BEING MADE IN RELIANCE ON RULE 144A (AS INDICATED BY THE BOX CHECKED
BY THE TRANSFEROR ON THE CERTIFICATE OF TRANSFER ON THE REVERSE OF THIS
SECURITY), (3) IN AN OFFSHORE TRANSACTION IN ACCORDANCE WITH REGULATION S UNDER
THE SECURITIES ACT (AS INDICATED BY THE BOX CHECKED BY THE TRANSFEROR ON THE
CERTIFICATE OF TRANSFER ON THE REVERSE OF THIS SECURITY), AND, IF SUCH TRANSFER
IS BEING EFFECTED BY CERTAIN TRANSFERORS SPECIFIED IN THE INDENTURE (AS DEFINED
BELOW) PRIOR TO AUGUST 31, 1997, A CERTIFICATE WHICH MAY BE OBTAINED FROM THE
COMPANY OR THE TRUSTEE IS DELIVERED BY THE TRANSFEREE TO THE COMPANY AND THE
TRUSTEE, (4) TO AN INSTITUTION THAT IS AN "ACCREDITED INVESTOR" AS DEFINED IN
RULE 501(a)(1), (2), (3) OR (7) UNDER THE SECURITIES ACT (AS INDICATED BY THE
BOX CHECKED BY THE TRANSFEROR ON THE CERTIFICATE OF TRANSFER ON THE REVERSE OF
THIS SECURITY) THAT IS ACQUIRING THIS SECURITY FOR INVESTMENT PURPOSES AND NOT
FOR DISTRIBUTION, AND A CERTIFICATE IN THE FORM ATTACHED TO THIS SECURITY IS
DELIVERED BY THE TRANSFEREE TO THE COMPANY AND THE TRUSTEE (PROVIDED THAT
CERTAIN HOLDERS SPECIFIED IN THE INDENTURE MAY NOT TRANSFER THIS SECURITY
PURSUANT TO THIS CLAUSE (4) ON OR PRIOR TO AUGUST 31, 1997) OR (5) PURSUANT TO
AN EFFECTIVE REGISTRATION STATEMENT UNDER THE SECURITIES ACT, IN EACH CASE IN
ACCORDANCE WITH ANY APPLICABLE SECURITIES LAWS OF ANY STATE OF THE UNITED
STATES. AN INSTITUTIONAL ACCREDITED INVESTOR HOLDING THIS SECURITY AGREES THAT
IT WILL FURNISH TO THE COMPANY AND THE TRUSTEE SUCH CERTIFICATES AND OTHER
INFORMATION AS THEY MAY REASONABLY REQUIRE TO CONFIRM THAT ANY TRANSFER BY IT OF
THIS SECURITY COMPLIES WITH THE FOREGOING RESTRICTIONS. THE HOLDER HEREOF, BY
PURCHASING THIS SECURITY, REPRESENTS AND AGREES FOR THE BENEFIT OF THE COMPANY
AND THE INITIAL PURCHASERS THAT IT IS (1) A
28
<PAGE>
QUALIFIED INSTITUTIONAL BUYER WITHIN THE MEANING OF RULE 144A OR (2) AN
INSTITUTION THAT IS AN "ACCREDITED INVESTOR" AS DEFINED IN RULE 501(a)(1), (2),
(3) OR (7) UNDER THE SECURITIES ACT AND THAT IT IS HOLDING THIS SECURITY FOR
INVESTMENT PURPOSES AND NOT FOR DISTRIBUTION OR (3) A NON-U.S. PERSON OUTSIDE
THE UNITED STATES WITHIN THE MEANING OF (OR AN ACCOUNT SATISFYING THE
REQUIREMENTS OF PARAGRAPH (o)(2) OF RULE 902 UNDER) REGULATION S UNDER THE
SECURITIES ACT.]
9 1/4% SENIOR NOTES DUE JULY 15, 2007
[IF RESTRICTED GLOBAL SECURITY - CUSIP NO. 582266AD4]
[IF ANY REGULATION S NOTE - CUSIP NO. U58159AB7]
[IF REGULATION S GLOBAL SECURITY - ISIN NO. USU58159AB72]
[IF OTHER NOTE - CUSIP NO. ___________]
No. R-_____ $__________________
McLeodUSA Incorporated, a corporation duly organized and existing under the
laws of Delaware (herein called the "Company", which term includes any successor
Person under the Indenture hereinafter referred to), for value received, hereby
promises to pay to _____________, or registered assigns, the principal sum of
________________ Dollars [if this Note is a Global Security, then insert: (which
principal amount may from time to time be increased or decreased to such other
principal amounts (which, taken together with the principal amounts of all other
outstanding Notes, shall not exceed $225,000,000 in the aggregate at any time)
by adjustments made on the records of the Trustee hereinafter referred to in
accordance with the Indenture)] on July 15, 2007, and to pay interest thereon
from the Issue Date, semi-annually in arrears on January 15 and July 15 of each
year, commencing January 15, 1998, at the rate of 9 1/4% per annum, until the
principal hereof is paid or made available for payment [If Original Notes, then
insert: provided, however, that if (i) the Company has not filed a registration
statement (the "Exchange Offer Registration Statement") under the Securities Act
of 1933, as amended (the "Act"), registering a security substantially identical
to this Note (except that such Note will not contain terms with respect to the
Special Interest payments described below or transfer restrictions) pursuant to
an exchange offer (the "Registered Exchange Offer") (or, in lieu thereof, a
registration statement registering this Note for resale (a "Shelf Registration
Statement")) by September 19, 1997, or (ii) the Exchange Offer Registration
Statement relating to the Registered Exchange Offer has not become or been
declared effective by December 18, 1997, or (iii) neither the Registered
Exchange Offer has been consummated nor the Shelf Registration Statement has
been declared effective prior to January 17, 1998, or (iv) either the Exchange
Offer Registration Statement or, if applicable, the Shelf Registration Statement
is filed and declared effective (except as specifically permitted therein) but
shall thereafter cease to be effective without being succeeded promptly by an
additional registration statement filed and declared effective, in each case (i)
through (iv) upon the terms and conditions set forth in the Registration
29
<PAGE>
Agreement (each such event referred to in clauses (i) through (iv), a
"Registration Default"), then interest will accrue (in addition to any stated
interest on the Notes) (the "Step-Up") at a rate of 0.5% per annum, during the
90-day period from and including the date on which any such Registration Default
shall occur to but excluding the date on which all Registration Defaults have
been cured and shall increase by 0.25% per annum at the end of each subsequent
90-day period, but in no event shall such rate exceed 2.00% per annum, in the
aggregate regardless of the number of Registration Defaults. Interest accruing
as a result of the Step-Up is referred to herein as "Special Interest." Accrued
Special Interest, if any, shall be paid semi-annually on January 15 and July 15
of each year; and the amount of accrued Special Interest shall be determined on
the basis of the number of days actually elapsed. Any accrued and unpaid
interest (including Special Interest) on this Note upon the issuance of an
Exchange Note (as defined in the Indenture) in exchange for this Note shall
cease to be payable to the Holder hereof but such accrued and unpaid interest
(including Special Interest) shall be payable on the next Interest Payment Date
for such Exchange Note to the Holder thereof on the related Regular Record
Date.] The interest so payable, and punctually paid or duly provided for, on
any Interest Payment Date will, as provided in such Indenture, be paid to the
Person in whose name this Note (or one or more Predecessor Notes) is registered
at the close of business on the Regular Record Date for such interest, which
shall be December 30 or June 30 (whether or not a Business Day), as the case may
be, immediately preceding such Interest Payment Date. Any such interest not so
punctually paid or duly provided for will forthwith cease to be payable to the
Holder on such Regular Record Date and may either be paid to the Person in whose
name this Note (or one or more Predecessor Notes) is registered at the close of
business on a Special Record Date for the payment of such Defaulted Interest to
be fixed by the Trustee, notice whereof shall be given to Holders of Notes not
more than 15 calendar days and not less than 10 calendar days prior to such
Special Record Date, or be paid at any time in any other lawful manner not
inconsistent with the requirements of any securities exchange on which the Notes
may be listed, and upon such notice as may be required by such exchange, all as
more fully provided in said Indenture.
The principal of this Note shall accrue interest at the rate of 9.25 % per
annum, and in the case of a default in payment of principal and premium, if any,
upon acceleration or redemption, in which case interest shall be payable
pursuant to the preceding paragraph on such overdue principal (and premium, if
any), such interest shall be payable on demand and, if not so paid on demand,
such interest shall itself bear interest at the rate of 10.25% per annum (to the
extent that the payment of such interest shall be legally enforceable), and
shall accrue from the date of such demand for payment to the date payment of
such interest has been made or duly provided for, and such interest on unpaid
interest shall also be payable on demand.
Payment of the principal of (and premium, if any) and interest on this Note
will be made at the corporate trust office of the Trustee and at the office or
agency of the Company maintained for that purpose in the Borough of Manhattan,
The City of New York, New York, and at any other office or agency maintained by
the Company for such purpose, in such coin or currency of the United States of
America as at the time of payment is legal
30
<PAGE>
tender for payment of public and private debts; provided, however, that at the
option of the Company payment of interest may be made by check mailed to the
address of the Person entitled thereto as such address shall appear in the Note
Register.
Reference is hereby made to the further provisions of this Note set forth
on the reverse hereof, which further provisions shall for all purposes have the
same effect as if set forth at this place.
Unless the certificate of authentication hereon has been executed by the
Trustee referred to on the reverse hereof by manual signature, this Note 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.
Dated:
MCLEODUSA INCORPORATED
By____________________________
Attest:
______________________________
SECTION 2.03. Form of Reverse of Note.
-----------------------
This Note is one of a duly authorized issue of Notes of the Company
designated as its 9.25% Senior Notes due July 15 , 2007 (the "Notes") issued
under an Indenture, dated as of July 21, 1997 (herein called the "Indenture"),
between the Company and United States Trust Company of New York, as trustee
(herein called the "Trustee", which term includes any successor trustee under
the Indenture). The Notes are limited in aggregate principal amount to
$225,000,000. Reference is hereby made to the Indenture and all indentures
supplemental thereto for a statement of the respective rights, limitations of
rights, duties and immunities thereunder of the Company, the Trustee and the
Holders of the Notes and of the terms upon which the Notes are, and are to be,
authenticated and delivered.
31
<PAGE>
The Notes are subject to redemption upon not less than 30 nor more than 60
days' notice by mail to each Holder of Notes to be redeemed at such Holder's
address appearing in the Note Register, in amounts of $1,000 or an integral
multiple of $1,000, at any time on or after July 15, 2002 and prior to maturity,
as a whole or in part, at the election of the Company, at the following
Redemption Prices (expressed as percentages of the principal amount) plus
accrued interest to but excluding the Redemption Date (subject to the right of
Holder on the relevant Regular Record Date to receive interest due on an
Interest Payment Date that is on or prior to the Redemption Date), if redeemed
during the 12-month period beginning July 15, of each of the years indicated
below:
<TABLE>
<CAPTION>
Redemption
Year Price
---- ----------
<S> <C>
2002 104.625%
2003 103.083%
2004 101.542%
</TABLE>
and thereafter at a Redemption Price equal to 100% of the principal amount,
together in the case of any such redemption with accrued interest to but
excluding the Redemption Date, but interest installments whose Stated Maturity
is on or prior to such Redemption Date will be payable to the Holders of such
Notes, or one or more Predecessor Notes, of record at the close of business on
the relevant Regular Record Dates referred to on the face hereof, all as
provided in the Indenture.
The Notes are further subject to redemption prior to July 15, 2000
only in the event that the Company receives net proceeds from any sale of its
Common Stock in a Strategic Equity Investment on or before July 15, 2000, in
which case the Company may, at its option, use all or a portion of any such net
proceeds to redeem Notes in a principal amount of up to an aggregate amount
equal to 33 1/3% of the original principal amount of the Notes, provided,
however, that Notes in an amount equal to at least 66 2/3% of the original
principal amount of the Notes remain outstanding after such redemption. Such
redemption must occur on a Redemption Date within 90 days of any such sale and
upon not less than 30 nor more than 60 days' notice by mail to each Holder of
Notes to be redeemed at such Holder's address appearing in the Note Register, in
amounts of $1,000 or an integral multiple of $1,000 at a Redemption Price equal
to 109.25% of the principal amount of the Notes so redeemed, plus accrued and
unpaid interest thereon (if any) to but excluding the Redemption Date.
The Notes do not have the benefit of any sinking fund obligations.
The Indenture provides that, subject to certain conditions, if (i) a
Change of Control (as defined in the Indenture) occurs, (ii) the CCI Transaction
(as defined in the Indenture) is
32
<PAGE>
not consummated by the Termination Date (as defined in the Indenture) or is
terminated prior to such date, or (iii) certain Excess Proceeds are available to
the Company as a result of any Asset Sale, the Company shall be required to make
a Change of Control Offer, a CCI Transaction Put Option Offer or an Asset Sale
Offer, as the case may be, for all or a specified portion of the Notes.
[If not a Global Security insert -- In the event of redemption or
purchase pursuant to an Asset Sale Offer of this Note in part only, a new Note
or Notes of like tenor for the unredeemed or unpurchased portion hereof will be
issued in the name of the Holder hereof upon the cancellation hereof.]
[If a Global Security insert -- In the event of a deposit or
withdrawal of an interest in this Note (including upon an exchange, transfer,
redemption or repurchase of this Note in part only) effected in accordance with
the Applicable Procedures, the Note Registrar, upon receipt of notice of such
event from the Depositary's custodian for this Note, shall make an adjustment on
its records to reflect an increase or decrease of the outstanding principal
amount of this Note resulting from such deposit or withdrawal, as the case may
be.]
If an Event of Default shall occur and be continuing, the principal of
all the Notes may be declared due and payable in the manner and with the effect
provided in the Indenture.
The Indenture contains provisions for defeasance at any time of (i)
the entire indebtedness of this Note, or (ii) certain restrictive covenants and
Events of Default with respect to this Note, in each case upon compliance with
certain conditions set forth therein.
Unless the context otherwise requires, the Original Notes (as defined
in the Indenture) and the Exchange Notes (as defined in the Indenture) shall
constitute one series for all purposes under the Indenture, including without
limitation, amendments, waivers, redemptions, Change of Control Offers, CCI
Transaction Put Option Offers and Asset Sale Offers.
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 of the Notes under the Indenture at any
time by the Company and the Trustee with the consent of the Holders of a
majority in aggregate principal amount of the Notes at the time outstanding.
The Indenture also contains provisions permitting the Holders of specified
percentages in aggregate principal amount of the Notes at the time outstanding,
on behalf of the Holders of all the Notes, to waive compliance by the Company
with certain provisions of the Indenture and certain past defaults under the
Indenture and their consequences. Any such consent or waiver by the Holder of
this Note shall be conclusive and binding upon such Holder and upon all future
Holders of this Note and of any Note issued upon the registration of transfer
hereof or in exchange herefor or in lieu hereof, whether or not notation of such
consent or waiver is made upon this Note.
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<PAGE>
No reference herein to the Indenture and no provision of this Note or
of the Indenture shall alter or impair the obligation of the Company, which is
absolute and unconditional, to pay the principal of (and premium, if any) and
interest on this Note at the times, place and rate, and in the coin or currency,
herein prescribed.
As provided in the Indenture and subject to certain limitations
therein set forth, the transfer of this Note is registrable in the Note
Register, upon surrender of this Note for registration of transfer at the office
or agency of the Company in the Borough of Manhattan, The City of New York, New
York, duly endorsed by, or accompanied by a written instrument of transfer in
form satisfactory to the Company and the Note Registrar duly executed by, the
Holder hereof or his attorney duly authorized in writing, and thereupon one or
more new Notes, of authorized denominations and like tenor and for the same
aggregate principal amount, will be issued to the designated transferee or
transferees.
The Notes are issuable only in registered form without coupons in
denominations of $1,000 and any integral multiple thereof. As provided in the
Indenture and subject to certain limitations therein set forth, Notes are
exchangeable for a like tenor and aggregate principal amount of Notes of a
different authorized denomination, as requested by the Holder surrendering the
same.
No service charge shall be made for any such registration of transfer
or exchange, but the Company may require payment of a sum sufficient to cover
any tax or other governmental charge payable in connection therewith.
Prior to due presentment of this Note 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 Note is registered as the owner hereof for all
purposes, whether or not this Note be overdue, and neither the Company, the
Trustee nor any such agent shall be affected by notice to the contrary.
Interest on this Note shall be computed on the basis of a 360-day year
of twelve 30-day months; provided, however, that Special Interest shall be
computed on the basis of a 365-or 366-day year, as the case may be, and the
number of days actually elapsed.
THE INDENTURE AND THE NOTES, INCLUDING THIS NOTE, SHALL BE GOVERNED BY
AND CONSTRUED IN ACCORDANCE WITH THE LAWS OF THE STATE OF NEW YORK APPLICABLE TO
AGREEMENTS MADE AND TO BE PERFORMED IN SUCH STATE.
All terms used in this Note which are defined in the Indenture
shall have the meanings assigned to them in the Indenture.
CERTIFICATE OF TRANSFER
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<PAGE>
The transferor hereof (the "Transferor") hereby certifies in connection
with the transfer of this Note as follows:
(Please check one)
[_] The Transferor has requested that this Note be transferred to a
person (the "Transferee") who will take delivery in the form of a Regulation S
Note. In connection with such transfer, the Transferor hereby certifies that,
unless such transfer is being effected pursuant to an effective registration
statement under the Securities Act, it is being effected in accordance with Rule
904 or Rule 144 under the Securities Act and with all applicable securities laws
of the states of the United States and other jurisdictions. Accordingly, the
Transferor hereby further certifies as follows:
(1) Rule 904 Transfers. If the transfer is being effected in
------------------
accordance with Rule 904:
(A) the Transferor is not a distributor of the Notes, an
affiliate of the Company or any such distributor or a person
acting on behalf of any of the foregoing;
(B) the offer of this Note was not made to a person in the
United States;
(C) either:
(i) at the time the buy order was originated, the
Transferee was outside the United States or the Transferor
and any person acting on its behalf reasonably believed that
the Transferee was outside the United States, or
(ii) the transaction is being executed in, on or through
the facilities of the Eurobond market, as regulated by the
Association of International Bond Dealers, or another
designated offshore securities market and neither the Owner
nor any person acting on its behalf knows that the
transaction has been prearranged with a buyer in the United
States;
(D) no directed selling efforts have been made in the United
States by or on behalf of the Transferor or any affiliate
thereof;
(E) if the Transferor is a dealer in securities or has
received a selling concession, fee or other remuneration in
respect of this Note, and the
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transfer is to occur during the Restricted Period, then the
requirements of Rule 904(c)(1) have been satisfied; and
(F) the transaction is not part of a plan or scheme to evade
the registration requirements of the Securities Act.
(2) Rule 144 Transfers. If the transfer is being effected
------------------
pursuant to Rule 144:
(A) the transfer is occurring after a holding period of at
least one year (computed in accordance with paragraph (d) of Rule
144) has elapsed since this Note was last acquired from the
Company or from an affiliate of the Company, whichever is later,
and is being effected in accordance with the applicable amount,
manner of sale and notice requirements of Rule 144; or
(B) the transfer is occurring after a holding period of at
least two years has elapsed since this Note was last acquired
from the Company or from an affiliate of the Company, whichever
is later, and the Transferor is not, and during the preceding
three months has not been, an affiliate of the Company.
[_] The Transferor has requested that this Note be transferred to the
Transferee who will take delivery in the form of a Restricted Note. In
connection with such transfer, the Transferor hereby certifies that, unless such
transfer is being effected pursuant to an effective registration statement under
the Securities Act, it is being effected in accordance with Rule 144A, Rule 144
or to an Institutional Accredited Investor under Rule 501(a)(1), (2), (3) or (7)
under the Securities Act and in compliance with all applicable securities laws
of the states of the United States and other jurisdictions. Accordingly, the
Transferor hereby further certifies as follows:
(1) Rule 144A Transfers. If the transfer is being effected in
-------------------
accordance with Rule 144A:
(A) this Note is being transferred to a person that the
Transferor and any person acting on its behalf reasonably believe
is a "qualified institutional buyer" within the meaning of Rule
144A, acquiring for its own account or for the account of a
qualified institutional buyer; and
(B) the Transferor and any person acting on its behalf have
taken reasonable steps to ensure that the Transferee is aware
that the Transferor may be relying on Rule 144A in connection
with the transfer; and
(2) Rule 144 Transfers. If the transfer is being effected
------------------
pursuant to Rule 144:
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<PAGE>
(A) the transfer is occurring after a holding period of at
least one year (computed in accordance with paragraph (d) of Rule
144) has elapsed since this Note was last acquired from the
Company or from an affiliate of the Company, whichever is later,
and is being effected in accordance with the applicable amount,
manner of sale and notice requirements of Rule 144; or
(B) the transfer is occurring after a holding period of at
least two years has elapsed since this Note was last acquired
from the Company or from an affiliate of the Company, whichever
is later, and the Transferor is not, and during the preceding
three months has not been, an affiliate of the Company.
(3) Institutional Accredited Investor Transfers. If the
-------------------------------------------
transfer is being effected to an Institutional Accredited Investor as
defined under Rule 501(a)(1), (2), (3) or (7), this Note is being
transferred to such an Institutional Accredited Investor as therein so
defined who is purchasing for investment purposes and not for distribution.
OPTION OF HOLDER TO ELECT PURCHASE
If you want to elect to have this Note purchased by the Company pursuant to
Section 4.07, 4.08 or 4.09 of the Indenture, check the box:
[_]
If you want to elect to have only a part of this Note purchased by the
Company pursuant to Section 4.07, 4.08 or 4.09 of the Indenture, state the
amount: $_________________
Dated: Your Signature:
-------------------- ----------------------
(Sign exactly as name appears
on the other side of this Note)
Signature Guarantee:
----------------------------------------------------------
Notice: Signature(s) must be guaranteed by an "eligible guarantor
institution" meeting the requirements of the Note Registrar which
requirements will include membership or participation in STAMP or such
other "signature guarantee program" as may be determined by the Trustee in
addition to, or in substitution for STAMP, all in accordance with the
Securities Exchange Act of 1934, as amended.
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SECTION 2.04. Form of Trustee's Certificate of Authentication.
-----------------------------------------------
This is one of the Notes referred to in the within-mentioned Indenture.
Date:
,
-----------------------
as Trustee
By
-----------------------
Authorized Signatory
SECTION 2.05. Execution and Authentication. The aggregate principal
----------------------------
amount of Notes outstanding at any time shall not exceed $225,000,000. The
Notes shall be executed on behalf of the Company by its Chief Executive Officer,
its President or any Executive Vice President and shall be attested by the
Company's Secretary or one of its Assistant Secretaries, in each case by manual
or facsimile signature.
The Notes shall be authenticated by manual signature of an authorized
officer of the Trustee and shall not be valid for any purpose unless so
authenticated.
In case any officer of the Company whose signature shall have been placed
upon any of the Notes shall cease to be such officer of the Company before
authentication of such Notes by the Trustee and the issuance and delivery
thereof, such Notes may, nevertheless, be authenticated by the Trustee and
issued and delivered with the same force and effect as though such Person had
not ceased to be such officer of the Company.
Notwithstanding any other provision hereof, the Trustee shall authenticate
and deliver Notes only upon receipt by the Trustee of an Officers' Certificate
complying with Section 10.04 hereof with respect to satisfaction of all
conditions precedent contained in this Indenture to authentication and delivery
of such Notes.
Upon compliance by the Company with the provisions of the previous
paragraph, the Trustee shall, upon receipt of a Company Order requesting such
action, authenticate Notes for original issuance in an aggregate principal
amount not to exceed $225,000,000. Such Company Order shall specify the amount
of Notes to be authenticated and the date on which the Notes are to be
authenticated and shall further provide instructions concerning registration,
amounts for each Holder and delivery.
A Note shall not be valid or entitled to any benefit under this Indenture
or obligatory for any purpose unless executed by the Company and authenticated
by the manual signature of the Trustee as provided herein. The signature of an
authorized officer of the Trustee shall be conclusive evidence, and the only
evidence, that such Note has been authenticated and delivered under this
Indenture.
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The Trustee may appoint an authenticating agent reasonably acceptable to
the Company to authenticate the Notes. Unless limited by the terms of such
appointment, an authenticating agent may authenticate Notes whenever the Trustee
may do so. Each reference in this Indenture to authentication by the Trustee
includes authentication by such agent. Any authenticating agent of the Trustee
shall have the same rights hereunder as any Registrar or Paying Agent. The
Trustee shall not be liable for any failure to act of the authenticating agent
in performing any duty either required herein or authorized herein to be
performed by such person in accordance with the Indenture.
SECTION 2.06. Note Registrar and Paying Agent. The Company shall
-------------------------------
maintain, pursuant to Section 4.02 hereof, an office or agency where the Notes
may be presented for registration of transfer or for exchange. The Company
shall cause to be kept at such office a register (the register maintained in
such office being herein sometimes referred to as the "Note Register") in which,
subject to such reasonable regulations as it may prescribe, the Company shall
provide for the registration of Notes and of transfers of Notes entitled to be
registered or transferred as provided herein. The Trustee, at its Corporate
Trust Office, is initially appointed "Note Registrar" for the purpose of
registering Notes and transfers of Notes as herein provided. The Company may,
upon written notice to the Trustee, change the designation of the Trustee as
Note Registrar and appoint another Person to act as Note Registrar for purposes
of this Indenture. If any Person other than the Trustee acts as Note Registrar,
the Trustee shall have the right at any time, upon reasonable notice, to inspect
or examine the Note Register and to make such inquiries of the Note Registrar as
the Trustee shall in its discretion deem necessary or desirable in performing
its duties hereunder.
The Company shall enter into an appropriate agency agreement with any
Person designated by the Company as Note Registrar or Paying Agent that is not a
party to this Indenture, which agreement shall incorporate the provisions of the
Trust Indenture Act and shall implement the provisions of this Indenture that
relate to such Note Registrar or Paying Agent. Prior to the designation of any
such Person, the Company shall, by written notice (which notice shall include
the name and address of such Person), inform the Trustee of such designation.
If the Company fails to maintain a Note Registrar or Paying Agent, the Trustee
shall act as such.
Upon surrender for registration of transfer of any Note at an office or
agency of the Company designated for such purpose, the Company shall execute,
and the Trustee shall authenticate and deliver, in the name of the designated
transferee or transferees, one or more new Initial Notes or Exchange Notes, as
the case may be, of any authorized denomination or denominations, of like tenor
and aggregate principal amount, all as requested by the transferor.
Every Note presented or surrendered for registration of transfer or for
exchange shall (if so required by the Company, the Trustee or the Note
Registrar) be duly endorsed, or be accompanied by a duly executed instrument of
transfer in form satisfactory to the Company,
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the Trustee and the Note Registrar, by the Holder thereof or such Holder's
attorney duly authorized in writing.
SECTION 2.07. Paying Agent to Hold Money in Trust. On or prior to 10:00
-----------------------------------
a.m. on each due date of the principal, premium, or any payment of interest with
respect to any Note, the Company shall deposit with the Paying Agent a sum
sufficient to pay such principal, premium or interest when so becoming due.
The Company shall require each Paying Agent (other than the Trustee) to
agree in writing that such Paying Agent, shall hold in trust for the benefit of
Holders or the Trustee all money held by such Paying Agent for the payment of
principal, premium, or interest with respect to the Notes, shall notify the
Trustee of any default by the Company in making any such payment and at any time
during the continuance of any such default, upon the written request of the
Trustee, shall forthwith pay to the Trustee all sums held in trust by such
Paying Agent.
The Company at any time may require a Paying Agent to pay all money held by
it to the Trustee and to account for any funds disbursed by such Paying Agent.
Upon complying with this Section 2.07, the Paying Agent shall have no further
liability for the money delivered to the Trustee.
SECTION 2.08. Registration, Registration of Transfer and Exchange.
---------------------------------------------------
(a) At the option of the Holder, and subject to the other provisions of
this Section 2.08, Notes may be exchanged for other Notes of any authorized
denominations and of a like tenor and aggregate principal amount, upon surrender
of the Notes to be exchanged at such office or agency. Whenever any Notes are
so surrendered for exchange, the Company shall execute, and the Trustee shall
authenticate and deliver, the Notes which the Holder making the exchange is
entitled to receive.
All Notes issued upon any registration of transfer or exchange of Notes
shall be the valid obligations of the Company, evidencing the same debt, and
(subject to the provisions in the Original Notes regarding the payment of
Special Interest) entitled to the same benefits under this Indenture, as the
Notes surrendered upon such registration of transfer or exchange.
Every Note presented or surrendered for registration of transfer or for
exchange shall (if so required by the Company or the Trustee) be duly endorsed,
or be accompanied by a written instrument of transfer in form satisfactory to
the Company and the Note Registrar duly executed, by the Holder thereof or his
attorney duly authorized in writing.
No service charge shall be made to the Holder for any registration of
transfer or exchange of Notes, but the Company may require payment of a sum
sufficient to cover any tax or other governmental charge that may be imposed in
connection with any registration of
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<PAGE>
transfer or exchange of Notes, other than exchanges pursuant to Sections 2.11,
3.06 or 9.06 or in accordance with any offer pursuant to Section 4.07, 4.08 or
4.09 not involving any transfer.
Any holder of a Global Security shall, by acceptance of such Global
Security, agree that transfers of beneficial interests in such Global Security
may be effected through a book entry system maintained by the holder of such
Global Security (or its agent) and the ownership of a beneficial interest in the
Note shall be reflected in a book entry.
The Company shall not be required (i) to issue, register the transfer of or
exchange any Note during a period beginning at the opening of business 15 days
before the day of the mailing of a notice of redemption of Notes selected for
redemption under Section 3.03 and ending at the close of business on the day of
such mailing, or (ii) to register the transfer of or exchange any Note so
selected for redemption in whole or in part, except the unredeemed portion of
any Note being redeemed in part.
(b) Certain Transfers and Exchanges. Notwithstanding any other provision
-------------------------------
of this Indenture or the Notes, transfers and exchanges of Notes and beneficial
interests in a Global Security of the kinds specified in this Section 2.08(b)
shall be made only in accordance with this Section 2.08(b).
(i) Restricted Global Security to Regulation S Global Security. If
----------------------------------------------------------
the owner of a beneficial interest in the Restricted Global Security wishes
at any time to transfer such interest to a Person who wishes to acquire the
same in the form of a beneficial interest in the Regulation S Global
Security, such transfer may be effected only in accordance with the
provisions of this Clause (b)(i) and Clause (b)(vii) below and subject to
the Applicable Procedures. Upon receipt by the Trustee, as Note Registrar,
of (A) an order given by the Depositary or its authorized representative
directing that a beneficial interest in the Regulation S Global Security in
a specified principal amount be credited to a specified Agent Member's
account and that a beneficial interest in the Restricted Global Security in
an equal principal amount be debited from another specified Agent Member's
account and (B) a Regulation S Certificate, satisfactory to the Trustee and
duly executed by the owner of such beneficial interest in the Restricted
Global Security or his attorney duly authorized in writing, then the
Trustee, as Note Registrar but subject to Clause (b)(vii) below, shall
reduce the principal amount of the Restricted Global Security and increase
the principal amount of the Regulation S Global Security by such specified
principal amount as provided in Section 2.08(d)(3).
(ii) Regulation S Global Security to Restricted Global Security. If
----------------------------------------------------------
the owner of a beneficial interest in the Regulation S Global Security
wishes at any time to transfer such interest to a Person who wishes to
acquire the same in the form of a beneficial interest in the Restricted
Global Security, such transfer may be effected only in accordance with this
Clause (b)(ii) and subject to the Applicable Procedures.
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<PAGE>
Upon receipt by the Trustee, as Note Registrar, of (A) an order given by the
Depositary or its authorized representative directing that a beneficial interest
in the Restricted Global Security in a specified principal amount be credited to
a specified Agent Member's account and that a beneficial interest in the
Regulation S Global Security in an equal principal amount be debited from
another specified Agent Member's account and (B) if such transfer is to occur
during the Restricted Period, a Restricted Notes Certificate, satisfactory to
the Trustee and duly executed by the owner of such beneficial interest in the
Regulation S Global Security or his attorney duly authorized in writing, then
the Trustee, as Note Registrar, shall reduce the principal amount of the
Regulation S Global Security and increase the principal amount of the Restricted
Global Security by such specified principal amount as provided in Section
2.08(d)(3).
(iii) Restricted Non-Global Security to Restricted Global Security or
-------------------------------------------- ------------------
Regulation S Global Security. Subject to Section 2.08(d)(2) hereof, if the
- ----------------------------
Holder of a Restricted Note (other than a Global Security) wishes at any time to
transfer all or any portion of such Restricted Note to a Person who wishes to
take delivery thereof in the form of a beneficial interest in the Restricted
Global Security or the Regulation S Global Security, such transfer may be
effected only in accordance with the provisions of this Clause (b)(iii) and
Clause (b)(vii) below and subject to the Applicable Procedures. Upon receipt by
the Trustee, as Note Registrar, of (A) such Restricted Note as provided in
Section 2.08(a) and instructions satisfactory to the Trustee directing that a
beneficial interest in the Restricted Global Security or Regulation S Global
Security in a specified principal amount not greater than the principal amount
of such Note be credited to a specified Agent Member's account and (B) a
Restricted Notes Certificate (or the completion of the Certificate of Transfer
on the Note), if the specified account is to be credited with a beneficial
interest in the Restricted Global Security, or a Regulation S Certificate (or
the completion of the Certificate of Transfer on the Note), if the specified
account is to be credited with a beneficial interest in the Regulation S Global
Security, in either case satisfactory to the Trustee and duly executed by such
Holder or his attorney duly authorized in writing, then the Trustee, as Note
Registrar but subject to Clause (b)(vii) below, shall cancel such Restricted
Note (and issue a new Restricted Note in respect of any untransferred portion
thereof) as provided in Section 2.08(a) and increase the principal amount of the
Restricted Global Security or the Regulation S Global Security , as the case may
be, by the specified principal amount as provided in Section 2.08(d)(3).
(iv) Regulation S Non-Global Security to Restricted Global Security or
---------------------------------------------- ------------------
Regulation S Global Security. Subject to Section 2.08(d)(2) hereof, if the
- ----------------------------
Holder of a Regulation S Note (other than a Global Security) wishes at any time
to transfer all or any portion of such Regulation S Note to a Person who wishes
to acquire the same in the form of a beneficial interest in the Restricted
Global Security or the Regulation S Global Security, such transfer may be
effected only in accordance with this Clause
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(b)(iv) and Clause (b)(vii) below and subject to the Applicable Procedures.
Upon receipt by the Trustee, as Note Registrar, of (A) such Regulation S Note as
provided in Section 2.08(a) and instructions satisfactory to the Trustee
directing that a beneficial interest in the Restricted Global Security or
Regulation S Global Security in a specified principal amount not greater than
the principal amount of such Note be credited to a specified Agent Member's
account and (B) if the transfer is to occur during the Restricted Period and the
specified account is to be credited with a beneficial interest in the Restricted
Global Security, a Restricted Notes Certificate (or the completion of the
Certificate of Transfer on the Note) satisfactory to the Trustee and duly
executed by such Holder or his attorney duly authorized in writing, then the
Trustee, as Note Registrar but subject to Clause (b)(vii) below, shall cancel
such Regulation S Note (and issue a new Regulation S Note in respect of any
untransferred portion thereof) as provided in Section 2.08(a) and increase the
principal amount of the Restricted Global Security or the Regulation S Global
Security, as the case may be, by the specified principal amount as provided in
Section 2.08(d)(3).
(v) Non-Global Security to Non-Global Security. A Note that is not a
------------------------------------------
Global Security may be transferred, in whole or in part, to a Person who takes
delivery in the form of another Note that is not a Global Security as provided
in Section 2.08(a), provided that, if the Note to be transferred in whole or in
part is a Restricted Note, or is a Regulation S Note and the transfer is to
occur during the Restricted Period, then the Trustee shall have received (A) a
Restricted Notes Certificate (or the completion of the Certificate of Transfer
on the Note), satisfactory to the Trustee and duly executed by the transferor
Holder or his attorney duly authorized in writing, in which case the transferee
Holder shall take delivery in the form of a Restricted Note or (B) a Regulation
S Certificate (or the completion of the Certificate of Transfer on the Note),
satisfactory to the Trustee and duly executed by the transferor Holder or his
attorney duly authorized in writing; in which case the transferee Holder shall
take delivery in the form of a Regulation S Note (subject in every case to
Section 2.08(c)).
(vi) Exchanges between Global Security and Non-Global Security. A
---------------------------------------------------------
beneficial interest in a Global Security may be exchanged for a Note that is not
a Global Security as provided in Section 2.08(d)(2), provided that, if such
interest is a beneficial interest in the Restricted Global Security, or if such
interest is a beneficial interest in the Regulation S Global Security and such
exchange is to occur during the Restricted Period, then such interest shall be
exchanged for a Restricted Note (subject in each case to Section 2.08(c)). A
Note that is not a Global Security may be exchanged for a beneficial interest in
a Global Security only if (A) such exchange occurs in connection with a transfer
effected in accordance with Clause (b)(iii) or (iv) above or (B) such Note is a
Regulation S Note and such exchange occurs after the Restricted Period.
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(vii) Regulation S Global Security to be Held Through Euroclear
----------------------------------------------- ---------
or Cedel during Restricted Period. The Company shall use its best efforts
---------------------------------
to cause the Depositary to ensure that, until the expiration of the
Restricted Period, beneficial interests in the Regulation S Global Security
may be held only in or through accounts maintained at the Depositary by
Euroclear or Cedel (or by Agent Members acting for the account thereof),
and no person shall be entitled to effect any transfer or exchange that
would result in any such interest being held otherwise than in or through
such an account; provided that this Clause (b)(vii) shall not prohibit any
transfer or exchange of such an interest in accordance with Clause (b)(ii)
or (vi) above.
(c) Securities Act Legends. Rule 144A Notes, Other Notes and their
----------------------
respective Successor Notes shall bear a Restricted Note Legend, and the
Regulation S Notes and their Successor Notes shall bear a Regulation S Legend,
subject to the following:
(i) subject to the following Clauses of this Section 2.08(c), a
Note or any portion thereof which is exchanged, upon transfer or otherwise,
for a Global Security or any portion thereof shall bear the Securities Act
Legend borne by such Global Security while represented thereby;
(ii) subject to the following Clauses of this Section 2.08(c), a
new Note which is not a Global Security and is issued in exchange for
another Note (including a Global Security) or any portion thereof, upon
transfer or otherwise, shall bear the Securities Act Legend borne by such
other Note, provided that, if such new Note is required pursuant to Section
2.08(b)(v) or (vi) to be issued in the form of a Restricted Note, it shall
bear a Restricted Note Legend and, if such new Note is so required to be
issued in the form of a Regulation S Note, it shall bear a Regulation S
Legend;
(iii) Registered Notes shall not bear a Securities Act Legend;
(iv) at any time after the Notes may be freely transferred
without registration under the Securities Act or without being subject to
transfer restrictions pursuant to the Securities Act, a new Note which does
not bear a Securities Act Legend may be issued in exchange for or in lieu
of a Note (other than a Global Security) or any portion thereof which bears
such a legend if the Trustee has received an Unrestricted Note Certificate,
satisfactory to the Trustee and duly executed by the Holder of such
legended Note or his attorney duly authorized in writing, and after such
date and receipt of such certificate, the Trustee shall authenticate and
deliver such a new Note in exchange for or in lieu of such other Note as
provided in this Article II;
(v) a new Note which does not bear a Securities Act Legend may
be issued in exchange for or in lieu of a Note (other than a Global
Security) or any portion thereof which bears such a legend if, in the
Company's judgment, placing such a legend upon such new Note is not
necessary to ensure compliance with the registration requirements of the
Securities Act, and the Trustee, at the direction of the
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Company, shall authenticate and deliver such a new Note as provided in
this Article II; and
(vi) notwithstanding the foregoing provisions of this Section
2.08(c), a Successor Note of a Note that does not bear a particular form of
Securities Act Legend shall not bear such form of legend unless the Company
has reasonable cause to believe that such Successor Note is a "restricted
security" within the meaning of Rule 144, in which case the Trustee, at the
direction of the Company, shall authenticate and deliver a new Note bearing
a Restricted Note Legend in exchange for such Successor Note as provided in
this Article II.
(d) The provisions of Clauses (1), (2), (3), (4) and (5) below shall apply
only to Global Securities:
(1) Each Global Security authenticated under this Indenture shall be
registered in the name of the Depositary or a nominee thereof and delivered
to the Depositary or a nominee thereof or custodian therefor, and each such
Global Security shall constitute a single Note for all purposes of this
Indenture.
(2) Notwithstanding any other provision in this Indenture, no Global
Security may be exchanged in whole or in part for Notes registered, and no
transfer of a Global Security in whole or in part may be registered, in the
name of any Person other than the Depositary or a nominee thereof unless
(i) the Depositary notifies the Company that it is unwilling or unable to
continue as a depositary for such Global Security or if at any time the
Depositary ceases to be a clearing agency registered under the Exchange
Act, and a successor depositary is not appointed by the Company within 90
days, (ii) the Company executes and delivers to the Trustee a notice that
such Global Security shall be so transferable, registrable and
exchangeable, and such transfer shall be registrable or (iii) there shall
have occurred and be continuing an Event of Default with respect to the
Notes represented by such Global Security.
(3) If any Global Security is to be exchanged for other Notes or
cancelled in whole, it shall be surrendered by or on behalf of the
Depositary or its nominee to the Trustee, as Note Registrar, for exchange
or cancellation as provided in this Article II. If any Global Security is
to be exchanged for other Notes or cancelled in part, or if another Note is
to be exchanged in whole or in part for a beneficial interest in any Global
Security, then either (i) such Global Security shall be so surrendered for
exchange or cancellation as provided in this Article II or (ii) the
principal amount thereof shall be reduced or increased by an amount equal
to the portion thereof to be so exchanged or cancelled, or equal to the
principal amount of such other Note to be so exchanged for a beneficial
interest therein, as the case may be, by means of an appropriate adjustment
made on the records of the Trustee, as Note Registrar, whereupon the
Trustee, in accordance with the Applicable Procedures, shall instruct the
Depositary or its authorized representative to make a corresponding
adjustment to
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its records. Upon any such surrender or adjustment of a Global Security,
the Trustee shall, subject to Section 2.08(d)(2) and as otherwise provided
in this Article II, authenticate and deliver any Notes issuable in exchange
for such Global Security (or any portion thereof) to or upon the order of,
and registered in such names as may be directed by, the Depositary or its
authorized representative. Upon the request of the Trustee in connection
with the occurrence of any of the events specified in the preceding
paragraph, the Company shall promptly make available to the Trustee a
reasonable supply of Notes that are not in the form of Global Securities.
The Trustee shall be entitled to rely upon any order, direction or request
of the Depositary or its authorized representative which is given or made
pursuant to this Article II if such order, direction or request is given or
made in accordance with the Applicable Procedures.
(4) Every Note authenticated and delivered upon registration of
transfer of, or in exchange for or in lieu of, a Global Security or any
portion thereof, whether pursuant to this Section, Section 2.05, 2.09,
3.06, 4.07, 4.08, 4.09 or 9.06 or otherwise, shall be authenticated and
delivered in the form of, and shall be, a Global Security, unless such Note
is registered in the name of a Person other than the Depositary or a
nominee thereof.
(5) None of the Company, the Trustee, any agent of the Trustee, any
Paying Agent or the Note Registrar will have any responsibility or
liability for any aspect of the Depository's records (or the records of the
participant of such Depository) relating to or payments made on account of
beneficial ownership interests of a Global Security or for maintaining,
supervising or reviewing any records of the Depository relating to such
beneficial ownership interests.
SECTION 2.09. Replacement Notes. If any mutilated Note is surrendered to
-----------------
the Trustee, the Company shall execute and upon its written request the Trustee
shall authenticate and deliver, in exchange for any such mutilated Note, a new
Note containing identical provisions and of like principal amount, bearing a
number not contemporaneously outstanding.
If there shall be delivered to the Company and the Trustee (i) evidence to
their satisfaction of the destruction, loss or theft of any Note and (ii) such
security or indemnity as may be required by them to save either of them and any
agent of each of them harmless, then, in the absence of notice to the Company or
the Trustee that such Note has been acquired by a bona fide purchaser, the
Company shall execute and upon its request the Trustee shall authenticate and
deliver, in lieu of any such destroyed, lost or stolen Note, a new Note
containing identical provisions and of like principal amount, bearing a number
not contemporaneously outstanding.
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In case any such mutilated, destroyed, lost or stolen Note has become or is
about to become due and payable, the Company in its discretion may, instead of
issuing a new Note, pay such Note.
Upon the issuance of any new Note under this Section 2.09, the Company may
require the payment by the Holder of a sum sufficient to cover any tax or other
governmental charge that may be imposed in relation thereto and any other
expenses (including the fees and expenses of the Trustee) connected therewith.
Every new Note issued pursuant to this Section 2.09 in lieu of any
destroyed, lost or stolen Note shall constitute an original additional
contractual obligation of the Company, whether or not the destroyed, lost or
stolen Note shall be at any time enforceable by anyone, and shall be entitled to
all the benefits of this Indenture equally and proportionately with any and all
other Notes duly issued hereunder.
The provisions of this Section 2.09 are exclusive and shall preclude (to
the extent lawful) all other rights and remedies with respect to the replacement
or payment of mutilated, destroyed, lost or stolen Notes.
SECTION 2.10. Outstanding Notes. Notes outstanding at any time are all
-----------------
Notes authenticated by the Trustee except for those canceled by it, those
delivered to it for cancellation and those described in this Section 2.10 as not
outstanding. A Note does not cease to be outstanding because the Company or an
Affiliate of the Company holds such Note.
If a Note is replaced pursuant to Section 2.09 hereof, it ceases to be
outstanding unless the Trustee and the Company receive proof satisfactory to
them that such replaced Note is held by a bona fide purchaser.
If the Paying Agent segregates and holds in trust, in accordance with this
Indenture, on a redemption date or Maturity date money sufficient to pay all
principal, premium, if any, and interest payable on that date with respect to
the Notes (or portions thereof) to be redeemed or maturing, as the case may be,
then on and after that date such Notes (or such portions thereof) shall cease to
be outstanding and interest on them shall cease to accrue.
In determining whether the Holders of the required principal amount of
Notes have concurred in any direction, waiver or consent or any amendment,
modification or other change to this Indenture, Notes held or beneficially owned
by the Company or a Restricted Subsidiary of the Company or by an Affiliate of
the Company or a Restricted Subsidiary of the Company or by agents of any of the
foregoing 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 or any amendment, modification or other change to this Indenture,
only Notes which a Trust Officer knows are so owned shall be so disregarded.
Notes so owned which have been pledged in good faith shall not be disregarded if
the
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pledgee establishes to the satisfaction of the Trustee such pledgee's right so
to act with respect to the Notes and that the pledgee is not the Company or an
Affiliate of the Company or any of their agents.
SECTION 2.11. Temporary Notes. Pending the preparation of definitive
---------------
Notes, the Company may execute, and the Trustee shall authenticate, temporary
notes ("Temporary Notes") which are printed, lithographed, or otherwise
produced, substantially of the tenor of the definitive Notes in lieu of which
they are issued and with such appropriate insertions, omissions, substitutions
and other variations.
If Temporary Notes are issued, the Company shall cause definitive Notes to
be prepared without unreasonable delay. After the preparation of definitive
Notes, the Temporary Notes shall be exchangeable for definitive Notes upon
surrender of the Temporary Notes to the Trustee, without charge to the Holder.
Until so exchanged, Temporary Notes will evidence the same debt and will be
entitled to the same benefits under this Indenture as the definitive Notes in
lieu of which they have been issued.
SECTION 2.12. Cancellation. The Company at any time may deliver Notes to
------------
the Trustee for cancellation. The Note Registrar and the Paying Agent shall
forward to the Trustee any Notes surrendered to them for registration of
transfer, exchange, purchase or payment. The Trustee shall cancel all Notes
surrendered for registration of transfer, exchange, purchase, payment or
cancellation and shall destroy such canceled Notes unless the Company shall by
Company Order otherwise direct. The Company may not issue new Notes to replace
Notes that have been delivered to the Trustee for cancellation.
SECTION 2.13. Payment of Interest; Interest Rights Preserved. Interest
----------------------------------------------
on any Note which is payable, and is punctually paid or duly provided for, on
any Interest Payment Date shall be paid to the Person in whose name such Note is
registered at the close of business on the Regular Record Date for such interest
payment, which shall be the December 30 or June 30 (whether or not a Business
Day) immediately preceding such Interest Payment Date.
Any interest on any Note which is payable, but is not punctually paid or
duly provided for, on any Interest Payment Date (herein called "Defaulted
Interest") shall forthwith cease to be payable to the registered Holder on the
relevant Regular Record Date, and, except as hereinafter provided, such
Defaulted Interest, and any interest payable on such Defaulted Interest, may be
paid by the Company, at its election, as provided in clause (a) or (b) below:
(a) The Company may elect to make payment of any Defaulted Interest, and
any interest payable on such Defaulted Interest, to the Persons in whose
names the Notes are registered at the close of business on a Special Record
Date for the payment of such Defaulted Interest, which shall be fixed in
the following manner. The Company shall notify the Trustee in writing of
the amount of Defaulted Interest
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proposed to be paid on the Notes and the date of the proposed payment, and
at the same time the Company shall deposit with the Trustee an amount of
money equal to the aggregate amount proposed to be paid in respect of such
Defaulted Interest or shall make arrangements satisfactory to the Trustee
for such deposit prior to the date of the proposed payment, such money when
deposited to be held in trust for the benefit of the Persons entitled to
such Defaulted Interest as provided in this Clause. Thereupon the Trustee
shall fix a Special Record Date for the payment of such Defaulted Interest
which shall be not more than 15 calendar days and not less than 10 calendar
days prior to the date of the proposed payment and not less than 10
calendar days after the receipt by a Trust Officer of the Trustee of the
notice of the proposed payment. The Trustee shall promptly notify the
Company of such Special Record Date and, in the name and at the expense of
the Company, shall cause notice of the proposed payment of such Defaulted
Interest and the Special Record Date therefor to be sent, first class mail,
postage prepaid, to each Holder at such Holder's address as it appears in
the Note Register, not less than 10 calendar days prior to such Special
Record Date. Notice of the proposed payment of such Defaulted Interest and
the Special Record Date therefor having been mailed as aforesaid, such
Defaulted Interest shall be paid to the Persons in whose names the Notes
are registered at the close of business on such Special Record Date and
shall no longer be payable pursuant to the following clause (b).
(b) The Company may make payment of any Defaulted Interest, and any
interest payable on such Defaulted Interest, on the Notes in any other
lawful manner not inconsistent with the requirements of any securities
exchange on which the Notes may be listed, and upon such notice as may be
required by such exchange, if, after notice given by the Company to the
Trustee of the proposed payment pursuant to this clause, such manner of
payment shall be deemed practicable by the Trustee.
Subject to the foregoing provisions of this Section 2.13, each Note
delivered under this Indenture upon registration of transfer of, or in exchange
for, or in lieu of, any other Note, shall carry the rights to interest accrued
and unpaid, and to accrue, which were carried by such other Note.
SECTION 2.14. Authorized Denominations. The Notes shall be issuable in
------------------------
minimum denominations of $1,000 and any integral multiple thereof.
SECTION 2.15. Computation of Interest. Interest on the Notes shall be
-----------------------
computed on the basis of a 360-day year of twelve 30-day months; provided that
Special Interest shall be computed on the basis of a 365- or 366-day year, as
the case may be, and the number of days actually elapsed from the date Special
Interest commences to accrue to but not including the date on which Special
Interest ceases to accrue.
SECTION 2.16. Persons Deemed Owners. Prior to the due presentation for
---------------------
registration of transfer of any Note, the Company, the Trustee, the Paying
Agent, the Note
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Registrar or any co-registrar may deem and treat the person in whose name Note
is registered as the absolute owner of such Note for the purpose of receiving
payment of principal of, premium, if any, and interest on such Note and for all
other purposes whatsoever, whether or not such Note is overdue, and none of the
Company, the Trustee, the Paying Agent, the Note Registrar or any co-Registrar
shall be affected by notice to the contrary.
SECTION 2.17. CUSIP Numbers. The Company, in issuing the Notes, may use
-------------
"CUSIP" and "ISIN" numbers for each series of Notes and, if so, the Trustee
shall use the relevant CUSIP and ISIN numbers in any notices to Holders as a
convenience to such Holders; provided that any such notice may state that no
representation is made as to the correctness or accuracy of the CUSIP and ISIN
numbers printed in the notice or on the Notes and that reliance may be placed
only on the other identification numbers printed on the Notes. The Company
shall promptly notify the Trustee of any change in any CUSIP or "ISIN" numbers
used.
SECTION 2.18. Holder Lists. The Trustee shall preserve in as current a
------------
form as is reasonably practicable the most recent list available to it of the
names and addresses of Holders and shall otherwise comply with Trust Indenture
Act (S) 312(a). If the Trustee is not the Note Registrar, the Company shall
furnish to the Trustee as of each Regular Record 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,
including the aggregate principal amount of Notes held by each Holder.
ARTICLE III.
REDEMPTION
SECTION 3.01. Notice to Trustee. If the Company elects to redeem Notes
-----------------
pursuant to paragraph two or three of the reverse side of the Notes, it shall
notify the Trustee in writing of the Redemption Date and the principal amount of
Notes to be redeemed. The Company shall give each such notice to the Trustee at
least 60 calendar days prior to the Redemption Date unless the Trustee consents
in writing to a shorter period. Such notice shall be accompanied by an
Officers' Certificate and an Opinion of Counsel from the Company to the effect
that such redemption will comply with any conditions to such redemption set
forth herein and in the Notes.
SECTION 3.02. Selection of Notes to be Redeemed. If less than all the
---------------------------------
Notes are to be redeemed at any time, the Trustee shall select the Notes to be
redeemed by lot, on a pro rata or other basis as it shall deem fair and
appropriate; provided that the Trustee may select for redemption in part only
Notes in denominations larger than $1,000. In selecting Notes to be redeemed
pursuant to this Section 3.02, the Trustee shall make such adjustments,
reallocations and eliminations as it shall deem proper so that the principal
amount of each Note to be redeemed shall be $1,000 or an integral multiple
thereof, by increasing,
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decreasing or eliminating any amount less than $1,000 which would be allocable
to any Holder. If the Notes to be redeemed are Certificated Notes, the
Certificated Notes to be redeemed shall be selected by the Trustee by prorating,
as nearly as may be, the principal amount of Certificated Notes to be redeemed
among the Holders of Certificated Notes registered in their respective names.
The Trustee in its discretion may determine the particular Notes (if there are
more than one) registered in the name of any Holder which are to be redeemed, in
whole or in part. Provisions of this Indenture that apply to Notes called for
redemption also apply to portions of Notes called for redemption. The Trustee
shall notify the Company promptly of the Notes or portions of Notes to be
redeemed.
SECTION 3.03. Notice of Redemption. At least 30 calendar days but not
--------------------
more than 60 calendar days before a Redemption Date, the Company shall send a
notice of redemption, first class mail, postage prepaid, to Holders of Notes to
be redeemed at the addresses of such Holders as they appear in the Note
Register.
The notice shall identify the Notes to be redeemed and shall state:
(a) the Redemption Date;
(b) the Redemption Price (and shall specify the portion of such
Redemption Price that constitutes the amount of accrued and unpaid interest
to be paid, if any);
(c) the name and address of the Paying Agent;
(d) that the Notes called for redemption must be surrendered to the
Paying Agent to collect the Redemption Price;
(e) if any Note is being redeemed in part, the portion of the principal
amount of such Note to be redeemed and that, after the Redemption Date, a
new Note or Notes in principal amount equal to the unredeemed portion will
be issued;
(f) if fewer than all the outstanding Notes are to be redeemed, the
identification and principal amounts of the particular Notes to be
redeemed;
(g) that, unless the Company defaults in making the redemption payment,
interest on the Notes (or portions thereof) called for redemption shall
cease and such Notes (or portions thereof) shall cease to accrue interest
on and after the Redemption Date;
(h) the paragraph of the Notes pursuant to which the Notes are being
called for redemption; and
(i) any other information necessary to enable Holders to comply with the
notice of redemption.
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At the Company's request, the Trustee shall give the notice of redemption
in the Company's name and at the Company's expense. In such event, the Company
shall provide the Trustee with the information required by this Section 3.03 in
a timely manner.
SECTION 3.04. Effect of Notice of Redemption. Once notice of redemption
------------------------------
is mailed, Notes called for redemption shall become due and payable on the
Redemption Date and at the Redemption Price stated in such notice. Upon
surrender to the Paying Agent, such Notes shall be paid at the Redemption Price
stated in such notice. Failure to give notice or any defect in the notice to
any Holder shall not affect the validity of the notice to any other Holder.
SECTION 3.05. Deposit of Redemption Price. On or prior to 10:00 a.m.,
---------------------------
New York City time, on each Redemption Date, the Company shall deposit with the
Paying Agent (or, if the Company, one of its Subsidiaries or any of their
Affiliates is the Paying Agent, the Paying Agent shall segregate and hold in
trust for the benefit of the Holders) money, in federal or other immediately
available funds, sufficient to pay the Redemption Price on all Notes to be
redeemed on that date other than Notes or portions of Notes called for
redemption on such date which have been delivered by the Company to the Trustee
for cancellation.
So long as the Company complies with the preceding paragraph and the other
provisions of this Article III, interest on the Notes to be redeemed on the
applicable Redemption Date shall cease to accrue from and after such date and
such Notes or portions thereof shall be deemed not to be entitled to any benefit
under this Indenture except to receive payment of the Redemption Price on the
Redemption Date. If any Note called for redemption shall not be so paid upon
surrender for redemption, then, from the Redemption Date until such principal is
paid, interest shall be paid on the unpaid principal and, to the extent
permitted by law, on any accrued but unpaid interest thereon, in each case at
the rate prescribed therefor by such Notes.
SECTION 3.06. Notes Redeemed in Part. Upon surrender and cancellation of
----------------------
a Note that is redeemed in part, the Company shall issue and the Trustee shall
authenticate and deliver to the surrendering Holder (at the Company's expense) a
new Note equal in principal amount to the unredeemed portion of the Note
surrendered and canceled; provided that each such Note shall be in a principal
amount of $1,000 or an integral multiple thereof.
ARTICLE IV.
COVENANTS
SECTION 4.01. Payment of Notes. The Company shall promptly pay the
----------------
principal of, premium, if any, and interest on, the Notes on the dates and in
the manner provided in the Notes and in this Indenture. Principal, premium and
interest shall be considered paid on
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the date due if, on such date, the Trustee or the Paying Agent holds in
accordance with this Indenture money sufficient to pay all principal, premium
and interest then due.
To the extent lawful, the Company shall pay interest on (i) any overdue
principal of (and premium, if any, on) the Notes, at the interest rate borne on
the Notes, plus 1% per annum, and (ii) Defaulted Interest (without regard to any
applicable grace period), at the same rate. The Company's obligation pursuant
to the previous sentence shall apply whether such overdue amount is due at its
Stated Maturity, as a result of the Company's obligations pursuant to Section
3.05, Section 4.07, Section 4.08 or Section 4.09 hereof, or otherwise.
SECTION 4.02. Maintenance of Office or Agency. The Company shall
-------------------------------
maintain in the Borough of Manhattan, The City of New York, an office or agency
where Notes may be presented or surrendered for payment, where Notes may be
surrendered for registration of transfer or exchange and where notices and
demands to or upon the Company in respect of the Notes and this Indenture may be
served. The Company shall give prompt written notice to the Trustee of the
location, and any change in the location, of such office or agency. If at any
time the Company shall fail to maintain any such required office or agency or
shall fail to furnish the Trustee with the address thereof, such presentations,
surrenders, notices and demands may be made or served at the Corporate Trust
Office of the Trustee, and the Company hereby appoints the Trustee its agent to
receive all presentations, surrenders, notices and demands.
The Company may also from time to time designate one or more other offices
or agencies (in or outside of The City of New York) where the Notes may be
presented or surrendered for any or all of such purposes, and may from time to
time rescind such designations; provided that no such designation or rescission
shall in any manner relieve the Company of its obligation to maintain an office
or agency in The City of New York, for such purposes. The Company shall give
prompt written notice to the Trustee of any such designation and any change in
the location of any such other office or agency.
SECTION 4.03. Money for the Note Payments to be Held in Trust. If the
-----------------------------------------------
Company, any Subsidiary of the Company or any of their respective Affiliates
shall at any time act as Paying Agent with respect to the Notes, such Paying
Agent shall, on or before each due date of the principal of (and premium, if
any) or interest on any of the Notes, segregate and hold in trust for the
benefit of the Persons entitled thereto money sufficient to pay the principal
(and premium, if any) or interest so becoming due until such money shall be paid
to such Persons or otherwise disposed of as herein provided, and shall promptly
notify the Trustee of its action or failure so to act.
Whenever the Company shall have one or more Paying Agents with respect to
the Notes, it shall, prior to or on each due date of the principal of (and
premium, if any) or interest on any of the Notes, deposit with a Paying Agent a
sum sufficient to pay the principal (and premium, if any) or interest so
becoming due, such sum to be held in trust for the benefit of the Persons
entitled to such principal, premium or interest, and (unless such
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Paying Agent is the Trustee) the Paying Agent shall promptly notify the Trustee
of the Company's action or failure so to act.
SECTION 4.04. Corporate Existence. Subject to the provisions of Article
-------------------
IV and Article V hereof, the Company shall do or cause to be done all things
necessary to preserve and keep in full force and effect the corporate existence,
rights (charter and statutory) and franchises of the Company and each of its
Restricted Subsidiaries; provided that the Company and any such Restricted
Subsidiary shall not be required to preserve the corporate existence of any such
Restricted Subsidiary or any such right or franchise if the Board of Directors
shall determine that the preservation thereof is no longer desirable in the
conduct of the business of the Company and provided further that any Restricted
Subsidiary may consolidate with, merge into, or sell, convey, lease or otherwise
dispose of all of its property and assets to the Company or any wholly owned
Restricted Subsidiary.
SECTION 4.05. Maintenance of Property. The Company shall cause all
-----------------------
Property used or useful in the conduct of its business or the business of any of
its Restricted Subsidiaries and material to the Company and its Restricted
Subsidiaries taken as a whole to be maintained and kept in good condition,
repair and working order and supplied with all necessary equipment and shall
cause to be made all necessary repairs, renewals, replacements, betterments and
improvements thereof, all as, in the judgment of the Company, may be necessary
so that the business carried on in connection therewith may be properly and
advantageously conducted at all times; provided that nothing in this Section
4.05 shall prevent the Company from discontinuing the operation or maintenance
of any of such Property if such discontinuance is, in the judgment of the
Company, desirable in the conduct of its business or the business of any of its
Restricted Subsidiaries.
SECTION 4.06. 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 material taxes, assessments and governmental charges levied
or imposed upon the Company or any of its Restricted Subsidiaries or upon the
income, profits or Property of the Company or any of its Restricted Subsidiaries
and (b) all material lawful claims for labor, materials and supplies which, if
unpaid, might by law become a Lien upon the Property of the Company or any of
its Restricted Subsidiaries; provided 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 whose amount, applicability or validity is being contested in
good faith by appropriate proceedings upon stay of execution or the enforcement
thereof and for which adequate reserves in accordance with GAAP or other
appropriate provision has been made.
SECTION 4.07. Repurchase at the Option of Holders upon a Change of
----------------------------------------------------
Control. (a) Upon the occurrence of a Change of Control, each Holder shall have
- -------
the right to require the Company to purchase such Holder's Notes, in whole or in
part, in a principal amount that is an integral multiple of $1,000, pursuant to
the offer described in Section 4.07(b) hereof (the "Change of Control Offer"),
at a purchase price (the "Change of Control Purchase Price") in
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cash equal to 101 percent of the principal amount of such Notes (or portions
thereof), plus accrued and unpaid interest, if any, to the Change of Control
Payment Date.
(b) Within 30 calendar days of the date of any Change of Control, the
Company, or the Trustee at the request and expense of the Company, shall send to
each Holder by first class mail, postage prepaid, a notice prepared by the
Company stating:
(i) that a Change of Control has occurred and a Change of Control Offer
is being made pursuant to this Section 4.07, and that all Notes that are
timely tendered will be accepted for payment;
(ii) the Change of Control Purchase Price, and the date Notes are to be
purchased pursuant to the Change of Control Offer (the "Change of Control
Payment Date"), which date shall be a date occurring no earlier than 30
calendar days nor later than 60 calendar days subsequent to the date such
notice is mailed;
(iii) that any Notes or portions thereof not tendered or accepted for
payment will continue to accrue interest;
(iv) that, unless the Company defaults in the payment of the Change of
Control Purchase Price with respect thereto, all Notes or portions thereof
accepted for payment pursuant to the Change of Control Offer shall cease to
accrue interest from and after the Change of Control Payment Date;
(v) that any Holder electing to have any Notes or portions thereof
purchased pursuant to a Change of Control Offer will be required to
surrender such Notes, with the form entitled "Option of Holder to Elect
Purchase" on the reverse of such Notes completed, to the Paying Agent at
the address specified in the notice, prior to the close of business on the
third Business Day preceding the Change of Control Payment Date;
(vi) that any Holder shall be entitled to withdraw such election if the
Paying Agent receives, not later than the close of business on the second
Business Day preceding the Change of Control Payment Date, a telegram,
telex, facsimile transmission or letter, setting forth the name of the
Holder, the principal amount of Notes delivered for purchase, and a
statement that such Holder is withdrawing such Holder's election to have
such Notes or portions thereof purchased pursuant to the Change of Control
Offer;
(vii) that any Holder electing to have Notes purchased pursuant to the
Change of Control Offer must specify the principal amount that is being
tendered for purchase, which principal amount must be $1,000 or an integral
multiple thereof;
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(viii) that any Holder whose Notes are being purchased only in part will
be issued new Notes equal in principal amount to the unpurchased portion of
the Note or Notes surrendered, which unpurchased portion will be equal in
principal amount to $1,000 or an integral multiple thereof; and
(ix) any other information necessary to enable any Holder to tender
Notes and to have such Notes purchased pursuant to this Section 4.07.
(c) On the Change of Control Payment Date, the Company shall (i) accept for
payment any Notes or portions thereof properly tendered pursuant to the Change
of Control Offer; (ii) irrevocably deposit with the Paying Agent, by 10:00 a.m.,
New York City time, on such date, in immediately available funds, an amount
equal to the Change of Control Purchase Price in respect of all Notes or
portions thereof so accepted; and (iii) deliver, or cause to be delivered, to
the Trustee the Notes so accepted together with an Officers' Certificate listing
the Notes or portions thereof tendered to the Company and accepted for payment.
The Paying Agent shall promptly send by first class mail, postage prepaid, to
each Holder of Notes or portions thereof so accepted for payment, payment in an
amount equal to the Change of Control Purchase Price for such Notes or portions
thereof. The Company shall publicly announce the results of the Change of
Control Offer on or as soon as practicable after the Change of Control Payment
Date.
(d) Upon surrender and cancellation of a Note that is purchased in part
pursuant to a Change of Control Offer, the Company shall promptly issue and the
Trustee shall authenticate and deliver to the surrendering Holder of such Note,
a new Note equal in principal amount to the unpurchased portion of such
surrendered Note; provided that each such new Note shall be in a principal
amount of $1,000 or an integral multiple thereof.
(e) The Company shall comply with the requirements of Section 14(e) under
the Exchange Act and any other securities laws or regulations, to the extent
such laws and regulations are applicable, in connection with the purchase of
Notes pursuant to a Change of Control Offer.
SECTION 4.08. Repurchase at the Option of Holders upon Failure to
---------------------------------------------------
Consummate the CCI Transaction.
- ------------------------------
(a) If the CCI Transaction is not consummated by March 31, 1998 (or, if the
CCI Transaction has not been consummated by March 31, 1998 solely as a result of
CCI having failed to receive all required regulatory approvals or consents, by
May 30, 1998) (the "Termination Date") or is terminated prior to such date, each
Holder shall have the right to require the Company to purchase such Holder's
Notes, in whole or in part, in a principal amount that is an integral multiple
of $1,000 (the "CCI Transaction Put Option"), pursuant to the offer described in
Section 4.08(b) hereof ("CCI Transaction Put Option Offer"), at a purchase price
(the "CCI Transaction Purchase Price") in cash equal to 100 percent of the
principal amount of such Notes (or portions thereof), plus accrued and unpaid
interest, if
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any, to the CCI Transaction Put Option Exercise Date (as defined herein). If
the CCI Transaction is consummated on a date subsequent to the Termination Date
and such consummation date is the date of, or prior to, the date of receipt by
the Paying Agent of such Holder's notice of intention to exercise the CCI
Transaction Put Option, such Holder shall be deemed to have waived its right to
exercise its CCI Transaction Put Option, notwithstanding the date of such
Holder's notice or the date of mailing of such notice.
(b) If the CCI Transaction is not consummated by the Termination Date
or is terminated on a date prior thereto, the Company or Trustee, at the request
and expense of the Company, shall, within fifteen (15) days following the
Termination Date (in the event of the non-consummation of the CCI Transaction)
or following the date of termination of the CCI Transaction (in the event of the
termination of the CCI Transaction prior to the Termination Date), send to each
Holder by first class mail, postage prepaid, a notice prepared by the Company
stating:
(i) that the CCI Transaction Put Option Offer is being made pursuant to
this Section 4.08, and that all Notes that are timely tendered will be
accepted for payment;
(ii) the CCI Transaction Purchase Price, and the date on or prior to
which a Holder must notify the Paying Agent of its intention to exercise
the CCI Transaction Put Option, which date shall be no earlier than fifteen
(15) days nor later than forty-five (45) days from the date such notice is
mailed;
(iii) that any Notes or portions thereof not tendered or accepted for
payment will accrue interest;
(iv) that, unless the Company defaults in the payment of the CCI
Transaction Purchase Price, all Notes or portions accepted for payment
pursuant to the CCI Transaction Put Option Offer shall cease to accrue
interest from and after the date of purchase by the Company, which date of
purchase shall be not later than sixty (60) days from the date such notice
is mailed (the "CCI Transaction Put Option Exercise Date");
(v) that any Holder electing to have any Notes or portions thereof
purchased pursuant to a CCI Transaction Put Option Offer will be required
to surrender such Notes, with the form entitled "Option of Holder to Elect
Purchase" on the reverse of such Notes completed, to the Paying Agent at
the address specified in the notice, prior to the close of business on the
third Business Day preceding the CCI Transaction Put Option Exercise Date;
(vi) that any Holder shall be entitled to withdraw such election if the
Paying Agent receives, no later than the close of business on the second
Business Day preceding the CCI Transaction Put Option Exercise Date, a
telegram, telex, facsimile
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transmission or letter setting forth the name of the Holder, the principal
amount of the Notes delivered for purchase and a statement that such Holder
is withdrawing such Holder's election to have Notes or portions thereof
purchased pursuant to the CCI Transaction Put Option Offer;
(vii) that any Holder electing to have Notes purchased pursuant to the
CCI Transaction Put Option Offer must specify the principal amount that is
being tendered for purchase, which principal amount must be $1,000 or an
integral multiple thereof;
(viii) that any Holder whose Notes are being purchased only in part will
be issued new Notes equal in principal amount to the unpurchased portion of
the Note or Notes surrendered, which unpurchased portion will be equal in
principal amount to $1,000 or an integral multiple thereof;
(ix) that if the CCI Transaction is consummated on a date subsequent to
the Termination Date and such consummation date is the date of, or prior
to, the date of receipt by the Paying Agent of a Holder's notice of
intention to exercise the CCI Transaction Put Option, such Holder shall be
deemed to have waived its right to exercise the CCI Transaction Put Option,
notwithstanding the date of such Holder's notice or the date of mailing of
such notice; and
(x) any other information necessary to enable any Holder to tender Notes
and to have such Notes purchased pursuant to this Section 4.08.
(c) On the CCI Transaction Put Option Exercise Date, the Company shall (i)
accept for payment any Notes or portions thereof properly tendered pursuant to
the CCI Transaction Put Option Offer; (ii) irrevocably deposit with the Paying
Agent, by 10:00 a.m., New York City time, on such date, in immediately available
funds an amount equal to the CCI Transaction Purchase Price in respect of all
Notes or portions thereof so accepted; and (iii) deliver, or caused to be
delivered, to the Trustee the Notes, so accepted together with an Officer's
Certificate listing the Notes or portion thereof tendered to the Company and
accepted for payment. The Paying Agent shall promptly send by first-class mail,
postage prepaid, to each Holder of Notes or portions thereof so accepted for
payment, payment in an amount equal to the CCI Transaction Purchase Price for
such Notes or portions thereof. The Company shall publicly announce the results
of the CCI Transaction Put Option Offer on or as soon as practicable after the
CCI Transaction Put Option Exercise Date.
(d) Upon surrender and cancellation of a Note that is purchased in part
pursuant to the CCI Transaction Put Option Offer, the Company shall promptly
issue and the Trustee shall authenticate and deliver to the surrendering Holder
of such Note, a new Note equal in principal amount to the unpurchased portion of
such surrendered Note; provided that each such new Note shall be in a principal
amount of $1,000 or an integral multiple thereof.
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(e) The Company shall comply with the requirements of Section 14(e)
under the Exchange Act and any other securities laws or regulations, to the
extent such laws and regulations are applicable, in connection with the purchase
of Notes pursuant to a CCI Transaction Put Option Offer.
SECTION 4.09. Limitation on Asset Sales. (a) The Company shall not, and
-------------------------
shall not permit any of its Restricted Subsidiaries, directly or indirectly, to,
consummate any Asset Sale, unless:
(i) the Company or such Restricted Subsidiary, as the case may be,
receives consideration for such Asset Sale at least equal to the Fair Market
Value (as evidenced by a Board Resolution delivered to the Trustee) of the
Property or assets sold or otherwise disposed of;
(ii) at least 75 percent of the consideration received in respect of such
Asset Sale by the Company or such Restricted Subsidiary, as the case may be, for
such Property or assets consists of (a) Cash Proceeds and/or Telecommunications
Assets; (b) shares of publicly-traded Voting Stock of any Person engaged in the
Telecommunications Business in the United States; or (c) the assumption of
Indebtedness of the Company or such Restricted Subsidiary (other than
Indebtedness that is subordinated to the Notes) and the release of the Company
or the Restricted Subsidiary, as the case may be, from all liability on the
Indebtedness assumed; and
(iii) the Company or such Restricted Subsidiary, as the case may be, uses
the Net Cash Proceeds from such Asset Sale in the manner set forth in Section
4.09(b) hereof.
(b) Within 360 calendar days after the closing of any Asset Sale, the
Company or such Restricted Subsidiary, as the case may be, may, at its option:
(i) reinvest an amount equal to the Net Cash Proceeds, or any portion
thereof, from such Asset Sale in Telecommunications Assets or in Capital Stock
of any Person engaged in the Telecommunications Business; and/or
(ii) apply an amount equal to such Net Cash Proceeds, or remaining Net
Cash Proceeds, to the permanent reduction of Indebtedness of the Company (other
than Indebtedness to a Restricted Subsidiary of the Company) that is senior to
or pari passu with the Notes or to the permanent reduction of Indebtedness or
---- -----
Preferred Stock of any Restricted Subsidiary of the Company (other than
Indebtedness to, or Preferred Stock owned by, the Company or another Restricted
Subsidiary of the Company).
Net Cash Proceeds from any Asset Sale that are not applied pursuant to clause
(i) or (ii) above within 360 calendar days of the closing of such Asset Sale
shall constitute "Excess Proceeds."
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(c) If at any time the aggregate amount of Excess Proceeds calculated as of
such date exceeds $5 million, the Company shall use the then-existing Excess
Proceeds to make an offer, as described in Section 4.09(d) hereof (an "Asset
Sale Offer"), to purchase from all Holders, on a pro rata basis, Notes in an
aggregate principal amount equal to the maximum principal amount that may be
purchased out of the then-existing Excess Proceeds, at a purchase price (the
"Asset Sale Purchase Price") in cash equal to 100 percent of the principal
amount of such Notes, plus accrued and unpaid interest, if any, to the Asset
Sale Payment Date.
(d) Within 30 calendar days of the date the amount of Excess Proceeds
exceeds $5 million, the Company, or the Trustee at the request and expense of
the Company, shall send to each Holder by first class mail, postage prepaid, a
notice prepared by the Company stating:
(i) that an Asset Sale Offer is being made pursuant to this Section 4.09,
and that all Notes that are timely tendered will be accepted for payment,
subject to proration in the event the amount of Excess Proceeds is less than the
aggregate Asset Sale Purchase Price of all Notes timely tendered pursuant to the
Asset Sale Offer;
(ii) the Asset Sale Purchase Price, the amount of Excess Proceeds that are
available to be applied to purchase tendered Notes, and the date Notes are to be
purchased pursuant to the Asset Sale Offer (the "Asset Sale Payment Date"),
which date shall be a date no earlier than 30 calendar days nor later than 40
calendar days subsequent to the date such notice is mailed;
(iii) that any Notes or portions thereof not tendered or accepted for
payment will continue to accrue interest;
(iv) that, unless the Company defaults in the payment of the Asset Sale
Purchase Price with respect thereto, all Notes or portions thereof accepted for
payment pursuant to the Asset Sale Offer shall cease to accrue interest from and
after the Asset Sale Payment Date;
(v) that any Holder electing to have any Notes or portions thereof
purchased pursuant to the Asset Sale Offer will be required to surrender such
Notes, with the form entitled "Option of Holder to Elect Purchase" on the
reverse of such Notes completed, to the Paying Agent at the address specified in
the notice, prior to the close of business on the third Business Day preceding
the Asset Sale Payment Date;
(vi) that any Holder shall be entitled to withdraw such election if the
Paying Agent receives, not later than the close of business on the second
Business Day preceding the Asset Sale Payment Date, a telegram, telex, facsimile
transmission or letter, setting forth the name of the Holder, the principal
amount of Notes delivered
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for purchase, and a statement that such Holder is withdrawing such Holder's
election to have such Notes or portions thereof purchased pursuant to the Asset
Sale Offer;
(vii) that any Holder electing to have Notes purchased pursuant to the
Asset Sale Offer must specify the principal amount that is being tendered for
purchase, which principal amount must be $1,000 or an integral multiple thereof;
(viii) that any Holder whose Notes are being purchased only in part will
be issued new Notes equal in principal amount to the unpurchased portion of the
Note or Notes surrendered, which unpurchased portion will be equal in principal
amount to $1,000 or an integral multiple thereof; and
(ix) any other information necessary to enable any Holder to tender Notes
and to have such Notes purchased pursuant to this Section 4.09.
(e) If the aggregate Asset Sale Purchase Price of the Notes surrendered by
Holders exceeds the amount of Excess Proceeds as indicated in the notice
required by Section 4.09(d) hereof, the Trustee shall select the Notes to be
purchased on a pro rata basis based on the principal amount of the Notes
tendered, with such adjustments as may be deemed appropriate by the Trustee, so
that only Notes in denominations of $1,000 or integral multiples thereof shall
be purchased.
(f) On the Asset Sale Payment Date, the Company shall (i) accept for
payment any Notes or portions thereof properly tendered and selected for
purchase pursuant to the Asset Sale Offer and Section 4.09(e) hereof; (ii)
irrevocably deposit with the Paying Agent, by 10:00 a.m., New York City time, on
such date, in immediately available funds, an amount equal to the Asset Sale
Purchase Price in respect of all Notes or portions thereof so accepted; and
(iii) deliver, or cause to be delivered, to the Trustee the Notes so accepted
together with an Officers' Certificate listing the Notes or portions thereof
tendered to the Company and accepted for payment. The Paying Agent shall
promptly send by first class mail, postage prepaid, to each Holder of Notes or
portions thereof so accepted for payment, payment in an amount equal to the
Asset Sale Purchase Price for such Notes or portions thereof. The Company shall
publicly announce the results of the Asset Sale Offer on or as soon as
practicable after the Asset Sale Payment Date.
(g) Upon surrender and cancellation of a Note that is purchased in part,
the Company shall promptly issue and the Trustee shall authenticate and deliver
to the surrendering Holder of such Note a new Note equal in principal amount to
the unpurchased portion of such surrendered Note; provided that each such new
Note shall be in a principal amount of $1,000 or an integral multiple thereof.
(h) Upon completion of an Asset Sale Offer (including payment of the Asset
Sale Purchase Price for accepted Notes), any surplus Excess Proceeds that were
the subject of
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such offer shall cease to be Excess Proceeds, and the Company may then use such
amounts for general corporate purposes.
(i) The Company shall comply with the requirements of Section 14(e) under
the Exchange Act and any other securities laws or regulations, to the extent
such laws and regulations are applicable, in connection with the purchase of
Notes pursuant to an Asset Sale Offer.
SECTION 4.10. Limitation on Consolidated Indebtedness. (a) The Company
---------------------------------------
shall not, and shall not permit any Restricted Subsidiary to, Incur any
Indebtedness after the Issue Date unless either (a) the ratio of (i) the
aggregate consolidated principal amount of Indebtedness of the Company
outstanding as of the most recent available quarterly or annual balance sheet,
after giving pro forma effect to the Incurrence of such Indebtedness and any
other Indebtedness Incurred since such balance sheet date and the receipt and
application of the proceeds thereof, to (ii) Consolidated Cash Flow Available
for Fixed Charges for the four full fiscal quarters immediately preceding the
Incurrence of such Indebtedness for which consolidated financial statements of
the Company have been filed with the Commission or have otherwise become
publicly available, determined on a pro forma basis as if any such Indebtedness
had been Incurred and the proceeds thereof had been applied at the beginning of
such four fiscal quarters, would be less than 5.5 to 1.0 for such four-quarter
periods ending on or prior to December 31, 2000 and 5.0 to 1.0 for such periods
ending thereafter, or (b) the Company's Consolidated Capital Ratio as of the
most recent quarterly or annual balance sheet of the Company that has been filed
with the Commission or has otherwise become publicly available, after giving pro
forma effect to (x) the Incurrence of such Indebtedness and any other
Indebtedness Incurred since such balance sheet date and (y) paid-in capital
received since such balance sheet date or concurrently with the Incurrence of
such Indebtedness, and in each case the receipt and application of the proceeds
thereof, is less than 2.0 to 1.0.
(b) Notwithstanding the foregoing limitation, the Company and any
Restricted Subsidiary may Incur each and all of the following:
(i) Indebtedness under Senior Credit Facilities in an aggregate principal
amount outstanding or available at any one time not to exceed $100 million, and
any renewal, extension, refinancing or refunding thereof in an amount which,
together with any principal amount remaining outstanding or available under all
Senior Credit Facilities, does not exceed the aggregate principal amount
outstanding or available under all Senior Credit Facilities immediately prior to
such renewal, extension, refinancing or refunding;
(ii) Indebtedness under Qualified Receivable Facilities in an aggregate
principal amount outstanding or available at any one time not to exceed the
greater of (x) $150 million or (y) an amount equal to 85% of net Receivables
determined in accordance with GAAP, and any renewal, extension, refinancing or
refunding thereof
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in an amount which, together with any principal amount remaining outstanding or
available under all Qualified Receivable Facilities, does not exceed the
aggregate principal amount outstanding or available under all Qualified
Receivable Facilities immediately prior to such renewal, extension, refinancing
or refunding;
(iii) Purchase Money Indebtedness, provided that the amount of such
Purchase Money Indebtedness does not exceed 90% of the cost of the construction,
acquisition or improvement of the applicable Telecommunications Assets;
(iv) Indebtedness owed by the Company to any Wholly-Owned Restricted
Subsidiary of the Company or Indebtedness owed by a Restricted Subsidiary of the
Company to the Company or a Wholly-Owned Restricted Subsidiary of the Company;
provided that upon either (x) the transfer or other disposition by such Wholly-
Owned Restricted Subsidiary or the Company of any Indebtedness so permitted to a
Person other than the Company or another Wholly-Owned Restricted Subsidiary of
the Company or (y) the issuance (other than directors' qualifying shares), sale,
lease, transfer or other disposition of shares of Capital Stock (including by
consolidation or merger) of such Wholly-Owned Restricted Subsidiary to a Person
other than the Company or another such Wholly-Owned Restricted Subsidiary, the
provisions of this clause (iv) shall no longer be applicable to such
Indebtedness and such Indebtedness shall be deemed to have been Incurred at the
time of such transfer or other disposition;
(v) Indebtedness Incurred to renew, extend, refinance or refund (each, a
"refinancing") the Notes or Indebtedness outstanding at the date of the
Indenture or Purchase Money Indebtedness Incurred pursuant to clause (iii) of
this paragraph in an aggregate principal amount not to exceed the aggregate
principal amount of and accrued interest on the Indebtedness so refinanced plus
the amount of any premium required to be paid in connection with such
refinancing pursuant to the terms of the Indebtedness so refinanced or the
amount of any premium reasonably determined by the Company as necessary to
accomplish such refinancing by means of a tender offer or privately negotiated
repurchase, plus the expenses of the Company incurred in connection with such
refinancing; provided that Indebtedness the proceeds of which are used to
refinance the Notes or Indebtedness which is pari passu to the Notes or
Indebtedness which is subordinate in right of payment to the Notes shall only be
permitted under this clause (v) if (A) in the case of any refinancing of the
Notes or Indebtedness which is pari passu to the Notes, the refinancing
Indebtedness is made pari passu to the Notes or constitutes Subordinated
Indebtedness, and, in the case of any refinancing of Subordinated Indebtedness,
the refinancing Indebtedness constitutes Subordinated Indebtedness and (B) in
any case, the refinancing Indebtedness by its terms, or by the terms of any
agreement or instrument pursuant to which such Indebtedness is issued, (x) does
not provide for payments of principal of such Indebtedness at stated maturity or
by way of a sinking fund applicable thereto or by way of any mandatory
redemption, defeasance, retirement or repurchase thereof by
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the Company (including any redemption, retirement or repurchase which is
contingent upon events or circumstances, but excluding any retirement required
by virtue of the acceleration of any payment with respect to such Indebtedness
upon any event of default thereunder), in each case prior to the time the same
are required by the terms of the Indebtedness being refinanced and (y) does not
permit redemption or other retirement (including pursuant to an offer to
purchase made by the Company) of such Indebtedness at the option of the Holder
thereof prior to the time the same are required by the terms of the Indebtedness
being refinanced, other than a redemption or other retirement at the option of
the Holder of such Indebtedness (including pursuant to an offer to purchase made
by the Company) which is conditioned upon a change of control pursuant to
provisions substantially similar to those described in Section 4.07 hereof;
(vi) Indebtedness consisting of Permitted Interest Rate and Currency
Protection Agreements;
(vii) Indebtedness (A) in respect of performance, surety or appeal
bonds provided in the ordinary course of business or (B) arising from customary
agreements providing for indemnification, adjustment of purchase price for
closing balance sheet changes within 90 days after closing, or similar
obligations, or from Guarantees or letters of credit, surety bonds or
performance bonds securing any obligations of the Company or any of its
Restricted Subsidiaries pursuant to such agreements, in each case Incurred in
connection with the disposition of any business, assets or Restricted Subsidiary
of the Company (other than Guarantees of Indebtedness Incurred by any Person
acquiring all or any portion of such business, assets or Restricted Subsidiary
of the Company for the purpose of financing such acquisition) and in an
aggregate principal amount not to exceed the gross proceeds actually received by
the Company or any Restricted Subsidiary in connection with such disposition;
and
(viii) Indebtedness not otherwise permitted to be Incurred pursuant to
clauses (i) through (vii) above, which, together with any other outstanding
Indebtedness Incurred pursuant to this clause (viii), has an aggregate principal
amount not in excess of $10 million at any time outstanding.
(c) Notwithstanding any other provision of this Section 4.10, the maximum
amount of Indebtedness that the Company or a Restricted Subsidiary may Incur
pursuant to this Section 4.10, shall not be deemed to be exceeded due solely as
the result of fluctuations in the exchange rates of currencies.
(d) For purposes of determining any particular amount of Indebtedness under
this Section 4.10, (1) Guarantees, Liens or obligations with respect to letters
of credit supporting Indebtedness otherwise included in the determination of
such particular amount shall not be included and (2) any Liens granted pursuant
to the equal and ratable provisions referred to in Section 4.13 hereof shall not
be treated as Indebtedness. For purposes of determining
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compliance with this Section 4.10, in the event that an item of Indebtedness
meets the criteria of more than one of the types of Indebtedness described in
the above clauses, the Company, in its sole discretion, shall classify such item
of Indebtedness and only be required to include the amount and type of such
Indebtedness in one of such clauses.
SECTION 4.11. Limitation on Indebtedness and Preferred Stock of Restricted
------------------------------------------------------------
Subsidiaries. The Company shall not permit any Restricted Subsidiary of the
- ------------
Company to Incur any Indebtedness or issue any Preferred Stock except:
(i) Indebtedness or Preferred Stock outstanding on the date of the
Indenture after giving effect to the application of the proceeds of the Notes;
(ii) Indebtedness Incurred or Preferred Stock issued to and held by the
Company or a Wholly-Owned Restricted Subsidiary of the Company (provided that
such Indebtedness or Preferred Stock is at all times held by the Company or a
Wholly-Owned Restricted Subsidiary of the Company);
(iii) Indebtedness Incurred or Preferred Stock issued by a Person prior to
the time (A) such Person became a Restricted Subsidiary of the Company, (B) such
Person merges into or consolidates with a Restricted Subsidiary of the Company
or (C) another Restricted Subsidiary of the Company merges into or consolidates
with such Person (in a transaction in which such Person becomes a Restricted
Subsidiary of the Company), which Indebtedness or Preferred Stock was not
Incurred or issued in anticipation of such transaction and was outstanding prior
to such transaction;
(iv) Indebtedness under a Senior Credit Facility which is permitted to be
outstanding under clause (i) of the second paragraph of Section 4.10;
(v) in the case of a Restricted Subsidiary that is a Qualified Receivable
Subsidiary, Indebtedness under a Qualified Receivable Facility which is
permitted to be outstanding under clause (ii) of the second paragraph of Section
4.10;
(vi) Indebtedness consisting of Permitted Interest Rate and Currency
Protection Agreements;
(vii) Indebtedness (A) in respect of performance, surety and appeal bonds
provided in the ordinary course of business or (B) arising from customary
agreements providing for indemnification, adjustment of purchase price for
closing balance sheet changes within 90 days after closing, or similar
obligations, or from Guarantees or letters of credit, surety bonds or
performance bonds securing any obligation of such Restricted Subsidiary pursuant
to such agreements, in each case Incurred in connection with the disposition of
any business, assets or Restricted Subsidiary of such Restricted Subsidiary
(other than Guarantees of Indebtedness Incurred by any Person acquiring all or
any portion of such business, assets or Restricted Subsidiary
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for the purpose of financing such acquisition) and in an aggregate principal
amount not to exceed the gross proceeds actually received by such Restricted
Subsidiary in connection with such disposition; and
(viii) Indebtedness or Preferred Stock which is exchanged for, or the
proceeds of which are used to refinance, refund or redeem, any Indebtedness or
Preferred Stock permitted to be outstanding pursuant to clauses (i) and (iii)
hereof or any extension or renewal thereof (for purposes hereof, a
"refinancing"), in an aggregate principal amount, in the case of Indebtedness,
or with an aggregate liquidation preference in the case of Preferred Stock, not
to exceed the aggregate principal amount of the Indebtedness so refinanced or
the aggregate liquidation preference of the Preferred Stock so refinanced, plus
the amount of any premium required to be paid in connection with such
refinancing pursuant to the terms of the Indebtedness or Preferred Stock so
refinanced or the amount of any premium reasonably determined by the Company as
necessary to accomplish such refinancing by means of a tender offer or privately
negotiated repurchase, plus the amount of expenses of the Company and the
applicable Restricted Subsidiary Incurred in connection therewith and provided
the Indebtedness or Preferred Stock Incurred or issued upon such refinancing is
by its terms, or by the terms of any agreement or instrument pursuant to which
such Indebtedness or Preferred Stock is Incurred or issued, (x) does not provide
for payments of principal or liquidation value at the stated maturity of such
Indebtedness or Preferred Stock or by way of a sinking fund applicable to such
Indebtedness or Preferred Stock or by way of any mandatory redemption,
defeasance, retirement or repurchase of such Indebtedness or Preferred Stock by
the Company or any Restricted Subsidiary of the Company (including any
redemption, retirement or repurchase which is contingent upon events or
circumstances, but excluding any retirement required by virtue of acceleration
of such Indebtedness upon an event of default thereunder), in each case prior to
the time the same are required by the terms of the Indebtedness or Preferred
Stock being refinanced and (y) does not permit redemption or other retirement
(including pursuant to an offer to purchase made by the Company or a Restricted
Subsidiary of the Company) of such Indebtedness or Preferred Stock at the option
of the holder thereof prior to the stated maturity of the Indebtedness or
Preferred Stock being refinanced, other than a redemption or other retirement at
the option of the holder of such Indebtedness or Preferred Stock (including
pursuant to an offer to purchase made by the Company or a Restricted Subsidiary
of the Company) which is conditioned upon the change of control of the Company
pursuant to provisions substantially similar to those described in Section 4.07
hereof and provided, further, that in the case of any exchange or redemption of
Preferred Stock of a Restricted Subsidiary of the Company, such Preferred Stock
may only be exchanged for or redeemed with Preferred Stock of such Restricted
Subsidiary.
SECTION 4.12. Limitation on Restricted Payments. (a) The Company shall
---------------------------------
not, and will not permit any of its Restricted Subsidiaries to, directly or
indirectly, make any
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Restricted Payment unless, at the time of and after giving effect to such
proposed Restricted Payment:
(i) no Default or Event of Default shall have occurred and be continuing or
shall occur as a consequence thereof;
(ii) after giving effect, on a pro forma basis, to such Restricted Payment
and the incurrence of any Indebtedness the net proceeds of which are used to
finance such Restricted Payment, the Company could incur at least $1.00 of
additional Indebtedness pursuant to the first paragraph of Section 4.10 hereof;
and
(iii) after giving effect to such Restricted Payment on a pro forma
basis, the aggregate amount expended (the amount so expended, if other than
cash, to be determined in good faith by a majority of the disinterested members
of the Board of Directors, whose determination shall be conclusive and evidenced
by a resolution thereof) or declared for all Restricted Payments after the Issue
Date does not exceed the sum of (A) 50% of the Consolidated Net Income of the
Company (or, if Consolidated Net Income shall be a deficit, minus 100% of such
deficit) for the period (taken as one accounting period) beginning on the last
day of the fiscal quarter immediately preceding the Issue Date and ending on the
last day of the fiscal quarter for which the Company's financial statements have
been filed with the Commission or otherwise become publicly available
immediately preceding the date of such Restricted Payment, plus (B) 100% of the
net reduction in Investments, subsequent to the Issue Date, in any Person,
resulting from payments of interest on Indebtedness, dividends, repayments of
loans or advances, or other transfers of Property (but only to the extent such
interest, dividends, repayments or other transfers of Property are not included
in the calculation of Consolidated Net Income), in each case to the Company or
any Restricted Subsidiary from any Person (including, without limitation, from
Unrestricted Subsidiaries) or from redesignations of Unrestricted Subsidiaries
as Restricted Subsidiaries (valued in each case as provided in the definition of
"Investments" in Section 1.01 hereof), not to exceed in the case of any Person
the amount of Investments previously made subsequent to the Issue Date by the
Company or any Restricted Subsidiary in such Person and which was treated as a
Restricted Payment; provided that the Company or a Restricted Subsidiary of the
Company may make any Restricted Payment with the aggregate net proceeds received
after the date of the Indenture, including the fair value of property other than
cash (determined in good faith by the Board of Directors as evidenced by a
resolution of the Board of Directors filed with the Trustee), (x) as capital
contributions to the Company, (y) from the issuance (other than to a Restricted
Subsidiary) of Capital Stock (other than Disqualified Stock) of the Company and
warrants, rights or options on Capital Stock (other than Disqualified Stock) of
the Company, or (z) from the conversion of Indebtedness of the Company into
Capital Stock (other than Disqualified Stock and other than by a Restricted
Subsidiary) of the Company after the date of this Indenture.
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(b) The foregoing limitations shall not prevent the Company from:
(i) paying a dividend on its Capital Stock at any time within 60 days
after the declaration thereof if, on the declaration date, the Company could
have paid such dividend in compliance with the preceding paragraph of this
Section 4.12;
(ii) retiring (A) any Capital Stock of the Company or any Restricted
Subsidiary of the Company, (B) Indebtedness of the Company that is subordinated
in right of payment to the Notes, or (C) Indebtedness of a Restricted Subsidiary
of the Company, in exchange for, or out of the proceeds of the substantially
concurrent sale of Qualified Stock of the Company;
(iii) retiring any Indebtedness of the Company subordinated in right of
payment to the Notes in exchange for, or out of the proceeds of, the
substantially concurrent incurrence of Indebtedness of the Company (other than
Indebtedness to a Subsidiary of the Company), provided that such new
Indebtedness (A) is subordinated in right of payment to the Notes at least to
the same extent as, (B) has an Average Life at least as long as, and (C) has no
scheduled principal payments due in any amount earlier than, any equivalent
amount of principal under the Indebtedness so retired;
(iv) retiring any Indebtedness of a Restricted Subsidiary of the Company
in exchange for, or out of the proceeds of, the substantially concurrent
incurrence of Indebtedness of the Company or any Restricted Subsidiary that is
permitted under Section 4.10 hereof (in the case of Indebtedness of the Company)
and Section 4.11 hereof (in the case of Indebtedness of Restricted Subsidiaries)
and that (A) is not secured by any assets of the Company or any Restricted
Subsidiary to a greater extent than the retired Indebtedness was so secured, (B)
has an Average Life at least as long as the retired Indebtedness, and (C) is
subordinated in right of payment to the Notes at least to the same extent as the
retired Indebtedness;
(v) retiring any Capital Stock or options to acquire Capital Stock of the
Company or any Restricted Subsidiary of the Company held by any directors,
officers or employees of the Company or any Restricted Subsidiary, provided that
the aggregate price paid for all such retired Capital Stock shall not exceed, in
the aggregate, the sum of $2 million plus the aggregate cash proceeds received
by the Company subsequent to the Issue Date from issuances of Capital Stock or
options to acquire Capital Stock by the Company to directors, officers or
employees of the Company and its Subsidiaries;
(vi) making payments or distributions to dissenting stockholders pursuant
to applicable law in connection with a consolidation, merger or transfer of
assets permitted in Article V hereof;
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(vii) retiring any Capital Stock of the Company to the extent necessary
(as determined in good faith by a majority of the disinterested members of
the Board of Directors, whose determination shall be conclusive and evidenced
by a resolution thereof) to prevent the loss, or to secure the renewal or
reinstatement, of any license or franchise held by the Company or any
Restricted Subsidiary from any governmental agency; and
(viii) making Investments not otherwise permitted in an aggregate amount
not to exceed $15 million at any time outstanding.
(c) In determining the amount of Restricted Payments permissible under this
Section 4.12, amounts expended pursuant to clauses (ii), (iii) and (iv) of the
foregoing paragraph shall not be included as Restricted Payments.
(d) Not later than the date of making any Restricted Payment (including any
Restricted Payment permitted to be made pursuant to the two previous
paragraphs), 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 required calculations were computed, which calculations may be
based upon the Company's latest available financial statements.
SECTION 4.13. Limitation on Liens. (a) The Company shall not, and shall
-------------------
not permit any Restricted Subsidiary of the Company to, Incur or suffer to exist
any Lien on or with respect to any property or assets now owned or hereafter
acquired to secure any Indebtedness without making, or causing such Restricted
Subsidiary to make, effective provision for securing the Notes (x) equally and
ratably with such Indebtedness as to such property for so long as such
Indebtedness will be so secured or (y) in the event such Indebtedness is
Indebtedness of the Company which is subordinate in right of payment to the
Notes, prior to such Indebtedness as to such property for so long as such
Indebtedness will be so secured.
(b) The foregoing restrictions shall not apply to:
(i) Liens existing on the date of the Indenture and securing
Indebtedness outstanding on the date of the Indenture or Incurred on or
after the Issue Date pursuant to any Senior Credit Facility or Qualified
Receivable Facility;
(ii) Liens securing Indebtedness in an amount which, together with the
aggregate amount of Indebtedness then outstanding or available under all
Senior Credit Facilities (or under refinancings or amendments of such
Senior Credit Facilities), does not exceed 1.5 times the Company's
Consolidated Cash Flow Available for Fixed Charges for the four full fiscal
quarters preceding the Incurrence of such Lien for which the Company's
consolidated financial statements have been filed with the Commission or
become publicly available, determined on a pro forma
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basis as if such Indebtedness had been Incurred and the proceeds thereof had
been applied at the beginning of such four fiscal quarters;
(iii) Liens in favor of the Company or any Wholly-Owned Restricted
Subsidiary of the Company;
(iv) Liens on Property of the Company or a Restricted Subsidiary acquired,
constructed or constituting improvements made after the Issue Date of the Notes
to secure Purchase Money Indebtedness which is otherwise permitted under the
Indenture, provided that (a) the principal amount of any Indebtedness secured by
any such Lien does not exceed 100% of such purchase price or cost of
construction or improvement of the Property subject to such Lien, (b) such Lien
attaches to such property prior to, at the time of or within 180 days after the
acquisition, completion of construction or commencement of operation of such
Property and (c) such Lien does not extend to or cover any Property other than
the specific item of Property (or portion thereof) acquired, constructed or
constituting the improvements made with the proceeds of such Purchase Money
Indebtedness;
(v) Liens to secure Acquired Indebtedness, provided that (a) such Lien
attaches to the acquired asset prior to the time of the acquisition of such
asset and (b) such Lien does not extend to or cover any other Property;
(vi) Liens to secure Indebtedness Incurred to extend, renew, refinance or
refund (or successive extensions, renewals, refinancings or refundings), in
whole or in part, Indebtedness secured by any Lien referred to in the foregoing
clauses (i), (ii), (iv) and (v) so long as such Lien does not extend to any
other Property and the principal amount of Indebtedness so secured is not
increased except as otherwise permitted under clause (v) of the second paragraph
of Section 4.10 hereof (in the case of Indebtedness of the Company) or clause
(viii) of Section 4.11 hereof (in the case of Indebtedness of Restricted
Subsidiaries);
(vii) Liens not otherwise permitted by the foregoing clauses (i) through
(vi) in an aggregate amount not to exceed 5% of the Company's Consolidated
Tangible Assets;
(viii) Liens granted after the Issue Date pursuant to the immediately
preceding paragraph to secure the Notes; and
(ix) Permitted Liens.
SECTION 4.14. Limitation on Sale and Leaseback Transactions. The Company
---------------------------------------------
shall not, and shall not permit any of its Restricted Subsidiaries to, directly
or indirectly, enter into, assume, Guarantee or otherwise become liable with
respect to any Sale and Leaseback Transaction (other than a Sale and Leaseback
Transaction between the Company or a
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Restricted Subsidiary on the one hand and a Restricted Subsidiary or the Company
on the other hand), unless (i) the Company or such Restricted Subsidiary, as the
case may be, receives consideration at the time of such Sale and Leaseback
Transaction at least equal to the Fair Market Value (as evidenced by a Board
Resolution delivered to the Trustee) of the Property subject to such
transaction; (ii) the Attributable Indebtedness of the Company or such
Restricted Subsidiary with respect thereto is included as Indebtedness and would
be permitted by Section 4.10 hereof or Section 4.11 hereof, as the case may be;
(iii) the Company or such Restricted Subsidiary would be permitted to create a
Lien on such Property without securing the Notes by Section 4.13 hereof; and
(iv) the Net Cash Proceeds from such transaction are applied in accordance with
Section 4.09 hereof; provided that the Company shall be permitted to enter into
Sale and Leaseback Transactions for up to $25 million with respect to phase I of
the Company's headquarters buildings located in Cedar Rapids, Iowa, provided
that such transaction is entered into on or before December 31, 1997 and up to
$30 million with respect to other phases of such headquarters building, provided
that any such transaction is entered into within 180 days of the earlier of (x)
substantial completion or (y) occupation of the applicable phase of such
headquarters building.
SECTION 4.15. Limitation on Dividends and Other Payment Restrictions
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Affecting Subsidiaries. The Company shall not, and shall not permit any
- ----------------------
Restricted Subsidiary to, directly or indirectly, cause or suffer to exist or
become effective, or enter into, any encumbrance or restriction (other than
pursuant to law or regulation) on the ability of any Restricted Subsidiary (i)
to pay dividends or make any other distributions in respect of its Capital Stock
or pay any Indebtedness or other obligation owed to the Company or any
Restricted Subsidiary; (ii) to make loans or advances to the Company or any
Restricted Subsidiary; or (iii) to transfer any of its Property to the Company
or any other Restricted Subsidiary, except:
(a) any encumbrance or restriction existing as of the Issue Date or any
other agreement relating to any Existing Indebtedness or any Indebtedness
under a Qualified Receivable Facility otherwise permitted under this
Indenture;
(b) any encumbrance or restriction pursuant to an agreement relating to
an acquisition of Property, so long as the encumbrances or restrictions in any
such agreement relate solely to the Property so acquired;
(c) any encumbrance or restriction relating to any Indebtedness of any
Restricted Subsidiary existing on the date on which such Restricted Subsidiary
is acquired by the Company or another Restricted Subsidiary (other than any
such Indebtedness Incurred by such Restricted Subsidiary in connection with or
in anticipation of such acquisition);
(d) any encumbrance or restriction pursuant to an agreement effecting a
permitted refinancing of Indebtedness issued pursuant to an agreement referred
to in the foregoing clauses (a) through (c), so long as the encumbrances and
restrictions
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contained in any such refinancing agreement are not materially more
restrictive than the encumbrances and restrictions contained in such
agreements;
(e) customary provisions (A) that restrict the subletting, assignment or
transfer of any property or asset that is a lease, license, conveyance or
contract or similar property or asset; (B) existing by virtue of any
transfer of, agreement to transfer, option or right with respect to, or
Lien on, any property or assets of the Company or any Restricted Subsidiary
not otherwise prohibited by the Indenture or (C) arising or agreed to in
the ordinary course of business, not relating to any Indebtedness, and that
do not, individually or in the aggregate, detract from the value of
property or assets of the Company or any Restricted Subsidiary in any
manner material to the Company or any Restricted Subsidiary;
(f) in the case of clause (iii) above, restrictions contained in any
security agreement (including a Capital Lease Obligation) securing
Indebtedness of the Company or a Restricted Subsidiary otherwise permitted
under the Indenture, but only to the extent such restrictions restrict the
transfer of the property subject to such security agreement; and
(g) any restriction with respect to a Restricted Subsidiary of the
Company imposed pursuant to an agreement which has been entered into for
the sale or disposition of all or substantially all of the Capital Stock or
assets of such Restricted Subsidiary, provided that the consummation of
such transaction would not result in an Event of Default or an event that,
with the passing of time or the giving of notice or both, would constitute
an Event of Default, that such restriction terminates if such transaction
is not consummated and that the consummation or abandonment of such
transaction occurs within one year of the date such agreement was entered
into.
Nothing contained in this Section 4.15 shall prevent the Company or any
other Restricted Subsidiary from (1) creating, incurring, assuming or suffering
to exist any Liens otherwise permitted under Section 4.13 or (2) restricting the
sale or other disposition of property or assets of the Company or any of its
Restricted Subsidiaries that secure Indebtedness of the Company or any of its
Restricted Subsidiaries otherwise permitted under Section 4.10 hereof or Section
4.11 hereof, as the case may be.
SECTION 4.16. Limitation on Issuance and Sale of Capital Stock of
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Restricted Subsidiaries. The Company (i) shall not permit any Restricted
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Subsidiary to issue any Capital Stock other than to the Company or a Wholly-
Owned Restricted Subsidiary unless immediately after giving effect thereto such
Restricted Subsidiary would no longer constitute a Restricted Subsidiary and any
Investment of the Company or any other Restricted Subsidiary in such Restricted
Subsidiary would have been permitted under Section 4.12 hereof if made on the
date of such issuance and (ii) shall not permit any Person other than the
Company or a Wholly-Owned Restricted Subsidiary to own any Capital Stock of any
Restricted Subsidiary, other than directors' qualifying shares and except for:
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(a) a sale of 100% of the Capital Stock of a Restricted Subsidiary sold
in a transaction not prohibited by the covenant described under Section
4.09 hereof;
(b) Capital Stock of a Restricted Subsidiary issued and outstanding on
the Issue Date and held by Persons other than the Company or any Restricted
Subsidiary;
(c) Capital Stock of a Restricted Subsidiary issued and outstanding
prior to the time that such Person becomes a Restricted Subsidiary so long
as such Capital Stock was not issued in anticipation or contemplation of
such Person's becoming a Restricted Subsidiary or otherwise being acquired
by the Company; and
(d) any Preferred Stock permitted to be issued under Section 4.11
hereof.
SECTION 4.17. Transactions with Affiliates. The Company shall not, and
----------------------------
shall not permit any of its Restricted Subsidiaries to, directly or indirectly,
sell, lease, transfer, or otherwise dispose of, any of its Properties or assets
to, or purchase any Property or assets from, or enter into any contract,
agreement, understanding, loan, advance or Guarantee with or for the benefit of,
any Affiliate (each of the foregoing, an "Affiliate Transaction"), unless (a)
such Affiliate Transaction or series of Affiliate Transactions is on terms that
are no less favorable to the Company or such Restricted Subsidiary than those
that would have been obtained in a comparable arm's-length transaction by the
Company or such Restricted Subsidiary with a Person that is not an Affiliate
(or, in the event that there are no comparable transactions involving Persons
who are not Affiliates of the Company or the relevant Restricted Subsidiary to
apply for comparative purposes, is otherwise on terms that, taken as a whole,
the Company has determined to be fair to the Company or the relevant Restricted
Subsidiary) and (b) the Company delivers to the Trustee (i) with respect to any
Affiliate Transaction involving aggregate payments in excess of $1 million, a
certificate of the chief executive, operating or financial officer of the
Company evidencing such officer's determination that such Affiliate Transaction
or series of Affiliate Transactions complies with clause (a) above and is in the
best interests of the Company or such Restricted Subsidiary and (ii) with
respect to any Affiliate Transaction or series of Affiliate Transactions
involving aggregate payments in excess of $5 million, a Board Resolution
certifying that such Affiliate Transaction or series of Affiliate Transactions
complies with clause (a) above and that such Affiliate Transaction or series of
Affiliate Transactions has been approved by a majority of the disinterested
members of the Board of Directors who have determined that such Affiliate
Transaction or series of Affiliate Transactions is in the best interest of the
Company or such Restricted Subsidiary; provided that the following shall not be
deemed Affiliate Transactions:
(i) any employment agreement entered into by the Company or any of its
Restricted Subsidiaries in the ordinary course of business and consistent
with industry practice;
(ii) any agreement or arrangement with respect to the compensation of a
director or officer of the Company or any Restricted Subsidiary approved by
a
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majority of the disinterested members of the Board of Directors and
consistent with industry practice;
(iii) transactions between or among the Company and its Restricted
Subsidiaries;
(iv) transactions permitted by Section 4.12 hereof;
(v) transactions pursuant to any agreement or arrangement existing on
the Issue Date; and
(vi) transactions with respect to wireline or wireless transmission
capacity, the lease or sharing or other use of cable or fiberoptic lines,
equipment, rights-of-way or other access rights, between the Company or any
Restricted Subsidiary and any other Person; provided, in any case, that
such transaction is on terms that are no less favorable, taken as a whole,
to the Company or the relevant Restricted Subsidiary than those that could
have been obtained in a comparable transaction by the Company or such
Restricted Subsidiary with Persons who are not Affiliates of the Company or
the relevant Restricted Subsidiary (or, in the event that there are no
comparable transactions involving Persons who are not Affiliates of the
Company or the relevant Restricted Subsidiary to apply for comparative
purposes, is otherwise on terms that, taken as a whole, the Company has
determined to be fair to the Company or the relevant Restricted
Subsidiary).
SECTION 4.18. Restricted and Unrestricted Subsidiaries. (a) The Company
----------------------------------------
may designate a Subsidiary (including a newly formed or newly acquired
Subsidiary) of the Company or any of its Restricted Subsidiaries as an
Unrestricted Subsidiary if such Subsidiary does not have any obligations which,
if in Default, would result in a cross default on Indebtedness of the Company or
a Restricted Subsidiary (other than Indebtedness to the Company or a Wholly-
Owned Restricted Subsidiary), and (i) such Subsidiary has total assets of $1,000
or less, (ii) such Subsidiary has assets of more than $1,000 and an Investment
in such Subsidiary in an amount equal to the Fair Market Value of such
Subsidiary would then be permitted under Section 4.11(a) hereof or (iii) such
designation is effective immediately upon such Person becoming a Subsidiary.
Unless so designated as an Unrestricted Subsidiary, any Person that becomes a
Subsidiary of the Company or any of its Restricted Subsidiaries shall be
classified as a Restricted Subsidiary thereof.
(b) The Company shall not, and shall not permit any of its Restricted
Subsidiaries to, take any action or enter into any transaction or series of
transactions that would result in a Person (other than a newly formed Subsidiary
having no outstanding Indebtedness (other than Indebtedness to the Company or a
Restricted Subsidiary) at the date of determination) becoming a Restricted
Subsidiary (whether through an acquisition, the redesignation of an Unrestricted
Subsidiary or otherwise), unless, after giving effect to such action,
transaction or series of transactions on a pro forma basis, (i) the Company
could incur at least $1 of
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additional Indebtedness pursuant to Section 4.10(a) and (ii) no Default or Event
of Default would occur.
(c) Subject to clause (b), an Unrestricted Subsidiary may be redesignated
as a Restricted Subsidiary. The designation of a Subsidiary as an Unrestricted
Subsidiary or the designation of an Unrestricted Subsidiary as a Restricted
Subsidiary in compliance with clause (b) shall be made by the Board of Directors
pursuant to a Board Resolution delivered to the Trustee and shall be effective
as of the date specified in such Board Resolution, which shall not be prior to
the date such Board Resolution is delivered to the Trustee.
SECTION 4.19. Reports. For as long as any Notes remain outstanding, the
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Company shall furnish to the Holders of the Notes and to securities analysts and
prospective investors, upon their request, the information required to be
delivered pursuant to Rule 144A(d)(4) under the Securities Act. The Company
shall file with the Trustee within 15 days after it files them with the
Commission copies of the annual and quarterly reports and the information,
documents, and other reports that the Company is required to file with the
Commission pursuant to Section 13(a) or 15(d) of the Exchange Act ("SEC
Reports"). In the event the Company shall cease to be required to file SEC
Reports pursuant to the Exchange Act, the Company shall nevertheless continue to
file such reports with the Commission (unless the Commission shall not accept
such a filing) and in any event with the Trustee. The Company shall furnish
copies of the SEC Reports to the Holders of Notes at the time the Company is
required to file the same with the Trustee and will make such information
available to investors who request it in writing.
SECTION 4.20. Compliance Certificate; Notice of Default or Event of
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Default. The Company shall deliver to the Trustee within 120 calendar days
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after the end of each fiscal year of the Company ending after the date hereof,
an Officers' Certificate stating whether or not, to the best knowledge of such
officer, the Company has complied with all conditions and covenants under this
Indenture, and, if the Company shall be in Default, specifying all such Defaults
and the nature thereof of which such officer may have knowledge.
For the purposes of this Section 4.20, compliance shall be determined
without regard to any period of grace or requirement of notice under this
Indenture.
The Company shall deliver written notice to the Trustee within 30 calendar
days after any executive officer of the Company becomes aware of the occurrence
of any event which constitutes, or with the giving of notice or the lapse of
time or both would constitute, a Default or Event of Default, describing such
Default or Event of Default, its status and what action the Company is taking or
proposes to take with respect thereto.
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ARTICLE V.
CONSOLIDATION, MERGER, CONVEYANCE, LEASE OR TRANSFER
SECTION 5.01. Merger, Consolidation or Sale of Assets. The Company
---------------------------------------
shall not in any transaction or series of related transactions, consolidate
with, or merge with or into, any other Person or permit any other Person to
merge with or into the Company (other than a merger of a Restricted Subsidiary
of the Company into the Company in which the Company is the continuing
corporation), or sell, convey, assign, transfer, lease or otherwise dispose of
all or substantially all of the Property and assets of the Company and its
Restricted Subsidiaries taken as a whole to any other Person, unless:
(a) either (i) the Company shall be the continuing corporation or (ii)
the corporation (if other than the Company) formed by such consolidation or
into which the Company is merged, or the Person which acquires, by sale,
assignment, conveyance, transfer, lease or disposition, all or
substantially all of the Property and assets of the Company and its
Restricted Subsidiaries taken as a whole (any such corporation or Person
being the "Surviving Entity") shall be a corporation organized and validly
existing under the laws of the United States of America, any political
subdivision thereof, any state thereof or the District of Columbia, and
shall expressly assume, by an indenture supplemental hereto, executed and
delivered to the Trustee, in form reasonably satisfactory to the Trustee,
the due and punctual payment of the principal of (and premium, if any) and
interest on all the Notes and the performance of every covenant and
obligation in this Indenture on the part of the Company to be performed or
observed;
(b) immediately after giving effect to such transaction or series of
related 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 related transactions), no
Default or Event of Default shall have occurred and be continuing;
(c) immediately after giving effect to such transaction or series of
related 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 Company
(or the Surviving Entity, if the Company is not continuing) would (A) be
permitted to Incur $1.00 of additional Indebtedness under Section 4.10(a)
hereof and (B) have a Consolidated Net Worth that is not less than the
Consolidated Net Worth of the Company immediately before such transaction
or series of transactions; and
(d) if, as a result of any such transaction, Property of the Company
would become subject to a Lien prohibited by the provisions of the
Indenture described
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under Section 4.13 hereof, the Company or the successor entity to the
Company shall have secured the Notes as required thereby.
In connection with any consolidation, merger, conveyance, lease or other
disposition contemplated by this Section 5.01, the Company shall deliver, or
cause to be delivered, to the Trustee, in form reasonably satisfactory to the
Trustee, an Officers' Certificate and an Opinion of Counsel, each stating that
such consolidation, merger, conveyance, lease or disposition and any
supplemental indenture in respect thereto comply with this Article V and that
all conditions precedent herein provided for relating to such transaction have
been complied with.
SECTION 5.02. Successor Corporation Substituted. Upon any
---------------------------------
consolidation with, or merger by the Company with or into, any other
corporation, or any sale, assignment, transfer, lease, conveyance or other
disposition of all or substantially all of the Property and assets of the
Company and its Restricted Subsidiaries taken as a whole in accordance with
Section 5.01 hereof, the successor corporation formed by such consolidation or
into which the Company is merged, or the Person to which such sale, conveyance,
assignment, transfer, lease, conveyance or other disposition is made, shall
succeed to, and be substituted for, and may exercise every right and power of,
the Company under this Indenture with the same effect as if such successor
Person has been named as the Company herein; and thereafter the predecessor
corporation shall be relieved of all obligations and covenants under this
Indenture and the Notes, except for the obligation to pay the principal of (and
premium, if any) and interest on the Notes.
ARTICLE VI.
DEFAULTS AND REMEDIES
SECTION 6.01. Events of Default. "Event of Default," wherever used
-----------------
herein with respect to the Notes, means any one of the following events
(whatever the reason for such event, and whether it shall be voluntary or
involuntary, or be effected by operation of law, pursuant to any judgment,
decree or order of any court or any order, rule or regulation of any
administrative or governmental body):
(a) default in the payment of interest on any Note when the same
becomes due and payable, and the continuance of such Default for a period
of 30 calendar days; or
(b) default in the payment of the principal of (or premium, if any,
on) any Note when the same becomes due and payable whether upon Maturity,
optional redemption, required repurchase (including pursuant to a Change of
Control Offer, the CCI Transaction Put Option Offer or an Asset Sale Offer)
or otherwise, or the failure to make an offer to purchase any Note as
herein required; or
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(c) default in the performance, or breach, of any covenant or
agreement contained in Section 4.07, Section 4.08, Section 4.09 or Article V
hereof; or
(d) default in the performance, or breach, of any covenant or warranty
of the Company contained in this Indenture or the Notes (other than a covenant
or warranty addressed in Section 6.01(a), Section 6.01(b) or Section 6.01(c)
hereof), and the continuance of such Default or breach for a period of 60
calendar days after written notice thereof has been given to the Company by the
Trustee or to the Company and the Trustee by the Holders of at least 25 percent
of the aggregate principal amount of the outstanding Notes specifying such
Default and stating that such notice is a "Notice of Default" delivered in
connection with this Indenture; or
(e) a default or defaults under any bond, debenture, note or other
evidence of Indebtedness by the Company or any Restricted Subsidiary of the
Company (or under any mortgage, indenture or instrument under which there may be
issued or by which there may be secured or evidenced any Indebtedness by the
Company or any such Restricted Subsidiary) having, individually or in the
aggregate, a principal or similar amount outstanding of at least $10 million,
whether such indebtedness now exists or shall hereafter be created, which
default or defaults shall have resulted in the acceleration of the maturity of
such Indebtedness prior to its express maturity or shall constitute a failure to
pay such Indebtedness when due and payable after the expiration of any
applicable grace period with respect thereto or shall have resulted in such
Indebtedness becoming or being declared due and payable; or
(f) a final judgment or final judgments for the payment of money
(other than to the extent covered by insurance as to which the insurance company
has acknowledged coverage and other than to the extent covered by an indemnity
given by an insurance company) is entered against the Company or any Restricted
Subsidiary of the Company in an aggregate amount in excess of $10 million by a
court or courts of competent jurisdiction, which judgment is not discharged,
waived, stayed, bonded or satisfied for a period of 45 consecutive calendar
days; or
(g) the entry by a court having jurisdiction in the premises of (i) a
decree or order for relief in respect of the Company or any Restricted
Subsidiary of the Company in an involuntary case or proceeding under United
States bankruptcy laws, as now or hereafter constituted, or any other applicable
Federal, state, or foreign bankruptcy, insolvency, or other similar law or (ii)
a decree or order adjudging the Company or any Restricted Subsidiary of the
Company a bankrupt or insolvent, or approving as properly filed a petition
seeking reorganization, arrangement, adjustment or composition of, or in respect
of, the Company or any Restricted Subsidiary of the Company under United States
bankruptcy laws, as now or hereafter constituted, or any other applicable
Federal, state or foreign bankruptcy, insolvency, or similar law, or appointing
a custodian, receiver, liquidator, assignee, trustee, sequestrator or other
similar official of the Company or any Restricted Subsidiary of the Company or
of
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any substantial part of the Property or assets of the Company or any Restricted
Subsidiary of the Company, or ordering the winding-up or liquidation of the
affairs of the Company or any Restricted Subsidiary of the Company, and the
continuance of any such decree or order for relief or any such other decree or
order unstayed and in effect for a period of 60 consecutive calendar days; or
(h) the commencement by the Company or any Restricted Subsidiary of
the Company of a voluntary case or proceeding under United States bankruptcy
laws, as now or hereafter constituted, or any other applicable Federal, state,
or foreign bankruptcy, insolvency or other similar law or of any other case or
proceeding to be adjudicated a bankrupt or insolvent; or (ii) the consent by the
Company or any Restricted Subsidiary of the Company to the entry of a decree or
order for relief in respect of the Company or any Restricted Subsidiary of the
Company in an involuntary case or proceeding under United States bankruptcy
laws, as now or hereafter constituted, or any other applicable Federal, state,
or foreign bankruptcy, insolvency, or other similar law or to the commencement
of any bankruptcy or insolvency case or proceeding against the Company or any
Restricted Subsidiary of the Company; or (iii) the filing by the Company or any
Restricted Subsidiary of the Company of a petition or answer or consent seeking
reorganization or relief under United States bankruptcy laws, as now or
hereafter constituted, or any other applicable Federal, state or foreign
bankruptcy, insolvency or other similar law; or (iv) the consent by the Company
or any Restricted Subsidiary of the Company to the filing of such petition or to
the appointment of or taking possession by a custodian, receiver, liquidator,
assignee, trustee, sequestrator or similar official of the Company or any
Restricted Subsidiary of the Company or of any substantial part of the Property
or assets of the Company or any Restricted Subsidiary of the Company, or the
making by the Company or any Restricted Subsidiary of the Company of an
assignment for the benefit of creditors; or (v) the admission by the Company or
any Restricted Subsidiary of the Company in writing of its inability to pay its
debts generally as they become due; or (vi) the taking of corporate action by
the Company or any Restricted Subsidiary of the Company in furtherance of any
such action.
SECTION 6.02. Acceleration. If any Event of Default (other than an
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Event of Default specified in Section 6.01(g) or Section 6.01(h) hereof) occurs
and is continuing, then and in every such case, the Trustee by a notice in
writing to the Company may, and at the direction of the Holders of not less than
25 percent of the outstanding aggregate principal amount of Notes by a notice in
writing to the Company and the Trustee, shall declare the Default Amount and any
accrued and unpaid interest on all Notes then outstanding to be immediately due
and payable. Upon any such declaration, such Default Amount and any accrued and
unpaid interest on all Notes then outstanding will become and be immediately due
and payable.
If an Event of Default specified in Section 6.01(g) or Section 6.01(h)
hereof occurs, the Default Amount and any accrued and unpaid interest on all
Notes then outstanding shall
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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 Notes.
In the event of a declaration of acceleration because an Event of
Default set forth in Section 6.01(e) hereof has occurred and is continuing, such
declaration of acceleration shall be automatically rescinded and annulled if the
event of default triggering such Event of Default pursuant to Section 6.01(e)
hereof shall be remedied, or cured, or waived by the holders of the relevant
Indebtedness, within 60 calendar days after such event of default; provided no
judgment or decree for the payment of the money due on the Notes has been
obtained by the Trustee as hereinafter in this Article VI provided.
At any time after a declaration of acceleration with respect to Notes
has been made and before a judgment or decree for payment of the money due has
been obtained by the Trustee as hereinafter in this Article VI provided, the
Holders of a majority in principal amount of the outstanding Notes, by written
notice to the Company and the Trustee, may rescind and annul such declaration
and its consequences if,
(a) the Company has paid or deposited with the
Trustee a sum sufficient to pay:
(i) all overdue installments of interest on all
Notes,
(ii) the principal of (and premium, if any, on) any Notes which have
become due otherwise than by such declaration of acceleration and interest
thereon at the rate or rates prescribed therefor in such Notes,
(iii) to the extent that payment of such interest is lawful, interest
on the Defaulted Interest at the rate prescribed therefor in the Notes and this
Indenture, and
(iv) all moneys paid or advanced by the Trustee hereunder and the
reasonable compensation, expenses, disbursements and advances of the Trustee,
its agents and counsel and all other amounts due to the Trustee pursuant to
Section 7.07 hereof; and
(b) all Events of Default with respect to the Notes, other than the
non-payment of the principal of Notes which have become due solely by such
declaration of acceleration, have been cured or waived by the Holders as
provided herein.
No such rescission shall affect any subsequent
Default or impair any right consequent thereon.
SECTION 6.03. Other Remedies. The Company covenants that if an Event
--------------
of Default specified in Section 6.01(a) or Section 6.01(b) occurs the Company
shall, upon demand of the Trustee, pay to the Trustee, for the benefit of the
Holders, the whole amount
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then due and payable on the Notes for principal (and premium, if any) and
interest and, to the extent that payment of such interest shall be legally
enforceable, interest upon the overdue principal (and premium, if any) and upon
Defaulted Interest, at the rate or rates prescribed therefor in such Notes; and,
in addition thereto, such further amount as shall be sufficient to cover the
costs and expenses of collection, including the reasonable compensation,
expenses, disbursements and advances of the Trustee, its agents and counsel and
all other amounts due to the Trustee pursuant to Section 7.07 hereof.
If the Company fails to pay such amounts forthwith upon such demand,
the Trustee, in its own name and as trustee of an express trust, may and, at the
direction of the Holders of not less than a majority of the outstanding
aggregate principal amount of the Notes, shall institute a judicial proceeding
for the collection of the sums so due and unpaid, and may prosecute such
proceeding to judgment or final decree, and may enforce the same against the
Company or any other obligor upon such Notes and collect the moneys adjudged or
decreed to be payable in the manner provided by law out of the Property and
assets of the Company or any other obligor upon such Notes, wherever situated.
If an Event of Default with respect to the Notes occurs and is
continuing, the Trustee may in its discretion proceed to protect and enforce its
rights and the rights of the Holders by such appropriate judicial proceedings as
the Trustee shall deem most effectual to protect and enforce any such rights,
whether for the specific enforcement of any covenant or agreement in this
Indenture or in aid of the exercise of any power granted herein, or to enforce
any other proper remedy.
SECTION 6.04. Waiver of Past Defaults. The Holders of not less than
-----------------------
a majority in principal amount of the outstanding Notes may, on behalf of the
Holders of all the Notes, waive any past Default and its consequences under this
Article VI, except a Default (a) in the payment of the principal of (or
premium, if any) or interest on, any Note, or (b) in respect of a covenant or
provision hereof which under Section 9.02 hereof cannot be modified or amended
without the consent of the Holders of each outstanding Note affected.
SECTION 6.05. Control by Majority. The Holders of not less than a
-------------------
majority in principal amount of the outstanding Notes shall have the right to
direct the time, method and place of conducting any proceeding for any remedy
available to the Trustee or exercising any trust or power conferred on the
Trustee; provided that
(a) such direction shall not be in conflict with any rule of law or
with this Indenture or unduly prejudicial to the rights of other Holders and
would not subject the Trustee to personal liability, and
(b) the Trustee may take any other action deemed proper by the Trustee
which is not inconsistent with such direction.
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SECTION 6.06. Limitation on Suits. No Holder of Notes shall have any
-------------------
right to institute any proceeding, judicial or otherwise, with respect to this
Indenture, or for the appointment of a receiver or trustee, or for any other
remedy hereunder, unless:
(a) such Holder has previously given written notice to the Trustee of
a continuing Event of Default with respect to the Notes;
(b) the Holders of not less than 25 percent in principal amount of the
outstanding Notes shall have made written request to the Trustee to institute
proceedings in respect of such Event of Default in its own name as Trustee
hereunder;
(c) such Holder or Holders have offered and, if requested, provided to
the Trustee security or indemnity satisfactory to the Trustee in its reasonable
discretion against the costs, expenses and liabilities to be incurred in
compliance with such request;
(d) the Trustee for 30 calendar days after its receipt of such notice,
request and offer of indemnity has failed to institute any such proceeding; and
(e) no direction inconsistent with such written request has been given
to the Trustee during such 30-day period by the Holders of a majority in
principal amount of the outstanding Notes;
in any event, it being understood and intended that no one or more Holders of
Notes shall have any right in any manner whatever by virtue of, or by availing
of, any provision of this Indenture to affect, disturb or prejudice the rights
of any other Holders of Notes, or to obtain or to seek to obtain priority or
preference over any other of such Holders or to enforce any right under this
Indenture, except in the manner herein provided and for the equal and ratable
benefit of all Holders of Notes.
SECTION 6.07. Rights of Holders to Receive Payment. Notwithstanding
------------------------------------
any other provision of this Indenture, the right of any Holder to receive
payment of principal of (premium, if any) and interest on the Notes held by such
Holder, on or after the respective due dates expressed in the Notes or the
redemption dates or purchase dates provided for therein, or to bring suit for
the enforcement of any such payment on or after such respective dates, shall be
absolute and unconditional and shall not be impaired or affected without the
consent of such Holder.
SECTION 6.08. Trustee May File Proofs of Claim. In case of the
--------------------------------
pendency of any receivership, insolvency, liquidation, bankruptcy,
reorganization, arrangement, adjustment, composition or other judicial
proceedings, or any voluntary or involuntary case under United States bankruptcy
laws, as now or hereafter constituted, relative to the Company or any other
obligor upon the Notes or the Property and assets of the Company or of such
other obligor
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or their creditors, the Trustee (irrespective of whether the principal of such
Notes shall then be due and payable as therein expressed or by declaration or
otherwise and irrespective of whether the Trustee shall have made any demand on
the Company for the payment of overdue principal or interest) shall be entitled
and empowered, by intervention in such proceeding or otherwise, (i) to file and
prove a claim for the whole amount of principal (and premium, if any) and
interest owing and unpaid in respect of the Notes, to file such other papers or
documents and to take such other actions, including participating as a member or
otherwise in any official committee of creditors appointed in the matter, 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 all other amounts due to the Trustee
pursuant to Section 7.07 hereof) and of the Holders allowed in such judicial
proceeding, and (ii) to collect and receive any moneys or other Property payable
or deliverable on any such claims and to distribute the same; and any receiver,
assignee, trustee, custodian, liquidator, sequestrator (or other similar
official) in any such proceeding is hereby authorized by each Holder to make
such payments to the Trustee, and in the event that the Trustee shall consent to
the making of such payments directly to the Holders, to pay to the Trustee any
amount due it for the reasonable compensation, expenses, disbursements and
advances of the Trustee, its agents and counsel, and any other amounts due the
Trustee under Section 7.07 hereof. Nothing contained herein shall be deemed to
authorize the Trustee to authorize or consent to or accept or adopt on behalf of
any Holder any plan of reorganization, arrangement, adjustment or composition
affecting the Notes or the rights of any Holder thereof, or to authorize the
Trustee to vote in respect of the claim of any Holder in any such proceeding.
SECTION 6.09. Priorities. Any money collected by the Trustee
----------
pursuant to this Article VI shall be applied in the following order, at the date
or dates fixed by the Trustee and, in case of the distribution of such money on
account of principal (premium, if any) or interest, upon presentation of the
Notes and the notation thereon of the payment if only partially paid and upon
surrender thereof if fully paid:
FIRST: To the payment of all amounts due the
Trustee under Section 7.07 hereof;
SECOND: To the payment of the amounts then due and unpaid for
principal of (and premium, if any) and interest on the Notes, ratably, without
preference or priority of any kind, according to the amounts due and payable on
such Notes for principal (and premium, if any) and interest, respectively; and
THIRD: To the Company.
The Trustee may fix a record date and payment date for any payment to
Holders pursuant to this Section 6.09. At least 15 calendar days before such
record date, the Company shall mail to each Holder and the Trustee a notice that
states such record date, the
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payment date and amount to be paid. The Trustee may mail such notice in the
name and at the expense of the Company.
SECTION 6.10. Undertaking for Costs. All parties to this Indenture
---------------------
agree, and each Holder of any Note by such Holder's acceptance thereof shall be
deemed to have agreed, that any court may in its discretion require, 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, suffered or omitted by it as Trustee,
the filing by any party litigant in such suit of an undertaking to pay the costs
of such suit and that such court may in its discretion assess reasonable costs,
including reasonable attorneys' fees, against any party litigant in such suit,
having due regard to the merits and good faith of the claims or defenses made by
such party litigant; but the provisions of this Section shall not apply to any
suit instituted by the Trustee, to any suit instituted by any Holder, or group
of Holders, holding in the aggregate more than 10 percent in principal amount of
the outstanding Notes, or to any suit instituted by any Holder for the
enforcement of the payment of the principal of (or premium, if any) or interest
on any Note on or after its Stated Maturity.
SECTION 6.11. Waiver of Stay or Extension Laws. The Company (to the
--------------------------------
extent it may lawfully do so) shall not at any time insist upon, or plead, or in
any manner whatsoever claim or take the benefit or advantage of, any stay or
extension law wherever enacted, now or at any time hereafter in force, which may
affect the covenants or the performance of this Indenture; and the Company (to
the extent that it may lawfully do so) hereby expressly waives all benefit or
advantage of any such law, and shall not hinder, delay or impede the execution
of any power herein granted to the Trustee, but shall suffer and permit the
execution of every such power as though no such law had been enacted.
SECTION 6.12. Trustee May Enforce Claims Without Possession of the
----------------------------------------------------
Notes. All rights of action and claims under this Indenture or the Notes may be
- -----
prosecuted and enforced by the Trustee without the possession of any of the
Notes or the production thereof in any proceeding relating thereto, and any such
proceeding instituted by the Trustee shall be brought in its own name, as
trustee of an express trust, and any recovery of judgment shall, after provision
for the payment of the reasonable compensation, expenses, disbursements and
advances of the Trustee, its agents and counsel, be for the ratable benefit of
the Holders of the Notes.
SECTION 6.13. Restoration of Rights and Remedies. If the Trustee or
----------------------------------
any Holder of Notes has instituted any proceeding to enforce any right or remedy
under this Indenture and such proceeding has been discontinued or abandoned for
any reason, or has been determined adversely to the Trustee or to such Holder,
then and in every such case 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.
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SECTION 6.14. Rights and Remedies Cumulative. Except as otherwise
------------------------------
provided in Section 2.09 hereof, no right or remedy herein conferred upon or
reserved to the Trustee or to the Holders is intended to be exclusive of any
other right or remedy, and every right and remedy shall, to the extent permitted
by law, be cumulative and in addition to every other right and remedy given
hereunder or now or hereafter existing at law or in equity or otherwise. The
assertion or employment of any right or remedy hereunder, or otherwise, shall
not prevent the concurrent assertion or employment of any other appropriate
right or remedy.
SECTION 6.15. Delay or Omission Not Waiver. No delay or omission of
----------------------------
the Trustee or of any Holder of any Note to exercise any right or remedy
accruing upon any Event of Default shall impair any such right or remedy or
constitute a waiver of any such Event of Default or an acquiescence therein.
Every right and remedy given by this Article VI or by law to the Trustee or to
the Holders may be exercised from time to time, and as often as may be deemed
expedient, by the Trustee or by the Holders, as the case may be.
ARTICLE VII.
TRUSTEE
SECTION 7.01. Duties of Trustee. (a) If an Event of Default has occurred
-----------------
and is continuing, the Trustee shall exercise the rights and powers vested in it
by this Indenture and shall use the same degree of care and skill in their
exercise as a prudent person would exercise or use under the circumstances in
the conduct of such person's own affairs.
(b) Except during the continuance of an Event of Default of which a
Trust Officer has actual knowledge: (i) the Trustee undertakes to perform such
duties and only such duties as are specifically set forth in this Indenture and
no implied covenants or obligations shall be read into this Indenture against
the Trustee; and (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; provided that in
the case of any such certificates or opinions that by any provision of this
Indenture are specifically required to be furnished to the Trustee, the Trustee
shall examine such certificates and opinions to determine whether or not they
conform to the requirements of this Indenture.
(c) The Trustee may not be relieved from liability for its own
negligent action, its own negligent failure to act or its own willful
misconduct; provided that: (i) this paragraph (c) shall 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
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liable with respect to any action it takes or omits to take in good faith in
accordance with a direction received by it pursuant to Section 6.05 hereof.
(d) Money held in trust by the Trustee need not
be segregated from other funds except to the extent required by law.
(e) 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 of liability is
not reasonably assured to it.
(f) Every provision of this Indenture relating to the conduct or
affecting the liability of or affording protection to the Trustee shall be
subject to the provisions of this Article VII and to the provisions of the Trust
Indenture Act.
SECTION 7.02. Rights of Trustee. (a) The Trustee may rely on any
-----------------
document believed by it to be genuine and to have been signed or presented by
the proper Person. Except as provided in Section 7.01(b) hereof, the Trustee
need not investigate any fact or matter stated in the document.
(b) Before the Trustee acts or refrains from acting, it may require an
Officers' Certificate or an Opinion of Counsel. The Trustee shall not be liable
for any action it takes or omits to take in good faith in reliance on any
Officers' Certificate or Opinion of Counsel.
(c) The Trustee may act through agents and shall not be responsible
for the misconduct or negligence of any such agent; provided that such agent was
appointed with due care by the Trustee.
(d) The Trustee shall not be liable for any action it takes or omits
to take in good faith which it believes to be authorized or within its rights or
powers; provided that the Trustee's conduct does not constitute willful
misconduct or gross negligence.
(e) The Trustee shall not be charged with knowledge of any Default or
Event of Default under Section 6.01(c), 6.01(d), 6.01(e) or 6.01(f) hereof, of
the identity of any Restricted Subsidiary or of the existence of any Change of
Control or Asset Sale unless either (i) a Trust Officer shall have actual
knowledge thereof, or (ii) the Trustee shall have received notice thereof in
accordance with Section 10.02 hereof from the Company or any Holder of Notes.
(f) The Trustee may consult with counsel and the written advice of
such counsel or any Opinion of Counsel shall be full and complete authorization
and protection in respect of any action taken, suffered or omitted by it
hereunder in good faith and in reliance thereon.
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(g) The Trustee shall not be bound to make any investigation into the
facts or matters stated in any resolution, certificate, statement, instrument,
opinion, report, notice, request, direction, consent, order, bond, debenture or
other paper or document, but the Trustee, in its discretion may make such
further inquiry or investigation into such facts or matters as it may see fit,
and, if the Trustee shall determine to make such further inquiry or
investigation, it shall be entitled to examine the books, records and premises
of the Company, personally or by agent or attorney.
(h) The Trustee shall not be liable for any action it takes or omits
to take in good faith in accordance with the direction of the Holders of a
majority of the aggregate outstanding principal amount of Notes relating to the
time, method and place of conducting any proceeding for any remedy available to
the Trustee, or exercising any trust or power conferred upon the Trustee, under
this Indenture.
SECTION 7.03. Individual Rights of Trustee. The Trustee, any Paying
----------------------------
Agent or Note Registrar, in its individual or any other capacity, may become the
owner or pledgee of Notes and may otherwise deal with the Company or its
Affiliates with the same rights it would have if it were not Trustee, Paying
Agent or Note Registrar hereunder, as the case may be; provided that the Trustee
must in any event comply with Sections 7.10 and 7.11 hereof.
SECTION 7.04. Trustee's Disclaimer. The Trustee shall not be
--------------------
responsible for and makes no representation as to the validity or adequacy of
this Indenture or the Notes, it shall not be accountable for the Company's use
of the proceeds from the Notes, and it shall not be responsible (a) for any
statement of the Company in this Indenture, including the recitals contained
herein, or in any document issued in connection with the sale of the Notes or in
the Notes other than the Trustee's certificate of authentication or (b) for
compliance by the Company with the Registration Agreement.
SECTION 7.05. Notice of Defaults. Within 90 calendar days after the
------------------
occurrence of any Default hereunder known to a Trust Officer with respect to the
Notes, the Trustee shall transmit by mail to all Holders, as their names and
addresses appear in the Note Register, notice of such Default hereunder known to
the Trustee, unless such Default shall have been cured or waived; provided that,
except in the case of a Default in the payment of the principal of (or premium,
if any) or interest on any Note, the Trustee shall be protected in withholding
such notice if and so long as the board of directors, the executive committee or
a trust committee of directors and/or Trust Officers of the Trustee in good
faith determine that the withholding of such notice is in the interest of the
Holders.
SECTION 7.06. Preservation of Information; Reports by Trustee to
--------------------------------------------------
Holders. (a) The Company shall furnish or cause to be furnished to the Trustee:
- -------
(i) semiannually, not less than 10 calendar days prior to each
Interest Payment Date, a list, in such form as the Trustee may reasonably
require, of the
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names and addresses of the Holders as of the Regular Record Date immediately
preceding such Interest Payment Date, and
(ii) at such other times as the Trustee may request in writing, within
30 calendar days after the receipt by the Company of any such request, a list of
similar form and content as of a date not more than 15 calendar days prior to
the time such list is furnished;
provided that if and so long as the Trustee shall be the Note Registrar for the
Notes, no such list need be furnished with respect to the Notes.
(b) The Trustee shall preserve, in as current a form as is reasonably
practicable, the names and addresses of Holders contained in the most recent
list furnished to the Trustee as provided in Section 7.06(a) hereof and the
names and addresses of Holders received by the Trustee in its capacity as Note
Registrar, if so acting. The Trustee may destroy any list furnished to it as
provided in Section 7.06(a) hereof upon receipt of a new list so furnished.
(c) Holders may communicate as provided in Section 312(b) of the Trust
Indenture Act with other Holders with respect to their rights under this
Indenture or under the Notes.
(d) Each Holder of Notes, by receiving and holding the same, agrees
with the Company and the Trustee that neither the Company nor the Trustee shall
be held accountable by reason of the disclosure of any such information as to
the names and addresses of the Holders in accordance with this Section 7.06,
regardless of the source from which such information was derived, and that the
Trustee shall not be held accountable by reason of mailing any material pursuant
to a request made under this Section 7.06.
(e) Within 60 calendar days after April 15 of each year commencing
with the year 1998, the Trustee shall transmit by mail to all Holders of Notes,
a brief report dated as of such April 15 if and to the extent required under
Section 313(a) of the Trust Indenture Act.
(f) The Trustee shall comply with Sections 313(b) and 313(c) of the
Trust Indenture Act.
(g) A copy of each report described in Section 7.06(e) hereof shall,
at the time of its transmission to Holders, be filed by the Trustee with each
stock exchange, if any, upon which the Notes are then listed, with the
Commission and also with the Company. The Company shall promptly notify the
Trustee of any stock exchange upon which the Notes are listed.
SECTION 7.07. Compensation and Indemnity. The Company shall pay to
--------------------------
the Trustee from time to time reasonable compensation for its services. The
Company shall reimburse the Trustee upon request for all reasonable out-of-
pocket expenses incurred or
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made by it, including costs of collection, in addition to the compensation for
its services. Such expenses shall include the reasonable compensation and
expenses, disbursements and advances of the Trustee's agents and counsel. The
Trustee's compensation shall not be limited by any law on compensation of a
trustee of an express trust.
The Company shall indemnify the Trustee for, and hold it harmless
against, any and all loss, liability or expense (including reasonable attorneys'
fees) arising out of or incurred by it in connection with the acceptance or
administration of the trust created by this Indenture and the performance of its
duties hereunder, except as set forth in the next paragraph. The Trustee shall
notify the Company promptly of any claim for which it may seek indemnity.
Failure by the Trustee to so notify the Company shall not relieve the Company of
its obligations hereunder. The Company shall defend any such claim and the
Trustee shall cooperate in the defense of such claim. The Trustee may have
separate counsel and the Company shall pay the reasonable fees and expenses of
such counsel. The Company need not pay for any settlement made without its
consent, which consent shall not be unreasonably withheld.
The Company need not reimburse any expense or indemnify against any
loss, liability or expense incurred by the Trustee through the Trustee's own
willful misconduct, negligence or bad faith.
To secure the Company's payment obligations in this Section 7.07, the
Trustee shall have a Lien prior to the Notes on all money or property held or
collected by the Trustee other than money or property held in trust to pay
principal of, premium, if any, and interest on, particular Notes.
The Company's payment obligations pursuant to this Section 7.07 shall
survive the resignation or removal of the Trustee and discharge of this
Indenture. Subject to any other rights available to the Trustee under
applicable bankruptcy law, when the Trustee incurs expenses after the occurrence
of a Default specified in Section 6.01(g) or Section 6.01(h) hereof, the
expenses are intended to constitute expenses of administration under bankruptcy
law.
SECTION 7.08. Replacement of Trustee. (a) No resignation or removal
----------------------
of the Trustee and no appointment of a successor Trustee pursuant to this
Article VII shall become effective until the acceptance of appointment by the
successor Trustee under this Section 7.08.
(b) The Trustee may resign at any time by giving written notice
thereof to the Company. If an instrument of acceptance by a successor Trustee
shall not have been delivered to the Trustee within 30 calendar days after the
giving of such notice of resignation, the resigning Trustee may petition any
court of competent jurisdiction for the appointment of a successor Trustee.
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(c) The Trustee may be removed at any time by Act of the Holders of a
majority in principal amount of the outstanding Notes, delivered to the Trustee
and to the Company.
(d) If at any time:
(i) the Trustee shall fail to comply with Section 310(b) of the
Trust Indenture Act after written request therefor by the Company or
by any Holder who has been a bona fide Holder of a Note for at least
six months, unless the Trustee's duty to resign is stayed in
accordance with the provisions of Section 310(b) of the Trust
Indenture Act; or
(ii) the Trustee shall cease to be eligible under Section 7.10
hereof and shall fail to resign after written request therefor by the
Company or by any such Holder; or
(iii) the Trustee shall become incapable of acting or a decree or
order for relief by a court having jurisdiction in the premises shall
have been entered in respect of the Trustee in an involuntary case
under the United States bankruptcy laws, as now or hereafter
constituted, or any other applicable Federal or state bankruptcy,
insolvency or similar law; or a decree or order by a court having
jurisdiction in the premises shall have been entered for the
appointment of a receiver, custodian, liquidator, assignee, trustee,
sequestrator (or other similar official) of the Trustee or of its
Property and assets or affairs, or any public officer shall take
charge or control of the Trustee or of its Property and assets or
affairs for the purpose of rehabilitation, conservation, winding up or
liquidation; or
(iv) the Trustee shall commence a voluntary case under the United
States bankruptcy laws, as now or hereafter constituted, or any other
applicable Federal or state bankruptcy, insolvency or similar law or
shall consent to the appointment of or taking possession by a
receiver, custodian, liquidator, assignee, trustee, sequestrator (or
other similar official) of the Trustee or its Property and assets or
affairs, or shall make an assignment for the benefit of creditors, or
shall admit in writing its inability to pay its debts generally as
they become due, or shall take corporate action in furtherance of any
such action,
then, in any such case, (i) the Company by a Board Resolution may remove the
Trustee with respect to the Notes, or (ii) subject to Section 6.10 hereof, any
Holder who has been a bona fide Holder of a Note for at least six months may, on
behalf of such Holder and all others similarly situated, petition any court of
competent jurisdiction for the removal of the Trustee and the appointment of a
successor Trustee for the Notes.
(e) If the Trustee shall resign, be removed or become incapable of
acting, or if a vacancy shall occur in the office of Trustee for any cause, the
Company, by or pursuant to a Board Resolution, shall promptly appoint a
successor Trustee. If, within one year after such
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resignation, removal or incapability, or the occurrence of such vacancy, a
successor Trustee shall be appointed by the Holders of a majority in principal
amount of the outstanding Notes delivered to the Company and the retiring
Trustee, the successor Trustee so appointed shall, forthwith upon its acceptance
of such appointment in accordance with this Section 7.08, become the successor
Trustee and to that extent replace any successor Trustee appointed by the
Company. If no successor Trustee shall have been so appointed by the Company or
the Holders and shall have accepted appointment in the manner hereinafter
provided, any Holder that has been a bona fide Holder of a Note for at least six
months may, subject to Section 6.10 hereof, on behalf of himself and all others
similarly situated, petition any court of competent jurisdiction for the
appointment of a successor Trustee.
(f) The Company shall give notice of each resignation and each removal
of the Trustee and each appointment of a successor Trustee by mailing written
notice of such resignation, removal and appointment by first class mail, postage
prepaid, to the Holders as their names and addresses appear in the Note
Register. Each notice shall include the name of the successor Trustee with
respect to the Notes and the address of its Corporate Trust Office.
(g) In the event of an appointment hereunder of a successor Trustee,
each such successor Trustee so appointed shall execute, acknowledge and deliver
to the Company and to the retiring Trustee an instrument accepting such
appointment, and thereupon the resignation or removal of the retiring Trustee
shall become effective and such successor Trustee, without any further act, deed
or conveyance, shall become vested with all the rights, powers, trusts and
duties of the retiring Trustee but, on request of the Company or the successor
Trustee, such retiring Trustee shall, upon payment of its charges, execute and
deliver an instrument transferring to such successor Trustee all the rights,
powers and trusts of the retiring Trustee, and shall duly assign, transfer and
deliver to such successor Trustee all Property and money held by such former
Trustee hereunder, subject to its Lien, if any, provided for in Section 7.07
hereof.
(h) Upon request of any such successor Trustee, the Company shall
execute any and all instruments for more fully and certainly vesting in and
confirming to such successor Trustee all such rights, powers and trusts referred
to in Section 7.08(g) hereof.
(i) No successor Trustee shall accept its appointment unless at the
time of such acceptance such successor Trustee shall be qualified and eligible
under this Article VII and under the Trust Indenture Act.
SECTION 7.09. Successor Trustee by Merger. Any corporation into
---------------------------
which the Trustee may be merged or converted or with which it may be
consolidated, or any corporation resulting from any merger, conversion or
consolidation to which the Trustee shall be a party, or any corporation
succeeding to all or substantially all of the corporate trust business of the
Trustee, shall be the successor of the Trustee hereunder; provided that such
corporation shall be otherwise qualified and eligible under this Article VII and
under the
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Trust Indenture Act, without the execution or filing of any paper or any further
act on the part of any of the parties hereto. In case any Notes shall have been
authenticated, but not delivered, by the Trustee then in office, any successor
by merger, conversion or consolidation to such authenticating Trustee may adopt
such authentication and deliver the Notes so authenticated with the same effect
as if such successor Trustee had itself authenticated such Notes. In the event
that any Notes shall not have been authenticated by such predecessor Trustee,
any such successor Trustee may authenticate and deliver such Notes, in either
its own name or that of its predecessor Trustee, with the full force and effect
which this Indenture provides for the certificate of authentication of the
Trustee.
SECTION 7.10. Eligibility; Disqualification. There shall at all times
-----------------------------
be a Trustee hereunder which shall be
(i) a corporation organized and doing business under the laws of
the United States of America, any State or Territory thereof or the
District of Columbia, authorized under such laws to exercise corporate
trust powers, and subject to supervision or examination by Federal,
State, Territorial or District of Columbia authority, or
(ii) a corporation or other Person organized and doing business
under the laws of a foreign government that is permitted to act as
Trustee pursuant to a rule, regulation or order of the Commission,
authorized under such laws to exercise corporate trust powers, and
subject to supervision or examination by authority of such foreign
government or a political subdivision thereof substantially equivalent
to supervision or examination applicable to United States
institutional trustees,
in either case having a combined capital and surplus of at least $25,000,000.
If such Person publishes reports of condition at least annually,
pursuant to law or to the requirements of the aforesaid supervising or examining
authority, then for the purposes of this Section 7.10, 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.
Neither the Company nor any Affiliate of the Company shall serve as Trustee
hereunder. If at any time the Trustee shall cease to be eligible to serve as
Trustee hereunder pursuant to the provisions of this Section 7.10, it shall
resign immediately in the manner and with the effect specified in this Article
VII.
If the Trustee has or shall acquire any "conflicting interest" within
the meaning of Section 310(b) of the Trust Indenture Act, the Trustee and the
Company shall in all respects comply with the provisions of Section 310(b) of
the Trust Indenture Act. Nothing herein shall prevent the Trustee from filing
with the Commission the application referred to in the penultimate paragraph of
Section 310(b) of the Trust Indenture Act.
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SECTION 7.11. Preferential Collection of Claims Against Company. The
-------------------------------------------------
Trustee shall comply with Section 311(a) of the Trust Indenture Act, excluding
any creditor relationship listed in Section 311(b) of the Trust Indenture Act.
A Trustee who has resigned or been removed shall be subject to Section 311(a) of
the Trust Indenture Act to the extent indicated therein.
ARTICLE VIII.
DEFEASANCE
SECTION 8.01. Company's Option to Effect Legal Defeasance or
----------------------------------------------
Covenant Defeasance. The Company may elect, at its option, at any time, to have
- -------------------
Section 8.02 or Section 8.03 hereof applied to the outstanding Notes (in whole
and not in part) upon compliance with the conditions set forth below in this
Article VIII. Such election shall be evidenced by a Board Resolution delivered
to the Trustee.
SECTION 8.02. Legal Defeasance and Discharge. Upon the Company's
------------------------------
exercise of its option to have this Section 8.02 applied to the outstanding
Notes (in whole and not in part), the Company shall be deemed to have been
discharged from its obligations with respect to such Notes as provided in this
Section 8.02 on and after the date the conditions set forth in Section 8.04
hereof are satisfied (hereinafter called "Defeasance"). For this purpose, such
Defeasance means that the Company shall be deemed to have paid and discharged
the entire indebtedness represented by such Notes and to have satisfied all its
other obligations under such Notes and this Indenture insofar as such Notes are
concerned (and the Trustee, at the expense of the Company, shall execute proper
instruments acknowledging the same), subject to the following which shall
survive until otherwise terminated or discharged hereunder:
(a) the rights of Holders of such Notes to receive, solely from the
trust fund described in Section 8.04 hereof and as more fully set forth in such
Section 8.04, payments in respect of the principal of and any premium and
interest on such Notes when such payments are due,
(b) the Company's obligations with respect to such Notes under
Sections 2.09, 2.10, 2.12, 4.02 and 4.03 hereof,
(c) the rights, powers, trusts, duties and immunities of the Trustee
under this Indenture,
(d) Article III hereof, and
(e) this Article VIII.
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Subject to compliance with this Article VIII, the Company may exercise
its option to have this Section 8.02 applied to the outstanding Notes (in whole
and not in part) notwithstanding the prior exercise of its option to have
Section 8.03 hereof applied to such Notes.
SECTION 8.03. Covenant Defeasance. Upon the Company's exercise of
-------------------
its option to have this Section 8.03 applied to the outstanding Notes (in whole
and not in part), (i) the Company shall be released from its obligations under
Section 5.01(c) and (d), Sections 4.05 through 4.19, inclusive, and any covenant
added to this Indenture subsequent to the Issue Date pursuant to Section 9.01
hereof, (ii) the occurrence of any event specified in Section 6.01(c) or Section
6.01(d) hereof, with respect to any of Section 5.01(c) and (d), Sections 4.05
through 4.19, inclusive, and any covenant added to this Indenture subsequent to
the Issue Date pursuant to Section 9.01 hereof, shall be deemed not to be or
result in an Event of Default, in each case with respect to such Notes as
provided in this Section 8.03 on and after the date the conditions set forth in
Section 8.04 hereof are satisfied (hereinafter called "Covenant Defeasance").
For this purpose, such Covenant Defeasance means that, with respect to such
Notes, the Company may omit to comply with and shall have no liability in
respect of any term, condition or limitation set forth in any such specified
Section (to the extent so specified in the case of Sections 6.01(c) and 6.01(d)
hereof), whether directly or indirectly by reason of any reference elsewhere
herein to any such Section or by reason of any reference in any such Section to
any other provision herein or in any other document; but the remainder of this
Indenture and such Notes shall be unaffected thereby.
SECTION 8.04. Conditions to Defeasance or Covenant Defeasance. The
-----------------------------------------------
following shall be the conditions to the application of Section 8.02 or Section
8.03 hereof to the outstanding Notes:
(a) 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 benefits of the Holders of such Notes, (i) money in an amount, or (ii)
U.S. Government Obligations which through the scheduled payment of principal and
interest in respect thereof in accordance with their terms will provide, not
later than one day before the due date of any payment, money in an amount, or
(iii) a combination thereof, in each case 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 (or any such other qualifying trustee)
to pay and discharge, the principal of and any installment of interest on such
Notes on the respective Stated Maturities thereof, in accordance with the terms
of this Indenture and such Notes.
(b) In the event of an election to have Section 8.02 hereof apply to
the outstanding Notes, the Company shall have delivered to the Trustee an
Opinion of Counsel stating that (i) the Company has received from, or there has
been published by, the Internal Revenue Service a ruling or (ii) since the date
of this Indenture, there has been a change in the
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applicable Federal income tax law, in either case (i) or (ii) to the effect
that, and based thereon such opinion shall confirm that, the Holders of such
Notes will not recognize gain or loss for Federal income tax purposes as a
result of the deposit, Defeasance and discharge to be effected with respect to
such Notes and will be subject to Federal income tax on the same amount, in the
same manner and at the same times as would be the case if such deposit,
Defeasance and discharge were not to occur.
(c) In the event of an election to have Section 8.03 hereof apply to
the outstanding Notes, the Company shall have delivered to the Trustee an
Opinion of Counsel reasonably acceptable to the Trustee to the effect that the
Holders of such Notes will not recognize gain or loss for Federal income tax
purposes as a result of the deposit and Covenant Defeasance to be effected with
respect to such Notes and will be subject to Federal income tax on the same
amount, in the same manner and at the same times as would be the case if such
deposit and Covenant Defeasance were not to occur.
(d) No Default or Event of Default with respect to the outstanding
Notes shall have occurred and be continuing at the time of such deposit after
giving effect thereto or at any time on or prior to the 91st calendar day after
the date of such deposit (it being understood that this condition shall not be
deemed satisfied until after such 91st calendar day).
(e) Such Defeasance or Covenant Defeasance shall not cause the
Trustee to have a conflicting interest within the meaning of the Trust Indenture
Act (assuming for the purpose of this clause (e) that all Notes are in default
within the meaning of such Act).
(f) Such Defeasance or Covenant Defeasance shall not result in a
breach or violation of, or constitute a default under, any other agreement or
instrument to which the Company is a party or by which it is bound.
(g) Such Defeasance or Covenant Defeasance shall not result in the
trust arising from such deposit constituting an investment company within the
meaning of the Investment Company Act of 1940, as amended, unless such trust
shall be registered under such Act or exempt from registration thereunder.
(h) The Company shall have delivered to the Trustee an Officers'
Certificate and an Opinion of Counsel, each stating that all conditions
precedent with respect to such Defeasance or Covenant Defeasance have been
complied with.
SECTION 8.05. Deposited Money and U.S. Government Obligations to be
-----------------------------------------------------
Held in Trust; Miscellaneous Provisions. All money and U.S. Government
- ---------------------------------------
Obligations (including the proceeds thereof) deposited with the Trustee pursuant
to Section 8.04 hereof in respect of the outstanding Notes shall be held in
trust and applied by the Trustee, in accordance with the provisions of such
Notes and this Indenture, to the payment, either directly or through any such
Paying Agent as the Trustee may determine, to the Holders of such Notes, of all
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sums due and to become due thereon in respect of principal and any premium and
interest, but money so held in trust 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 Section 8.04 hereof or the
principal and interest received in respect thereof other than any such tax, fee
or other charge which by law is for the account of the Holders of outstanding
Notes.
Anything in this Article VIII to the contrary notwithstanding, the
Trustee shall deliver or pay to the Company from time to time upon Company Order
any money or U.S. Government Obligations held by it as provided in Section 8.04
hereof which, in the opinion of a nationally recognized firm of independent
public accountants expressed in a written certification thereof delivered to the
Trustee, are in excess of the amount thereof that would then be required to be
deposited to effect the Defeasance or Covenant Defeasance, as the case may be,
with respect to the outstanding Notes.
The Trustee and the Paying Agent shall pay to the Company upon written
request any money held by them for the payment of principal, premium, if any, or
interest that remains unclaimed for two years; provided that the Trustee or such
--------
Paying Agent before being required to make any payment may cause to be published
at the expense of the Company once in a newspaper of general circulation in the
City of New York or mail to each Holder entitled to such money at such Holder's
address (as set forth in the Note Register) 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 such money must look to the Company for payment as
general creditors unless an applicable law designates another Person, and all
liability of the Trustee and such Paying Agent with respect to such money shall
cease.
SECTION 8.06. Reinstatement. If the Trustee or Paying Agent is
-------------
unable to apply any money in accordance with this Article VIII with respect to
any Notes by reason of any order or judgement of any court or governmental
authority enjoining, restraining or otherwise prohibiting such application then
the obligations under this Indenture and such Notes from which the Company has
been discharged or released pursuant to Sections 8.02 or 8.03 hereof shall be
revived and reinstated as though no deposit had occurred pursuant to this
Article VIII with respect to such Notes, until such time as the Trustee or
Paying Agent is permitted to apply all money held in trust pursuant to Section
8.05 hereof with respect to such Notes in accordance with this Article VIII;
provided that if the Company makes any payment of principal of or any premium or
interest on any such Note following such reinstatement of its obligations, the
Company shall be subrogated to the rights (if any) of the Holders of such Notes
to receive such payment from the money so held in trust.
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ARTICLE IX.
AMENDMENTS
SECTION 9.01. Without Consent of Holders. The Company and the
--------------------------
Trustee may, at any time, and from time to time, without notice to or consent of
any Holder of Notes, enter into one or more indentures supplemental hereto, in
form satisfactory to the Trustee, for any of the following purposes:
(a) to evidence the succession of another Person to the Company and
the assumption by such successor of the covenants of the Company herein and
contained in the Notes; or
(b) to add to the covenants of the Company, for the benefit of the
Holders of all of the Notes, or to surrender any right or power herein conferred
upon the Company; or
(c) to add any additional Events of Default; or
(d) to provide for uncertificated Notes in addition to or in place of
Certificated Notes; or
(e) to evidence and provide for the acceptance of appointment
hereunder of a successor Trustee; or
(f) to secure the Notes; or
(g) to cure any ambiguity herein, or to correct or supplement any
provision hereof which may be inconsistent with any other provision hereof or to
add any other provisions with respect to matters or questions arising under this
Indenture; provided that such actions shall not adversely affect the interests
--------
of the Holders of Notes in any material respect; or
(h) to comply with the requirements of the Commission in order to
effect or maintain the qualification of this Indenture under the Trust Indenture
Act.
SECTION 9.02. With Consent of Holders. With the consent of the
-----------------------
Holders of not less than a majority in principal amount of the outstanding
Notes, by Act of said Holders delivered to the Company and the Trustee, the
Company and the Trustee may enter into one or more indentures supplemental
hereto for the purpose of adding any provisions to or changing in any manner or
eliminating any of the provisions of this Indenture or of modifying in any
manner the rights of the Holders; provided that no such supplemental indenture
shall, without the consent of the Holder of each outstanding Note,
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(a) change the Stated Maturity of the principal of, or any
installment of interest on, any Note, or alter the redemption provisions
thereof, or reduce the principal amount thereof (or any premium, if any), or the
interest thereon, that would be due and payable upon Maturity thereof, or change
the place of payment where, or the coin or currency in which, any Note or any
premium or interest thereon is payable, or impair the right to institute suit
for the enforcement of any such payment on or after the Maturity thereof; or
(b) reduce the percentage in principal amount of the outstanding
Notes, the consent of whose Holders is required for any such supplemental
indenture; or
(c) modify any of the provisions of Section 6.04 hereof, except to
increase any percentage set forth therein or to provide that certain other
provisions of this Indenture cannot be modified or waived without the consent of
the Holder of each outstanding Note affected thereby; or
(d) subordinate in right of payment, or otherwise subordinate, the
Notes to any other Indebtedness; or
(e) modify any of the provisions of this Section 9.02, except to
increase any percentage set forth herein or to provide that certain other
provisions of this Indenture cannot be modified or waived without the consent of
the Holder of each outstanding Note affected thereby.
It shall not be necessary for any Act of Holders under this Section
9.02 to approve the particular form of any proposed supplemental indenture, but
it shall be sufficient if such Act shall approve the substance thereof.
SECTION 9.03. Effect of Supplemental Indentures. Upon the execution
---------------------------------
of any supplemental indenture under this Article IX, this Indenture shall be
modified in accordance therewith, and such supplemental indenture shall form a
part of this Indenture for all purposes; and every Holder of Notes theretofore
or thereafter authenticated and delivered hereunder shall be bound thereby.
SECTION 9.04. Compliance with Trust Indenture Act. Every amendment
-----------------------------------
or supplement to this Indenture or the Notes shall comply with the Trust
Indenture Act as then in effect.
SECTION 9.05. Revocation and Effect of Consents and Waivers. A
---------------------------------------------
consent to an amendment, supplement or a waiver by a Holder of a Note shall bind
the Holder and every subsequent Holder of such Note or portion of such Note that
evidences the same debt as the consenting Holder's Note, even if notation of the
consent or waiver is not made on such Note; provided that any such Holder or
--------
subsequent Holder may revoke the consent or waiver as to such Holder's Note or
portion of such Note if the Trustee receives the notice of
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<PAGE>
revocation at least one day prior to the date the amendment, supplement or
waiver becomes effective. After an amendment, supplement or waiver becomes
effective pursuant to this Article IX, it shall bind every Holder.
The Company may, but shall not be obligated to, fix a record date for
the purpose of determining the Holders entitled to give their consent or take
any other action described above or required or permitted to be taken pursuant
to this Indenture. If a record date is fixed, then notwithstanding 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 give such consent or to revoke any consent previously given or to
take any such action, whether or not such Persons continue to be Holders after
such record date. No such consent shall be valid or effective for more than 120
calendar days after such record date.
SECTION 9.06. Notation on or Exchange of Notes. If a supplemental
--------------------------------
indenture changes the terms of a Note, the Trustee may require the Holder
thereof to deliver such Note to the Trustee. The Trustee may place an
appropriate notation on such Note regarding the changed terms and return it to
the Holder. Alternatively, if the Company or the Trustee so determines, the
Company in exchange for such Note shall issue and the Trustee shall authenticate
a new Note that reflects the changed terms. Failure to make the appropriate
notation or to issue a new Note shall not affect the validity of such amendment
or supplement.
SECTION 9.07. Trustee to Execute Supplemental Indentures. The
------------------------------------------
Trustee shall execute any supplemental indenture authorized pursuant to this
Article IX if such supplemental indenture does not adversely affect the rights,
duties, liabilities or immunities of the Trustee. If it does, the Trustee may,
but shall not be required to, execute such supplemental indenture. In executing
any supplemental indenture, the Trustee shall be (subject to Section 7.01
hereof) fully protected in relying upon an Officers' Certificate and an Opinion
of Counsel, which shall not be at the expense of the Trustee, stating that the
execution of such supplemental indenture is authorized or permitted by this
Indenture.
ARTICLE X.
MISCELLANEOUS
SECTION 10.01. Trust Indenture Act Controls. If and to the extent
----------------------------
that any provision of this Indenture limits, qualifies or conflicts with the
duties imposed by, or with another provision (an "incorporated provision")
included in this Indenture by operation of, Sections 310 to 318, inclusive, of
the Trust Indenture Act, such imposed duties or incorporated provision shall
control.
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SECTION 10.02. Notices. Any notice or communication shall be in
-------
writing and delivered in person or mailed by first class mail, postage prepaid,
addressed as follows: if to the Company: McLeodUSA Incorporated, 6400 C Street,
S.W., Cedar Rapids, Iowa 52406, Attention: Clark E. McLeod; if to the Trustee:
United States Trust Company of New York, 114 West 47th Street, New York, New
York 10031, Attention: James E. Logan.
The Company or the Trustee, by notice to the other, may designate
additional or different addresses for subsequent notices or communications. Any
notice or communication mailed to a Holder shall be sent to the Holder by first
class mail, postage prepaid, at the Holder's address as it appears in the Note
Register and shall be duly given if so sent within the time prescribed. Failure
to mail a notice or communication to a Holder or any defect in it shall not
affect its sufficiency with respect to other Holders. If a notice or
communication is mailed to the Company, the Trustee or a Holder in the manner
provided above, it is duly given, whether or not the addressee receives it. In
case by reason of the suspension of regular mail service or by reason of any
other cause it shall be impracticable to give notice by mail to Holders, then
such notification as shall be made with the approval of the Trustee shall
constitute a sufficient notification for every purpose hereunder.
SECTION 10.03. Certificate and Opinion as to Conditions Precedent.
--------------------------------------------------
Upon any request or application by the Company to the Trustee to take or refrain
from taking any action under this Indenture, the Company 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.
SECTION 10.04. Statements Required in Certificate or Opinion. Each
---------------------------------------------
certificate or opinion with respect to compliance with a covenant or condition
provided for in this Indenture (other than pursuant to Section 4.20 hereof)
shall include: (a) a statement that the individual making such certificate or
opinion has read such covenant or condition; (b) a brief statement as to the
nature and scope of the examination or investigation upon which the statements
or opinions contained in such certificate or opinion are based; (c) a statement
that, in the opinion of such individual, such person has made such examination
or investigation as is necessary to enable such person to express an informed
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 individual,
such covenant or condition has been complied with; provided that, with respect
to matters of fact, an Opinion of Counsel may rely on an Officers' Certificate
or certificates of public officials.
SECTION 10.05. Rules by Trustee, Paying Agent and Note Registrar.
-------------------------------------------------
The Trustee may make reasonable rules for action by or a meeting of Holders, and
any Note Registrar and Paying Agent may make reasonable rules for their
functions; provided that no such rule shall conflict with terms of this
Indenture or the Trust Indenture Act.
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SECTION 10.06. Payments on Business Days. If a payment hereunder is
-------------------------
scheduled to be made on a date that is not a Business Day, payment shall be made
on the next succeeding day that is a Business Day, and no interest shall accrue
with respect to that payment during the intervening period. If a regular record
date is a date that is not a Business Day, such record date shall not be
affected.
SECTION 10.07. Governing Law. THIS INDENTURE AND THE NOTES SHALL BE
-------------
GOVERNED BY, AND CONSTRUED IN ACCORDANCE WITH, THE LAWS OF THE STATE OF NEW YORK
APPLICABLE TO AGREEMENTS MADE AND TO BE PERFORMED IN SAID STATE.
SECTION 10.08. No Recourse Against Others. No controlling Person,
--------------------------
director, officer, employee, incorporator or stockholder of the Company, as
such, shall have any liability for any obligations of the Company under the
Notes or this Indenture or for any claim based on, in respect of, or by reason
of, such obligations or their creation, solely by reason of its past, present or
future status as a controlling Person, director, officer, employee, incorporator
or stockholder of the Company. By accepting a Note, each Holder waives and
releases all such liability (but only such liability) as part of the
consideration for issuance of such Note to such Holder.
SECTION 10.09. Successors. All agreements of the Company in this
----------
Indenture and the Notes shall bind its successors and assigns whether so
expressed or not. All agreements of the Trustee in this Indenture shall bind
its successors and assigns whether so expressed or not.
SECTION 10.10. Counterparts. This Indenture may be executed in any
------------
number of counterparts and by the parties thereto in separate counterparts, each
of which when so executed shall be deemed to be an original and all of which
taken together shall constitute one and the same agreement.
SECTION 10.11. Table of Contents; Headings. 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 intended
to be considered a part hereof and shall not modify or restrict any of the terms
or provisions hereof.
SECTION 10.12. Severability. In case any provision in this Indenture
------------
or in the Notes shall be invalid, illegal or unenforceable, the validity,
legality and enforceability of the remaining provisions shall not in any way be
affected or impaired thereby.
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SECTION 10.13. Further Instruments and Acts. Upon request of the
----------------------------
Trustee, the Company will execute and deliver such further instruments and do
such further acts as may be reasonably necessary or proper to carry out more
effectively the purposes of this Indenture.
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IN WITNESS WHEREOF, the parties hereto have caused this Indenture to
be duly executed all as of the day and year first above written.
MCLEODUSA INCORPORATED
By /s/ Casey D. Mahon
---------------------------
Name: Casey D. Mahon
Title: Senior Vice President
Attest:
Joseph G. Connolly, Jr.
- -------------------------------
UNITED STATES TRUST COMPANY OF NEW YORK,
as Trustee
By /s/ James E. Logan
---------------------------
Name: James E. Logan
Title: Vice President
Attest:
Cynthia Chaney
- -------------------------------
103
<PAGE>
DISTRICT OF COLUMBIA ) SS.:
On the 21st day of July, 1997, before me personally came Casey D.
Mahon, to me known, who, being by me duly sworn, did depose and say that she is
Senior Vice President of McLeodUSA Incorporated, one of the corporations
described in and which executed the foregoing instrument and that she signed her
name thereto by authority of the Board of Directors of said corporation.
Carol Hedgpeth
---------------------------
Notary Public
District of Columbia
My commission expires 12/14/2001
[Seal]
<PAGE>
STATE OF NEW YORK )
) SS.:
COUNTY OF NEW YORK )
On the 21st day of July, 1997, before me personally came James E.
Logan, to me known, who, being by me duly sworn, did depose and say that he is
Vice President of United States Trust Company of New York, one of the
corporations described in and which executed the foregoing instrument and that
he signed his name thereto by authority of the Board of Directors of said
corporation.
Christine C. Collins
---------------------------
Notary Public
State of New York
My commission expires 3/30/98
[Seal]
<PAGE>
ANNEX A -- Form of
Regulation S Certificate
REGULATION S CERTIFICATE
(For transfers pursuant to (S) 2.08(b)(i), (iii) and (v)
of the Indenture)
United States Trust Company of New York,
as Trustee
114 West 47th Street
New York, New York 10036
Attention:
Re: 9-1/4% Senior Discount Notes due July 15, 2007
of McLeodUSA Incorporated (the "Notes")
----------------------------------------------
Reference is made to the Indenture, dated as of July 21, 1997 (the
"Indenture"), between McLeodUSA Incorporated (the "Company") and United States
Trust Company of New York, as Trustee. Terms used herein and defined in the
Indenture or in Regulation S or Rule 144 under the U.S. Securities Act of 1933,
as amended (the "Securities Act") are used herein as so defined.
This certificate relates to U.S. $________ principal amount of Notes,
which are evidenced by the following certificate(s) (the "Specified Notes"):
CUSIP No(s). _________________________________
CERTIFICATE No(s). ___________________________
The person in whose name this certificate is executed below (the "Undersigned")
hereby certifies that either (i) it is the sole beneficial owner of the
Specified Notes or (ii) it is acting on behalf of all the beneficial owners of
the Specified Notes and is duly authorized by them to do so. Such beneficial
owner or owners are referred to herein collectively as the "Owner". If the
Specified Notes are represented by a Global Security, they are held through the
Depositary or an Agent Member in the name of the Undersigned, as or on behalf of
the Owner. If the Specified Notes are not represented by a Global Security,
they are registered in the name of the Undersigned, as or on behalf of the
Owner.
<PAGE>
The Owner has requested that the Specified Notes be transferred to a
person (the "Transferee") who will take delivery in the form of a Regulation S
Note. In connection with such transfer, the Owner hereby certifies that, unless
such transfer is being effected pursuant to an effective registration statement
under the Securities Act, it is being effected in accordance with Rule 904 or
Rule 144 under the Securities Act and with all applicable securities laws of the
states of the United States and other jurisdictions. Accordingly, the Owner
hereby further certifies as follows:
(1) Rule 904 Transfers. If the transfer is being effected in accordance
------------------
with Rule 904:
(A) the Owner is not a distributor of the Notes, an affiliate of the
Company or any such distributor or a person acting on behalf of any of the
foregoing;
(B) the offer of the Specified Notes was not made to a person in the
United States;
(C) either:
(i) at the time the buy order was originated, the Transferee was
outside the United States or the Owner and any person acting on its
behalf reasonably believed that the Transferee was outside the United
States, or
(ii) the transaction is being executed in, on or through the
facilities of the Eurobond market, as regulated by the Association of
International Bond Dealers, or another designated offshore securities
market and neither the Owner nor any person acting on its behalf knows
that the transaction has been prearranged with a buyer in the United
States;
(D) no directed selling efforts have been made in the United
States by or on behalf of the Owner or any affiliate thereof;
(E) if the Owner is a dealer in securities or has received a selling
concession, fee or other remuneration in respect of the Specified Notes,
and the transfer is to occur during the Restricted Period, then the
requirements of Rule 904(c)(1) have been satisfied; and
(F) the transaction is not part of a plan or scheme to evade
the registration requirements of the Securities Act.
<PAGE>
(2) Rule 144 Transfers. If the transfer is being effected
------------------
pursuant to Rule 144:
(A) the transfer is occurring after a holding period of at least one
year (computed in accordance with paragraph (d) of Rule 144) has elapsed since
the Specified Notes were last acquired from the Company or from an affiliate of
the Company, whichever is later, and is being effected in accordance with the
applicable amount, manner of sale and notice requirements of Rule 144; or
(B) the transfer is occurring after a holding period of at least two
years has elapsed since the Specified Notes were last acquired from the Company
or from an affiliate of the Company, whichever is later, and the Owner is not,
and during the preceding three months has not been, an affiliate of the Company.
This certificate and the statements contained herein are made for your
benefit and the benefit of the Company and the Purchasers.
Dated: ______________________________________________
(Print the name of the Undersigned, as such
term is defined in the second paragraph of this
certificate.)
By:____________________________________________
Name:
Title:
(If the Undersigned is a corporation, partnership or fiduciary,
the title of the person signing on behalf of the Undersigned
must be stated.)
<PAGE>
ANNEX B -- Form of Restricted
Notes Certificate
RESTRICTED NOTES CERTIFICATE
(For transfers pursuant to (S) 2.08(b)(ii), (iii), (iv) and (v)
of the Indenture)
United States Trust Company of New York,
as Trustee
114 West 47th Street
New York, New York 10036
Attention:
Re: 9-1/4% Senior Discount Notes due July 15, 2007
of McLeodUSA Incorporated (the "Notes")
----------------------------------------------
Reference is made to the Indenture, dated as of July 21, 1997 (the
"Indenture"), between McLeodUSA Incorporated (the "Company") and United States
Trust Company of New York, as Trustee. Terms used herein and defined in the
Indenture or in Regulation S or Rule 144 under the U.S. Securities Act of 1933,
as amended (the "Securities Act") are used herein as so defined.
This certificate relates to U.S. $__________ principal amount of
Notes, which are evidenced by the following certificate(s) (the "Specified
Notes"):
CUSIP No(s). _____________________________
CERTIFICATE No(s). _______________________
The person in whose name this certificate is executed below (the "Undersigned")
hereby certifies that either (i) it is the sole beneficial owner of the
Specified Notes or (ii) it is acting on behalf of all the beneficial owners of
the Specified Notes and is duly authorized by them to do so. Such beneficial
owner or owners are referred to herein collectively as the "Owner". If the
Specified Notes are represented by a Global Security, they are held through the
Depositary or an Agent Member in the name of the Undersigned, as or on behalf of
the Owner. If the Specified Notes are not represented by a Global Security,
they are registered in the name of the Undersigned, as or on behalf of the
Owner.
<PAGE>
The Owner has requested that the Specified Notes be transferred to a
person (the "Transferee") who will take delivery in the form of a Restricted
Note. In connection with such transfer, the Owner hereby certifies that, unless
such transfer is being effected pursuant to an effective registration statement
under the Securities Act, it is being effected in accordance with Rule 144A,
Rule 144 or to an Institutional Accredited Investor under Rule 501(a)(1), (2),
(3) or (7) under the Securities Act and in compliance with all applicable
securities laws of the states of the United States and other jurisdictions.
Accordingly, the Owner hereby further certifies as follows:
(1) Rule 144A Transfers. If the transfer is being effected in
-------------------
accordance with Rule 144A:
(A) the Specified Notes are being transferred to a person that the
Owner and any person acting on its behalf reasonably believe is a "qualified
institutional buyer" within the meaning of Rule 144A, acquiring for its own
account or for the account of a qualified institutional buyer; and
(B) the Owner and any person acting on its behalf have taken
reasonable steps to ensure that the Transferee is aware that the Owner may be
relying on Rule 144A in connection with the transfer; and
(2) Rule 144 Transfers. If the transfer is being effected
------------------
pursuant to Rule 144:
(A) the transfer is occurring after a holding period of at least one
year (computed in accordance with paragraph (d) of Rule 144) has elapsed since
the Specified Notes were last acquired from the Company or from an affiliate of
the Company, whichever is later, and is being effected in accordance with the
applicable amount, manner of sale and notice requirements of Rule 144; or
(B) the transfer is occurring after a holding period of at least two
years has elapsed since the Specified Notes were last acquired from the Company
or from an affiliate of the Company, whichever is later, and the Owner is not,
and during the preceding three months has not been, an affiliate of the Company.
(3) Institutional Accredited Investor Transfers. If the
-------------------------------------------
transfer is being effected to an Institutional Accredited Investor as defined
under Rule 501(a)(1), (2), (3) or (7), the Specified Notes are being transferred
to such an Institutional Accredited Investor as therein so defined who is
purchasing for investment purposes and not for distribution.
<PAGE>
This certificate and the statements contained herein are made for your
benefit and the benefit of the Company and the Purchasers.
Dated: _________________________________________________________
(Print the name of the Undersigned, as such
term is defined in the second paragraph of this
certificate.)
By:_____________________________________________________
Name:
Title:
(If the Undersigned is a corporation,
partnership or fiduciary, the title of the
person signing on behalf of the Undersigned
must be stated.)
<PAGE>
ANNEX C -- Form of Unrestricted
Notes Certificate
UNRESTRICTED NOTES CERTIFICATE
(For removal of Securities Act Legends pursuant to (S) 2.08c)
of the Indenture)
United States Trust Company of New York,
as Trustee
114 West 47th Street
New York, New York 10036
Attention:
Re: 9-1/4 % Senior Discount Notes due July 15, 2007
of McLeodUSA Incorporated (the "Notes")
-----------------------------------------------
Reference is made to the Indenture, dated as of July 21, 1997 (the
"Indenture"), between McLeodUSA Incorporated (the "Company") and United States
Trust Company of New York, as Trustee. Terms used herein and defined in the
Indenture or in Regulation S or Rule 144 under the U.S. Securities Act of 1933,
as amended (the "Securities Act") are used herein as so defined.
This certificate relates to U.S. $_________________ principal amount
of Notes, which are evidenced by the following certificate(s) (the "Specified
Notes"):
CUSIP No(s). _________________________________
CERTIFICATE No(s). ___________________________
The person in whose name this certificate is executed below (the "Undersigned")
hereby certifies that either (i) it is the sole beneficial owner of the
Specified Notes or (ii) it is acting on behalf of all the beneficial owners of
the Specified Notes and is duly authorized by them to do so. Such beneficial
owner or owners are referred to herein collectively as the "Owner". If the
Specified Notes are represented by a Global Security, they are held through the
Depositary or an Agent Member in the name of the Undersigned, as or on behalf of
the
<PAGE>
Owner. If the Specified Notes are not represented by a Global Security, they
are registered in the name of the Undersigned, as or on behalf of the Owner.
The Owner has requested that the Specified Notes be exchanged for
Notes bearing no Securities Act Legend pursuant to Section 2.08(c) of the
Indenture. In connection with such exchange, the Owner hereby certifies that
the exchange is occurring after a holding period of at least two years (computed
in accordance with paragraph (d) of Rule 144) has elapsed since the Specified
Notes were last acquired from the Company or from an affiliate of the Company,
whichever is later, and the Owner is not, and during the preceding three months
has not been, an affiliate of the Company. The Owner also acknowledges that any
future transfers of the Specified Notes must comply with all applicable
securities laws of the states of the United States and other jurisdictions.
This certificate and the statements contained herein are made for your
benefit and the benefit of the Company and the Purchasers.
Dated: _______________________________________________________
(Print the name of the Undersigned, as such
term is defined in the second paragraph of this
certificate.)
By:_____________________________________________________
Name:
Title:
(If the Undersigned is a corporation,
partnership or fiduciary, the title of the
person signing on behalf of the Undersigned
must be stated.)
<PAGE>
Exhibit 4.11
EXECUTION COPY
MCLEODUSA INCORPORATED
Senior Notes Due 2007
REGISTRATION AGREEMENT
New York, New York
July 21, 1997
Salomon Brothers Inc
Morgan Stanley Dean Witter
Bear, Stearns & Co.Inc.
c/o Salomon Brothers Inc
Seven World Trade Center
New York, New York 10048
Dear Sirs:
McLeodUSA Incorporated, a Delaware corporation (the "Company"),
proposes to issue and sell to certain purchasers (the "Purchasers"), upon the
terms set forth in a purchase agreement dated July 15, 1997 (the "Purchase
Agreement"), its 9.25% Senior Notes due 2007 (the "Securities") (the "Initial
Placement"). As an inducement to the Purchasers to enter into the Purchase
Agreement and in satisfaction of a condition to your obligations thereunder, the
Company agrees with you, (i) for your benefit and (ii) for the benefit of the
holders from time to time of the Securities (including you and the other
Purchasers) (each of the foregoing a "Holder" and together the "Holders"), as
follows:
1. Definitions. Capitalized terms used herein without definition
-----------
shall have their respective meanings set forth in the Purchase Agreement. As
used in this Registration Agreement (the "Agreement"), the following capitalized
defined terms shall have the following meanings:
"Act" means the Securities Act of 1933, as amended, and the rules and
---
regulations of the Commission promulgated thereunder.
"Affiliate" of any specified person means any other person which,
---------
directly or indirectly, is in control of, is controlled by, or is under common
control with, such specified person. For purposes of this definition, control
of a person means the power, direct or indirect, to direct or cause the
direction of the management and policies of such person whether by contract or
otherwise; and the terms "controlling" and "controlled" have meanings
correlative to the foregoing.
<PAGE>
2
"Closing Date" has the meaning set forth in the Purchase Agreement.
------------
"Commission" means the Securities and Exchange Commission.
----------
"Exchange Act" means the Securities Exchange Act of 1934, as amended,
------------
and the rules and regulations of the Commission promulgated thereunder.
"Exchange Offer Registration Period" means the 1 year period following
----------------------------------
the consummation of the Registered Exchange Offer, exclusive of any period
during which any stop order shall be in effect suspending the effectiveness of
the Exchange Offer Registration Statement.
"Exchange Offer Registration Statement" means a registration statement
-------------------------------------
of the Company on an appropriate form under the Act with respect to the
Registered Exchange Offer, all amendments and supplements to such registration
statement, including post-effective amendments, in each case including the
Prospectus contained therein, all exhibits thereto and all material incorporated
by reference therein.
"Exchanging Dealer" means any Holder (which may include the
-----------------
Purchasers) which is a broker-dealer, electing to exchange Securities acquired
for its own account as a result of market-making activities or other trading
activities, for New Securities.
"Final Memorandum" has the meaning set forth in the Purchase
----------------
Agreement.
"Holder" has the meaning set forth in the preamble hereto.
------
"Indenture" means the Indenture relating to the Securities dated as of
---------
July 21, 1997, between the Company and United States Trust Company of New York
as trustee, as the same may be amended from time to time in accordance with the
terms thereof.
"Initial Placement" has the meaning set forth in the preamble hereto.
-----------------
"Majority Holders" means the Holders of a majority of the aggregate
----------------
principal amount of securities registered under a Registration Statement.
<PAGE>
3
"Managing Underwriters" means the investment banker or investment
---------------------
bankers and manager or managers that shall administer an underwritten offering.
"New Securities" means debt securities of the Company identical in all
--------------
material respects to the Securities (except that the interest rate step up
provisions and the transfer restrictions will be modified or eliminated, as
appropriate), to be issued under the Indenture or the New Securities Indenture.
"New Securities Indenture" means an indenture between the Company and
------------------------
the New Securities Trustee, identical in all material respects with the
Indenture (except that the interest rate step up provisions will be modified or
eliminated, as appropriate).
"New Securities Trustee" means a bank or trust company reasonably
----------------------
satisfactory to the Purchaser, as trustee with respect to the New Securities
under the New Securities Indenture.
"Prospectus" means the prospectus included in any Registration
----------
Statement (including, without limitation, a prospectus that discloses
information previously omitted from a prospectus filed as part of an effective
registration statement in reliance upon Rule 430A under the Act), as amended or
supplemented by any prospectus supplement, with respect to the terms of the
offering of any portion of the Securities or the New Securities, covered by such
Registration Statement, and all amendments and supplements to the Prospectus,
including post-effective amendments.
"Registered Exchange Offer" means the proposed offer to the Holders to
-------------------------
issue and deliver to such Holders, in exchange for the Securities, a like
principal amount of the New Securities.
"Registration Statement" means any Exchange Offer Registration
----------------------
Statement or Shelf Registration Statement that covers any of the Securities or
the New Securities pursuant to the provisions of this Agreement, amendments and
supplements to such registration statement, including post-effective amendments,
in each case including the Prospectus contained therein, all exhibits thereto
and all material incorporated by reference therein.
"Securities" has the meaning set forth in the preamble hereto.
----------
<PAGE>
4
"Shelf Registration" means a registration effected pursuant to Section
------------------
3 hereof.
"Shelf Registration Period" has the meaning set forth in Section 3(b)
-------------------------
hereof.
"Shelf Registration Statement" means a "shelf" registration statement
----------------------------
of the Company pursuant to the provisions of Section 3 hereof which covers some
or all of the Securities or New Securities, as applicable, on an appropriate
form under Rule 415 under the Act, or any similar rule that may be adopted by
the Commission, amendments and supplements to such registration statement,
including post-effective amendments, in each case including the Prospectus
contained therein, all exhibits thereto and all material incorporated by
reference therein.
"Trustee" means the trustee with respect to the Securities under the
-------
Indenture.
"Underwriter" means any underwriter of Securities in connection with
-----------
an offering thereof under a Shelf Registration Statement.
2. Registered Exchange Offer; Resales of New Securities by
-------------------------------------------------------
Exchanging Dealers; Private Exchange. (a) Except as set forth in Section 3(i)
- ------------------------------------
below, the Company shall prepare and, not later than 60 days following the
Closing Date, shall file with the Commission the Exchange Offer Registration
Statement with respect to the Registered Exchange Offer. The Company shall use
its best efforts to cause the Exchange Offer Registration Statement to become
effective under the Act within 150 days of the Closing Date.
(b) Upon the effectiveness of the Exchange Offer Registration
Statement, the Company shall promptly commence the Registered Exchange Offer, it
being the objective of such Registered Exchange Offer to enable each Holder
electing to exchange Securities for New Securities (assuming that such Holder is
not an affiliate of the Company within the meaning of the Act, acquires the New
Securities in the ordinary course of such Holder's business and has no
arrangements with any person to participate in the distribution of the New
Securities) to trade such New Securities from and after their receipt without
any limitations or restrictions under the Act and without material restrictions
under the securities laws of a substantial proportion of the several states of
the United States.
(c) In connection with the Registered Exchange Offer, the Company
shall:
<PAGE>
5
(i) mail to each Holder a copy of the Prospectus forming part of
the Exchange Offer Registration Statement, together with an appropriate
letter of transmittal and related documents;
(ii) keep the Registered Exchange Offer open for not less than 30
days and not more than 45 days after the date notice thereof is mailed to
the Holders (or longer if required by applicable law);
(iii) utilize the services of a depositary for the Registered
Exchange Offer with an address in the Borough of Manhattan, The City of New
York; and
(iv) comply in all material respects with all applicable laws.
(d) As soon as practicable after the close of the Registered
Exchange Offer, the Company shall:
(i) accept for exchange all Securities tendered and not validly
withdrawn pursuant to the Registered Exchange Offer;
(ii) deliver to the Trustee for cancellation all securities so
accepted for exchange; and
(iii) cause the Trustee or the New Securities Trustee, as the case
may be, promptly to authenticate and deliver to each Holder of Securities
New Securities equal in principal amount to the Securities of such Holder
so accepted for exchange.
(e) The Purchasers and the Company acknowledge that, pursuant to
interpretations by the Commission's staff of Section 5 of the Act, and in the
absence of an applicable exemption therefrom, each Exchanging Dealer is required
to deliver a Prospectus in connection with a sale of any New Securities received
by such Exchanging Dealer pursuant to the Registered Exchange Offer in exchange
for Securities acquired for its own account as a result of market-making
activities or other trading activities. Accordingly, the Company shall:
(i) include the information set forth in Annex A hereto on the
cover of the Exchange Offer Registration Statement, in Annex B hereto in
the forepart of the Exchange Offer Registration Statement in a section
setting forth details of the Exchange Offer, and in Annex C hereto in the
underwriting or plan of distribution section of the
<PAGE>
6
Prospectus forming a part of the Exchange Offer Registration Statement, and
include the information set forth in Annex D hereto in the Letter of
Transmittal delivered pursuant to the Registered Exchange Offer; and
(ii) use its best efforts to keep the Exchange Offer Registration
Statement continuously effective under the Act during the Exchange Offer
Registration Period for delivery by Exchanging Dealers in connection with
sales of New Securities received pursuant to the Registered Exchange Offer,
as contemplated by Section 4(h) below.
(f) In the event that any Purchaser determines that it is not
eligible to participate in the Registered Exchange Offer with respect to the
exchange of Securities constituting any portion of an unsold allotment, at the
request of such Purchaser, the Company shall issue and deliver to such Purchaser
or the party purchasing New Securities registered under a Shelf Registration
Statement as contemplated by Section 3 hereof from such Purchaser, in exchange
for such Securities, a like principal amount of New Securities. The Company
shall seek to cause the CUSIP Service Bureau to issue the same CUSIP number for
such New Securities as for New Securities issued pursuant to the Registered
Exchange Offer.
3. Shelf Registration. If, (i) because of any change in law or
------------------
applicable interpretations thereof by the Commission's staff, the Company
determines upon advice of its outside counsel that it is not permitted to effect
the Registered Exchange Offer as contemplated by Section 2 hereof, or (ii) for
any other reason the Exchange Offer Registration Statement has not been filed
with the Commission within 60 days of the Closing Date, or (iii) for any other
reason the Registered Exchange Offer is not consummated within 180 days of the
Closing Date, or (iv) any Purchaser so requests with respect to Securities held
by it following consummation of the Registered Exchange Offer, or (v) in the
case of any Purchaser that participates in the Registered Exchange Offer or
acquires New Securities pursuant to Section 2(f) hereof, such Purchaser does not
receive freely tradeable New Securities in exchange for Securities constituting
any portion of an unsold allotment (it being understood that, for purposes of
this Section 3, (x) the requirement that a Purchaser deliver a Prospectus
containing the information required by Items 507 and/or 508 of Regulation S-K
under the Act in connection with sales of New Securities acquired in exchange
for such Securities shall result in such New Securities being not "freely
tradeable" but (y) the requirement that an Exchanging Dealer deliver a
Prospectus in connection with sales of New Securities acquired in the Registered
Exchange Offer in exchange for Securities acquired
<PAGE>
7
as a result of market-making activities or other trading activities shall not
result in such New Securities being not "freely tradeable"), the following
provisions shall apply:
(a) The Company shall as promptly as practicable (but in no event more
than 30 days after so required or requested pursuant to this Section 3), file
with the Commission and thereafter shall use its best efforts to cause to be
declared effective under the Act a Shelf Registration Statement relating to the
offer and sale of the Securities or the New Securities, as applicable, by the
Holders from time to time in accordance with the methods of distribution elected
by such Holders and set forth in such Shelf Registration Statement; provided,
--------
that with respect to New Securities received by a Purchaser in exchange for
Securities constituting any portion of an unsold allotment, the Company may, if
permitted by current interpretations by the Commission's staff, file a post-
effective amendment to the Exchange Offer Registration Statement containing the
information required by Regulation S-K Items 507 and/or 508, as applicable, in
satisfaction of its obligations under this paragraph (a) with respect thereto,
and any such Exchange Offer Registration Statement, as so amended, shall be
referred to herein as, and governed by the provisions herein applicable to, a
Shelf Registration Statement.
(b) The Company shall use its best efforts to keep the Shelf
Registration Statement continuously effective in order to permit the Prospectus
forming part thereof to be usable by Holders for a period of two years from the
date the Shelf Registration Statement is declared effective by the Commission or
such shorter period that will terminate when all the Securities or New
Securities, as applicable, covered by the Shelf Registration Statement have been
sold pursuant to the Shelf Registration Statement (in any such case, such period
being called the "Shelf Registration Period"). The Company shall be deemed not
to have used its best efforts to keep the Shelf Registration Statement effective
during the requisite period if it voluntarily takes any action that would result
in Holders of securities covered thereby not being able to offer and sell such
securities during that period, unless (i) such action is required by applicable
law, or (ii) such action is taken by the Company in good faith and for valid
business reasons (not including avoidance of the Company's obligations
hereunder), including the acquisition or divestiture of assets, so long as the
Company promptly thereafter complies with the requirements of Section 4(k)
hereof, if applicable.
(c) No Holder of Securities may include any of its Securities in any
Shelf Registration Statement pursuant to this
<PAGE>
8
Agreement unless such Holder furnishes to the Company in writing, within 10 days
after receipt of a request therefor, such information as the Company may
reasonably request for use in connection with any Shelf Registration Statement
or Prospectus or preliminary Prospectus included therein, and each such Holder
agrees to furnish promptly to the Company all information required to be
disclosed in order to make the information previously furnished to the Company
by such Holder not materially misleading.
4. Registration Procedures. In connection with any Shelf
-----------------------
Registration Statement and, to the extent applicable, any Exchange Offer
Registration Statement, the following provisions shall apply:
(a) The Company shall furnish to you, prior to the filing thereof
with the Commission, a copy of any Shelf Registration Statement and any
Exchange Offer Registration Statement, and each amendment thereof and each
amendment or supplement, if any, to the Prospectus included therein and
shall use its best efforts to reflect in each such document, when so filed
with the Commission, such comments as you and your counsel reasonably may
propose.
(b) The Company shall ensure that (i) any Registration Statement and
any amendment thereto and any Prospectus forming part thereof and any
amendment or supplement thereto complies in all material respects with the
Act and the rules and regulations thereunder, (ii) any Registration
Statement and any amendment thereto does not, when it becomes effective,
contain an untrue statement of a material fact or omit to state a material
fact required to be stated therein or necessary to make the statements
therein not misleading and (iii) any Prospectus forming part of any
Registration Statement, and any amendment or supplement to such Prospectus,
does not include an untrue statement of a material fact or omit to state a
material fact necessary in order to make the statements, in the light of
the circumstances under which they were made, not misleading.
(c) (1) The Company shall advise you and, in the case of a Shelf
Registration Statement, the Holders of securities covered thereby, and, if
requested by you or any such Holder, confirm such advice in writing:
(i) when a Registration Statement and any amendment thereto has
been filed with the Commission and when the Registration Statement or
any post-effective amendment thereto has become effective; and
<PAGE>
9
(ii) of any request by the Commission for amendments or
supplements to the Registration Statement or the Prospectus included
therein or for additional information.
(2) The Company shall advise you and, in the case of a Shelf
Registration Statement, the Holders of securities covered thereby, and, in the
case of an Exchange Offer Registration Statement, any Exchanging Dealer which
has provided in writing to the Company a telephone or facsimile number and
address for notices, and, if requested by you or any such Holder or Exchanging
Dealer, confirm such advice in writing:
(i) of the issuance by the Commission of any stop order
suspending the effectiveness of the Registration Statement or the
initiation of any proceedings for that purpose;
(ii) of the receipt by the Company of any notification with
respect to the suspension of the qualification of the securities
included therein for sale in any jurisdiction or the initiation or
threatening of any proceeding for such purpose; and
(iii) of the happening of any event that requires the making of
any changes in the Registration Statement or the Prospectus so that,
as of such date, the statements therein are not misleading and do not
omit to state a material fact required to be stated therein or
necessary to make the statements therein (in the case of the
Prospectus, in light of the circumstances under which they were made)
not misleading (which advice shall be accompanied by an instruction to
suspend the use of the Prospectus until the requisite changes have
been made).
(d) The Company shall use its best efforts to obtain the withdrawal
of any order suspending the effectiveness of any Registration Statement at the
earliest possible time.
(e) The Company shall furnish to each Holder of securities included
within the coverage of any Shelf Registration Statement, without charge, at
least one copy of such Shelf Registration Statement and any post-effective
amendment thereto, including financial statements and schedules, and, if the
Holder so requests in writing, all exhibits (including those incorporated by
reference).
<PAGE>
10
(f) The Company shall, during the Shelf Registration Period, deliver
to each Holder of securities included within the coverage of any Shelf
Registration Statement, without charge, as many copies of the Prospectus
(including each preliminary Prospectus) included in such Shelf Registration
Statement and any amendment or supplement thereto as such Holder may reasonably
request; and the Company consents to the use of the Prospectus or any amendment
or supplement thereto by each of the selling Holders of securities in connection
with the offering and sale of the securities covered by the Prospectus or any
amendment or supplement thereto.
(g) The Company shall furnish to each Exchanging Dealer which so requests,
without charge, at least one copy of the Exchange Offer Registration Statement
and any post-effective amendment thereto, including financial statements and
schedules, any documents incorporated by reference therein, and, if the
Exchanging Dealer so requests in writing, all exhibits (including those
incorporated by reference).
(h) The Company shall, during the Exchange Offer Registration Period,
promptly deliver to each Exchanging Dealer, without charge, as many copies of
the Prospectus included in such Exchange Offer Registration Statement and any
amendment or supplement thereto as such Exchanging Dealer may reasonably request
for delivery by such Exchanging Dealer in connection with a sale of New
Securities received by it pursuant to the Registered Exchange Offer; and the
Company consents to the use of the Prospectus or any amendment or supplement
thereto by any such Exchanging Dealer, as aforesaid.
(i) Prior to the Registered Exchange Offer or any other offering of
securities pursuant to any Registration Statement, the Company shall register or
qualify or cooperate with the Holders of securities included therein and their
respective counsel in connection with the registration or qualification of such
securities for offer and sale under the securities or blue sky laws of such
jurisdictions as any such Holders reasonably request in writing and do any and
all other acts or things necessary or advisable to enable the offer and sale in
such jurisdictions of the securities covered by such Registration Statement;
provided, however, that the Company will not be required to qualify generally to
- -------- -------
do business in any jurisdiction where it is not then so qualified or to take any
action which would subject it to general service of process or to
<PAGE>
11
taxation in any such jurisdiction where it is not then so subject.
(j) The Company shall cooperate with the Holders of Securities to
facilitate the timely preparation and delivery of certificates representing
Securities to be sold pursuant to any Registration Statement free of any
restrictive legends and in such denominations and registered in such names as
Holders may request prior to sales of securities pursuant to such Registration
Statement.
(k) Upon the occurrence of any event contemplated by paragraph (c)(2)(iii)
above, the Company shall promptly prepare a post-effective amendment to any
Registration Statement or an amendment or supplement to the related Prospectus
or file any other required document so that, as thereafter delivered to
purchasers of the securities included therein, the Prospectus will not include
an untrue statement of a material fact or omit to state any material fact
necessary to make the statements therein, in the light of the circumstances
under which they were made, not misleading.
(l) Not later than the effective date of any such Registration Statement
hereunder, the Company shall provide a CUSIP number for the Securities or New
Securities, as the case may be, registered under such Registration Statement,
and provide the applicable trustee with printed certificates for such Securities
or New Securities, in a form eligible for deposit with The Depository Trust
Company.
(m) The Company shall use its best efforts to comply with all applicable
rules and regulations of the Commission and shall make generally available to
its security holders as soon as practicable after the effective date of the
applicable Registration Statement an earnings statement satisfying the
provisions of Section 11(a) of the Act.
(n) The Company shall cause the Indenture or the New Securities Indenture,
as the case may be, to be qualified under the Trust Indenture Act in a timely
manner.
(o) The Company may require each Holder of securities to be sold pursuant
to any Shelf Registration Statement to furnish to the Company such information
regarding the holder and the distribution of such securities as the Company may
from time to time reasonably require for inclusion in such Registration
Statement.
<PAGE>
12
(p) The Company shall, if requested, promptly incorporate in a
Prospectus supplement or post-effective amendment to a Shelf Registration
Statement, such information as the Managing Underwriters and Majority Holders
reasonably agree should be included therein and shall make all required filings
of such Prospectus supplement or post-effective amendment as soon as notified of
the matters to be incorporated in such Prospectus supplement or post-effective
amendment.
(q) In the case of any Shelf Registration Statement, the Company shall
enter into such agreements (including underwriting agreements) and take all
other appropriate actions in order to expedite or facilitate the registration or
the disposition of the Securities, and in connection therewith, if an
underwriting agreement is entered into, cause the same to contain
indemnification provisions and procedures no less favorable than those set forth
in Section 6 (or such other provisions and procedures acceptable to the Majority
Holders and the Managing Underwriters, if any) with respect to all parties to be
indemnified pursuant to Section 6 from Holders of Securities to the Company.
(r) In the case of any Shelf Registration Statement, the Company shall (i)
make reasonably available for inspection by the Holders of securities to be
registered thereunder, any underwriter participating in any disposition pursuant
to such Registration Statement, and any attorney, accountant or other agent
retained by the Holders or any such underwriter such financial and other books
and records of the Company as shall be necessary to conduct a reasonable
investigation; (ii) cause the Company's officers, directors and employees to
supply all relevant information reasonably requested by the Holders or any such
underwriter, attorney, accountant or agent in connection with any such
Registration Statement as is customary for similar due diligence examinations;
provided, however, that any information that is designated in writing by the
- -------- -------
Company, in good faith, as confidential at the time of delivery of such
information shall be kept confidential by the Holders or any such underwriter,
attorney, accountant or agent, unless such disclosure is made in connection with
a court proceeding or required by law, or such information becomes available to
the public generally or through a third party without an accompanying obligation
of confidentiality; (iii) make such representations and warranties to the
Holders of securities registered thereunder and the underwriters, if any, in
form, substance and scope as are customarily made by issuers to
<PAGE>
13
underwriters in primary underwritten offerings and covering matters including,
but not limited to, those set forth in the Purchase Agreement; (iv) obtain
opinions of counsel to the Company and updates thereof (which counsel and
opinions (in form, scope and substance) shall be reasonably satisfactory to the
Managing Underwriters, if any) addressed to each selling Holder and the
underwriters, if any, covering such matters as are customarily covered in
opinions requested in underwritten offerings and such other matters as may be
reasonably requested by such Holders and underwriters; (v) obtain "cold comfort"
letters and updates thereof from the independent certified public accountants of
the Company (and, if necessary, any other independent certified public
accountants of any subsidiary of the Company or of any business acquired by the
Company for which financial statements and financial data are, or are required
to be, included in the Registration Statement), addressed to each selling Holder
of securities registered thereunder and the underwriters, if any, in customary
form and covering matters of the type customarily covered in "cold comfort"
letters in connection with primary underwritten offerings; and (vi) deliver such
documents and certificates as may be reasonably requested by the Majority
Holders and the Managing Underwriters, if any, including those to evidence
compliance with Section 4(k) and with any customary conditions contained in the
underwriting agreement or other agreement entered into by the Company. The
foregoing actions set forth in clauses (iii), (iv), (v) and (vi) of this Section
4(r) shall be performed at (A) the effectiveness of such Registration Statement
and each post-effective amendment thereto and (B) each closing under any
underwriting or similar agreement as and to the extent required thereunder.
(s) In the case of any Exchange Offer Registration Statement, the Company
shall (i) make reasonably available for inspection by such Purchaser, and any
attorney, accountant or other agent retained by such Purchaser, such financial
and other information and books and records of the Company as shall be necessary
to conduct a reasonable investigation; (ii) cause the Company's officers,
directors and employees to supply all relevant information reasonably requested
by such Purchaser or any such attorney, accountant or agent in connection with
any such Registration Statement as is customary for similar due diligence
examinations; provided, however, that any information that is designated in
-------- -------
writing by the Company, in good faith, as confidential at the time of delivery
of such information shall be kept confidential by such Purchaser or any such
attorney,
<PAGE>
14
accountant or agent, unless such disclosure is made in connection with a court
proceeding or required by law, or such information becomes available to the
public generally or through a third party without an accompanying obligation of
confidentiality; (iii) make such representations and warranties to such
Purchaser, in form, substance and scope as are customarily made by issuers to
underwriters in primary underwritten offerings and covering matters including,
but not limited to, those set forth in the Purchase Agreement; (iv) obtain
opinions of counsel to the Company and updates thereof (which counsel and
opinions (in form, scope and substance) shall be reasonably satisfactory to such
Purchaser and its counsel, addressed to such Purchaser, covering such matters as
are customarily covered in opinions requested in underwritten offerings and such
other matters as may be reasonably requested by such Purchaser or its counsel;
(v) obtain "cold comfort" letters and updates thereof from the independent
certified public accountants of the Company (and, if necessary, any other
independent certified public accountants of any subsidiary of the Company or of
any business acquired by the Company for which financial statements and
financial data are, or are required to be, included in the Registration
Statement), addressed to such Purchaser, in customary form and covering matters
of the type customarily covered in "cold comfort" letters in connection with
primary underwritten offerings, or if requested by such Purchaser or its counsel
in lieu of a "cold comfort" letter, an agreed-upon procedures letter under
Statement on Auditing Standards No. 35, covering matters requested by such
Purchaser or its counsel; and (vi) deliver such documents and certificates as
may be reasonably requested by such Purchaser or its counsel, including those to
evidence compliance with Section 4(k) and with conditions customarily contained
in underwriting agreements. The foregoing actions set forth in clauses (iii),
(iv), (v), and (vi) of this Section 4(s) shall be performed at the close of the
Registered Exchange Offer and the effective date of any post-effective amendment
to the Exchange Offer Registration Statement.
5. Registration Expenses. The Company shall bear all expenses
---------------------
incurred in connection with the performance of its obligations under Sections 2,
3 and 4 hereof and, in the event of any Shelf Registration Statement, will
reimburse the Holders for the reasonable fees and disbursements of one firm or
counsel designated by the Majority Holders to act as counsel for the Holders in
connection therewith, and, in the case of any Exchange Offer Registration
Statement, will reimburse the Purchasers for the reasonable fees and
disbursements of counsel acting in
<PAGE>
15
connection therewith. Notwithstanding the foregoing, the Holders of any
Securities or New Securities being registered on the Shelf Registration
Statement shall pay all agency or brokerage fees and commissions and
underwriting discounts and commissions attributable to the sale of such
Securities or New Securities and the fees and disbursements of any counsel
retained by such Holders other that counsel referred to above.
6. Indemnification and Contribution.
--------------------------------
(a) In connection with any Registration Statement, the Company agrees
to indemnify and hold harmless each Holder of securities covered thereby
(including each Purchaser and, with respect to any Prospectus delivery as
contemplated in Section 4(h) hereof, each Exchanging Dealer), the
directors, officers, employees and agents of each such Holder and each
person who controls any such Holder within the meaning of either the Act or
the Exchange Act against any and all losses, claims, damages or
liabilities, joint or several, to which they or any of them may become
subject under the Act, the Exchange Act or other Federal or state statutory
law or regulation, at common law or otherwise, insofar as such losses,
claims, damages or liabilities (or actions in respect thereof) arise out of
or are based upon any untrue statement or alleged untrue statement of a
material fact contained in the Registration Statement as originally filed
or in any amendment thereof, or in any preliminary Prospectus or
Prospectus, or in any amendment thereof or supplement thereto, or arise out
of or are based upon the omission or alleged omission to state therein a
material fact required to be stated therein or necessary to make the
statements therein not misleading, and agrees to reimburse each such
indemnified party, as incurred, for any legal or other expenses reasonably
incurred by them in connection with investigating or defending any such
loss, claim, damage, liability or action; provided, however, that the
-----------------
Company will not be liable in any case to the extent that any such
loss, claim, damage or liability arises out of or is based upon any such
untrue statement or alleged untrue statement or omission or alleged
omission made therein in reliance upon and in conformity with written
information furnished to the Company by or on behalf of any such Holder
specifically for inclusion therein. This indemnity agreement will be in
addition to any liability which the Company may otherwise have.
The Company also agrees to indemnify or contribute to Losses of, as
provided in Section 6(d), any underwriters of Securities registered under a
Shelf Registration Statement,
<PAGE>
16
their officers and directors and each person who controls such underwriters
on substantially the same basis as that of the indemnification of the
Purchaser and the selling Holders provided in this Section 6(a) and shall,
if requested by any Holder, enter into an underwriting agreement reflecting
such agreement, as provided in Section 4(q) hereof.
(b) Each Holder of securities covered by a Registration Statement
(including each Purchaser and, with respect to any Prospectus delivery as
contemplated in Section 4(h) hereof, each Exchanging Dealer) severally
agrees to indemnify and hold harmless (i) the Company, (ii) each of its
directors, (iii) each of its officers who signs such Registration Statement
and (iv) each person who controls the Company within the meaning of either
the Act or the Exchange Act to the same extent as the foregoing indemnity
from the Company to each such Holder, but only with reference to written
information relating to such Holder furnished to the Company by or on
behalf of such Holder specifically for inclusion in the documents referred
to in the foregoing indemnity. This indemnity agreement will be in addition
to any liability which any such Holder may otherwise have.
(c) Promptly after receipt by an indemnified party under this Section
6 or notice of the commencement of any action, such indemnified party will,
if a claim in respect thereof is to be made against the indemnifying party
under this Section 6, notify the indemnifying party in writing of the
commencement thereof; but the failure so to notify the indemnifying party
(i) will not relieve it from liability under paragraph (a) or (b) above
unless and to the extent it did not otherwise learn of such action and such
failure results in the forfeiture by the indemnifying party of substantial
rights and defenses and (ii) will not, in any event, relieve the
indemnifying party from any obligations to any indemnified party other than
the indemnification obligation provided in paragraph (a) or (b) above. The
indemnifying party shall be entitled to appoint counsel of the indemnifying
party's choice at the indemnifying party's expense to represent the
indemnified party in any action for which indemnification is sought (in
which case the indemnifying party shall not thereafter be responsible for
the fees and expenses of any separate counsel retained by the indemnified
party or parties except as set forth below); provided, however, that such
-------- -------
counsel shall be satisfactory to the indemnified party. Notwithstanding the
indemnifying party's election to appoint counsel to represent the
indemnified party in an action, the indemnified party shall
<PAGE>
17
have the right to employ separate counsel (including local counsel), and
the indemnifying party shall bear the reasonable fees, costs and expenses
of such separate counsel (and local counsel) if (i) the use of counsel
chosen by the indemnifying party to represent the indemnified party would
present such counsel with a conflict of interest, (ii) the actual or
potential defendants in, or targets of, any such action include both the
indemnified party and the indemnifying party and the indemnified party
shall have reasonably concluded that there may be legal defenses available
to it and/or other indemnified parties which are different from or
additional to those available to the indemnifying party, (iii) the
indemnifying party shall not have employed counsel satisfactory to the
indemnified party to represent the indemnified party within a reasonable
time after notice of the institution of such action or (iv) the
indemnifying party shall authorize the indemnified party to employ separate
counsel at the expense of the indemnifying party. An indemnifying party
will not, without the prior written consent of the indemnified parties,
settle or compromise or consent to the entry of any judgment with respect
to any pending or threatened claim, action, suit or proceeding in respect
of which indemnification or contribution may be sought hereunder (whether
or not the indemnified parties are actual or potential parties to such
claim or action) unless such settlement, compromise or consent includes an
unconditional release of each indemnified party from all liability arising
out of such claim, action, suit or proceeding.
(d) In the event that the indemnity provided in paragraph (a) or (b)
of this Section 6 is unavailable to or insufficient to hold harmless an
indemnified party for any reason, then each applicable indemnifying party,
in lieu of indemnifying such indemnified party, shall have a joint and
several obligation to contribute to the aggregate losses, claims, damages
and liabilities (including legal or other expenses reasonably incurred in
connection with investigating or defending same) (collectively "Losses") to
which such indemnified party may be subject in such proportion as is
appropriate to reflect the relative benefits received by such indemnifying
party, on the one hand, and such indemnified party, on the other hand, from
the Initial Placement and the Registration Statement which resulted in such
Losses; provided, however, that in no case shall any Purchaser or any
-------- -------
subsequent Holder of any Security or New Security be responsible, in the
aggregate, for any amount in excess of the purchase discount or commission
applicable to such Security, or in the case of a New
<PAGE>
18
Security, applicable to the Security which was exchangeable into such New
Security, as set forth on the cover page of the Final Memorandum, nor shall
any underwriter be responsible for any amount in excess of the underwriting
discount or commission applicable to the securities purchased by such
underwriter under the Registration Statement which resulted in such Losses.
If the allocation provided by the immediately preceding sentence is
unavailable for any reason, the indemnifying party and the indemnified
party shall contribute in such proportion as is appropriate to reflect not
only such relative benefits but also the relative fault of such
indemnifying party, on the one hand, and such indemnified party, on the
other hand, in connection with the statements or omissions which resulted
in such Losses as well as any other relevant equitable considerations.
Benefits received by the Company shall be deemed to be equal to the sum of
(x) the total net proceeds from the Initial Placement (before deducting
expenses) as set forth on the cover page of the Final Memorandum and (y)
the total amount of additional interest which the Company was not required
to pay as a result of registering the securities covered by the
Registration Statement which resulted in such Losses. Benefits received by
the Purchasers shall be deemed to be equal to the total purchase discounts
and commissions as set forth on the cover page of the Final Memorandum, and
benefits received by any other Holders shall be deemed to be equal to the
value of receiving Securities or New Securities, as applicable, registered
under the Act. Benefits received by any underwriter shall be deemed to be
equal to the total underwriting discounts and commissions, as set forth on
the cover page of the Prospectus forming a part of the Registration
Statement which resulted in such Losses. Relative fault shall be determined
by reference to whether any alleged untrue statement or omission relates to
information provided by the indemnifying party, on the one hand, or by the
indemnified party, on the other hand. The parties agree that it would not
be just and equitable if contribution were determined by pro rata
allocation or any other method of allocation which does not take account of
the equitable considerations referred to above. Notwithstanding the
provisions of this paragraph (d), no person guilty of fraudulent
misrepresentation (within the meaning of Section 11(f) of the Act) shall be
entitled to contribution from any person who was not guilty of such
fraudulent misrepresentation. For purposes of this Section 6, each person
who controls a Holder within the meaning of either the Act or the Exchange
Act and each director, officer, employee and agent of such Holder shall
have the
<PAGE>
19
same rights to contribution as such Holder, and each person who controls
the Company within the meaning of either the Act or the Exchange Act, each
officer of the Company who shall have signed the Registration Statement and
each director of the Company shall have the same rights to contribution as
the Company, subject in each case to the applicable terms and conditions of
this paragraph (d).
(e) The provisions of this Section 6 will remain in full force and
effect, regardless of any investigation made by or on behalf of any Holder
or the Company or any of the officers, directors or controlling persons
referred to in Section 6 hereof, and will survive the sale by a Holder of
securities covered by a Registration Statement.
7. Underwritten Offerings. No Holder may participate in any
----------------------
underwritten Shelf Registration Statement hereunder unless such Holder (i)
agrees to sell such Holder's Securities on the basis provided in any
underwriting arrangements entered into in connection therewith and (ii)
completes and executes all questionnaires, powers of attorney, indemnities,
underwriting agreements and other documents reasonably required under the terms
of such underwriting arrangements.
8. Miscellaneous.
-------------
(a) No Inconsistent Agreements. The Company has not, as of the date
--------------------------
hereof, entered into, nor shall it, on or after the date hereof, enter
into, any agreement with respect to its securities that is inconsistent
with the rights granted to the Holders herein or otherwise conflicts with
the provisions hereof.
(b) Amendments and Waivers. The provisions of this Agreement,
----------------------
including the provisions of this sentence, may not be amended, qualified,
modified or supplemented, and waivers or consents to departures from the
provisions hereof may not be given, unless the Company has obtained the
written consent of the Holders of at least a majority of the then
outstanding aggregate principal amount of Securities (or, after the
consummation of any Exchange Offer in accordance with Section 2 hereof, of
Securities and New Securities); provided that, with respect to any matter
--------
that directly or indirectly affects the rights of any Purchaser hereunder,
the Company shall obtain the written consent of each such Purchaser against
which such amendment, qualification, supplement, waiver or consent is to be
effective. Notwithstanding the foregoing (except the foregoing proviso), a
waiver or consent to departure from
<PAGE>
20
the provisions hereof with respect to a matter that relates exclusively to
the rights of Holders whose securities are being sold pursuant to a
Registration Statement and that does not directly or indirectly affect the
rights of other Holders may be given by the Majority Holders, determined on
the basis of securities being sold rather than registered under such
Registration Statement.
(c) Notices. All notices and other communications provided for or
-------
permitted hereunder shall be made in writing by hand-delivery, first-class
mail, telex, telecopier, or air courier guaranteeing overnight delivery:
(1) if to a Holder, at the most current address given by such
holder to the Company in accordance with the provisions of this
Section 7(c), which address initially is, with respect to each
Holder, the address of such Holder maintained by the Registrar under
the Indenture, with a copy in like manner to Salomon Brothers Inc;
(2) if to you, initially at the respective addresses set forth
in the Purchase Agreement; and
(3) if to the Company, initially at its address set forth in
the Purchase Agreement.
All such notices and communications shall be deemed to have been duly
given at the time delivered by hand, if personally delivered, five business
days after being deposited in the mail, postage prepaid, if mailed; when
answered back, if telexed; when receipt acknowledged, if telecopied; and on
the next business day, if timely delivered to an air courier guaranteeing
overnight delivery.
The Purchasers or the Company by notice to the other may designate
additional or different addresses for subsequent notices or communications.
(d) Successors and Assigns. This Agreement shall inure to the
----------------------
benefit of and be binding upon the successors and assigns of each of the
parties, including, without the need for an express assignment or any
consent by the Company thereto, subsequent Holders of Securities and/or New
Securities. The Company hereby agrees to extend the benefits of this
Agreement to any Holder of Securities and/or New Securities and any such
Holder may specifically enforce the provisions of this Agreement as if an
original party hereto.
<PAGE>
21
(e) Counterparts. This agreement may be executed in any number of
------------
counterparts and by the parties hereto in separate counterparts, each of
which when so executed shall be deemed to be an original and all of which
taken together shall constitute one and the same agreement.
(f) Headings. The headings in this agreement are for convenience of
--------
reference only and shall not limit or otherwise affect the meaning hereof.
(g) Governing Law. This agreement shall be governed by and
-------------
construed in accordance with the laws of the State of New York applicable
to agreements made and to be performed in said State.
(h) Severability. In the event that any one or more of the
------------
provisions contained herein, or the application thereof in any
circumstances, is held invalid, illegal or unenforceable in any respect for
any reason, the validity, legality and enforceability of any such provision
in every other respect and of the remaining provisions hereof shall not be
in any way impaired or affected thereby, it being intended that all of the
rights and privileges of the parties shall be enforceable to the fullest
extent permitted by law.
(i) Securities Held by the Company, etc. Whenever the consent or
-----------------------------------
approval of Holders of a specified percentage of principal amount of
Securities or New Securities is required hereunder, Securities or New
Securities, as applicable, held by the Company or its Affiliates (other
than subsequent Holders of Securities or New Securities if such subsequent
Holders are deemed to be Affiliates solely by reason of their holdings of
such Securities or New Securities) shall not be counted in determining
whether such consent or approval was given by the Holders of such required
percentage.
<PAGE>
22
Please confirm that the foregoing correctly sets forth the agreement
between the Company and you.
Very truly yours,
MCLEODUSA INCORPORATED
By: Casey Mahon
--------------------------
Name:
Title:
Accepted in New York, New York
July 21, 1997
SALOMON BROTHERS INC
By: Tim Davies
-----------------------
Name: Tim Davies
Title: Vice President
BEAR, STEARNS & CO. INC.
By: Norman C. Frost, Jr.
-----------------------
Name: Norman C. Frost, Jr.
Title: Managing Director
MORGAN STANLEY & CO. INCORPORATED
By: Robert M. Shepardson
------------------------
Name: Robert M. Shepardson
Title: Principal
<PAGE>
[FORM OF OFFERING MEMORANDUM DESCRIPTION OF
REGISTRATION AGREEMENT]
EXCHANGE OFFER; REGISTRATION RIGHTS
The Company and the Initial Purchasers will enter into the
Registration Agreement on or prior to the Closing Date. The Company will agree,
pursuant to the Registration Agreement with the Initial Purchasers, for the
benefit of the holders, that the Company will, at its cost, (i) no later than 60
days after the Closing Date file the Exchange Offer Registration Statement with
the Commission relating to the Registered Exchange Offer to exchange the Notes
for Exchange Notes having terms substantially identical in all material respects
to the Notes (except that the Exchange Notes will not contain terms with respect
to transfer restrictions) and (ii) use its best efforts to cause the Exchange
Offer Registration Statement to be declared effective under the Securities Act
not later than 150 days after the Closing Date. Upon the effectiveness of the
Exchange Offer Registration Statement, the Company will offer the Exchange Notes
in exchange for surrender of the Notes. The Company will keep the Registered
Exchange Offer open for not less than 30 days and not more than 45 days (or
longer if required by applicable law) after the date notice of the Registered
Exchange Offer is mailed to the holders. For each Note surrendered to the
Company pursuant to the Registered Exchange Offer, the holder of such Note will
receive an Exchange Note having a principal amount equal to that of the
surrendered Note. Interest on each Exchange Note will accrue from the last
Interest Payment Date on which interest was paid on the Note surrendered in
exchange therefor, or, if no interest has been paid on such Note, from the date
of its original issue. Under existing Commission interpretations, the Exchange
Notes would be freely transferable by holders other than affiliates of the
Company after the Registered Exchange Offer without further registration under
the Securities Act if the holder of the Exchange Notes represents that it is
acquiring the Exchange Notes in the ordinary course of its business, that it has
no arrangement or understanding with any person to participate in the
distribution of the Exchange Notes and that it is not an affiliate of the
Company, as such terms are interpreted by the Commission; provided that broker-
dealers ("Participating Broker-Dealers") receiving Exchange Notes in the
Registered Exchange Offer will have a prospectus delivery requirement with
respect to
<PAGE>
2
resales of such Exchange Notes. The Commission has taken the position that
Participating Broker-Dealers may fulfill their prospectus delivery requirements
with respect to Exchange Notes (other than a resale of an unsold allotment from
the original sale of the Notes) with the prospectus contained in the Exchange
Offer Registration Statement. Under the Registration Agreement, the Company is
required to allow Participating Broker-Dealers and other persons, if any, with
similar prospectus delivery requirements to use the prospectus contained in the
Exchange Offer Registration Statement in connection with the resale of such
Exchange Notes.
A holder of Notes (other than certain specified holders) who wishes to
exchange such Notes for Exchange Notes in the Registered Exchange Offer will be
required to represent that any Exchange Notes to be received by it will be
acquired in the ordinary course of its business, and that at the time of the
commencement of the Registered Exchange Offer it has no arrangement or
understanding with any person to participate in the distribution (within the
meaning of the Securities Act) of the Exchange Notes and that it is not an
"affiliate" of the Company, as defined in Rule 405 of the Securities Act, or if
it is an affiliate, that it will comply with the registration and prospectus
delivery requirements of the Securities Act to the extent applicable.
In the event that applicable interpretations of the staff of the
Commission do not permit the Company to effect such a Registered Exchange Offer,
or if for any other reason the Registered Exchange Offer is not consummated
within 180 days after the Closing Date, or if the Initial Purchasers so request
with respect to Notes not eligible to be exchanged for Exchange Notes in the
Registered Exchange Offer, or if any holder of Notes does not receive freely
tradeable Exchange Notes in the Registered Exchange Offer, the Company will, at
its cost, (a) as promptly as practicable, file a Shelf Registration Statement
covering resales of the Notes or the Exchange Notes, as the case may be, (b) use
its best efforts to cause the Shelf Registration Statement to be declared
effective under the Securities Act and (c) keep the Shelf Registration Statement
effective until two years after its effective date or such shorter period ending
when all resales of Notes or Exchange Notes covered by such Shelf Registration
Statement have been made. The Company will, in the event a Shelf Registration
Statement is filed, among other things, provide to each holder for whom such
Shelf Registration Statement was filed copies of the prospectus which is a part
of the Shelf Registration Statement, notify each such holder when the Shelf
Registration Statement has become effective and take certain other actions as
are required to permit unrestricted
<PAGE>
3
resales of the Notes or the Exchange Notes, as the case may be. A holder selling
such Notes or Exchange Notes pursuant to the Shelf Registration Statement
generally would be required to be named as a selling security holder in the
related prospectus and to deliver a prospectus to purchasers, will be subject to
certain of the civil liability provisions under the Securities Act in connection
with such sales and will be bound by the provisions of the Registration
Agreement which are applicable to such holder (including certain indemnification
obligations).
If (i) within 60 days after the Closing Date, neither the Exchange
Offer Registration Statement nor the Shelf Registration Statement has been filed
with the Commission; (ii) within 150 days after the Closing Date the Exchange
Offer Registration Statement has not been declared effective; (iii) within 180
days after the Closing Date, neither the Registered Exchange Offer has been
consummated nor the Shelf Registration Statement has been declared effective; or
(iv) after either the Exchange Offer Registration Statement or the Shelf
Registration Statement has been declared effective, such Registration Statement
thereafter ceases to be effective or usable (subject to certain exceptions) in
connection with resales of Notes or Exchange Notes in accordance with and during
the periods specified in the Registration Agreement, Special Interest will
accrue and be payable semi-annually on the Notes and the Exchange Notes (in
addition to the stated interest on the Notes and the Exchange Notes) from and
including the date on which any such Registration Default shall occur to but
excluding the date on which all Registration Defaults have been cured. Special
Interest will accrue and be payable semi-annually at a rate of 0.50% per annum
during the 90-day period immediately following the occurrence of any
Registration Default and shall increase by 0.25% per annum at the end of each
subsequent 90-day period, but in no event shall such rate exceed 2.00% per annum
in the aggregate regardless of the number of Registration Defaults.
The summary herein of certain provisions of the Registration Agreement
does not purport to be complete and is subject to, and is qualified in its
entirety by reference to, all the provisions of the Registration Agreement, a
copy of which is available upon request to the Company.
<PAGE>
ANNEX A
Each broker-dealer that receives New Securities for its own account pursuant to
the Exchange Offer must acknowledge that it will deliver a prospectus in
connection with any resale of such New Securities. The Letter of Transmittal
states that by so acknowledging and by delivering a prospectus, a broker-dealer
will not be deemed to admit that it is an "underwriter" within the meaning of
the Securities Act. This Prospectus, as it may be amended or supplemented from
time to time, may be used by a broker-dealer in connection with resales of New
Securities received in exchange for Securities where such New Securities were
acquired by such broker-dealer as a result of market-making activities or other
trading activities. The Company has agreed that, starting on the Expiration
Date (as defined herein) and ending on the close of business on the first
anniversary of the Expiration Date, it will make this Prospectus available to
any broker-dealer for use in connection with any such resale. See "Plan of
Distribution."
<PAGE>
ANNEX B
Each broker-dealer that receives New Securities for its own account in exchange
for Securities, where such Securities were acquired by such broker-dealer as a
result of market-making activities or other trading activities, must acknowledge
that it will deliver a prospectus in connection with any resale of such New
Securities. See "Plan of Distribution."
<PAGE>
ANNEX C
PLAN OF DISTRIBUTION
--------------------
Each broker-dealer that receives New Securities for its own account
pursuant to the Exchange Offer must acknowledge that it will deliver a
prospectus in connection with any resale of such New Securities. This
Prospectus, as it may be amended or supplemented from time to time, may be used
by a broker-dealer in connection with resales of New Securities received in
exchange for Securities where such Securities were acquired as a result of
market-making activities or other trading activities. The Company has agreed
that, starting on the Expiration Date and ending on the close of business on the
first anniversary of the Expiration Date, it will make this Prospectus, as
amended or supplemented, available to any broker-dealer for use in connection
with any such resale.
The Company will not receive any proceeds from any sale of New
Securities by broker-dealers. New Securities received by broker-dealers for
their own account pursuant to the Exchange Offer may be sold from time to time
in one or more transactions in the over-the-counter market, in negotiated
transactions, through the writing of options on the New Securities or a
combination of such methods of resale, at market prices prevailing at the time
of resale, at prices related to such prevailing market prices or negotiated
prices. Any such resale may be made directly to purchasers or to or through
brokers or dealers who may receive compensation in the form of commissions or
concessions from any such broker-dealer and/or the purchasers of any such New
Securities. Any broker-dealer that resells New Securities that were received by
it for its own account pursuant to the Exchange Offer and any broker or dealer
that participates in a distribution of such New Securities may be deemed to be
an "underwriter" within the meaning of the Securities Act and any profit of any
such resale of New Securities and any commissions or concessions received by any
such persons may be deemed to be underwriting compensation under the Securities
Act. The Letter of Transmittal states that by acknowledging that it will
deliver and by delivering a prospectus, a broker-dealer will not be deemed to
admit that it is an "underwriter" within the meaning of the Securities Act.
For a period of 1 year after the Expiration Date, the Company will
promptly send additional copies of this Prospectus and any amendment or
supplement to this Prospectus to any broker-dealer that requests such documents
in the Letter of Transmittal. The Company has agreed to pay all expenses
incident to the Exchange Offer (including the expenses of one counsel for the
<PAGE>
holders of the Securities) other than commissions or concessions of any brokers
or dealers and will indemnify the holders of the Securities (including any
broker-dealers) against certain liabilities, including liabilities under the
Securities Act.
[If applicable, add information required by Regulation S-K Items 507
and/or 508.]
<PAGE>
ANNEX D
Rider A
-------
CHECK HERE IF YOU ARE A BROKER-DEALER AND WISH TO RECEIVE 10 ADDITIONAL COPIES
OF THE PROSPECTUS AND 10 COPIES OF ANY AMENDMENTS OR SUPPLEMENTS THERETO.
Name:________________________________
Address:_____________________________
_____________________________
Rider B
-------
If the undersigned is not a broker-dealer, the undersigned represents that it is
not engaged in, and does not intend to engage in, a distribution of New
Securities. If the undersigned is a broker-dealer that will receive New
Securities for its own account in exchange for Securities, it represents that
the Securities to be exchanged for New Securities were acquired by it as a
result of market-making activities or other trading activities and acknowledges
that it will deliver a prospectus in connection with any resale of such New
Securities; however, by so acknowledging and by delivering a prospectus, the
undersigned will not be deemed to admit that it is an "underwriter" within the
meaning of the Securities Act.
