<PAGE>
- -------------------------------------------------------------------------------
- -------------------------------------------------------------------------------
SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
----------------
SCHEDULE 13E-3/A
(AMENDMENT NO. 5--FINAL AMENDMENT)
RULE 13E-3 TRANSACTION STATEMENT
(PURSUANT TO SECTION 13(E) OF THE SECURITIES EXCHANGE ACT OF 1934)
----------------
IPC INFORMATION SYSTEMS, INC.
(NAME OF ISSUER)
----------------
IPC INFORMATION SYSTEMS, INC.
RICHARD P. KLEINKNECHT
(NAME OF PERSON FILING STATEMENT)
COMMON STOCK, PAR VALUE $0.01 PER 58-1636502
SHARE (I.R.S. EMPLOYER IDENTIFICATION
(TITLE OF CLASS OF SECURITIES) NUMBER)
----------------
DANIEL UTEVSKY, ESQ.
VICE PRESIDENT AND GENERAL COUNSEL
IPC INFORMATION SYSTEMS, INC.
88 PINE STREET
NEW YORK, NY 10005
(NAME, ADDRESS AND TELEPHONE NUMBER OF PERSONS AUTHORIZED TO RECEIVE
NOTICES AND COMMUNICATIONS ON BEHALF OF PERSON FILING STATEMENT)
----------------
WITH COPIES TO:
THOMAS N. TALLEY, ESQ. PHILIP H. WERNER, ESQ.
THACHER PROFFITT & WOOD MORGAN, LEWIS & BOCKIUS LLP
TWO WORLD TRADE CENTER 101 PARK AVENUE
NEW YORK, NEW YORK 10048 NEW YORK, NEW YORK 10178
This statement is filed in connection with (check the appropriate box):
(a)
[_]The filing of solicitation materials or an information statement to
Regulation 14A [17 CFR 240.14a-1 to 240.14a-103] Regulation 14C [17
CFR 240.14c-1 to 240.14c-101] or Rule 13e-3(c) [240.13e-3(c)] under
the Securities Exchange Act of 1934.
(b)
[_]The filing of a registration statement under the Securities Act of
1933.
(c)
[_]A tender offer.
(d)
[X]None of the above.
Check the following box if soliciting materials or information statement
referred to in checking box (a) are preliminary copies. [_]
- -------------------------------------------------------------------------------
- -------------------------------------------------------------------------------
<PAGE>
CALCULATION OF REGISTRATION FEE
TRANSACTION VALUATION AMOUNT OF FILING FEE
---------- --------
$*222,556,935 $44,511
IPC Information Systems, Inc., a Delaware corporation (the "Company"),
hereby submits its Rule 13e-3 Transaction Statement on Schedule 13E-3 (the
"Schedule 13E-3"). The Schedule 13E-3 relates to an Agreement and Plan of
Merger dated as of December 18, 1997, as amended and restated (the "Merger
Agreement"), between the Company and Arizona Acquisition Corp., a Delaware
corporation ("AAC"), pursuant to which AAC was merged with and into the
Company (the "Merger"). The transactions contemplated by the Merger Agreement
were approved by the Company's stockholders and were consummated, in each
case, on April 30, 1998. No stockholders of the Company asserted or perfected
dissenters' rights in connection with the Merger. Pursuant to the Merger, each
share of common stock, par value $0.01 per share, of the Company or any of its
subsidiaries issued and outstanding immediately prior to the effective time of
the Merger ("IPC Common Stock") (other than (i) shares of IPC Common Stock
held by the Company as treasury stock, which shares were canceled; (ii) shares
of IPC Common Stock as to which appraisal rights have been exercised and (iii)
fractional shares) was, subject to certain limitations, converted at the
election of the holder thereof, subject to the terms described in the proxy
statement/prospectus of the Company (the "Proxy Statement/Prospectus"), into
(a) the right to receive $21.00 in cash, or (b) the right to retain one fully
paid and nonassessable share of common stock of the surviving corporation
following the Merger ("Surviving Corporation Common Stock").
This Schedule 13E-3, as amended hereby, is intended to satisfy the reporting
requirements of Section 13(e) of the Securities Exchange Act of 1934, as
amended (the "Exchange Act"). Terms used but not defined herein shall have the
meanings set forth in the definitive proxy materials of the Company filed with
the Securities and Exchange Commission on April 16, 1998.
This final amendment to this Schedule 13E-3 reports the consummation of the
transactions contemplated by the Merger Agreement following approval thereof
by stockholders of the Company at the Company's Annual Meeting of Stockholders
held on April 30, 1998.
- --------
* For purposes of calculation of fee only, this amount is based on (i)
10,739,446 (the number of shares of IPC Common Stock outstanding as of
January 26, 1998) minus 3,809,524 (the number of shares of IPC Common Stock
to be exchanged for Surviving Corporation Common Stock) multiplied by $21
(the cash consideration per share of IPC Common Stock), plus (ii) 3,809,524
(the number of shares of IPC Common Stock to be exchanged for Surviving
Corporation Common Stock) multiplied by $20.22 (the average of the high and
low sales prices of the IPC Common Stock on the Nasdaq National Market on
February 12, 1998), which sum has been multiplied by 1/50 of one percent.
As permitted by Rule 0-11(a) under the Securities Exchange Act of 1934, the
amount paid by the Company indicated below has been subtracted, and the
balance ($0) transferred by electronic funds transfer to the Commission.
[X]Check box if any part of the fee is offset by Rule 0-11(a)(2) and identify
the filing with which the offsetting fee was previously paid. Identify the
previous filing by registration statement number, or the form or schedule
and the date of its filing.
Amount Previously Paid: $23,600
Form or Registration No.: Registration Statement on Form S-4, Filed
February 13, 1998.
Amount Previously Paid: $46,315
Form or Registration No.: Registration Statement on Form S-3, Filed
February 13, 1998.
Amount Previously Paid: $6,785
Form or Registration No.: Amendment No. 1 to Registration Statement on Form
S-3, Filed April 6, 1998.
Filing Parties: IPC Information Systems, Inc. and Richard P. Kleinknecht
Date Filed: February 13, 1998
2
<PAGE>
ITEM 2. IDENTITY AND BACKGROUND.
(c) After the Merger, Richard P. Kleinknecht will serve as Vice Chairman and
as a director of IPC.
ITEM 5. PLANS OR PROPOSALS OF THE ISSUER OR AFFILIATE.
(a) The Merger occurred on April 30, 1998 and the transactions contemplated
by the Merger Agreement were consummated. Stockholders of the Company elected
to retain 1,203,780 shares of Surviving Corporation Common Stock (which
included Richard P. Kleinknecht's election to retain 380,952 shares of
Surviving Corporation Common Stock) representing approximately 32% (29.81%
after the Exchange (as defined below)) at the Effective Time of the
outstanding shares of Surviving Corporation Common Stock. Because the
Company's stockholders (including Richard P. Kleinknecht) elected to retain
less than 1,752,381 shares of Surviving Corporation Common Stock, proration
was not required.
(c) Immediately prior to the Effective Time, the Board of Directors of the
Company approved a resolution authorizing an increase in the number of
directors constituting the Board to nine from six. At the Effective Time, four
directors (Peter J. Kleinknecht, Theodore J. Johnson, Peter M. Stein and
Robert J. McInerney), resigned from the Board of Directors, and the remaining
directors, Richard P. Kleinknecht and Terry Clontz, appointed Richard M.
Cashin, Jr., David Y. Howe, Peter A. Woog, Richard W. Smith, Kilin To, David
Walsh and Robert J. McInerney to serve as directors of the Surviving
Corporation.
(d) Immediately following the Effective Time, the transactions contemplated
by the Share Exchange and Termination Agreement were consummated. Pursuant to
the Share Exchange and Termination Agreement, David Walsh and Anthony Servidio
exchanged 336 shares and 224 shares, respectively, of IXnet common stock for
131,047 and 87,365 shares, respectively, of Surviving Corporation Common Stock
(net of (i) 15,239 and 10,159 shares, respectively, which the Surviving
Corporation held back pending receipt of certain releases from former
shareholders of IXnet and (ii) 6,095 and 4,063 shares, respectively, which
were transferred to a former shareholder of IXnet in satisfaction of a certain
Installment Share Purchase Agreement) (the "Exchange").
On May 1, 1998, the Surviving Corporation announced its intent to effect in
May, 1998 a 3 for 2 stock split by way of a stock dividend of one share for
every two shares outstanding which will result in an increase in the number of
outstanding shares of Surviving Corporation Common Stock from 4,038,094 shares
(after giving effect to the Exchange) to 6,057,141 (less any cash for
fractional shares).
(e) Following the Effective Time, shares of Surviving Corporation Common
Stock were listed on the Nasdaq SmallCap Market under the symbol "IPCX."
ITEM 9. REPORTS, OPINIONS, APPRAISALS AND CERTAIN NEGOTIATIONS.
(a) Prior to consummating the Merger and the other transactions contemplated
thereby, the Company's Board of Directors received a solvency opinion with
respect to the Company from Houlihan Lokey Howard & Zukin Financial Advisors,
Inc. ("Houlihan Lokey").
(b)(1) Houlihan Lokey is an investment banking firm specializing in business
and securities valuation, middle market investment banking and financial
restructuring. (b)(2) Houlihan Lokey rendered solvency opinions in over 50
transactions during 1997.
(b)(3) The Company selected Houlihan Lokey on the basis of its
qualifications and reputation in the industry.
(b)(4) Not applicable.
(b)(5) Not applicable.
(b)(6) Houlihan Lokey concluded that, after giving effect to the Transaction
(as defined in the opinion) both immediately before and immediately after the
Transaction, (i) on a pro forma basis, the fair value and present fair
saleable value of the Company's assets would exceed the Company's stated
liabilities and identified
3
<PAGE>
contingent liabilities; (ii) the Company should be able to pay its debts as
they become absolute and mature; and (iii) the capital remaining in the
Company after the Transaction would not be unreasonably small for the business
in which the Company is engaged, as management has indicated it is now
conducted and is proposed to be conducted following the consummation of the
Transaction. Houlihan Lokey based its opinion on such reviews, analyses and
inquiries as it deemed necessary and appropriate.
(c) The full text of the opinion is attached hereto as an exhibit and is
hereby incorporated by reference. The Surviving Corporation shall make the
opinion available at its principal executive offices during its regular
business hours for inspection and copying by any interested equity security
holder of the Surviving Corporation or his representative who has been so
designated in writing.
ITEM 10. INTEREST IN SECURITIES OF THE ISSUER.
(a)-(b) As of the Effective Time, Cable Systems Holding, LLC, Cable Systems
International, Inc., Richard P. Kleinknecht, LSH and David Walsh owned
1,704,792, 758,095, 380,952, 142,857 and 137,142 shares, respectively, of
Surviving Corporation Common Stock.
ITEM 11. CONTRACTS, ARRANGEMENTS OR UNDERSTANDINGS WITH RESPECT TO THE ISSUER.
The Company, Cable Systems Holding, LLC, Cable Systems International, Inc.
("CSI"), Richard P. Kleinknecht, David Walsh, Anthony Servidio and Lawrence,
Smith & Horey III, L.P. ("LSH") entered into an Amended and Restated Investors
Agreement dated as of April 9, 1998 (the "Amended and Restated Investors
Agreement"). The Amended and Restated Investors Agreement provides for the
addition of CSI and LSH as parties thereto, but otherwise contains
substantially the same terms and provisions as the Investors Agreement.
ITEM 17. MATERIAL TO BE FILED AS EXHIBITS.
(a) Indenture dated as of April 30, 1998 by and between IPC Information
Systems, Inc. and United States Trust Company of New York, as Indenture
Trustee.
(b)(iii) Solvency Opinion of Houlihan Lokey Howard & Zukin Financial
Advisors, Inc. dated April 30, 1998.
(c) Amended and Restated Investors Agreement, dated as of April 9, 1998,
among IPC Information Systems, Inc., Cable Systems Holding, LLC, Cable Systems
International, Inc., Richard P. Kleinknecht, David Walsh, Anthony Servidio and
Lawrence, Smith & Horey III, L.P.
4
<PAGE>
SIGNATURE
After due inquiry and to the best of its knowledge and belief, the
undersigned certifies that the information set forth in this Schedule 13E-3 is
true, complete and correct.
Dated: May 11, 1998.
IPC Information Systems, Inc.
/s/ Daniel Utevsky
By: _________________________________
Name:Daniel Utevsky
Title:Vice President and General
Counsel
After due inquiry and to the best of his knowledge and belief, the
undersigned certifies that the information set forth in this Schedule 13E-3 is
true, complete and correct.
Dated: May 11, 1998.
/s/ Richard P. Kleinknecht
_____________________________________
Richard P. Kleinknecht
5
<PAGE>
Exhibit (a)
================================================================================
IPC Information Systems, Inc.,
Issuer
and
United States Trust Company of New York,
Trustee
Indenture
Dated as of April 30, 1998
10 7/8% Senior Discount Notes due 2008
================================================================================
<PAGE>
CROSS-REFERENCE TABLE
---------------------
<TABLE>
<CAPTION>
TIA Sections Indenture Sections
- ------------ ------------------
<S> <C>
ss. 310(a)(1)................................................ 7.10
(a)(2)................................................ 7.10
(b)................................................... 7.03; 7.08
ss. 311(a)................................................... 7.03
(b)................................................... 7.03
ss. 312(a)................................................... 2.03
(b)................................................... 10.02
(c)................................................... 10.02
ss. 313(a)................................................... 7.06
(b)(2)................................................ 7.07
(c)................................................... 7.05; 7.06; 10.02
(d)................................................... 7.06
ss. 314(a)................................................... 7.05; 10.02
(a)(4)................................................ 4.17; 10.02
(c)(1)................................................ 10.03
(c)(2)................................................ 10.03
(e)................................................... 4.17; 10.04
ss. 315(a)................................................... 7.02
(b)................................................... 7.05; 10.02
(c)................................................... 7.02
(d)................................................... 7.02
(e)................................................... 6.11
ss. 316(a)(1)(A)............................................. 6.05
(a)(1)(B)............................................. 6.04
(b)................................................... 6.07
(c)................................................... 9.03
ss. 317(a)(1)................................................ 6.08
(a)(2)................................................ 6.09
(b)................................................... 2.04
ss. 318(a)................................................... 10.01
(c)................................................... 10.01
</TABLE>
Note: The Cross-Reference Table shall not for any purpose be deemed to be a
part of the Indenture.
<PAGE>
TABLE OF CONTENTS
<TABLE>
<CAPTION>
Page
<S> <C> <C>
ARTICLE ONE
DEFINITIONS AND INCORPORATION BY REFERENCE
SECTION 1.01. Definitions........................................................................................1
SECTION 1.02. Incorporation by Reference of Trust Indenture Act.................................................20
SECTION 1.03. Rules of Construction.............................................................................20
ARTICLE TWO
THE NOTES
SECTION 2.01. Form and Dating...................................................................................21
SECTION 2.02. Execution, Authentication and Denominations.......................................................21
SECTION 2.03. Registrar and Paying Agent........................................................................23
SECTION 2.04. Paying Agent to Hold Money in Trust...............................................................23
SECTION 2.05. Transfer and Exchange.............................................................................24
SECTION 2.06. Replacement Notes.................................................................................25
SECTION 2.07. Outstanding Notes.................................................................................26
SECTION 2.08. Temporary Notes...................................................................................26
SECTION 2.09. Cancellation......................................................................................27
SECTION 2.10. CUSIP Numbers.....................................................................................27
SECTION 2.11. Defaulted Interest................................................................................27
SECTION 2.12. Issuance of Additional Notes......................................................................27
ARTICLE THREE
REDEMPTION
SECTION 3.01. Right of Redemption...............................................................................28
SECTION 3.02. Notices to Trustee................................................................................28
SECTION 3.03. Selection of Notes to Be Redeemed.................................................................28
SECTION 3.04. Notice of Redemption..............................................................................29
SECTION 3.05. Effect of Notice of Redemption....................................................................30
SECTION 3.06. Deposit of Redemption Price.......................................................................30
SECTION 3.07. Payment of Notes Called for Redemption............................................................30
SECTION 3.08. Notes Redeemed in Part............................................................................31
</TABLE>
- --------
Note: The Table of Contents shall not for any purposes be deemed to be a part
of the Indenture.
<PAGE>
ii
<TABLE>
<S> <C> <C>
ARTICLE FOUR
COVENANTS
SECTION 4.01. Payment of Notes..................................................................................31
SECTION 4.02. Maintenance of Office or Agency...................................................................31
SECTION 4.03. Limitation on Indebtedness........................................................................32
SECTION 4.04. Limitation on Restricted Payments.................................................................34
SECTION 4.05. Limitation on Dividend and Other Payment Restrictions
Affecting Restricted Subsidiaries................................................................37
SECTION 4.06. Limitation on the Issuance and Sale of Capital Stock of Restricted
Subsidiaries.....................................................................................38
SECTION 4.07. Limitation on Issuances of Guarantees by Restricted Subsidiaries..................................38
SECTION 4.08. Limitation on Transactions with Stockholders and Affiliates.......................................39
SECTION 4.09. Limitation on Liens...............................................................................40
SECTION 4.10. Limitation on Sale-Leaseback Transactions.........................................................40
SECTION 4.11. Limitation on Asset Sales.........................................................................40
SECTION 4.12. Repurchase of Notes upon a Change of Control......................................................41
SECTION 4.13. Existence.........................................................................................42
SECTION 4.14. Payment of Taxes and Other Claims.................................................................42
SECTION 4.15. Maintenance of Properties and Insurance...........................................................42
SECTION 4.16. Notice of Defaults................................................................................43
SECTION 4.17. Compliance Certificates...........................................................................43
SECTION 4.18. Commission Reports and Reports to Holders.........................................................43
SECTION 4.19. Waiver of Stay, Extension or Usury Laws...........................................................44
SECTION 4.20. Calculation of Original Issue Discount............................................................44
ARTICLE FIVE
SUCCESSOR CORPORATION
SECTION 5.01. When Company May Merge, Etc.......................................................................44
SECTION 5.02. Successor Substituted.............................................................................45
ARTICLE SIX
DEFAULT AND REMEDIES
SECTION 6.01. Events of Default.................................................................................45
SECTION 6.02. Acceleration......................................................................................47
SECTION 6.03. Other Remedies....................................................................................48
SECTION 6.04. Waiver of Past Defaults...........................................................................48
SECTION 6.05. Control by Majority...............................................................................48
SECTION 6.06. Limitation on Suits...............................................................................48
</TABLE>
<PAGE>
iii
<TABLE>
<S> <C> <C>
SECTION 6.07. Rights of Holders to Receive Payment..............................................................49
SECTION 6.08. Collection Suit by Trustee........................................................................49
SECTION 6.09. Trustee May File Proofs of Claim..................................................................49
SECTION 6.10. Priorities........................................................................................50
SECTION 6.11. Undertaking for Costs.............................................................................50
SECTION 6.12. Restoration of Rights and Remedies................................................................50
SECTION 6.13. Rights and Remedies Cumulative....................................................................51
SECTION 6.14. Delay or Omission Not Waiver......................................................................51
ARTICLE SEVEN
TRUSTEE
SECTION 7.01. General .........................................................................................51
SECTION 7.02. Certain Rights of Trustee.........................................................................51
SECTION 7.03. Individual Rights of Trustee......................................................................52
SECTION 7.04. Trustee's Disclaimer..............................................................................53
SECTION 7.05. Notice of Default.................................................................................53
SECTION 7.06. Reports by Trustee to Holders.....................................................................53
SECTION 7.07. Compensation and Indemnity........................................................................53
SECTION 7.08. Replacement of Trustee............................................................................54
SECTION 7.09. Successor Trustee by Merger, Etc..................................................................55
SECTION 7.10. Eligibility.......................................................................................55
SECTION 7.11. Money Held in Trust...............................................................................55
ARTICLE EIGHT
DISCHARGE OF INDENTURE
SECTION 8.01. Termination of Company's Obligations..............................................................56
SECTION 8.02. Defeasance and Discharge of Indenture.............................................................56
SECTION 8.03. Defeasance of Certain Obligations.................................................................59
SECTION 8.04. Application of Trust Money........................................................................60
SECTION 8.05. Repayment to Company..............................................................................60
SECTION 8.06. Reinstatement.....................................................................................61
ARTICLE NINE
AMENDMENTS, SUPPLEMENTS AND WAIVERS
SECTION 9.01. Without Consent of Holders........................................................................61
SECTION 9.02. With Consent of Holders...........................................................................62
SECTION 9.03. Revocation and Effect of Consent..................................................................63
SECTION 9.04. Notation on or Exchange of Notes..................................................................64
</TABLE>
<PAGE>
iv
<TABLE>
<S> <C> <C>
SECTION 9.05. Trustee to Sign Amendments, Etc...................................................................64
SECTION 9.06. Conformity with Trust Indenture Act...............................................................64
ARTICLE TEN
MISCELLANEOUS
SECTION 10.01. Trust Indenture Act of 1939......................................................................64
SECTION 10.02. Notices .........................................................................................64
SECTION 10.03. Certificate and Opinion as to Conditions Precedent...............................................66
SECTION 10.04. Statements Required in Certificate or Opinion....................................................66
SECTION 10.05. Rules by Trustee, Paying Agent or Registrar......................................................66
SECTION 10.06. Payment Date Other Than a Business Day...........................................................67
SECTION 10.07. Governing Law....................................................................................67
SECTION 10.08. No Adverse Interpretation of Other Agreements....................................................67
SECTION 10.09. No Recourse Against Others.......................................................................67
SECTION 10.10. Successors.......................................................................................67
SECTION 10.11. Duplicate Originals..............................................................................67
SECTION 10.12. Separability.....................................................................................67
SECTION 10.13. Table of Contents, Headings, Etc.................................................................68
EXHIBIT A Form of Note.....................................................................................A-1
</TABLE>
<PAGE>
INDENTURE, dated as of April 30, 1998, between IPC Information
Systems, Inc., a Delaware corporation (the "Company"), and the United States
Trust Company of New York, a bank and trust company organized under the New York
Banking Law (the "Trustee").
RECITALS
The Company has duly authorized the execution and delivery of this
Indenture to provide for the issuance initially of up to $247,400,000 aggregate
principal amount at maturity of the Company's 107/8% Senior Discount Notes due
2008 (the "Notes") issuable as provided in this Indenture. All things necessary
to make this Indenture a valid agreement of the Company, in accordance with its
terms, have been done, and the Company has done 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, valid obligations of the
Company as hereinafter provided.
This Indenture is subject to, and shall be governed by, the provisions
of the Trust Indenture Act of 1939, as amended, that are required to be a part
of and to govern indentures qualified under the Trust Indenture Act of 1939, as
amended.
AND THIS INDENTURE FURTHER WITNESSETH
For and in consideration of the premises and the purchase of the Notes
by the Holders thereof, it is mutually covenanted and agreed, for the equal and
proportionate benefit of all Holders, as follows.
ARTICLE ONE
DEFINITIONS AND INCORPORATION BY REFERENCE
SECTION 1.01. Definitions.
"Accreted Value" means, for any Specified Date, the amount provided
below for each $1,000 principal amount at maturity of Notes:
(i) if the Specified Date occurs on one of the following dates
(each a "Semi-Annual Accrual Date"), the Accreted Value will equal the
amount set forth below for such Semi-Annual Accrual Date:
<PAGE>
2
Semi-Annual Accrual Date Accreted Value
------------------------- --------------
November 1, 1998 $ 767.40
May 1, 1999 $ 809.13
November 1, 1999 $ 853.12
May 1, 2000 $ 899.51
November 1, 2000 $ 948.52
May 1, 2001 $1,000.00
(ii) if the Specified Date occurs before the first Semi-Annual
Accrual Date, the Accreted Value will equal the sum of (a) the original
issue price and (b) an amount equal to the product of (1) the Accreted
Value for the first Semi-Annual Accrual Date less the original issue
price multiplied by (2) a fraction, the numerator of which is the number
of days from the Closing Date to the Specified Date, using a 360-day
year of twelve 30-day months, and the denominator of which is the number
of days from the Closing Date to the first Semi-Annual Accrual Date,
using a 360-day year of twelve 30-day months;
(iii) if the Specified Date occurs between two Semi-Annual Accrual
Dates, the Accreted Value will equal the sum of (a) the Accreted Value
for the Semi-Annual Accrual Date immediately preceding such Specified
Date and (b) an amount equal to the product of (1) the Accreted Value
for the immediately following Semi-Annual Accrual Date less the Accreted
Value for the immediately preceding Semi-Annual Accrual Date multiplied
by (2) a fraction, the numerator of which is the number of days from the
immediately preceding Semi-Annual Accrual Date to the Specified Date,
using a 360-day year of twelve 30-day months, and the denominator of
which is 180; or
(iv) if the Specified Date occurs after the last Semi-Annual
Accrual Date, the Accreted Value will equal $1,000.
"Acquired Indebtedness" means Indebtedness of a Person existing at the
time such Person becomes a Restricted Subsidiary or assumed in connection with
an Asset Acquisition by a Restricted Subsidiary and not Incurred in connection
with, or in anticipation of, such Person becoming a Restricted Subsidiary or
such Asset Acquisition; provided that Indebtedness of such Person which is
redeemed, defeased, retired or otherwise repaid at the time of or immediately
upon consummation of the transactions by which such Person becomes a Restricted
Subsidiary or such Asset Acquisition shall not be Acquired Indebtedness.
"Adjusted Consolidated Net Income" means, for any period, the aggregate
net income (or loss) of the Company and its Restricted Subsidiaries for such
period determined in conformity with GAAP; provided that the following items
shall be excluded in computing Adjusted Consolidated Net Income (without
duplication): (i) the net income of any Person that is not a Restricted
Subsidiary, except to the extent of the amount of dividends or other
distributions actually paid to the Company
<PAGE>
3
or any of its Restricted Subsidiaries by such Person during such period; (ii)
solely for the purposes of calculating the amount of Restricted Payments that
may be made pursuant to clause (C) of the first paragraph of Section 4.04 (and
in such case, except to the extent includable pursuant to clause (i) above), the
net income (or loss) of any Person accrued prior to the date it becomes a
Restricted Subsidiary or is merged into or consolidated with the Company or any
of its Restricted Subsidiaries or all or substantially all of the property and
assets of such Person are acquired by the Company or any of its Restricted
Subsidiaries; (iii) the net income of any Restricted Subsidiary to the extent
that the declaration or payment of dividends or similar distributions by such
Restricted Subsidiary of such net income is not at the time permitted by the
operation of the terms of its charter or any agreement, instrument, judgment,
decree, order, statute, rule or governmental regulation applicable to such
Restricted Subsidiary; (iv) any gains or losses (on an after-tax basis)
attributable to Asset Sales; (v) except for purposes of calculating the amount
of Restricted Payments that may be made pursuant to clause (C) of the first
paragraph of Section 4.04, any amount paid or accrued as dividends on Preferred
Stock (other than accrued dividends which, pursuant to the terms of the relevant
governing documents, will not be payable prior to the first anniversary after
the Stated Maturity of the Notes) of the Company or any Restricted Subsidiary
owned by Persons other than the Company and any of its Restricted Subsidiaries;
and (vi) all extraordinary gains and extraordinary losses.
"Adjusted Consolidated Net Tangible Assets" means the total amount of
assets of the Company and its Restricted Subsidiaries (less applicable
depreciation, amortization and other valuation reserves), except to the extent
resulting from write-ups of capital assets (excluding write-ups in connection
with accounting for acquisitions in conformity with GAAP), after deducting
therefrom (i) all current liabilities of the Company and its Restricted
Subsidiaries (excluding intercompany items) and (ii) all goodwill, trade names,
trademarks, patents, unamortized debt discount and expense and other like
intangibles, all as set forth on the most recent quarterly or annual
consolidated balance sheet of the Company and its Restricted Subsidiaries,
prepared in conformity with GAAP and filed with the Commission or provided to
the Trustee pursuant to Section 4.18.
"Affiliate" means, as applied to any Person, any other Person directly
or indirectly controlling, controlled by, or under direct or indirect common
control with, such Person. For purposes of this definition, "control"
(including, with correlative meanings, the terms "controlling," "controlled by"
and "under common control with"), as applied to any Person, means the
possession, directly or indirectly, of the power to direct or cause the
direction of the management and policies of such Person, whether through the
ownership of voting securities, by contract or otherwise.
"Agent" means any Registrar, Co-Registrar, Paying Agent or
authenticating agent.
"Asset Acquisition" means (i) an investment by the Company or any of its
Restricted Subsidiaries in any other Person pursuant to which such Person shall
become a Restricted Subsidiary or shall be merged into or consolidated with the
Company or any of its Restricted Subsidiaries; provided that such Person's
primary business is related, ancillary or complementary to the businesses of the
Company and its Restricted Subsidiaries on the date of such investment or (ii)
an acquisition
<PAGE>
4
by the Company or any of its Restricted Subsidiaries of the property and assets
of any Person other than the Company or any of its Restricted Subsidiaries that
constitute substantially all of a division or line of business of such Person;
provided that the property and assets acquired are related, ancillary or
complementary to the businesses of the Company and its Restricted Subsidiaries
on the date of such acquisition.
"Asset Sale" means any sale, transfer or other disposition (including by
way of merger, consolidation or sale-leaseback transaction) in one transaction
or a series of related transactions by the Company or any of its Restricted
Subsidiaries to any Person other than the Company or any of its Restricted
Subsidiaries of (i) all or any of the Capital Stock of any Restricted
Subsidiary, (ii) all or substantially all of the property and assets of an
operating unit or business of the Company or any of its Restricted Subsidiaries
or (iii) any other property and assets (other than the Capital Stock or other
Investment in an Unrestricted Subsidiary) of the Company or any of its
Restricted Subsidiaries outside the ordinary course of business of the Company
or such Restricted Subsidiary and, in each case, that is not governed by Article
Five; provided that "Asset Sale" shall not include (a) sales or other
dispositions of inventory, receivables and other current assets, (b) sales,
transfers or other dispositions of assets constituting a Restricted Payment
permitted to be made under Section 4.04, or (c) sales or other dispositions of
assets for consideration at least equal to the fair market value of the assets
sold or disposed of, to the extent that the consideration received would satisfy
clause (B) of Section 4.11.
"Average Life" means, at any date of determination with respect to any
debt security, the quotient obtained by dividing (i) the sum of the products of
(a) the number of years from such date of determination to the dates of each
successive scheduled principal payment of such debt security and (b) the amount
of such principal payment by (ii) the sum of all such principal payments.
"Board of Directors" means the Board of Directors of the Company or any
committee of such Board of Directors duly authorized to act under this
Indenture.
"Board Resolution" means a copy of a resolution certified by the
Secretary or an Assistant Secretary of the Company to have been duly adopted by
the Board of Directors and to be in full force and effect on the date of such
certification, and delivered to the Trustee.
"Business Day" means any day except a Saturday, Sunday or other day on
which commercial banks in The City of New York, or in the city of the Corporate
Trust Office of the Trustee, are authorized by law to close.
"Capital Stock" means, with respect to any Person, any and all shares,
interests, participations or other equivalents (however designated, whether
voting or non-voting) in equity of such Person, whether outstanding on the
Closing Date or issued thereafter, including, without limitation, all Common
Stock and Preferred Stock.
<PAGE>
5
"Capitalized Lease" means, as applied to any Person, any lease of any
property (whether real, personal or mixed) of which the discounted present value
of the rental obligations of such Person as lessee, in conformity with GAAP, is
required to be capitalized on the balance sheet of such Person.
"Capitalized Lease Obligations" means the discounted present value of
the rental obligations under a Capitalized Lease.
"Change of Control" means such time as (i) a "person" or "group" (within
the meaning of Sections 13(d) and 14(d)(2) of the Exchange Act) other than a
Permitted Holder becomes the ultimate "beneficial owner" (as defined in Rule
13d-3 under the Exchange Act) of Voting Stock representing more than 50% of the
total voting power of the Voting Stock of the Company on a fully diluted basis
or (ii) individuals who on the Closing Date constitute the Board of Directors
(together with any new directors whose election by the Board of Directors or
whose nomination by the Board of Directors for election by the Company's
stockholders was approved by a vote of at least two-thirds of the members of the
Board of Directors then in office who either were members of the Board of
Directors on the Closing Date or whose election or nomination for election was
previously so approved) cease for any reason to constitute a majority of the
members of the Board of Directors then in office.
"Citicorp" means Citicorp, a Delaware corporation.
"Closing Date" means the date on which the Notes are originally issued
under this Indenture.
"Commission" means the Securities and Exchange Commission, as from time
to time constituted, created under the Exchange Act or, if at any time after the
execution of this instrument such Commission is not existing and performing the
duties now assigned to it under the TIA, then the body performing such duties at
such time.
"Common Stock" means, with respect to any Person, any and all shares,
interests, participations or other equivalents (however designated, whether
voting or non-voting) of such Person's equity, other than Preferred Stock of
such Person, whether outstanding on the Closing Date or issued thereafter,
including, without limitation, all series and classes of such common stock.
"Company" means the party named as such in the first paragraph of this
Indenture until a successor replaces it pursuant to Article Five of this
Indenture and thereafter means the successor.
"Company Order" means a written request or order signed in the name of
the Company (i) by its Chairman, a Vice Chairman, its President or a Vice
President and (ii) by its Treasurer, an Assistant Treasurer, its Secretary or an
Assistant Secretary and delivered to the Trustee; provided, however, that such
written request or order may be signed by any two of the officers
<PAGE>
6
or directors listed in clause (i) above in lieu of being signed by one of such
officers or directors listed in such clause (i) and one of the officers listed
in clause (ii) above.
"Consolidated EBITDA" means, for any period, Adjusted Consolidated Net
Income for such period plus, to the extent such amount was deducted in
calculating such Adjusted Consolidated Net Income, (i) Consolidated Interest
Expense, (ii) income taxes (other than income taxes (either positive or
negative) attributable to extraordinary and non-recurring gains or losses or
sales of assets), (iii) depreciation expense, (iv) amortization expense and (v)
all other non-cash items reducing Adjusted Consolidated Net Income (other than
items that will require cash payments and for which an accrual or reserve is, or
is required by GAAP to be, made), less all non-cash items increasing Adjusted
Consolidated Net Income, all as determined on a consolidated basis for the
Company and its Restricted Subsidiaries in conformity with GAAP; provided that,
if any Restricted Subsidiary is not a Wholly Owned Restricted Subsidiary,
Consolidated EBITDA shall be reduced (to the extent not otherwise reduced in
accordance with GAAP) by an amount equal to (A) the amount of the Adjusted
Consolidated Net Income attributable to such Restricted Subsidiary multiplied by
(B) the percentage ownership interest in the income of such Restricted
Subsidiary not owned on the last day of such period by the Company or any of its
Restricted Subsidiaries.
"Consolidated Interest Expense" means, for any period, the aggregate
amount of interest in respect of Indebtedness (including, without limitation,
amortization of original issue discount on any Indebtedness and the interest
portion of any deferred payment obligation, calculated in accordance with the
effective interest method of accounting; all commissions, discounts and other
fees and charges owed with respect to letters of credit and bankers' acceptance
financing; the net costs associated with Interest Rate Agreements; and
Indebtedness that is Guaranteed or secured by the Company or any of its
Restricted Subsidiaries) and all but the principal component of rentals in
respect of Capitalized Lease Obligations paid, accrued or scheduled to be paid
or to be accrued by the Company and its Restricted Subsidiaries during such
period; excluding, however, (i) any amount of such interest of any Restricted
Subsidiary if the net income of such Restricted Subsidiary is excluded in the
calculation of Adjusted Consolidated Net Income pursuant to clause (iii) of the
definition thereof (but only in the same proportion as the net income of such
Restricted Subsidiary is excluded from the calculation of Adjusted Consolidated
Net Income pursuant to clause (iii) of the definition thereof) and (ii) any
premiums, fees and expenses (and any amortization thereof) payable in connection
with the offering of the Notes, all as determined on a consolidated basis
(without taking into account Unrestricted Subsidiaries) in conformity with GAAP.
"Consolidated Leverage Ratio" means, on any Transaction Date, the ratio
of (i) the aggregate amount of Indebtedness of the Company and its Restricted
Subsidiaries on a consolidated basis outstanding on such Transaction Date to
(ii) the aggregate amount of Consolidated EBITDA for the then most recent four
fiscal quarters for which financial statements
<PAGE>
7
of the Company have been filed with the Commission or provided to the Trustee
pursuant to Section 4.18 (such four fiscal quarter period being the "Four
Quarter Period"); provided that, in making the foregoing calculation, pro forma
effect shall be given to the following events which occur from the beginning of
the Four Quarter Period through the Transaction Date (the "Reference Period"):
(i) the Incurrence of the Indebtedness with respect to which the computation is
being made and (if applicable) the application of the net proceeds therefrom,
including to refinance other Indebtedness, as if such Indebtedness was incurred,
and the application of such proceeds occurred, at the beginning of the Four
Quarter Period; (ii) the Incurrence, repayment or retirement of any other
Indebtedness by the Company and its Restricted Subsidiaries since the first day
of the Four Quarter Period as if such Indebtedness was incurred, repaid or
retired at the beginning of the Four Quarter Period; (iii) in the case of
Acquired Indebtedness, the related acquisition, as if such acquisition occurred
at the beginning of the Four Quarter Period; (iv) any acquisition or disposition
by the Company and its Restricted Subsidiaries of any company or any business or
any assets out of the ordinary course of business, whether by merger, stock
purchase or sale or asset purchase or sale or any related repayment of
Indebtedness, in each case since the first day of the Four Quarter Period,
assuming such acquisition or disposition had been consummated on the first day
of the Four Quarter Period; and (v) the occurrence of any of the events
described in clauses (i)-(iv) above by any Person that has become a Restricted
Subsidiary or has been merged with or into the Company or any Restricted
Subsidiary during the Four Quarter Period.
"Consolidated Net Worth" means, at any date of determination,
stockholders' equity as set forth on the most recently available quarterly or
annual consolidated balance sheet of the Company and its Restricted Subsidiaries
(which shall be as of a date not more than 90 days prior to the date of such
computation, and which shall not take into account Unrestricted Subsidiaries),
less any amounts attributable to Disqualified Stock or any equity security
convertible into or exchangeable for Indebtedness, the cost of treasury stock
and the principal amount of any promissory notes receivable from the sale of the
Capital Stock of the Company or any of its Restricted Subsidiaries, each item to
be determined in conformity with GAAP (excluding the effects of foreign currency
exchange adjustments under Financial Accounting Standards Board Statement of
Financial Accounting Standards No. 52).
"Corporate Trust Office" means the office of the Trustee at which the
corporate trust business of the Trustee shall, at any particular time, be
principally administered, which office is, at the date of this Indenture,
located at 114 West 47th Street, New York, New York 10036-1532; Attention: Louis
Young, Corporate Trust Department.
"Credit Agreement" means the revolving credit facility, dated the
Closing Date among the Company, Morgan Stanley Senior Funding, Inc. and the
other lenders party thereto.
"Currency Agreement" means any foreign exchange contract, currency swap
agreement or other similar agreement or arrangement.
<PAGE>
8
"CVC" means Citicorp Venture Capital, Ltd. and its Permitted
Transferees.
"Default" means any event that is, or after notice or passage of time or
both would be, an Event of Default.
"Depositary" means The Depository Trust Company, its nominees, and their
respective successors.
"Disqualified Stock" means any class or series of Capital Stock of any
Person that by its terms or otherwise is (i) required to be redeemed prior to
the Stated Maturity of the Notes, (ii) redeemable at the option of the holder of
such class or series of Capital Stock at any time prior to the Stated Maturity
of the Notes or (iii) convertible into or exchangeable for Capital Stock
referred to in clause (i) or (ii) above or Indebtedness having a scheduled
maturity prior to the Stated Maturity of the Notes; provided that any Capital
Stock that would not constitute Disqualified Stock but for provisions thereof
giving holders thereof the right to require such Person to repurchase or redeem
such Capital Stock upon the occurrence of an "asset sale" or "change of control"
occurring prior to the Stated Maturity of the Notes shall not constitute
Disqualified Stock if the "asset sale" or "change of control" provisions
applicable to such Capital Stock are no more favorable to the holders of such
Capital Stock than the provisions contained in Section 4.11 and Section 4.12 and
such Capital Stock specifically provides that such Person will not repurchase or
redeem any such stock pursuant to such provision prior to the Company's
repurchase of such Notes as are required to be repurchased pursuant to Section
4.11 and Section 4.12.
"Equity Offering" means any public or private sale of common stock or
preferred stock of the Company (other than Disqualified Stock), other than
public offerings with respect to the Company's Common Stock registered on Form
S-8.
"Event of Default" has the meaning provided in Section 6.01.
"Excess Proceeds" has the meaning provided in Section 4.11.
"Exchange Act" means the Securities Exchange Act of 1934.
"fair market value" means the price that would be paid 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, whose determination shall
be conclusive if evidenced by a Board Resolution.
"Foreign Subsidiary" means any Subsidiary of the Company incorporated or
organized, as the case may be, outside of the United States of America.
<PAGE>
9
"GAAP" means generally accepted accounting principles in the United
States of America as in effect as of the Closing Date, including, without
limitation, those 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 approved by a significant segment
of the accounting profession. All ratios and computations contained or referred
to in this Indenture shall be computed in conformity with GAAP applied on a
consistent basis, except that calculations made for purposes of determining
compliance with the terms of the covenants and with other provisions of this
Indenture shall be made without giving effect to (i) the amortization or write
off of any expenses incurred in connection with the Transaction and (ii) except
as otherwise provided, the amortization of any amounts required or permitted by
Accounting Principles Board Opinion Nos. 16 and 17.
"Global Notes" has the meaning provided in Section 2.01.
"Guarantee" means any obligation, contingent or otherwise, of any Person
directly or indirectly guaranteeing any Indebtedness of any other Person and,
without limiting the generality of the foregoing, any obligation, direct or
indirect, contingent or otherwise, of such Person (i) to purchase or pay (or
advance or supply funds for the purchase or payment of) such Indebtedness of
such other Person (whether arising by virtue of partnership arrangements, or by
agreements to keep-well, to purchase assets, goods, securities or services
(unless such purchase arrangements are on arm's-length terms and are entered
into in the ordinary course of business), to take-or-pay, or to maintain
financial statement conditions or otherwise) or (ii) entered into for purposes
of assuring in any other manner the obligee of such Indebtedness of the payment
thereof or to protect such obligee against loss in respect thereof (in whole or
in part); provided that the term "Guarantee" shall not include endorsements for
collection or deposit in the ordinary course of business. The term "Guarantee"
used as a verb has a corresponding meaning.
"Guaranteed Indebtedness" has the meaning provided in Section 4.07.
"Holder" or "Noteholder" means the registered holder of any Note.
"Incur" means, with respect to any Indebtedness, to incur, create,
issue, assume, Guarantee or otherwise become liable for or with respect to, or
become responsible for, the payment of, contingently or otherwise, such
Indebtedness, including an "Incurrence" of Acquired Indebtedness; provided that
neither the accrual of interest nor the accretion of original issue discount
shall be considered an Incurrence of Indebtedness.
"Indebtedness" means, with respect to any Person at any date of
determination (without duplication), (i) all indebtedness of such Person for
borrowed money, (ii) all obligations of such
<PAGE>
10
Person evidenced by bonds, debentures, notes or other similar instruments, (iii)
all obligations of such Person in respect of letters of credit or other similar
instruments (including reimbursement obligations with respect thereto, but
excluding obligations with respect to letters of credit (including trade letters
of credit) securing obligations (other than obligations described in (i) or (ii)
above or (v), (vi) or (vii) below) entered into in the ordinary course of
business of such Person to the extent such letters of credit are not drawn upon
or, if drawn upon, to the extent such drawing is reimbursed no later than the
third Business Day following receipt by such Person of a demand for
reimbursement), (iv) all obligations of such Person to pay the deferred and
unpaid purchase price of property or services, which purchase price is due more
than six months after the date of placing such property in service or taking
delivery and title thereto or the completion of such services, except Trade
Payables, (v) all Capitalized Lease Obligations, (vi) all Indebtedness of other
Persons secured by a Lien on any asset of such Person, whether or not such
Indebtedness is assumed by such Person; provided that the amount of such
Indebtedness shall be the lesser of (A) the fair market value of such asset at
such date of determination and (B) the amount of such Indebtedness, (vii) all
Indebtedness of other Persons Guaranteed by such Person to the extent such
Indebtedness is Guaranteed by such Person and (viii) to the extent not otherwise
included in this definition, obligations under Currency Agreements and Interest
Rate Agreements. 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 (A) that the amount outstanding at any time of any Indebtedness issued
with original issue discount is the original issue price of such Indebtedness,
(B) that money borrowed and set aside at the time of the Incurrence of any
Indebtedness in order to prefund the payment of the interest on such
Indebtedness shall not be deemed to be "Indebtedness" so long as such money is
held to secure the payment of such interest and (C) that Indebtedness shall not
include any liability for federal, state, local or other taxes.
"Indenture" means this Indenture as originally executed or as it may be
amended or supplemented from time to time by one or more indentures supplemental
to this Indenture entered into pursuant to the applicable provisions of this
Indenture.
"Interest Payment Date" means each semiannual interest payment date on
May 1 and November 1 of each year, commencing November 1, 2001.
"Interest Rate Agreement" means any interest rate protection agreement,
interest rate future agreement, interest rate option agreement, interest rate
swap agreement, interest rate cap agreement, interest rate collar agreement,
interest rate hedge agreement, option or future contract or other similar
agreement or arrangement.
"Investment" in any Person means any direct or indirect advance, loan or
other extension of credit (including, without limitation, by way of Guarantee or
similar arrangement; but
<PAGE>
11
excluding advances to customers in the ordinary course of business that are, in
conformity with GAAP, recorded as accounts receivable on the balance sheet of
the Company or its Restricted Subsidiaries) or capital contribution to (by means
of any transfer of cash or other property to others or any payment for property
or services for the account or use of others), or any purchase or acquisition of
Capital Stock, bonds, notes, debentures or other similar instruments issued by,
such Person and shall include (i) the designation of a Restricted Subsidiary as
an Unrestricted Subsidiary and (ii) the fair market value of the Capital Stock
(or any other Investment), held by the Company or any of its Restricted
Subsidiaries, of (or in) any Person that has ceased to be a Restricted
Subsidiary, including without limitation, by reason of any transaction permitted
by clause (iii) of Section 4.06 provided that the fair market value of the
Investment remaining in any Person that has ceased to be a Restricted Subsidiary
shall not exceed the aggregate amount of Investments previously made in such
Person valued at the time such Investments were made less the net reduction of
such Investments. For purposes of the definition of "Unrestricted Subsidiary"
and Section 4.04, (i) "Investment" shall include the fair market value of the
assets (net of liabilities (other than liabilities to the Company or any of its
Restricted Subsidiaries)) of any Restricted Subsidiary at the time that such
Restricted Subsidiary is designated an Unrestricted Subsidiary, (ii) the fair
market value of the assets (net of liabilities (other than liabilities to the
Company or any of its Restricted Subsidiaries)) of any Unrestricted Subsidiary
at the time that such Unrestricted Subsidiary is designated a Restricted
Subsidiary shall be considered a reduction in outstanding Investments and (iii)
any property transferred to or from an Unrestricted Subsidiary shall be valued
at its fair market value at the time of such transfer.
"Investors Agreement" means the agreement by and among IPC, CSH LLC,
Richard P. Kleinknecht, David A. Walsh, Anthony Servidio and certain other
parties, dated as of December 18, 1997, as amended and restated from time to
time.
"Lien" means any mortgage, pledge, security interest, encumbrance, lien
or charge of any kind (including, without limitation, any conditional sale or
other title retention agreement or lease in the nature thereof or any agreement
to give any security interest).
"Moody's" means Moody's Investors Service, Inc. and its successors.
"Net Cash Proceeds" means, (a) with respect to any Asset Sale, the
proceeds of such Asset Sale in the form of cash or cash equivalents, including
payments in respect of deferred payment obligations (to the extent corresponding
to the principal, but not interest, component thereof) when received in the form
of cash or cash equivalents (except to the extent such obligations are financed
or sold with recourse to the Company or any Restricted Subsidiary) and proceeds
from the conversion of other property received when converted to cash or cash
equivalents, net of (i) brokerage commissions and other fees and expenses
(including fees and expenses of counsel and investment bankers) related to such
Asset Sale, (ii) provisions for all taxes (whether or not such taxes will
actually be paid or are payable) as a result of such Asset Sale without regard
to the
<PAGE>
12
consolidated results of operations of the Company and its Restricted
Subsidiaries, taken as a whole, (iii) payments made to repay Indebtedness or any
other obligation outstanding at the time of such Asset Sale that either (A) is
secured by a Lien on the property or assets sold or (B) is required to be paid
as a result of such sale and (iv) appropriate amounts to be provided by the
Company or any Restricted Subsidiary as a reserve against any liabilities
associated with such Asset Sale, including, without limitation, pension and
other post-employment benefit liabilities, liabilities related to environmental
matters and liabilities under any indemnification obligations associated with
such Asset Sale, all as determined in conformity with GAAP and (b) with respect
to any issuance or sale of Capital Stock, the proceeds of such issuance or sale
in the form of cash or cash equivalents, including payments in respect of
deferred payment obligations (to the extent corresponding to the principal, but
not interest, component thereof) when received in the form of cash or cash
equivalents (except to the extent such obligations are financed or sold with
recourse to the Company or any Restricted Subsidiary) and proceeds from the
conversion of other property received when converted to cash or cash
equivalents, net of attorney's fees, accountants' fees, underwriters' or
placement agents' fees, discounts or commissions and brokerage, consultant and
other fees incurred in connection with such issuance or sale and net of taxes
paid or payable as a result thereof.
"Notes" means any of the securities, as defined in the first paragraph
of the recitals hereof, that are authenticated and delivered under this
Indenture. For all purposes of this Indenture, the term "Notes" shall include
the Notes initially issued on the Closing Date and any other Notes issued after
the Closing Date under this Indenture. For purposes of this Indenture, all Notes
shall vote together as one series of Notes under this Indenture.
"Offer to Purchase" means an offer to purchase Notes by the Company from
the Holders commenced by mailing a notice to the Trustee and each Holder
stating: (i) the covenant pursuant to which the offer is being made and that all
Notes validly tendered will be accepted for payment on a pro rata basis; (ii)
the purchase price and the date of purchase (which shall be a Business Day no
earlier than 30 days nor later than 60 days from the date such notice is mailed)
(the "Payment Date"); (iii) that any Note not tendered will continue to accrue
interest (or accrete in value) pursuant to its terms; (iv) that, unless the
Company defaults in the payment of the purchase price, any Note accepted for
payment pursuant to the Offer to Purchase shall cease to accrue interest (or
accrete in value) on and after the Payment Date; (v) that Holders electing to
have a Note purchased pursuant to the Offer to Purchase will be required to
surrender the Note, together with the form entitled "Option of the Holder to
Elect Purchase" on the reverse side of the Note completed, to the Paying Agent
at the address specified in the notice prior to the close of business on the
Business Day immediately preceding the Payment Date; (vi) that Holders will be
entitled to withdraw their election if the Paying Agent receives, not later than
the close of business on the third Business Day immediately preceding the
Payment Date, a telegram, facsimile transmission or letter setting forth the
name of such Holder, the principal amount at maturity of Notes delivered for
purchase and a statement that such Holder is withdrawing his election to have
such Notes
<PAGE>
13
purchased; and (vii) that Holders whose Notes are being purchased only in part
will be issued new Notes equal in principal amount at maturity to the
unpurchased portion of the Notes surrendered; provided that each Note purchased
and each new Note issued shall be in a principal amount at maturity of $1,000 or
integral multiples thereof. On the Payment Date, the Company shall (i) accept
for payment on a pro rata basis Notes or portions thereof tendered pursuant to
an Offer to Purchase; (ii) deposit with the Paying Agent money sufficient to pay
the purchase price of all Notes or portions thereof so accepted; and (iii)
deliver, or cause to be delivered, to the Trustee all Notes or portions thereof
so accepted together with an Officers' Certificate specifying the Notes or
portions thereof accepted for payment by the Company. The Paying Agent shall
promptly mail to the Holders of Notes so accepted payment in an amount equal to
the purchase price, and the Trustee shall promptly authenticate and mail to such
Holders a new Note equal in principal amount at maturity to any unpurchased
portion of the Note surrendered; provided that each Note purchased and each new
Note issued shall be in a principal amount at maturity of $1,000 or integral
multiples thereof. The Company will publicly announce the results of an Offer to
Purchase as soon as practicable after the Payment Date. The Trustee shall act as
the Paying Agent for an Offer to Purchase. The Company shall comply with Rule
14e-1 under the Exchange Act and any other securities laws and regulations
thereunder to the extent such laws and regulations are applicable, in the event
that the Company is required to repurchase Notes pursuant to an Offer to
Purchase.
"Officer" means, with respect to the Company, (i) the Chairman of the
Board, the Chief Executive Officer, the President, any Vice President or the
Chief Financial Officer, and (ii) the Treasurer or any Assistant Treasurer, or
the Secretary or any Assistant Secretary.
"Officers' Certificate" means a certificate signed by one Officer listed
in clause (i) of the definition thereof and one Officer listed in clause (ii) of
the definition thereof or two officers listed in clause (i) of the definition
thereof. Each Officers' Certificate (other than certificates provided pursuant
to TIA Section 314(a)(4)) shall include the statements provided for in TIA
Section 314(e).
"Opinion of Counsel" means a written opinion signed by legal counsel,
who may be an employee of or counsel to the Company, that meets the requirements
of Section 10.04 hereof. Each such Opinion of Counsel shall include the
statements provided for in TIA Section 314(e).
"Paying Agent" has the meaning provided in Section 2.03, except that,
for the purposes of Article Eight, the Paying Agent shall not be the Company or
a Subsidiary of the Company or an Affiliate of any of them. The term "Paying
Agent" includes any additional Paying Agent.
"Payment Date" has the meaning provided in the definition of Offer to
Purchase.
<PAGE>
14
"Permitted Holders" means CVC, is Permitted Transferees and any party to
the Investors Agreement; provided that any party to the Investors Agreement and
any Permitted Transferee (other than CVC or any direct or indirect wholly owned
Subsidiary of CVC) shall not be a "Permitted Holder" if such Person is the
"beneficial owner" (as defined in Rules 13d-3 and 13d-5 under the Exchange Act),
directly or indirectly, of Voting Stock that represents at least 30% of the
aggregate Voting Power of all classes of the Voting Stock of the Company
(without giving effect to the attribution of beneficial ownership as a result of
the provisions of the Investors Agreement as in effect on the Closing Date, and
any amendment to such agreement that does not materially change the allocation
of voting power provided for in such agreement).
"Permitted Investment" means (i) an Investment in the Company or a
Restricted Subsidiary or a Person which will, upon the making of such
Investment, become a Restricted Subsidiary or be merged or consolidated with or
into or transfer or convey all or substantially all its assets to, the Company
or a Restricted Subsidiary; provided that such person's primary business is
related, ancillary or complementary to the businesses of the Company and its
Restricted Subsidiaries on the date of such Investment; (ii) Temporary Cash
Investments; (iii) commission, payroll, travel and similar advances to cover
matters that are expected at the time of such advances ultimately to be treated
as expenses in accordance with GAAP; (iv) stock, obligations or securities
received in satisfaction of judgments; (v) Investments in prepaid expenses,
negotiable instruments held for collection, and lease, utility and workers'
compensation, performance and other similar deposits; and (vi) Interest Rate
Agreements and Currency Agreements to the extent permitted under clause (iv) of
Section 4.03.
"Permitted Liens" means (i) Liens for taxes, assessments, governmental
charges or claims that are being contested in good faith by appropriate legal
proceedings promptly instituted and diligently conducted and for which a reserve
or other appropriate provision, if any, as shall be required in conformity with
GAAP shall have been made; (ii) statutory and common law Liens of landlords and
carriers, warehousemen, mechanics, suppliers, material men, repairmen or other
similar Liens arising in the ordinary course of business and with respect to
amounts not yet delinquent or being contested in good faith by appropriate legal
proceedings promptly instituted and diligently conducted and for which a reserve
or other appropriate provision, if any, as shall be required in conformity with
GAAP shall have been made; (iii) Liens incurred or deposits made in the ordinary
course of business in connection with workers' compensation, unemployment
insurance and other types of social security; (iv) Liens incurred or deposits
made to secure the performance of tenders, bids, leases, statutory or regulatory
obligations, bankers' acceptances, surety and appeal bonds, government
contracts, performance and return-of-money bonds and other obligations of a
similar nature incurred in the ordinary course of business (exclusive of
obligations for the payment of borrowed money); (v) easements, rights-of-way,
municipal and zoning ordinances and similar charges, encumbrances, title defects
or other irregularities that do not materially interfere with the ordinary
course of business of the Company or any of its Restricted Subsidiaries; (vi)
Liens (including extensions and renewals thereof) upon real or personal property
<PAGE>
15
acquired after the Closing Date; provided that (a) such Lien is created solely
for the purpose of securing Indebtedness Incurred, in accordance with Section
4.03, to finance the cost (including the cost of acquisition, installation,
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 (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; (vii) leases or subleases
granted to others that do not materially interfere with the ordinary course of
business of the Company and its Restricted Subsidiaries, taken as a whole;
(viii) 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; (ix) any interest or title of
a lessor in the property subject to any Capitalized Lease or operating lease;
(x) Liens arising from filing Uniform Commercial Code financing statements
regarding leases; (xi) Liens on property of, or on shares of Capital Stock or
Indebtedness of, any Person existing at the time such Person 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; (xii) Liens in favor of the Company
or any Restricted Subsidiary; (xiii) Liens arising from the rendering of a final
judgment or order against the Company or any Restricted Subsidiary that does not
give rise to an Event of Default; (xiv) 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; (xv)
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;
(xvi) Liens encumbering customary initial deposits and margin deposits, and
other Liens that are within the general parameters customary in the industry and
incurred in the ordinary course of business, in each case, securing Indebtedness
under Interest Rate Agreements and Currency Agreements and forward contracts,
options, future contracts, futures options or similar agreements or arrangements
designed solely to protect the Company or any of its Restricted Subsidiaries
from fluctuations in interest rates, currencies or the price of commodities;
(xvii) 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 Closing Date; and (xviii) Liens on or sales of receivables, including
related intangible assets and proceeds thereof; and (xix) Liens that secure
Indebtedness with an aggregate principal amount not to exceed $5 million at any
time outstanding.
"Permitted Transferee" means with respect to CVC (i) Citicorp and any
direct or indirect wholly owned subsidiary of Citicorp and any officer, director
or employee of CVC, Citicorp or any wholly owned subsidiary of Citicorp, (ii)
any spouse or lineal descendant (including by adoption and stepchildren) of the
officers, directors and employees referred to in clause (i) above
<PAGE>
16
and (iii) any trust, corporation or partnership all of the beneficiaries,
stockholders or partners of which consist of one or more of the persons
described in clause (i) or (ii) above.
"Person" means an individual, a corporation, a partnership, a limited
liability company, an association, a trust or any other entity or organization,
including a government or political subdivision or an agency or instrumentality
thereof.
"Preferred Stock" means, with respect to any Person, any and all shares,
interests, participations or other equivalents (however designated, whether
voting or non-voting) of such Person's preferred or preference equity, whether
outstanding on the Closing Date or issued thereafter, including, without
limitation, all series and classes of such preferred or preference stock.
"principal" of a debt security, including the Notes, means the principal
amount due on the Stated Maturity as shown on such debt security.
"Redemption Date" means, when used with respect to any Note to be
redeemed, the date fixed for such redemption by or pursuant to this Indenture.
"Redemption Price" means, when used with respect to any Note to be
redeemed, the price at which such Note is to be redeemed pursuant to this
Indenture.
"Registrar" has the meaning provided in Section 2.03.
"Regular Record Date" for the interest payable on any Interest Payment
Date means the April 15 or October 15 (whether or not a Business Day), as the
case may be, next preceding such Interest Payment Date.
"Responsible Officer", when used with respect to the Trustee, means the
chairman or any vice chairman of the board of directors, the chairman or any
vice chairman of the executive committee of the board of directors, the chairman
of the trust committee, the president, any vice president, any assistant vice
president, the secretary, any assistant secretary, the treasurer, any assistant
treasurer, the cashier, any assistant cashier, any trust officer or assistant
trust officer, the controller or any assistant controller or any other officer
of the Trustee in its corporate trust department customarily performing
functions similar to those performed by any of the above-designated officers and
also means, with respect to a particular corporate trust matter, any other
officer to whom such matter is referred because of his or her knowledge of and
familiarity with the particular subject.
"Restricted Payments" has the meaning provided in Section 4.04.
<PAGE>
17
"Restricted Subsidiary" means any Subsidiary of the Company other than
an Unrestricted Subsidiary.
"Securities Act" means the Securities Act of 1933.
"Security Register" has the meaning provided in Section 2.03.
"Significant Subsidiary" means, at any date of determination, any
Restricted Subsidiary that, together with its Subsidiaries, (i) for the most
recent fiscal year of the Company, accounted for more than 10% of the
consolidated revenues of the Company and its Restricted Subsidiaries or (ii) as
of the end of such fiscal year, was the owner of more than 10% of the
consolidated assets of the Company and its Restricted Subsidiaries, all as set
forth on the most recently available consolidated financial statements of the
Company for such fiscal year.
"S&P" means Standard & Poor's Ratings Group, a division of McGraw-Hill,
and its successors.
"Stated Maturity" means, (i) with respect to any debt security, the date
specified in such debt security as the fixed date on which the final installment
of principal of such debt security is due and payable and (ii) with respect to
any scheduled installment of principal of or interest on any debt security, the
date specified in such debt security as the fixed date on which such installment
is due and payable.
"Subsidiary" means, with respect to any Person, any corporation,
association or other business entity of which more than 50% of the voting power
of the outstanding Voting Stock is owned, directly or indirectly, by such Person
and one or more other Subsidiaries of such Person.
"Subsidiary Guarantee" has the meaning provided in Section 4.07.
"Temporary Cash Investment" means any of the following: (i) direct
obligations of the United States of America or any agency thereof or obligations
fully and unconditionally guaranteed by the United States of America or any
agency thereof, (ii) time deposit accounts, certificates of deposit and money
market deposits maturing within one year of the date of acquisition thereof
issued by a bank or trust company which is organized under the laws of the
United States of America, any state thereof or any foreign country recognized by
the United States of America, and which bank or trust company has capital,
surplus and undivided profits aggregating in excess of $50 million (or the
foreign currency equivalent thereof) and has outstanding debt which is rated "A"
(or such similar equivalent rating) or higher by at least one nationally
recognized statistical rating organization (as defined in Rule 436 under the
Securities Act) or any money-market fund sponsored by a registered broker dealer
or mutual fund distributor, (iii) repurchase obligations with a term of not more
than 30 days for underlying securities of the types described in clause (i)
above entered into with a bank meeting the
<PAGE>
18
qualifications described in clause (ii) above, (iv) commercial paper, maturing
not more than one year after the date of acquisition, issued by a corporation
(other than an Affiliate of the Company) organized and in existence under the
laws of the United States of America, any state thereof or any foreign country
recognized by the United States of America with a rating at the time as of which
any investment therein is made of "P-1" (or higher) according to Moody's or
"A-1" (or higher) according to S&P, and (v) securities with maturities of six
months or less from the date of acquisition issued or fully and unconditionally
guaranteed by any state, commonwealth or territory of the United States of
America, or by any political subdivision or taxing authority thereof, and rated
at least "A" by S&P or Moody's.
"TIA" or "Trust Indenture Act" means the Trust Indenture Act of 1939, as
amended (15 U.S. Code ss.ss. 77aaa-77bbbb), as in effect on the date this
Indenture was executed, except as provided in Section 9.06.
"Trade Payables" means, with respect to any Person, any accounts payable
or any other indebtedness or monetary obligation to trade creditors created,
assumed or Guaranteed by such Person or any of its Subsidiaries arising in the
ordinary course of business in connection with the acquisition of goods or
services.
"Transaction Date" means, with respect to the Incurrence of any
Indebtedness by the Company or any of its Restricted Subsidiaries, the date such
Indebtedness is to be Incurred and, with respect to any Restricted Payment, the
date such Restricted Payment is to be made.
"Transaction" means, collectively, the merger of Arizona Acquisition
Corp. with and into the Company; the entry into the Credit Agreement and the
equity investment in Arizona Acquisition Corp. by Cable Systems Holdings, LLC of
up to $72.0 million; and the ancillary and related transactions occurring
substantially contemporaneously therewith or as a direct result thereof.
"Trustee" means the party named as such in the first paragraph of this
Indenture until a successor replaces it in accordance with the provisions of
Article Seven of this Indenture and thereafter means such successor.
"United States Bankruptcy Code" means the Bankruptcy Reform Act of 1978,
as amended and as codified in Title 11 of the United States Code, as amended
from time to time hereafter, or any successor federal bankruptcy law.
"U.S. Government Obligations" means securities that are (i) direct
obligations of the United States of America for the payment of which its full
faith and credit 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 is unconditionally guaranteed as a full faith
<PAGE>
19
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 at any time
prior to the Stated Maturity of the Notes, and shall also include a depository
receipt issued by a bank or trust company as custodian with respect to any such
U.S. Government Obligation or a specific payment of interest on or principal of
any such U.S. Government Obligation held by such custodian for the account of
the holder of a depository receipt; provided that (except as required by law)
such custodian is not authorized to make any deduction from the amount payable
to the holder of such depository receipt from any amount received by the
custodian in respect of the U.S. Government Obligation or the specific payment
of interest on or principal of the U.S. Government Obligation evidenced by such
depository receipt.
"Unrestricted Subsidiary" means (i) any Subsidiary of the Company that
at the time of determination shall be designated an Unrestricted Subsidiary by
the Board of Directors in the manner provided below; and (ii) any Subsidiary of
an Unrestricted Subsidiary. The Board of Directors may designate any Restricted
Subsidiary (including any newly acquired or newly formed Subsidiary of the
Company) to be an Unrestricted Subsidiary unless such Subsidiary owns any
Capital Stock of, or owns or holds any Lien on any property of, the Company or
any Restricted Subsidiary; provided that (A) any Guarantee by the Company or any
Restricted Subsidiary of any Indebtedness of the Subsidiary being so designated
shall be deemed an "Incurrence" of such Indebtedness and an "Investment" by the
Company or such Restricted Subsidiary (or both, if applicable) at the time of
such designation; (B) either (I) the Subsidiary to be so designated has total
assets of $1,000 or less or (II) if such Subsidiary has assets greater than
$1,000, such designation would be permitted under Section 4.04 and (C) if
applicable, the Incurrence of Indebtedness and the Investment referred to in
clause (A) of this proviso would be permitted under Section 4.03 and Section
4.04. The Board of Directors may designate any Unrestricted Subsidiary to be a
Restricted Subsidiary; provided that (i) no Default or Event of Default shall
have occurred and be continuing at the time of or after giving effect to such
designation and (ii) all Liens and Indebtedness of such Unrestricted Subsidiary
outstanding immediately after such designation would, if Incurred at such time,
have been permitted to be Incurred (and shall be deemed to have been Incurred)
for all purposes of this Indenture. Any such designation by the Board of
Directors shall be evidenced to the Trustee by promptly filing with the Trustee
a copy of the Board Resolution giving effect to such designation and an
Officers' Certificate certifying that such designation complied with the
foregoing provisions.
"Voting Stock" means with respect to any Person, Capital Stock of any
class or kind ordinarily having the power to vote for the election of directors,
managers or other voting members of the governing body of such Person.
"Wholly Owned" means, with respect to any Subsidiary of any Person, the
ownership of all of the outstanding Capital Stock of such Subsidiary (other than
any director's qualifying shares
<PAGE>
20
or Investments by foreign nationals mandated by applicable law) by such Person
or one or more Wholly Owned Subsidiaries of such Person.
SECTION 1.02. Incorporation by Reference of Trust Indenture Act.
Whenever this Indenture refers to a provision of the TIA, the provision is
incorporated by reference in and made a part of this Indenture. The following
TIA terms used in this Indenture have the following meanings:
"indenture securities" means the Notes;
"indenture security holder" means a Holder or a Noteholder;
"indenture to be qualified" means this Indenture;
"indenture trustee" or "institutional trustee" means the Trustee;
and
"obligor" on the indenture securities means the Company or any
other obligor on the Notes.
All other TIA terms used in this Indenture that are defined by the TIA,
defined by TIA reference to another statute or defined by a rule of the
Commission and not otherwise defined herein have the meanings assigned to them
therein.
SECTION 1.03. Rules of Construction. Unless the context otherwise
requires:
(i) a term has the meaning assigned to it;
(ii) an accounting term not otherwise defined has the meaning
assigned to it in accordance with GAAP;
(iii) "or" is not exclusive;
(iv) words in the singular include the plural, and words in
the plural include the singular;
(v) provisions apply to successive events and transactions;
(vi) "herein," "hereof" and other words of similar import
refer to this Indenture as a whole and not to any particular Article,
Section or other subdivision;
<PAGE>
21
(vii) all ratios and computations based on GAAP contained in this
Indenture shall be computed in accordance with the definition of GAAP
set forth in Section 1.01; and
(viii) all references to Sections or Articles refer to Sections
or Articles of this Indenture unless otherwise indicated.
ARTICLE TWO
THE NOTES
SECTION 2.01. Form and Dating. The Notes and the Trustee's certificate
of authentication shall be substantially in the form annexed hereto as Exhibit A
with such appropriate insertions, omissions, substitutions and other variations
as are required or permitted by this Indenture. The Notes may have notations,
legends or endorsements required by law, stock exchange agreements to which the
Company is subject or usage. The Company shall approve the form of the Notes and
any notation, legend or endorsement on the Notes. Each Note shall be dated the
date of its authentication.
The terms and provisions contained in the form of the Notes annexed
hereto as Exhibit A shall constitute, and are hereby expressly made, a part of
this Indenture. To the extent applicable, the Company and the Trustee, by their
execution and delivery of this Indenture, expressly agree to such terms and
provisions of the Notes applicable to it and to be bound thereby.
The Notes shall be issued initially in the form of one or more global
Notes in registered form, substantially in the form set forth in Exhibit A (the
"Global Notes"), deposited with, or on behalf of the Depositary, duly executed
by the Company and authenticated by the Trustee as hereinafter provided. Each
Global Note shall bear such legend as may be required or reasonably requested by
the Depositary. The aggregate principal amount at maturity of the Global Notes
may from time to time be increased or decreased by adjustments made on the
records of the Trustee, as the custodian for the Depositary or its nominee as
hereinafter provided
The definitive Notes shall be typed, printed, lithographed or engraved
or produced by any combination of these methods or may be produced in any other
manner permitted by the rules of any securities exchange on which the Notes may
be listed, all as determined by the Officer executing such Notes, as evidenced
by such Officer's execution of such Notes.
SECTION 2.02. Execution, Authentication and Denominations. Subject to
Article Four and applicable law, the aggregate principal amount at maturity of
Notes which may be authenticated and delivered under this Indenture is
unlimited. The Notes shall be executed by an Officer of the Company. The
signature of such Officer on the Notes may be by facsimile or manual signature
in the name and on behalf of the Company.
<PAGE>
22
If an Officer whose signature is on a Note no longer holds that office
at the time the Trustee or authenticating agent authenticates the Note, the Note
shall be valid nevertheless.
A Note shall not be valid until the Trustee or authenticating agent
manually signs the certificate of authentication on the Note. The signature
shall be conclusive evidence that the Note has been authenticated under this
Indenture.
At any time and from time to time after the execution of this Indenture,
the Trustee or an authenticating agent shall upon receipt of a Company Order
authenticate for original issue Global Notes in the aggregate principal amount
at maturity specified in such Company Order; provided that the Trustee shall be
entitled to receive an Officers' Certificate and an Opinion of Counsel of the
Company in connection with such authentication of Notes. The Opinion of Counsel
shall, if requested by the Trustee, be to the effect that: (a) the form and
terms of such Notes have been established by or pursuant to a Board Resolution
or, if applicable, an indenture supplemental hereto in conformity with the
provisions of this Indenture; (b) such supplemental indenture, if any, when
executed and delivered by the Company and the Trustee, will constitute a valid
and binding obligation of the Company; (c) such Notes, when authenticated and
delivered by the Trustee and issued by the Company in the manner and subject to
any conditions specified in such Opinion of Counsel, will constitute valid and
binding obligations of the Company in accordance with their terms and will be
entitled to the benefits of this Indenture, subject to bankruptcy, insolvency,
fraudulent transfer, reorganization, moratorium and similar laws of general
applicability relating to or affecting creditors' rights and to general
equitable principles; and (d) that the Company has been duly incorporated in,
and is a validly existing corporation in good standing under the laws of, the
State of Delaware. Such Company Order shall specify the amount of Global Notes
to be authenticated and the date on which the original issue of Notes is to be
authenticated and, in case of an issuance of Notes pursuant to Section 2.12,
shall certify that such issuance is in compliance with Article Four.
The Trustee may appoint an authenticating agent to authenticate Notes.
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 authenticating agent. An authenticating agent has the
same rights as an Agent to deal with the Company or an Affiliate of the Company.
The Notes shall be issuable only in registered form without coupons and
only in denominations of $1,000 in principal amount at maturity and any integral
multiple thereof.
SECTION 2.03. Registrar and Paying Agent. The Company shall maintain an
office or agency where Notes may be presented for registration of transfer or
for exchange (the "Registrar"), an office or agency where Notes may be presented
for payment (the "Paying Agent") and an office or agency where notices and
demands to or upon the Company in respect of the
<PAGE>
23
Notes and this Indenture may be served, which shall be in the Borough of
Manhattan, The City of New York. The Company shall cause the Registrar to keep a
register of the Notes and of their transfer and exchange (the "Security
Register"). The Security Register shall be in written form or any other form
capable of being converted into written form within a reasonable time. The
Company may have one or more co-Registrars and one or more additional Paying
Agents.
The Company shall enter into an appropriate agency agreement with any
Agent not a party to this Indenture. The agreement shall implement the
provisions of this Indenture that relate to such Agent. The Company shall give
prompt written notice to the Trustee of the name and address of any such Agent
and any change in the address of such Agent. If the Company fails to maintain a
Registrar, Paying Agent and/or agent for service of notices and demands, the
Trustee shall act as such Registrar, Paying Agent and/or agent for service of
notices and demands. The Company may remove any Agent upon written notice to
such Agent and the Trustee; provided that no such removal shall become effective
until (i) the acceptance of an appointment by a successor Agent to such Agent as
evidenced by an appropriate agency agreement entered into by the Company and
such successor Agent and delivered to the Trustee or (ii) notification to the
Trustee that the Trustee shall serve as such Agent until the appointment of a
successor Agent in accordance with clause (i) of this proviso. The Company, any
Subsidiary of the Company, or any Affiliate of any of them may act as Paying
Agent, Registrar or co-Registrar, and/or agent for service of notice and
demands.
The Company initially appoints the Trustee as Registrar, Paying Agent,
authenticating agent and agent for service of notice and demands. The Trustee
shall preserve in as current a form as is reasonably practicable the most recent
list available to it of the names and addresses of Holders and shall otherwise
comply with TIA ss. 312(a). If the Trustee is not the Registrar, the Company
shall furnish to the Trustee as of each Regular Record Date and at such other
times as the Trustee may reasonably request the names and addresses of Holders
as they appear in the Security Register, including the aggregate principal
amount at maturity of Notes held by each Holder.
SECTION 2.04. Paying Agent to Hold Money in Trust. Not later than 11:00
a.m. (New York City time) on each due date of the principal, premium, if any,
and interest on any Notes, the Company shall deposit with the Paying Agent money
in immediately available funds sufficient to pay such principal, premium, if
any, and interest 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 the Holders or the Trustee all money held by the Paying
Agent for the payment of principal of, premium, if any, and interest on the
Notes (whether such money has been paid to it by the Company or any other
obligor on the Notes), and such Paying Agent shall promptly notify the Trustee
of any default by the Company (or any other obligor on the Notes) in making any
such payment. The Company at any time may require a Paying Agent to pay all
money held by it to the Trustee and account for any funds disbursed, and the
Trustee may at any
<PAGE>
24
time during the continuance of any payment default, upon written request to a
Paying Agent, require such Paying Agent to pay all money held by it to the
Trustee and to account for any funds disbursed. Upon doing so, the Paying Agent
shall have no further liability for the money so paid over to the Trustee. If
the Company or any Subsidiary of the Company or any Affiliate of any of them
acts as Paying Agent, it will, on or before each due date of any principal of,
premium, if any, or interest on the Notes, segregate and hold in a separate
trust fund for the benefit of the Holders a sum of money sufficient to pay such
principal, premium, if any, or interest so becoming due until such sum of money
shall be paid to such Holders or otherwise disposed of as provided in this
Indenture, and will promptly notify the Trustee of its action or failure to act.
SECTION 2.05. Transfer and Exchange. When Notes are presented to the
Registrar or a co-Registrar with a request to register the transfer or to
exchange them for an equal principal amount at maturity of Notes of other
authorized denominations, the Registrar shall register the transfer or make the
exchange as requested if its requirements for such transactions are met
(including that such Notes are duly endorsed or accompanied by a written
instrument of transfer in form satisfactory to the Trustee and Registrar duly
executed by the Holder thereof or by an attorney who is authorized in writing to
act on behalf of the Holder). To permit registrations of transfers and
exchanges, the Company shall execute and the Trustee shall authenticate Notes at
the Registrar's request. No service charge shall be made for any registration of
transfer or exchange or redemption of the Notes, but the Company may require
payment of a sum sufficient to cover any transfer tax or similar governmental
charge payable in connection therewith (other than any such transfer taxes or
other similar governmental charge payable upon exchanges pursuant to Section
2.08, 3.08 or 9.04).
The Registrar 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 or Section 3.08 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.
Notwithstanding any other provisions of this Section 2.05, unless and
until it is exchanged in whole or in part for Notes in definitive registered
form, the Global Notes representing all or a portion of the Notes may not be
transferred except as a whole by the Depositary to a nominee of such Depositary
or by a nominee of such Depositary to such Depositary or another nominee of such
Depositary or by such Depositary or any such nominee to a successor Depositary
or a nominee of such successor Depositary.
If the Depositary notifies the Company that it is unwilling or unable to
continue as Depositary for the Global Notes or if at any time the Depositary
shall no longer be eligible under the next sentence of this paragraph, the
Company shall appoint a successor Depositary with respect
<PAGE>
25
to the Notes. Each Depositary appointed pursuant to this Section 2.05 must, at
the time of its appointment and at all times while it serves as Depositary, be a
clearing agency registered under the Exchange Act and any other applicable
statute or regulation. The Company will execute, and the Trustee, upon receipt
of an authentication order, will authenticate and deliver, Notes in definitive
registered form in any authorized denominations, in an aggregate principal
amount at maturity equal to the principal amount at maturity of the Global Note
or Notes representing such Notes in exchange for such Global Note or Notes if
(i) the Depositary notifies the Company that it is unwilling or unable to
continue as Depositary for the Global Notes or if at any time the Depositary
shall no longer be eligible to serve as Depositary and a successor Depositary
for the Notes is not appointed by the Company within 60 days after the Company
receives such notice or becomes aware of such ineligibility or (ii) an Event of
Default has occurred and is continuing.
The Company may at any time and in its sole discretion determine that
the Notes shall no longer be represented by a Global Note or Notes. In such
event the Company will execute, and the Trustee will, upon receipt of an
authentication order, authenticate and deliver, Notes in definitive registered
form in any authorized denominations, in an aggregate principal amount at
maturity equal to the principal amount at maturity of the Global Note or Notes
representing such Notes in exchange for such Global Note or Notes.
Upon the exchange of a Global Note for Notes in definitive registered
form, without coupons, in authorized denominations, such Global Note shall be
canceled by the Trustee. Notes in definitive registered form issued in exchange
for a Global Note pursuant to this Section 2.05 shall be registered in such
names and in such authorized denominations as the Depositary for such Global
Note, pursuant to instructions from its direct or indirect participants or
otherwise, shall instruct the Trustee. The Trustee shall deliver such Notes to
or as directed by the Persons in whose names such Notes are so registered.
All Notes issued upon any transfer or exchange of Notes shall be valid
obligations of the Company, evidencing the same debt, and entitled to the same
benefits under this Indenture, as the Notes surrendered upon such transfer or
exchange.
SECTION 2.06. Replacement Notes. If a mutilated Note is surrendered to
the Trustee or if the Holder claims that the Note has been lost, destroyed or
wrongfully taken, 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
issue and the Trustee shall authenticate a replacement Note of like tenor and
principal amount and bearing a number not contemporaneously outstanding;
provided that the requirements of this Section 2.06 are met. If required by the
Trustee or the Company, an indemnity bond must be furnished that is sufficient
in the judgment of both the Trustee and the Company to protect the Company, the
Trustee or any Agent from any loss that any of them may suffer if a Note is
replaced. The Company may charge such Holder for its expenses and the expenses
of the Trustee in replacing a Note. In case any such mutilated, lost, destroyed
or
<PAGE>
26
wrongfully taken Note has become or is about to become due and payable, the
Company in its discretion may pay such Note instead of issuing a new Note in
replacement thereof.
Every replacement Note is an additional obligation of the Company and
shall be entitled to the benefits of this Indenture.
SECTION 2.07. Outstanding Notes. Notes outstanding at any time are all
Notes that have been authenticated by the Trustee except for those canceled by
it, those delivered to it for cancellation and those described in this Section
2.07 as not outstanding.
If a Note is replaced pursuant to Section 2.06, it ceases to be
outstanding unless and until the Trustee and the Company receive proof
satisfactory to them that the replaced Note is held by a bona fide purchaser.
If the Paying Agent (other than the Company or an Affiliate of the
Company) holds on a maturity date money sufficient to pay Notes payable on that
date, then on and after that date such Notes cease to be outstanding and
interest on them shall cease to accrue.
A Note does not cease to be outstanding because the Company or
one of its Affiliates holds such Note, provided, however, that in determining
whether the Holders of the requisite principal amount at maturity of the
outstanding Notes have given any request, demand, authorization, direction,
notice, consent or waiver hereunder, Notes owned by the Company or any other
obligor upon the Notes or any Affiliate of the Company or of such other obligor
shall be disregarded and deemed not to be outstanding, except that, in
determining whether the Trustee shall be protected in relying upon any such
request, demand, authorization, direction, notice, consent or waiver, only Notes
which the Trustee has actual knowledge to be so owned shall be so disregarded.
Notes so owned which have been pledged in good faith may be regarded as
outstanding if the pledgee establishes to the satisfaction of the Trustee the
pledgee's right so to act with respect to such Notes and that the pledgee is not
the Company or any other obligor upon the Notes or any Affiliate of the Company
or of such other obligor.
SECTION 2.08. Temporary Notes. Until definitive Notes are ready for
delivery, the Company may prepare and execute and the Trustee shall authenticate
temporary Notes. Temporary Notes shall be substantially in the form of
definitive Notes but may have insertions, substitutions, omissions and other
variations determined to be appropriate by the Officer executing the temporary
Notes, as evidenced by their execution of such temporary Notes. If temporary
Notes are issued, the Company will 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 at the office or agency of the Company designated for such purpose
pursuant to Section 4.02, without charge to the Holder. Upon surrender for
cancellation of any one or more temporary Notes the Company shall execute and
the
<PAGE>
27
Trustee shall authenticate and deliver in exchange therefor a like principal
amount at maturity of definitive Notes of authorized denominations. Until so
exchanged, the temporary Notes shall be entitled to the same benefits under this
Indenture as definitive Notes.
SECTION 2.09. Cancellation. The Company at any time may deliver to the
Trustee for cancellation any Notes previously authenticated and delivered
hereunder which the Company may have acquired in any manner whatsoever, and may
deliver to the Trustee for cancellation any Notes previously authenticated
hereunder which the Company has not issued and sold. The Registrar and the
Paying Agent shall forward to the Trustee any Notes surrendered to them for
transfer, exchange or payment. The Trustee shall cancel all Notes surrendered
for transfer, exchange, payment or cancellation and shall destroy them in
accordance with its normal procedure.
SECTION 2.10. CUSIP Numbers. The Company in issuing the Notes may use a
"CUSIP" number (if then generally in use), and the Company and the Trustee shall
use such CUSIP number, in notices of redemption or exchange as a convenience to
Holders; provided that any such notice shall state that no representation is
made as to the correctness of such number either as printed on the Notes or as
contained in any notice of redemption or exchange 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 "CUSIP", number for
the Notes.
SECTION 2.11. Defaulted Interest. If the Company defaults in a payment
of interest on the Notes, it shall pay, or shall deposit with the Paying Agent
money in immediately available funds sufficient to pay, the defaulted interest,
plus (to the extent lawful) any interest payable on the defaulted interest, to
the Persons who are Holders on a subsequent special record date. A special
record date, as used in this Section 2.11 with respect to the payment of any
defaulted interest, shall mean the 15th day next preceding the date fixed by the
Company for the payment of defaulted interest, whether or not such day is a
Business Day. At least 15 days before the subsequent special record date, the
Company shall mail to each Holder and to the Trustee a notice that states the
subsequent special record date, the payment date and the amount of defaulted
interest to be paid.
SECTION 2.12. Issuance of Additional Notes. The Company may, subject to
Article Four of this Indenture and applicable law, issue additional Notes under
this Indenture. The Notes issued on the Closing Date and any additional Notes
subsequently issued shall be treated as a single class for all purposes under
this Indenture.
<PAGE>
28
ARTICLE THREE
REDEMPTION
SECTION 3.01. Right of Redemption. The Notes are redeemable, at the
Company's option, in whole or in part, at any time or from time to time, on or
after May 1, 2003 and prior to maturity, upon not less than 30 nor more than 60
days' prior notice mailed by first class mail to each Holder's last address as
it appears in the Security Register, at the following Redemption Prices
(expressed in percentages of principal amount at maturity), plus accrued and
unpaid interest, if any, to the Redemption Date (subject to the right of Holders
of record on the relevant Regular Record Date that is on or prior to the
Redemption Date to receive interest due on an Interest Payment Date), if
redeemed during the 12-month period commencing May 1, of the years set forth
below:
Year Redemption Price
---- ----------------
2003.............................. 105.438%
2004.............................. 103.625%
2005.............................. 101.813%
2006 and thereafter............... 100.000%
In addition, at any time prior to May 1, 2001, the Company may redeem up
to 35% of the principal amount at maturity of the Notes with the proceeds of one
or more Equity Offerings, at any time or from time to time in part, at a
Redemption Price (expressed as a percentage of Accreted Value) of 110.875%, plus
accrued and unpaid interest to the Redemption Date (subject to the rights of
Holders of record on the relevant Regular Record Date that is prior to the
Redemption Date to receive interest due on an Interest Payment Date); provided
that (i) Notes representing 65% of the principal amount of Notes initially
issued remain outstanding after each such redemption and (ii) notice of such
redemption is mailed within 60 days of the related Equity Offering.
SECTION 3.02. Notices to Trustee. If the Company elects to redeem
Notes pursuant to Section 3.01, it shall notify the Trustee in writing of the
Redemption Date and the principal amount at maturity of Notes to be redeemed and
the clause of this Indenture pursuant to which redemption shall occur.
The Company shall give each notice provided for in this Section 3.02 in
an Officers' Certificate at least ten days before mailing the notice to the
Holders pursuant to Section 3.04 (unless a shorter period shall be satisfactory
to the Trustee).
SECTION 3.03. Selection of Notes to Be Redeemed. If less than all of the
Notes are to be redeemed at any time, the Trustee shall select the Notes to be
redeemed in compliance with the requirements, as certified to it by the Company,
of the principal national securities exchange, if
<PAGE>
29
any, on which the Notes are listed or, if the Notes are not listed on a national
securities exchange or automated quotation system, by lot or by such other
method as the Trustee in its sole discretion shall deem fair and appropriate;
provided that no Note of $1,000 in principal amount at maturity or less shall be
redeemed in part.
The Trustee shall make the selection from the Notes outstanding and not
previously called for redemption. Notes in denominations of $1,000 in principal
amount at maturity may only be redeemed in whole. The Trustee may select for
redemption portions (equal to $1,000 in principal amount at maturity or any
integral multiple thereof) of Notes that have denominations larger than $1,000
in principal amount at maturity. 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 and the Registrar promptly in
writing of the Notes or portions of Notes to be called for redemption.
SECTION 3.04. Notice of Redemption. With respect to any redemption of
Notes pursuant to Section 3.01, at least 30 days but not more than 60 days
before a Redemption Date, the Company shall mail a notice of redemption by
first-class mail to each Holder whose Notes are to be redeemed.
The notice shall identify the Notes to be redeemed and shall state:
(i) the Redemption Date;
(ii) the Redemption Price;
(iii) the name and address of the Paying Agent;
(iv) that Notes called for redemption must be surrendered to the
Paying Agent in order to collect the Redemption Price;
(v) that, unless the Company defaults in making the redemption
payment, interest on Notes called for redemption ceases to accrue on and
after the Redemption Date and the only remaining right of the Holders is
to receive payment of the Redemption Price plus accrued interest to the
Redemption Date upon surrender of the Notes to the Paying Agent;
(vi) that, if any Note is being redeemed in part, the portion of
the principal amount at maturity (equal to $1,000 in principal amount at
maturity or any integral multiple thereof) of such Note to be redeemed
and that, on and after the Redemption Date, upon surrender of such Note,
a new Note or Notes in principal amount at maturity equal to the
unredeemed portion thereof will be reissued; and
<PAGE>
30
(vii) that, if any Note contains a CUSIP number as provided in
Section 2.10, no representation is being made as to the correctness of
the CUSIP number either as printed on the Notes or as contained in the
notice of redemption and that reliance may be placed only on the other
identification numbers printed on the Notes.
At the Company's request (which request may be revoked by the Company at
any time prior to the time at which the Trustee shall have given such notice to
the Holders), made in writing to the Trustee at least ten days before mailing
the notice to Holders referred to in this Section 3.04 (or such shorter period
as shall be satisfactory to the Trustee), the Trustee shall give the notice of
redemption in the name and at the expense of the Company. If, however, the
Company gives such notice to the Holders, the Company shall concurrently deliver
to the Trustee an Officers' Certificate stating that such notice has been given.
SECTION 3.05. Effect of Notice of Redemption. Once notice of redemption
is mailed, Notes called for redemption become due and payable on the Redemption
Date and at the Redemption Price. Upon surrender of any Notes to the Paying
Agent, such Notes shall be paid at the Redemption Price, plus accrued interest,
if any, to the Redemption Date.
Notice of redemption shall be deemed to be given when mailed, whether or
not the Holder receives the notice. In any event, failure to give such notice,
or any defect therein, shall not affect the validity of the proceedings for the
redemption of Notes held by Holders to whom such notice was properly given.
SECTION 3.06. Deposit of Redemption Price. Prior to any Redemption Date,
the Company shall deposit with the Paying Agent (or, if the Company is acting as
its own Paying Agent, shall segregate and hold in trust as provided in Section
2.04) money sufficient to pay the Redemption Price of and accrued interest on
all Notes to be redeemed on that date other than Notes or portions thereof
called for redemption on that date that have been delivered by the Company to
the Trustee for cancellation.
SECTION 3.07. Payment of Notes Called for Redemption. If notice of
redemption has been given in the manner provided above, the Notes or portion of
Notes specified in such notice to be redeemed shall become due and payable on
the Redemption Date at the Redemption Price stated therein, together with
accrued interest to such Redemption Date, and on and after such date (unless the
Company shall default in the payment of such Notes at the Redemption Price and
accrued interest to the Redemption Date, in which case the principal, until
paid, shall bear interest from the Redemption Date at the rate prescribed in the
Notes), such Notes shall cease to accrue interest. Upon surrender of any Note
for redemption in accordance with a notice of redemption, such Note shall be
paid and redeemed by the Company at the Redemption Price, together with accrued
interest, if any, to the Redemption Date; provided that installments of interest
whose Stated Maturity is on or prior to the Redemption Date shall be payable to
the Holders registered as such at the close of business on the relevant Regular
Record Date.
<PAGE>
31
SECTION 3.08. Notes Redeemed in Part. Upon surrender of any Note that is
redeemed in part, the Company shall execute and the Trustee shall authenticate
and deliver to the Holder without service charge, a new Note equal in principal
amount at maturity to the unredeemed portion of such surrendered Note.
ARTICLE FOUR
COVENANTS
SECTION 4.01. Payment of Notes. The Company shall pay the principal of,
premium, if any, and interest on the Notes on the dates and in the manner
provided in the Notes and this Indenture. An installment of principal, premium,
if any, or interest shall be considered paid on the date due if the Trustee or
Paying Agent (other than the Company, a Subsidiary of the Company, or any
Affiliate of any of them) holds on that date money designated for and sufficient
to pay the installment. If the Company or any Subsidiary of the Company or any
Affiliate of any of them acts as Paying Agent, an installment of principal,
premium, if any, or interest shall be considered paid on the due date if the
entity acting as Paying Agent complies with the last sentence of Section 2.04.
As provided in Section 6.09, upon any bankruptcy or reorganization procedure
relative to the Company, the Trustee shall serve as the Paying Agent, if any,
for the Notes.
The Company shall pay interest on overdue principal and premium, if any,
and interest on overdue installments of interest, to the extent lawful, at the
rate per annum specified in the Notes.
SECTION 4.02. Maintenance of Office or Agency. The Company will maintain
in the Borough of Manhattan, The City of New York an office or agency where
Notes may be surrendered for registration of transfer or exchange or for
presentation for payment and where notices and demands to or upon the Company in
respect of the Notes and this Indenture may be served. The Company will give
prompt written notice to the Trustee of the location, and any change in the
location, of such office or agency. If at any time the Company shall fail to
maintain any such required office or agency or shall fail to furnish the Trustee
with the address thereof, such presentations, surrenders, notices and demands
may be made or served at the address of the Trustee set forth in Section 10.02.
The Company may also from time to time designate one or more other
offices or agencies where the Notes may be presented or surrendered for any or
all 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 Borough of Manhattan,
The City of New York for such purposes. The Company shall give prompt written
notice to the Trustee of any such designation or rescission and of any change in
the location of any such other office or agency.
<PAGE>
32
The Company hereby initially designates the Corporate Trust Office of
the Trustee as such office of the Company in accordance with Section 2.03.
SECTION 4.03. Limitation on Indebtedness. (a) The Company will not, and
will not permit any of its Restricted Subsidiaries to, Incur any Indebtedness
(other than the Notes and Indebtedness existing on the Closing Date); provided
that the Company may Incur Indebtedness if, after giving effect to the
Incurrence of such Indebtedness and the receipt and application of the proceeds
therefrom, the Consolidated Leverage Ratio would be positive and (i) with
respect to any Incurrence occurring from the Closing Date through January 1,
1999, greater than zero and less than 5.5:1 and (ii) with respect to any
Incurrence occurring thereafter, greater than zero and less than 5.0:1.
Notwithstanding the foregoing, the Company and any Restricted Subsidiary
(except as specified below) may Incur each and all of the following: (i)
Indebtedness of the Company (Guaranteed by Subsidiaries of the Company)
outstanding at any time in an aggregate principal amount not to exceed the
greater of (x) $55 million and (y) 80% of the consolidated net book value of the
accounts receivable and 25% of the net book value of the inventory, in each case
of the Company and its Restricted Subsidiaries as set forth on the consolidated
balance sheet of the Company then most recently filed pursuant to Section 4.18,
less any amount of such Indebtedness permanently repaid as provided under
Section 4.11; (ii) Indebtedness owed (A) to the Company evidenced by an
unsubordinated promissory note or (B) to any Restricted Subsidiary; provided
that any event which results in any such Restricted Subsidiary ceasing to be a
Restricted Subsidiary or any subsequent transfer of such Indebtedness (other
than to the Company or another Restricted Subsidiary) shall be deemed, in each
case, to constitute an Incurrence of such Indebtedness not permitted by this
clause (ii); (iii) Indebtedness issued in exchange for, or the net proceeds of
which are used to refinance or refund, then outstanding Indebtedness (other than
Indebtedness Incurred under clause (i), (ii), (iv), (vi), (viii), (x) or (xi) of
this paragraph) and any refinancings thereof in an amount not to exceed the
amount so refinanced or refunded (plus premiums, accrued interest, fees and
expenses); provided that Indebtedness the proceeds of which are used to
refinance or refund the Notes or Indebtedness that is pari passu with, or
subordinated in right of payment to, the Notes shall only be permitted under
this clause (iii) if (A) in case the Notes are refinanced in part or the
Indebtedness to be refinanced is pari passu with the Notes, such new
Indebtedness, by its terms or by the terms of any agreement or instrument
pursuant to which such new Indebtedness is outstanding, is expressly made pari
passu with, or subordinate in right of payment to, the remaining Notes, (B) in
case the Indebtedness to be refinanced is subordinated in right of payment to
the Notes, such new Indebtedness, by its terms or by the terms of any agreement
or instrument pursuant to which such new Indebtedness is issued or remains
outstanding, is expressly made subordinate in right of payment to the Notes at
least to the extent that the Indebtedness to be refinanced is subordinated to
the Notes and (C) such new Indebtedness, determined as of the date of Incurrence
of such new Indebtedness, does not mature prior to the Stated Maturity of the
Indebtedness to be refinanced or refunded, and the Average Life of such new
Indebtedness is at least equal to the remaining Average Life of the Indebtedness
to be
<PAGE>
33
refinanced or refunded; and provided further that in no event may Indebtedness
of the Company be refinanced by means of any Indebtedness of any Restricted
Subsidiary pursuant to this clause (iii); (iv) Indebtedness (A) in respect of
performance, surety or appeal bonds or letters of credit supporting trade
payables, in each case provided in the ordinary course of business, (B) under
Currency Agreements and Interest Rate Agreements; provided that such agreements
(1) are designed solely to protect the Company or its Restricted Subsidiaries
against fluctuations in foreign currency exchange rates or interest rates and
(2) do not increase the Indebtedness of the obligor outstanding at any time
other than as a result of fluctuations in foreign currency exchange rates or
interest rates or by reason of fees, indemnities and compensation payable
thereunder; and (C) arising from agreements providing for indemnification,
adjustment of purchase price 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 any case Incurred in connection with the disposition of any business, assets
or Restricted Subsidiary (other than Guarantees of Indebtedness Incurred by any
Person acquiring all or any portion of such business, assets or Restricted
Subsidiary for the purpose of financing such acquisition), in a principal amount
not to exceed the gross proceeds actually received by the Company or any
Restricted Subsidiary in connection with such disposition; (v) Indebtedness of
the Company, to the extent the net proceeds thereof are promptly (A) used to
purchase Notes tendered in an Offer to Purchase made as a result of a Change in
Control or (B) deposited to defease the Notes as described in Article Eight;
(vi) Guarantees of the Notes and Guarantees of Indebtedness of the Company by
any Restricted Subsidiary, provided the Guarantee of such Indebtedness is
permitted by and made in accordance with Section 4.07; (vii) Indebtedness
Incurred to finance the cost (including, without limitation, the cost of design,
development, construction, acquisition, installation or integration) of network
assets used in the telecommunications business (including, without limitation,
ownership interests in minimum investment units or indefeasible rights of use);
(viii) Indebtedness of the Company, not to exceed at any one time outstanding, 2
times the (A) Net Cash Proceeds received by the Company after the Closing Date
as a capital contribution or from the issuance and sale of its Capital Stock
(other than Disqualified Stock) to a Person that is not a Subsidiary of the
Company, to the extent such Net Cash Proceeds have not been used pursuant to
clause (C)(2) of the first paragraph or clause (iii), (iv) or (vi) of the second
paragraph of Section 4.04 to make a Restricted Payment and (B) 80% of the fair
market value of property (other than cash and cash equivalents) received by the
Company after the Closing Date from a contribution of capital or the sale of its
Capital Stock (other than Disqualified Stock) to a Person that is not a
Subsidiary of the Company, to the extent such capital contribution or sale of
Capital Stock has not been used pursuant to clause (iii), (iv) or (ix) of the
second paragraph of Section 4.04 to make a Restricted Payment; provided that
such Indebtedness does not mature prior to the Stated Maturity of the Notes and
has an Average Life longer than the Notes; (ix) Indebtedness of the Company
Incurred to finance capital expenditures in an amount not to exceed $5 million
in any given fiscal year of the Company; (x) Indebtedness of Foreign
Subsidiaries, not to exceed $5 million at any one time outstanding; and (xi)
Indebtedness of the Company (in addition to Indebtedness permitted under clauses
(i) through (x)
<PAGE>
34
above) in an aggregate principal amount outstanding at any time not to exceed
$100 million, less any amount of such Indebtedness permanently repaid as
provided under Section 4.11.
(b) Notwithstanding any other provision of this Section 4.03 the maximum
amount of Indebtedness that the Company or a Restricted Subsidiary may Incur
pursuant to this Section 4.03 shall not be deemed to be exceeded, with respect
to any outstanding Indebtedness due solely to the result of fluctuations in the
exchange rates of currencies.
(c) For purposes of determining any particular amount of Indebtedness
under this Section 4.03, (1) Indebtedness Incurred under the Credit Agreement on
or prior to the Closing Date shall be treated as Incurred pursuant to clause (i)
of the second paragraph of this Section 4.03, (2) Guarantees, Liens and
obligations with respect to letters of credit supporting Indebtedness otherwise
included in the determination of such particular amount shall not be included
and (3) any Liens granted pursuant to the equal and ratable provisions referred
to in Section 4.09 shall not be treated as Indebtedness. For purposes of
determining compliance with this Section 4.03, 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 (other than Indebtedness referred to in clause
(1) of the preceding sentence), the Company, in its sole discretion, shall
classify, and from time to time may reclassify, such item of Indebtedness and
only be required to include the amount and type of such Indebtedness in one of
such clauses.
SECTION 4.04. Limitation on Restricted Payments. The Company will not,
and will not permit any Restricted Subsidiary to, directly or indirectly, (i)
declare or pay any dividend or make any distribution on or with respect to its
Capital Stock (other than (x) dividends or distributions payable solely in
shares of its Capital Stock (other than Disqualified Stock) or in options,
warrants or other rights to acquire shares of such Capital Stock and (y) pro
rata dividends or distributions on Common Stock of Restricted Subsidiaries held
by minority stockholders) held by Persons other than the Company or any of its
Restricted Subsidiaries, (ii) purchase, redeem, retire or otherwise acquire for
value any shares of Capital Stock of (A) the Company or an Unrestricted
Subsidiary (including options, warrants or other rights to acquire such shares
of Capital Stock) held by any Person or (B) a Restricted Subsidiary (including
options, warrants or other rights to acquire such shares of Capital Stock) held
by any Affiliate of the Company (other than a Wholly Owned Restricted
Subsidiary) or any holder (or any Affiliate of such holder) of 5% or more of the
Capital Stock of the Company, (iii) make any voluntary or optional principal
payment, or voluntary or optional redemption, repurchase, defeasance, or other
acquisition or retirement for value, of Indebtedness of the Company that is
subordinated in right of payment to the Notes (other than, in each case, the
purchase, repurchase or acquisition of Indebtedness in anticipation of
satisfying a sinking fund obligation, principal installment or final maturity,
in any case due within one year after the date of such purchase, repurchase or
acquisition) or (iv) make any Investment, other than a Permitted Investment, in
any Person (such payments or any other actions described in clauses (i) through
(iv) above being collectively "Restricted Payments") if, at the time of, and
after giving effect to, the proposed Restricted Payment: (A) a Default or Event
of Default shall have occurred
<PAGE>
35
and be continuing, (B) the Company could not Incur at least $1.00 of
Indebtedness under the first paragraph of Section 4.03 or (C) the aggregate
amount of all Restricted Payments (the amount, if other than in cash, to be
determined in good faith by the Board of Directors, whose determination shall be
conclusive and evidenced by a Board Resolution) made after the Closing Date
shall exceed the sum of (1) 50% of the aggregate amount of the Adjusted
Consolidated Net Income (or, if the Adjusted Consolidated Net Income is a loss,
minus 100% of the amount of such loss) (determined by excluding income resulting
from transfers of assets by the Company or a Restricted Subsidiary to an
Unrestricted Subsidiary) accrued on a cumulative basis during the period (taken
as one accounting period) beginning on the first day of the fiscal quarter
immediately following the Closing Date and ending on the last day of the last
fiscal quarter preceding the Transaction Date for which reports have been filed
with the Commission or provided to the Trustee pursuant to Section 4.18 plus (2)
the aggregate Net Cash Proceeds received by the Company after the Closing Date
from the issuance and sale permitted by this Indenture of its Capital Stock
(other than Disqualified Stock) to a Person who is not a Subsidiary of the
Company, including an issuance or sale permitted by this Indenture of
Indebtedness of the Company for cash subsequent to the Closing Date upon the
conversion of such Indebtedness into Capital Stock (other than Disqualified
Stock) of the Company, or from the issuance to a Person who is not a Subsidiary
of the Company of any options, warrants or other rights to acquire Capital Stock
of the Company (in each case, exclusive of any Disqualified Stock or any
options, warrants or other rights that are redeemable at the option of the
holder, or are required to be redeemed, prior to the Stated Maturity of the
Notes) plus (3) an amount equal to the net reduction in Investments (other than
reductions in Permitted Investments and Investments made pursuant to clause
(vi), (ix) or (x) of the following paragraph) in any Person resulting from
payments of interest on Indebtedness, dividends, repayments of loans or
advances, or other transfers of assets, in each case to the Company or any
Restricted Subsidiary or from the Net Cash Proceeds from the sale of any such
Investment (except, in each case, to the extent any such payment or proceeds are
included in the calculation of Adjusted Consolidated Net Income), or from
redesignations of Unrestricted Subsidiaries as Restricted Subsidiaries (valued
in each case as provided in the definition of "Investment"), not to exceed, in
each case, the amount of Investments previously made by the Company or any
Restricted Subsidiary in such Person or Unrestricted Subsidiary.
The foregoing provision shall not be violated by reason of: (i) the
payment of any dividend within 60 days after the date of declaration thereof if,
at said date of declaration, such payment would comply with the foregoing
paragraph; (ii) the redemption, repurchase, defeasance or other acquisition or
retirement for value of Indebtedness that is subordinated in right of payment to
the Notes including premium, if any, and accrued and unpaid interest, with the
proceeds of, or in exchange for, Indebtedness Incurred under clause (iii) of the
second paragraph of Section 4.03(a); (iii) the repurchase, redemption or other
acquisition of Capital Stock of the Company or an Unrestricted Subsidiary (or
options, warrants or other rights to acquire such Capital Stock) in exchange
for, or out of the proceeds of a substantially concurrent offering of, shares of
Capital Stock (other than Disqualified Stock) of the Company (or options,
warrants or other rights to acquire such Capital Stock); (iv) the making of any
principal payment or the repurchase,
<PAGE>
36
redemption, retirement, defeasance or other acquisition for value of
Indebtedness of the Company which is subordinated in right of payment to the
Notes in exchange for, or out of the proceeds of, a substantially concurrent
offering of, shares of the Capital Stock (other than Disqualified Stock) of the
Company (or options, warrants or other rights to acquire such Capital Stock);
(v) payments or distributions, to dissenting stockholders pursuant to applicable
law, pursuant to or in connection with a consolidation, merger or transfer of
assets that complies with Article Five; (vi) Investments in any Person the
primary business of which is related, ancillary or complementary to the business
of the Company and its Restricted Subsidiaries on the date of such Investments;
provided that the aggregate amount of Investments made pursuant to this clause
(vi) does not exceed $20 million at any one time outstanding; (vii) the
purchase, redemption, acquisition, cancellation or other retirement for value of
shares of Capital Stock of the Company to the extent necessary, in the judgment
of the Board of Directors, to prevent the loss or secure the renewal or
reinstatement of any material license or material franchise held by the Company
or any Restricted Subsidiary from any governmental agency; (viii) the purchase,
redemption, retirement or other acquisition for value of shares of Capital Stock
of the Company, or options to purchase such shares held by directors, employees,
or former directors or employees of the Company or any Restricted Subsidiary (or
their estates or beneficiaries under their estates) upon their death,
disability, retirement, termination of employment or pursuant to the terms of
any agreement under such shares of Capital Stock or options were issued;
provided that the aggregate consideration paid for such purchase, redemption,
retirement or other acquisition for value of such shares of Capital Stock or
options after the Closing Date does not exceed $2 million in any calendar year,
or $5 million in the aggregate; (ix) Investments acquired in exchange for
Capital Stock (other than Disqualified Stock) of the Company or acquired with
Net Cash Proceeds received by the Company after the Closing Date from the
issuance and sale of its Capital Stock (other than Disqualified Stock); provided
that such Net Cash Proceeds are used to make such Investment within 90 days of
receipt thereof; (x) Restricted Payments in any aggregate amount not to exceed
$20 million, increased by the amount of any Investment made pursuant to this
clause (x) that is an Investment and is not outstanding; or (xi) payments to
stockholders in connection with the recapitalization of the Company, in an
amount not to exceed $203 million, occurring in connection with the issuance of
the Notes; (provided that, except in the case of clauses (i) and (iii), no
Default or Event of Default shall have occurred and be continuing or occur as a
consequence of the actions or payments set forth therein.
Each Restricted Payment permitted pursuant to the preceding paragraph
(other than the Restricted Payment referred to in clause (ii) thereof, an
exchange of Capital Stock for Capital Stock or Indebtedness referred to in
clause (iii) or (iv) thereof and an Investment referred to in clause (vi)
thereof), and the Net Cash Proceeds from any issuance of Capital Stock referred
to in clauses (iii) and (iv), shall be included in calculating whether the
conditions of clause (C) of the first paragraph of this Section 4.04 have been
met with respect to any subsequent Restricted Payments. In the event the
proceeds of an issuance of Capital Stock of the Company are used for the
redemption, repurchase or other acquisition of the Notes, or Indebtedness that
is pari passu with the Notes, then the Net Cash Proceeds of such issuance shall
be included in clause (C) of the
<PAGE>
37
first paragraph of this Section 4.04 covenant only to the extent such proceeds
are not used for such redemption, repurchase or other acquisition of
Indebtedness.
Any Restricted Payments made other than in cash shall be valued at fair
market value. The amount of any Investment "outstanding" at any time shall be
deemed to be equal to the amount of such Investment on the date made, less the
return of capital to the Company and its Restricted Subsidiaries with respect to
such Investment (up to the amount of such Investment on the date made).
SECTION 4.05. Limitation on Dividend and Other Payment Restrictions
Affecting Restricted Subsidiaries. The Company will not, and will not permit any
Restricted Subsidiary to, create or otherwise cause or suffer to exist or become
effective any consensual encumbrance or restriction of any kind on the ability
of any Restricted Subsidiary to (i) pay dividends or make any other
distributions permitted by applicable law on any Capital Stock of such
Restricted Subsidiary owned by the Company or any other Restricted Subsidiary,
(ii) pay any Indebtedness owed to the Company or any other Restricted
Subsidiary, (iii) make loans or advances to the Company or any other Restricted
Subsidiary or (iv) transfer any of its property or assets to the Company or any
other Restricted Subsidiary.
The foregoing provisions shall not restrict any encumbrances or
restrictions: (i) existing on the Closing Date in the Credit Agreement, this
Indenture or any other agreements in effect on the Closing Date, and any
extensions, refinancings, renewals or replacements of such agreements; provided
that the encumbrances and restrictions in any such extensions, refinancings,
renewals or replacements are no less favorable in any material respect to the
Holders than those encumbrances or restrictions that are then in effect and that
are being extended, refinanced, renewed or replaced; (ii) existing under or by
reason of applicable law; (iii) existing with respect to any Person or the
property or assets of such Person acquired by the Company or any Restricted
Subsidiary, existing at the time of such acquisition and not incurred in
contemplation thereof, which encumbrances or restrictions are not applicable to
any Person or the property or assets of any Person other than such Person or the
property or assets of such Person so acquired; (iv) in the case of clause (iv)
of the first paragraph of this Section 4.05, (A) that restrict in a customary
manner 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 this 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; (v) with
respect to a Restricted Subsidiary and imposed pursuant to an agreement that has
been entered into for the sale or disposition of all or substantially all of the
Capital Stock of, or property and assets of, such Restricted Subsidiary or (vi)
relating solely to any Foreign Subsidiaries and supporting Indebtedness of such
Foreign Subsidiaries Incurred under clause (x) of the second paragraph of
<PAGE>
38
Section 4.03. Nothing contained in this Section 4.05 shall prevent the Company
or any Restricted Subsidiary from (1) creating, incurring, assuming or suffering
to exist any Liens otherwise permitted in Section 4.09 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.
SECTION 4.06. Limitation on the Issuance and Sale of Capital Stock of
Restricted Subsidiaries. The Company will not sell, and will not permit any
Restricted Subsidiary, directly or indirectly, to issue or sell, any shares of
Capital Stock of a Restricted Subsidiary (including options, warrants or other
rights to purchase shares of such Capital Stock) except (i) to the Company or a
Wholly Owned Restricted Subsidiary; (ii) issuances of director's qualifying
shares or sales to foreign nationals of shares of Capital Stock of foreign
Restricted Subsidiaries, to the extent required by applicable law; or (iii) if,
immediately after giving effect to such issuance or sale, such Restricted
Subsidiary would no longer constitute a Restricted Subsidiary and any Investment
in such Person remaining after giving effect to such issuance or sale would have
been permitted to be made under Section 4.04 if made on the date of such
issuance or sale or (iv) issuances or sales of Common Stock of a Restricted
Subsidiary, provided that the Company or such Restricted Subsidiary applies the
Net Cash Proceeds, if any, of any such sale in accordance with clause (A) or (B)
of Section 4.11.
SECTION 4.07. Limitation on Issuances of Guarantees by Restricted
Subsidiaries. The Company will not permit any Restricted Subsidiary, directly or
indirectly, to Guarantee any Indebtedness of the Company which is pari passu
with or subordinate in right of payment to the Notes ("Guaranteed
Indebtedness"), unless (i) such Restricted Subsidiary simultaneously executes
and delivers a supplemental indenture to this Indenture providing for a
Guarantee (a "Subsidiary Guarantee") of payment of the Notes by such Restricted
Subsidiary and (ii) such Restricted Subsidiary waives and will not in any manner
whatsoever claim or take the benefit or advantage of, any rights of
reimbursement, indemnity or subrogation or any other rights against the Company
or any other Restricted Subsidiary as a result of any payment by such Restricted
Subsidiary under its Subsidiary Guarantee; provided that this paragraph shall
not be applicable to any Guarantee of any Restricted Subsidiary (x) that existed
at the time such Person became a Restricted Subsidiary and was not Incurred in
connection with, or in contemplation of, such Person becoming a Restricted
Subsidiary or (y) Indebtedness Incurred under clause (i) or (vii) of the second
paragraph of Section 4.03. If the Guaranteed Indebtedness is (A) pari passu with
the Notes, then the Guarantee of such Guaranteed Indebtedness shall be pari
passu with, or subordinated to, the Subsidiary Guarantee or (B) subordinated to
the Notes, then the Guarantee of such Guaranteed Indebtedness shall be
subordinated to the Subsidiary Guarantee at least to the extent that the
Guaranteed Indebtedness is subordinated to the Notes.
Notwithstanding the foregoing, any Subsidiary Guarantee by a Restricted
Subsidiary may provide by its terms that it shall be automatically and
unconditionally released and discharged upon (i) any sale, exchange or transfer,
to any Person not an Affiliate of the Company, of all of
<PAGE>
39
the Company's and each Restricted Subsidiary's Capital Stock in, or all or
substantially all the assets of, such Restricted Subsidiary (which sale,
exchange or transfer is not prohibited by this Indenture) or (ii) the release or
discharge of the Guarantee which resulted in the creation of such Subsidiary
Guarantee, except a discharge or release by or as a result of payment under such
Guarantee.
SECTION 4.08. Limitation on Transactions with Stockholders and
Affiliates. The Company will not, and will not permit any Restricted Subsidiary
to, directly or indirectly, enter into any transaction (including, without
limitation, the purchase, sale, lease or exchange of property or assets, or the
rendering of any service) with any holder (or any Affiliate of such holder) of
5% or more of any class of Capital Stock of the Company or with any Affiliate of
the Company or any Restricted Subsidiary, except upon fair and reasonable terms
no less favorable to the Company or such Restricted Subsidiary than could be
obtained, at the time of such transaction or, if such transaction is pursuant to
a written agreement, at the time of the execution of the agreement providing
therefor, in a comparable arm's-length transaction with a Person that is not
such a holder or an Affiliate.
The foregoing limitation does not limit, and shall not apply to (i)
transactions (A) approved by a majority of the disinterested members of the
Board of Directors or (B) for which the Company or a Restricted Subsidiary
delivers to the Trustee a written opinion of a nationally recognized investment
banking firm stating that the transaction is fair to the Company or such
Restricted Subsidiary from a financial point of view; (ii) any transaction
solely between the Company and any of its Wholly Owned Restricted Subsidiaries
or solely between Wholly Owned Restricted Subsidiaries; (iii) the payment of
reasonable and customary regular fees to directors of the Company who are not
employees of the Company; (iv) any payments or other transactions pursuant to
any tax-sharing agreement between the Company and any other Person with which
the Company files a consolidated tax return or with which the Company is part of
a consolidated group for tax purposes; (v) the existence of, or the performance
by the Company or any of its Restricted Subsidiaries of its obligations under
the terms of, any stockholders agreement (including any registration rights
agreement or purchase agreement related thereto) to which it is a party as of
the Closing Date and any similar agreements which it may enter into thereafter;
provided, however, that the existence of, or the performance by the Company or
any of its Restricted Subsidiaries of obligations under any future amendment to
any such existing agreement or under any similar agreement entered into after
the Closing Date shall only be permitted by this clause (v) to the extent that
the terms of any such amendment or new agreement are not otherwise
disadvantageous to the holders of the Notes in any material respect; (vi) the
payment of all fees and expenses and the performance of obligations related to
the Transaction; or (vii) any Restricted Payments not prohibited by Section
4.04. Notwithstanding the foregoing, any transaction or series of related
transactions covered by the first paragraph of this Section 4.08 and not covered
by clauses (ii) through (vii) of this paragraph, the aggregate amount of which
exceeds $2 million in value, must be approved or determined to be fair in the
manner provided for in clause (i)(A) or (B) above.
<PAGE>
40
SECTION 4.09. Limitation on Liens. The Company will not, and will not
permit any Restricted Subsidiary to, create, incur, assume or suffer to exist
any Lien on any of its assets or properties of any character, or any shares of
Capital Stock or Indebtedness of any Restricted Subsidiary, without making
effective provision for all of the Notes and all other amounts due under this
Indenture to be secured equally and ratably with (or, if the obligation or
liability to be secured by such Lien is subordinated in right of payment to the
Notes, prior to) the obligation or liability secured by such Lien.
The foregoing limitation does not apply to (i) Liens existing on the
Closing Date, including Liens securing obligations under the Credit Agreement;
(ii) Liens granted after the Closing Date on any assets or Capital Stock of the
Company or its Restricted Subsidiaries created in favor of the Holders; (iii)
Liens with respect to the assets of a Restricted Subsidiary granted by such
Restricted Subsidiary to the Company or a Wholly Owned Restricted Subsidiary to
secure Indebtedness owing to the Company or such other Restricted Subsidiary;
(iv) Liens securing Indebtedness which is Incurred to refinance secured
Indebtedness which is permitted to be Incurred under clause (i) or (iii) of the
second paragraph of Section 4.03; 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 securing the Indebtedness being refinanced; (v)
Liens on any property or assets of a Restricted Subsidiary securing Indebtedness
of such Restricted Subsidiary permitted under Section 4.03; or (vi) Permitted
Liens.
SECTION 4.10. Limitation on Sale-Leaseback Transactions. The Company
will not, and will not permit any Restricted Subsidiary to, enter into any
sale-leaseback transaction involving any of its assets or properties whether now
owned or hereafter acquired, whereby the Company or a Restricted Subsidiary
sells or transfers such assets or properties and then or thereafter leases such
assets or properties or any part thereof or any other assets or properties which
the Company or such Restricted Subsidiary, as the case may be, intends to use
for substantially the same purpose or purposes as the assets or properties sold
or transferred.
The foregoing restriction does not apply to any sale-leaseback
transaction if (i) the lease is for a period, including renewal rights, of not
in excess of three years; (ii) the lease secures or relates to industrial
revenue or pollution control bonds; (iii) the transaction is solely between the
Company and any Wholly Owned Restricted Subsidiary or solely between Wholly
Owned Restricted Subsidiaries; or (iv) the Company or such Restricted
Subsidiary, within 12 months after the sale or transfer of any assets or
properties is completed, applies an amount not less than the net proceeds
received from such sale in accordance with clause (A) or (B) of the first
paragraph of Section 4.11.
SECTION 4.11. Limitation on Asset Sales. The Company will not, and will
not permit any Restricted Subsidiary to, consummate any Asset Sale, unless (i)
the consideration received by the Company or such Restricted Subsidiary is at
least equal to the fair market value of the assets sold or disposed of and (ii)
at least 75% of the consideration received consists of cash or Temporary Cash
Investments; provided that the amount of (a) any liabilities (as shown on the
Company's or such Restricted Subsidiary's most recent balance sheet or in the
notes thereto) of
<PAGE>
41
the Company or any Restricted Subsidiary (other than liabilities that are by
their terms subordinated to the Notes), that are assumed by the transferee of
any such assets, to the extent the creditors with respect thereto execute a
written release of such liability, in favor of the Company or the Restricted
Subsidiary, as applicable, and (b) any notes or other obligations received by
the Company or such Restricted Subsidiary from such transferee that are
converted by the Company or such Restricted Subsidiary into cash (to the extent
of the cash received) within 180 days following the closing of such Asset Sale,
shall be deemed to be cash for purposes of this provision. In the event and to
the extent that the Net Cash Proceeds received by the Company or any of its
Restricted Subsidiaries from one or more Asset Sales occurring on or after the
Closing Date in any period of 12 consecutive months exceed 10% of Adjusted
Consolidated Net Tangible Assets (determined as of the date closest to the
commencement of such 12-month period for which a consolidated balance sheet of
the Company and its Subsidiaries has been filed pursuant to Section 4.18), then
the Company shall or shall cause the relevant Restricted Subsidiary to (i)
within twelve months after the date Net Cash Proceeds so received exceed 10% of
Adjusted Consolidated Net Tangible Assets (A) apply an amount equal to such
excess Net Cash Proceeds to permanently repay unsubordinated Indebtedness of the
Company, or any Restricted Subsidiary providing a Subsidiary Guarantee pursuant
to Section 4.07 or Indebtedness of any other Restricted Subsidiary, in each case
owing to a Person other than the Company or any of its Restricted Subsidiaries
or (B) invest an equal amount, or the amount not so applied pursuant to clause
(A) (or enter into a definitive agreement committing to so invest within 12
months after the date of such agreement), in property or assets (other than
current assets) of a nature or type or that are used in a business (or in a
company having property and assets of a nature or type, or engaged in a
business) similar or related to the nature or type of the property and assets
of, or the business of, the Company and its Restricted Subsidiaries existing on
the date of such investment and (ii) apply (no later than the end of the
12-month period referred to in clause (i)) such excess Net Cash Proceeds (to the
extent not applied pursuant to clause (i)) as provided in the following
paragraph of this Section 4.11. The amount of such excess Net Cash Proceeds
required to be applied (or to be committed to be applied) during such 12-month
period as set forth in clause (i) of the preceding sentence and not applied as
so required by the end of such period shall constitute "Excess Proceeds".
If, as of the first day of any calendar month, the aggregate amount of
Excess Proceeds not theretofore subject to an Offer to Purchase pursuant to this
Section 4.11 totals at least $10 million, the Company must commence, not later
than the fifteenth Business Day of such month, and consummate an Offer to
Purchase from the Holders on a pro rata basis an aggregate Accreted Value of
Notes equal to the Excess Proceeds on such date, at a purchase price equal to
100% of the Accreted Value of the Notes, plus, in each case, accrued interest
(if any) to the Payment Date.
SECTION 4.12. Repurchase of Notes upon a Change of Control. The Company
shall commence, within 30 days of the occurrence of a Change of Control, and
consummate an Offer to Purchase for all Notes then outstanding, at a purchase
price equal to 101% of the Accreted Value thereof on the relevant Payment Date,
plus accrued interest, if any, to the Payment Date.
<PAGE>
42
SECTION 4.13. Existence. Subject to Article Five of this Indenture, the
Company will do or cause to be done all things necessary to preserve and keep in
full force and effect its existence and the existence of each of its Restricted
Subsidiaries in accordance with the respective organizational documents of the
Company and each Restricted Subsidiary and the rights (whether pursuant to
charter, partnership certificate, agreement, statute or otherwise), licenses and
franchises of the Company and each Restricted Subsidiary; provided that the
Company shall not be required to preserve any such right, license or franchise,
or the existence of any Restricted Subsidiary, if the maintenance or
preservation thereof is no longer desirable in the conduct of the business of
the Company and its Restricted Subsidiaries taken as a whole.
SECTION 4.14. Payment of Taxes and Other Claims. The Company will pay or
discharge and shall cause each of its Subsidiaries to pay or discharge, or cause
to be paid or discharged, before the same shall become delinquent (i) all
material taxes, assessments and governmental charges levied or imposed upon (a)
the Company or any such Subsidiary, (b) the income or profits of any such
Subsidiary which is a corporation or (c) the property of the Company or any such
Subsidiary and (ii) all material lawful claims for labor, materials and supplies
that, if unpaid, might by law become a lien upon the property of the Company or
any such Subsidiary; 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 the amount, applicability or validity of which is being contested in
good faith by appropriate proceedings and for which adequate reserves have been
established.
SECTION 4.15. Maintenance of Properties and Insurance. The Company will
cause all properties used or useful in the conduct of its business or the
business of any of its Restricted Subsidiaries to be maintained and kept in good
condition, repair and working order and supplied with all necessary equipment
and will 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 4.15 shall prevent the Company or any Restricted Subsidiary from
discontinuing the use, operation or maintenance of any of such properties or
disposing of any of them, if such discontinuance or disposal is, in the judgment
of the Company, desirable in the conduct of the business of the Company or such
Restricted Subsidiary.
The Company will provide or cause to be provided, for itself and its
Restricted Subsidiaries, insurance (including appropriate self-insurance)
against loss or damage of the kinds customarily insured against by corporations
similarly situated and owning like properties, including, but not limited to,
products liability insurance and public liability insurance, with reputable
insurers or with the government of the United States of America, or an agency or
instrumentality thereof, in such amounts, with such deductibles and by such
methods as shall be customary for corporations similarly situated in the
industry in which the Company or any such Restricted Subsidiary, as the case may
be, is then conducting business.
<PAGE>
43
SECTION 4.16. Notice of Defaults. In the event that the Company or any
Officer becomes aware of any Default or Event of Default, the Company shall
promptly deliver to the Trustee an Officers' Certificate specifying such Default
or Event of Default.
SECTION 4.17. Compliance Certificates. (a) The Company shall deliver to
the Trustee, within 45 days after the end of each fiscal quarter (90 days after
the end of the last fiscal quarter of each year), an Officers' Certificate
stating whether or not the signers know of any Default or Event of Default that
occurred during such fiscal quarter. In the case of the Officers' Certificate
delivered within 90 days after the end of the Company's fiscal year, such
certificate shall contain a certification from the principal executive officer,
principal financial officer or principal accounting officer of the Company that
a review has been conducted of the activities of the Company and its Restricted
Subsidiaries and the Company's and its Restricted Subsidiaries' performance
under this Indenture and that the Company has complied with all conditions and
covenants under this Indenture. For purposes of this Section 4.17, such
compliance shall be determined without regard to any period of grace or
requirement of notice provided under this Indenture. If any of the officers of
the Company signing such certificate has knowledge of such a Default or Event of
Default, the certificate shall describe any such Default or Event of Default and
its status. The first certificate to be delivered pursuant to this Section
4.17(a) shall be for the first fiscal quarter beginning after the execution of
this Indenture.
(b) The Company shall deliver to the Trustee, within 90 days after the
end of each fiscal year, beginning with the fiscal year in which this Indenture
was executed, a certificate signed by the Company's independent certified public
accountants stating (i) that their audit examination has included a review of
the terms of this Indenture and the Notes as they relate to accounting matters,
(ii) that they have read the most recent Officers' Certificate delivered to the
Trustee pursuant to paragraph (a) of this Section 4.17 and (iii) whether, in
connection with their audit examination, anything came to their attention that
caused them to believe that the Company was not in compliance with any of the
terms, covenants, provisions or conditions of Article Four and Section 5.01 of
this Indenture as they pertain to accounting matters and, if any Default or
Event of Default has come to their attention, specifying the nature and period
of existence thereof; provided that such independent certified public
accountants shall not be liable in respect of such statement by reason of any
failure to obtain knowledge of any such Default or Event of Default that would
not be disclosed in the course of an audit examination conducted in accordance
with generally accepted auditing standards in effect at the date of such
examination.
SECTION 4.18. Commission Reports and Reports to Holders. Whether or not
the Company is then required to file reports with the Commission, the Company
shall file with the Commission (unless the Commission will not accept such
filing) all such reports and other information as it would be required to file
with the Commission by Section 13(a) or 15(d) under the Exchange Act if it were
subject thereto. The Company shall supply the Trustee and each Holder or shall
supply to the Trustee for forwarding to each such Holder, without cost to such
Holder, copies of such reports and other information within 15 days after the
date it would have
<PAGE>
44
been required to file such reports or other information with the Commission had
it been subject to such Sections; provided, however, that the copies of such
reports and information supplied to Holders may omit exhibits. The Company also
shall comply with the other provisions of TIA Section 314(a).
SECTION 4.19. Waiver of Stay, Extension or Usury Laws. The Company
covenants (to the extent that it may lawfully do so) that it will not at any
time insist upon, or plead, or in any manner whatsoever claim or take the
benefit or advantage of, any stay or extension law or any usury law or other law
that would prohibit or forgive the Company from paying all or any portion of the
principal of, premium, if any, or interest on the Notes as contemplated herein,
wherever enacted, now or at any time hereafter in force, or that may affect the
covenants or the performance of this Indenture; and (to the extent that it may
lawfully do so) the Company hereby expressly waives all benefit or advantage of
any such law and covenants that it will not hinder, delay or impede the
execution of any power herein granted to the Trustee, but will suffer and permit
the execution of every such power as though no such law had been enacted.
SECTION 4.20. Calculation of Original Issue Discount. The Company shall
file with the Trustee promptly at the end of each calendar year (i) a written
notice specifying the amount of original issue discount (including daily rates
and accrual periods) accrued on outstanding Notes as of the end of such year and
(ii) such other specific information relating to such original issue discount as
may then be relevant under the Internal Revenue Code of 1986, as amended from
time to time and requested by the Trustee.
ARTICLE FIVE
SUCCESSOR CORPORATION
SECTION 5.01. When Company May Merge, Etc. The Company shall not
consolidate with, merge with or into, or sell, convey, transfer, lease or
otherwise dispose of all or substantially all of its property and assets (as an
entirety or substantially an entirety in one transaction or a series of related
transactions) to, any Person or permit any Person to merge with or into the
Company unless: (i) the Company shall be the continuing Person, or the Person
(if other than the Company) formed by such consolidation or into which the
Company is merged or that acquired or leased such property and assets of the
Company shall be a corporation organized and validly existing under the laws of
the United States of America, the United Kingdom or, in each case, any
jurisdiction thereof and shall expressly assume, by a supplemental indenture,
executed and delivered to the Trustee, all of the obligations of the Company on
all of the Notes and under this Indenture; (ii) immediately after giving effect
to such transaction, no Default or Event of Default shall have occurred and be
continuing; (iii) immediately after giving effect to such transaction on a pro
forma basis, the Company or any Person becoming the successor obligor of the
Notes, as the case may be, (A) could Incur $1.00 of Indebtedness under the first
paragraph of Section 4.03 or (B) would have a Consolidated Leverage Ratio that
is positive, but equal to or
<PAGE>
45
lower than the Consolidated Leverage Ratio of the Company immediately prior to
such transaction; and (iv) the Company delivers to the Trustee an Officers'
Certificate (attaching the arithmetic computations to demonstrate compliance
with clause (iii)) and Opinion of Counsel, in each case stating that such
consolidation, merger or transfer and such supplemental indenture complies with
this provision and that all conditions precedent provided for herein relating to
such transaction have been complied with; provided, however, that clause (iii)
above does not apply if, in the good faith determination of the Board of
Directors of the Company, whose determination shall be evidenced by a Board
Resolution, the principal purpose of such transaction is to change the state of
incorporation of the Company; and provided further that any such transaction
shall not have as one of its purposes the evasion of the foregoing limitations.
SECTION 5.02. Successor Substituted. Upon any consolidation or merger,
or any sale, conveyance, transfer, lease or other disposition of all or
substantially all of the property and assets of the Company in accordance with
Section 5.01 of this Indenture, the successor Person formed by such
consolidation or into which the Company is merged or to which such sale,
conveyance, transfer, lease or other disposition is made shall succeed to, and
be substituted for, and may exercise every right and power of, the Company under
this Indenture with the same effect as if such successor Person had been named
as the Company herein; provided that the Company shall not be released from its
obligation to pay the principal of, premium, if any, or interest on the Notes in
the case of a lease of all or substantially all of its property and assets.
ARTICLE SIX
DEFAULT AND REMEDIES
SECTION 6.01. Events of Default. Any of the following events shall
constitute an "Event of Default" hereunder:
(a) default in the payment of principal of (or premium, if any,
on) any Note when the same becomes due and payable at maturity, upon
acceleration, redemption or otherwise;
(b) default in the payment of interest on any Note when the same
becomes due and payable, and such default continues for a period of 30 days;
(c) default in the performance or breach of Article Five or the
failure to make or consummate an Offer to Purchase in accordance with Section
4.11 or Section 4.12;
(d) the Company defaults in the performance of or breaches any
other covenant or agreement of the Company in this Indenture or under the Notes
(other than a default specified in clause
<PAGE>
46
(a), (b) or (c) above) and such default or breach continues for a
period of 30 consecutive days after written notice by the Trustee or the Holders
of 25% or more in aggregate principal amount of the Notes;
(e) there occurs with respect to any issue or issues of
Indebtedness of the Company or any Significant Subsidiary having an outstanding
principal amount of $5 million or more in the aggregate for all such issues of
all such Persons, whether such Indebtedness now exists or shall hereafter be
created,(I) an event of default that has caused the holder thereof to declare
such Indebtedness to be due and payable prior to its Stated Maturity and such
Indebtedness has not been discharged in full or such acceleration has not been
rescinded or annulled within 30 days of such acceleration and/or (II) the
failure to make a principal payment at the final (but not any interim) fixed
maturity and such defaulted payment shall not have been made, waived or extended
within 30 days of such payment default;
(f) any final judgment or order (not covered by insurance) for
the payment of money in excess of $5 million in the aggregate for all such final
judgments or orders against all such Persons (treating any deductibles,
self-insurance or retention as not so covered) shall be rendered against the
Company or any Significant Subsidiary and shall not be paid or discharged, and
there shall be any period of 30 consecutive days following entry of the final
judgment or order that causes the aggregate amount for all such final judgments
or orders outstanding and not paid or discharged against all such Persons to
exceed $5 million during which a stay of enforcement of such final judgment or
order, by reason of a pending appeal or otherwise, shall not be in effect;
(g) a court having jurisdiction in the premises enters a decree
or order for
(A) relief in respect of the Company or any Significant
Subsidiary in an involuntary case under any applicable bankruptcy, insolvency or
other similar law now or hereafter in effect,
(B) appointment of a receiver, liquidator, assignee, custodian,
trustee, sequestrator or similar official of the Company or any Significant
Subsidiary or for all or substantially all of the property and assets of the
Company or any Significant Subsidiary or
(C) the winding up or liquidation of the affairs of the Company
or any Significant Subsidiary and, in each case, such decree or order shall
remain unstayed and in effect for a period of 60 consecutive days; or
(h) the Company or any Significant Subsidiary
(A) commences a voluntary case under any applicable bankruptcy,
insolvency or other similar law now or hereafter in effect, or consents to the
entry of an order for relief in an involuntary case under any such law,
<PAGE>
47
(B) consents to the appointment of or taking possession by a
receiver, liquidator, assignee, custodian, trustee, sequestrator or similar
official of the Company or any Significant Subsidiary or for all or
substantially all of the property and assets of the Company or any Significant
Subsidiary or
(C) effects any general assignment for the benefit of creditors.
SECTION 6.02. Acceleration. If an Event of Default (other than an Event
of Default specified in clause (g) or (h) of Section 6.01 that occurs with
respect to the Company) occurs and is continuing under this Indenture, the
Trustee or the Holders of at least 25% in aggregate principal amount of the
Notes then outstanding, by written notice to the Company (and to the Trustee if
such notice is given by the Holders), may, and the Trustee at the request of
such Holders shall, declare the Accreted Value of, premium, if any, and accrued
interest on the Notes to be immediately due and payable. Upon a declaration of
acceleration, such Accreted Value, premium, if any, and accrued interest shall
be immediately due and payable. In the event of a declaration of acceleration
because an Event of Default set forth in clause (e) of Section 6.01 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 clause (e) shall be remedied or cured by the Company or the relevant
Significant Subsidiary or waived by the holders of the relevant Indebtedness
within 60 days after the declaration of acceleration with respect thereto. If an
Event of Default specified in clause (g) or (h) of Section 6.01 occurs with
respect to the Company, the Accreted Value of, premium, if any, and accrued
interest on the Notes then outstanding shall ipso facto become and be
immediately due and payable without any declaration or other act on the part of
the Trustee or any Holder.
At any time after such declaration of acceleration, but before a
judgment or decree for the payment of the money due has been obtained by the
Trustee, the Holders of at least a majority in principal amount of the
outstanding Notes by written notice to the Company and to the Trustee, may waive
all past Defaults and rescind and annul a declaration of acceleration and its
consequences if (a) the Company has paid or deposited with the Trustee a sum
sufficient to pay (i) all sums paid or advanced by the Trustee hereunder and the
reasonable compensation, expenses, disbursements and advances of the Trustee,
its agents and counsel, (ii) all overdue interest on all Notes, (iii) the
Accreted Value of and premium, if any, on any Notes that have become due
otherwise than by such declaration or occurrence of acceleration and interest
thereon at the rate prescribed therefor by such Notes, and (iv) to the extent
that payment of such interest is lawful, interest upon overdue interest, if any,
at the rate prescribed therefor by such Notes, (b) all existing Events of
Default, other than the non-payment of the Accreted Value of, premium, if any,
and accrued interest on the Notes that have become due solely by such
declaration of acceleration, have been cured or waived and (c) the rescission
would not conflict with any judgment or decree of a court of competent
jurisdiction.
<PAGE>
48
SECTION 6.03. Other Remedies. If an Event of Default occurs and is
continuing, the Trustee may, and at the direction of the Holders of at least a
majority in principal amount of the outstanding Notes shall, pursue any
available remedy by proceeding at law or in equity to collect the payment of
principal of, premium, if any, or interest on the Notes or to enforce the
performance of any provision of the Notes or this Indenture.
The Trustee may maintain a proceeding even if it does not possess any of
the Notes or does not produce any of them in the proceeding.
SECTION 6.04. Waiver of Past Defaults. Subject to Sections 6.02, 6.07
and 9.02, the Holders of at least a majority in principal amount of the
outstanding Notes, by notice to the Trustee, may waive an existing Default or
Event of Default and its consequences, except a Default in the payment of
principal of, premium, if any, or interest on any Note as specified in clause
(a) or (b) of Section 6.01 or in respect of a covenant or provision of this
Indenture which cannot be modified or amended without the consent of the Holder
of each outstanding Note affected. Upon any such waiver, such Default shall
cease to exist, and any Event of Default arising therefrom shall be deemed to
have been cured, for every purpose of this Indenture; but no such waiver shall
extend to any subsequent or other Default or Event of Default or impair any
right consequent thereto.
SECTION 6.05. Control by Majority. The Holders of at least a majority in
aggregate principal amount of the outstanding Notes may 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 the
Trustee may refuse to follow any direction that conflicts with law or this
Indenture, that may involve the Trustee in personal liability, or that the
Trustee determines in good faith may be unduly prejudicial to the rights of
Holders of Notes not joining in the giving of such direction; and provided
further that the Trustee may take any other action it deems proper that is not
inconsistent with any such direction received from Holders of Notes.
SECTION 6.06. Limitation on Suits. A Holder may not institute any
proceeding, judicial or otherwise, with respect to this Indenture or the Notes,
or for the appointment of a receiver or trustee, or for any other remedy
hereunder, unless:
(i) the Holder has previously given the Trustee written notice of
a continuing Event of Default;
(ii) the Holders of at least 25% in aggregate principal amount of
outstanding Notes shall have made a written request to the Trustee to
pursue such remedy;
(iii) such Holder or Holders offer the Trustee indemnity
reasonably satisfactory to the Trustee against any costs, liability or
expense;
<PAGE>
49
(iv) the Trustee does not comply with the request within 60 days
after receipt of the request and the offer of indemnity; and
(v) during such 60-day period, the Holders of a majority in
aggregate principal amount of the outstanding Notes do not give the
Trustee a direction that is inconsistent with the request.
For purposes of Section 6.05 of this Indenture and this Section 6.06,
the Trustee shall comply with TIA Section 316(a) in making any determination of
whether the Holders of the required aggregate principal amount of outstanding
Notes have concurred in any request or direction of the Trustee to pursue any
remedy available to the Trustee or the Holders with respect to this Indenture or
the Notes or otherwise under the law.
A Holder may not use this Indenture to prejudice the rights of another
Holder or to obtain a preference or priority over such other Holder.
SECTION 6.07. Rights of Holders to Receive Payment. Notwithstanding any
other provision of this Indenture, the right of any Holder of a Note to receive
payment of the Accreted Value of, premium, if any, or interest on, such Note or
to bring suit for the enforcement of any such payment, on or after the due date
expressed in the Notes, shall not be impaired or affected without the consent of
such Holder.
SECTION 6.08. Collection Suit by Trustee. If an Event of Default in
payment of principal, premium or interest specified in clause (a), (b) or (c) of
Section 6.01 occurs and is continuing, the Trustee may recover judgment in its
own name and as trustee of an express trust against the Company or any other
obligor of the Notes for the whole amount of principal, premium, if any, and
accrued interest remaining unpaid, together with interest on overdue principal,
premium, if any, and, to the extent that payment of such interest is lawful,
interest on overdue installments of interest, in each case at the rate specified
in the Notes, and such further amount as shall be sufficient to cover the costs
and expenses of collection, including the reasonable compensation, expenses,
disbursements and advances of the Trustee, its agents and counsel.
SECTION 6.09. Trustee May File Proofs of Claim. The Trustee may file
such proofs of claim and other papers or documents as may be necessary or
advisable in order to have the claims of the Trustee (including any claim for
the reasonable compensation, expenses, disbursements and advances of the
Trustee, its agents and counsel, and any other amounts due the Trustee under
Section 7.07) and the Holders allowed in any judicial proceedings relative to
the Company (or any other obligor of the Notes), its creditors or its property
and shall be entitled and empowered to collect and receive any monies,
securities or other property payable or deliverable upon conversion or exchange
of the Notes or upon any such claims and to distribute the same, and any
custodian, receiver, assignee, trustee, liquidator, sequestrator or other
similar official in any
<PAGE>
50
such judicial proceeding is hereby authorized by each Holder to make such
payments to the Trustee and, in the event that the Trustee shall consent to the
making of such payments directly to the Holders, to pay to the Trustee any
amount due to it for the reasonable compensation, expenses, disbursements and
advances of the Trustee, its agents and counsel, and any other amounts due the
Trustee under Section 7.07. Nothing herein contained shall be deemed to empower
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 6.10. Priorities. If the Trustee collects any money pursuant to
this Article Six, it shall pay out the money in the following order:
First: to the Trustee for all amounts due under Section 7.07;
Second: to Holders for amounts then due and unpaid for principal
of, premium, if any, and interest on the Notes in respect of which or
for the benefit of which such money has been collected, ratably, without
preference or priority of any kind, according to the amounts due and
payable on such Notes for principal, premium, if any, and interest,
respectively; and
Third: to the Company or any other obligors of the Notes, as
their interests may appear, or as a court of competent jurisdiction may
direct.
The Trustee, upon prior written notice to the Company, may fix a record
date and payment date for any payment to Holders pursuant to this Section 6.10.
SECTION 6.11. Undertaking for Costs. In any suit for the enforcement of
any right or remedy under this Indenture or in any suit against the Trustee for
any action taken or omitted by it as Trustee, a court may require any party
litigant in such suit to file an undertaking to pay the costs of the suit, and
the court may assess reasonable costs, including reasonable attorneys' fees,
against any party litigant in the suit having due regard to the merits and good
faith of the claims or defenses made by the party litigant. This Section 6.11
does not apply to a suit by the Trustee, a suit by a Holder pursuant to Section
6.07, or a suit by Holders of more than 10% in principal amount of the
outstanding Notes.
SECTION 6.12. Restoration of Rights and Remedies. If the Trustee or any
Holder has instituted any proceeding to enforce any right or remedy under this
Indenture and such proceeding has been discontinued or abandoned for any reason,
or has been determined adversely to the Trustee or to such Holder, then, and in
every such case, subject to any determination in such proceeding, the Company,
the Trustee and the Holders shall be restored severally and respectively
<PAGE>
51
to their former positions hereunder and thereafter all rights and remedies of
the Company, Trustee and the Holders shall continue as though no such proceeding
had been instituted.
SECTION 6.13. Rights and Remedies Cumulative. Except as otherwise
provided with respect to the replacement or payment of mutilated, destroyed,
lost or wrongfully taken Notes in Section 2.06, 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 6.14. Delay or Omission Not Waiver. No delay or omission of the
Trustee or of any Holder 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 Six 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 SEVEN
TRUSTEE
SECTION 7.01. General. The duties and responsibilities of the Trustee
shall be as provided by the TIA and as set forth herein. Notwithstanding the
foregoing, no provision of this Indenture shall require the Trustee to expend or
risk its own funds or otherwise incur any financial liability in the performance
of any of its duties hereunder, or in the exercise of any of its rights or
powers, if it shall have reasonable grounds for believing that repayment of such
funds or adequate indemnity against such risk or liability is not reasonably
assured to it. Whether or not herein expressly so provided, every provision of
this Indenture relating to the conduct or affecting the liability of or
affording protection to the Trustee shall be subject to the provisions of this
Article Seven.
SECTION 7.02. Certain Rights of Trustee. Subject to TIA Sections 315(a)
through (d):
(i) the Trustee may rely, and shall be protected in acting or
refraining from acting, upon any resolution, certificate, statement,
instrument, opinion, report, notice, request, direction, consent, order,
bond, debenture, note, other evidence of indebtedness or other paper or
document believed by it to be genuine and to have been signed or
presented by the proper person. The Trustee need not investigate any
fact or matter stated in the document and may in good faith conclusively
rely as to the truth of the statements and the correctness of the
opinions therein;
<PAGE>
52
(ii) before the Trustee acts or refrains from acting, it may
require an Officers' Certificate or an Opinion of Counsel, which shall
conform to Section 10.04. The Trustee shall not be liable for any action
it takes or omits to take in good faith in reliance on such certificate,
opinion and/or an accountants' certificate;
(iii) the Trustee may act through its attorneys and agents and
shall not be responsible for the misconduct or negligence of any
attorney or agent appointed with due care by it hereunder;
(iv) the Trustee shall be under no obligation to exercise any of
the rights or powers vested in it by this Indenture at the request or
direction of any of the Holders, unless such Holders shall have offered
to the Trustee security or indemnity reasonably satisfactory to it
against the costs, expenses and liabilities that might be incurred by it
in compliance with such request or direction;
(v) the Trustee shall not be liable for any action it takes or
omits to take in good faith that it believes to be authorized or within
its rights or powers or for any action it takes or omits to take in
accordance with the direction of the Holders of a majority in principal
amount of the outstanding Securities relating to the time, method and
place of conducting any proceeding for any remedy available to the
Trustee, or exercising any trust or power conferred upon the Trustee,
under this Indenture, provided that the Trustee's conduct does not
constitute negligence or bad faith;
(vi) whenever in the administration of this Indenture the Trustee
shall deem it desirable that a matter be proved or established prior to
taking, suffering or omitting any action hereunder, the Trustee (unless
other evidence be herein specifically prescribed) may, in the absence of
bad faith on its part, rely upon an Officers' Certificate;
(vii) the Trustee shall not be bound to make any investigation
into the facts or matters stated in any resolution, certificate,
statement, instrument, opinion, report, notice, request, direction,
consent, order, bond, debenture, note, other evidence of indebtedness or
other paper or document, but the Trustee, in its discretion, may make
such further inquiry or investigation into such facts or matters as it
may see fit, and, if the Trustee shall determine to make such further
inquiry or investigation, it shall be entitled to examine the books,
records and premises of the Company personally or by agent or attorney;
and
(viii) any request or direction of the Company mentioned herein
shall be sufficiently evidenced by a Company Order and any resolution of
the Board of Directors may be sufficiently evidenced by a Board
Resolution.
SECTION 7.03. Individual Rights of Trustee. The Trustee, in its
individual or any other capacity, may become the owner or pledgee of Notes and
may otherwise deal with the Company
<PAGE>
53
or its Affiliates with the same rights it would have if it were not the Trustee.
Any Agent may do the same with like rights. However, the Trustee is subject to
TIA Sections 310(b) and 311.
SECTION 7.04. Trustee's Disclaimer. The Trustee (i) makes no
representation as to the validity or adequacy of this Indenture or the Notes,
(ii) shall not be accountable for the Company's use or application of the
proceeds from the Notes and (iii) shall not be responsible for any statement in
the Notes other than its certificate of authentication.
SECTION 7.05. Notice of Default. If any Default or any Event of Default
occurs and is continuing and if such Default or Event of Default is known to the
Trustee, the Trustee shall mail to each Holder in the manner and to the extent
provided in TIA Section 313(c) notice of the Default or Event of Default within
45 days after it occurs, unless such Default or Event of Default has been cured;
provided, however, that, except in the case of a default in the payment of the
principal of, 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 Responsible
Officers of the Trustee in good faith determine that the withholding of such
notice is in the interest of the Holders.
SECTION 7.06. Reports by Trustee to Holders. Within 60 days after each
April 15, beginning with April 15, 1999, the Trustee shall mail to each Holder
as provided in TIA Section 313(c) a brief report dated as of such April 15, if
required by TIA Section 313(a).
A copy of each report at the time of its mailing to the Holders of
Securities shall be mailed to the Company and filed with the Commission and each
stock exchange on which the Securities are listed in accordance with TIA Section
313(d). The Company shall promptly notify the Trustee when the Securities are
listed on any stock exchange or of any delisting thereof.
SECTION 7.07. Compensation and Indemnity. The Company shall pay to the
Trustee such compensation as shall be agreed upon in writing for its services
hereunder. The compensation of the Trustee shall not be limited by any law on
compensation of a trustee of an express trust. The Company shall reimburse the
Trustee upon request for all reasonable disbursements, expenses and advances
incurred or made by the Trustee without negligence or bad faith on its part.
Such expenses shall include the reasonable compensation and expenses of the
Trustee's agents and counsel.
The Company shall indemnify the Trustee for, and hold it harmless
against, any loss or liability or expense incurred by it without negligence or
bad faith on its part in connection with the acceptance or administration of
this Indenture and its duties under this Indenture and the Notes, including,
without limitation, the costs and expenses of enforcing this Indenture against
the Company and of defending itself against any claim or liability and of
complying with any process served upon it or any of its officers in connection
with the exercise or performance of any of its powers or duties under this
Indenture and the Notes.
<PAGE>
54
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, in its capacity as Trustee, except money or property
held in trust to pay principal of, premium, if any, and interest on particular
Notes.
If the Trustee incurs expenses or renders services after the occurrence
of an Event of Default specified in clause (g) or (h) of Section 6.01, the
expenses and the compensation for the services will be intended to constitute
expenses of administration under Title 11 of the United States Bankruptcy Code
or any applicable federal or state law for the relief of debtors.
The provisions of this Section 7.07 shall survive the termination of
this Indenture.
The Trustee shall comply with the provisions of TIA Section 313(b)(2) to
the extent applicable.
SECTION 7.08. Replacement of Trustee. A resignation or removal of the
Trustee and appointment of a successor Trustee shall become effective only upon
the successor Trustee's acceptance of appointment as provided in this Section
7.08.
The Trustee may resign at any time by so notifying the Company in
writing at least 30 days prior to the date of the proposed resignation. The
Holders of a majority in principal amount at maturity of the outstanding Notes
may remove the Trustee by so notifying the Trustee in writing and may appoint a
successor Trustee with the consent of the Company. The Company may remove the
Trustee by Company Order given at least 30 days prior to the proposed date of
removal if: (i) the Trustee is no longer eligible under Section 7.10; (ii) the
Trustee is adjudged a bankrupt or an insolvent; (iii) a receiver or other public
officer takes charge of the Trustee or its property; or (iv) the Trustee becomes
incapable of acting.
If the Trustee resigns or is removed, or if a vacancy exists in the
office of Trustee for any reason, the Company shall promptly appoint a successor
Trustee. Within one year after the successor Trustee takes office, the Holders
of a majority in principal amount of the outstanding Notes may appoint a
successor Trustee to replace the successor Trustee appointed by the Company. If
the successor Trustee does not deliver its written acceptance required by the
next succeeding paragraph of this Section 7.08 within 30 days after the retiring
Trustee resigns or is removed, the retiring Trustee, the Company or the Holders
of a majority in principal amount at maturity of the outstanding Notes may, at
the expense of the Company, petition any court of competent jurisdiction for the
appointment of a successor Trustee.
A successor Trustee shall deliver a written acceptance of its
appointment to the retiring Trustee and to the Company. Immediately after the
delivery of such written acceptance, subject to the lien provided in Section
7.07, (i) the retiring Trustee shall transfer all property held by it as Trustee
to the successor Trustee, (ii) the resignation or removal of the retiring
Trustee shall
<PAGE>
55
become effective and (iii) the successor Trustee shall have all the rights,
powers and duties of the Trustee under this Indenture. A successor Trustee shall
mail notice of its succession to each Holder. 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.
If the Trustee is no longer eligible under Section 7.10 or shall fail to
comply with TIA Section 310(b), any Holder who satisfies the requirements of TIA
Section 310(b) may petition any court of competent jurisdiction for the removal
of the Trustee and the appointment of a successor Trustee. If at any time the
Trustee shall cease to be eligible in accordance with the provisions of this
Section 7.08, the Trustee shall resign immediately in the manner and with the
effect provided in this Section.
The Company shall give notice of any resignation and any removal of the
Trustee and each appointment of a successor Trustee to all Holders. Each notice
shall include the name of the successor Trustee and the address of its Corporate
Trust Office.
Notwithstanding replacement of the Trustee pursuant to this Section
7.08, the Company's obligation under Section 7.07 shall continue indefinitely
for the benefit of the retiring Trustee.
SECTION 7.09. Successor Trustee by Merger, Etc. If the Trustee
consolidates with, merges or converts into, or transfers all or substantially
all of its corporate trust business to, another corporation or national banking
association, the resulting, surviving or transferee corporation or national
banking association without any further act shall be the successor Trustee with
the same effect as if the successor Trustee had been named as the Trustee
herein, provided such corporation shall be otherwise qualified and eligible
under this Article.
SECTION 7.10. Eligibility. This Indenture shall always have a Trustee
who satisfies the requirements of TIA Section 310(a)(1). The Trustee shall have
a combined capital and surplus of at least $25 million as set forth in its most
recent published annual report of condition that is subject to the requirements
of applicable Federal or state supervising or examining authority. If at any
time the Trustee shall cease to be eligible in accordance with the provisions of
this Section, the Trustee shall resign immediately in the manner and with the
effect specified in this Article.
SECTION 7.11. Money Held in Trust. The Trustee shall not be liable for
interest on any money received by it except as the Trustee may agree with the
Company. Money held in trust by the Trustee need not be segregated from other
funds except to the extent required by law and except for money held in trust
under Article Eight of this Indenture.
<PAGE>
56
ARTICLE EIGHT
DISCHARGE OF INDENTURE
SECTION 8.01. Termination of Company's Obligations. Except as otherwise
provided in this Section 8.01, the Company may terminate its obligations under
the Notes and this Indenture if:
(i) all Notes previously authenticated and delivered (other than
destroyed, lost or stolen Notes that have been replaced or Notes that
are paid pursuant to Section 4.01 or Notes for whose payment money or
securities have theretofore been held in trust and thereafter repaid to
the Company, as provided in Section 8.05) have been delivered to the
Trustee for cancellation and the Company has paid all sums payable by it
hereunder; or
(ii) (A) the Notes mature within one year or all of them are to
be called for redemption within one year under arrangements satisfactory
to the Trustee for giving the notice of redemption, (B) the Company
irrevocably deposits in trust with the Trustee during such one-year
period, under the terms of an irrevocable trust agreement in form and
substance satisfactory to the Trustee, as trust funds solely for the
benefit of the Holders for that purpose, money or U.S. Government
Obligations sufficient (in the opinion of a nationally recognized firm
of independent public accountants expressed in a written certification
thereof delivered to the Trustee), without consideration of any
reinvestment of any interest thereon, to pay principal, premium, if,
any, and interest on the Notes to maturity or redemption, as the case
may be, and to pay all other sums payable by it hereunder, (C) no
Default or Event of Default with respect to the Notes shall have
occurred and be continuing on the date of such deposit, (D) such deposit
will not result in a breach or violation of, or constitute a default
under, this Indenture or any other agreement or instrument to which the
Company is a party or by which it is bound and (E) the Company has
delivered to the Trustee an Officers' Certificate and an Opinion of
Counsel, in each case stating that all conditions precedent provided for
herein relating to the satisfaction and discharge of this Indenture have
been complied with.
With respect to the foregoing clause (i), the Company's obligations
under Section 7.07 shall survive. With respect to the foregoing clause (ii), the
Company's obligations in Sections 2.02, 2.03, 2.04, 2.05, 2.06, 2.11, 4.01,
4.02, 7.07, 7.08, 8.04, 8.05 and 8.06 shall survive until the Notes are no
longer outstanding. Thereafter, only the Company's obligations in Sections 7.07,
8.04, 8.05 and 8.06 shall survive. After any such irrevocable deposit, the
Trustee upon request shall acknowledge in writing the discharge of the Company's
obligations under the Notes and this Indenture except for those surviving
obligations specified above.
SECTION 8.02. Defeasance and Discharge of Indenture. The Company will be
deemed to have paid and will be discharged from any and all obligations in
respect of the Notes on the 123rd day after the date of the deposit referred to
in clause (A) of this Section 8.02, and the
<PAGE>
57
provisions of this Indenture will no longer be in effect with respect to the
Notes, and the Trustee, at the expense of the Company, shall execute proper
instruments acknowledging the same if:
(A) with reference to this Section 8.02, the Company has
irrevocably deposited or caused to be irrevocably deposited with the
Trustee (or another trustee satisfying the requirements of Section 7.10)
and conveyed all right, title and interest to the Trustee for the
benefit of the Holders, under the terms of an irrevocable trust
agreement in form and substance satisfactory to the Trustee as trust
funds in trust, specifically pledged to the Trustee for the benefit of
the Holders as security for payment of the principal of, premium, if
any, and interest, if any, on the Notes, and dedicated solely to, the
benefit of the Holders, in and to (1) money in an amount, (2) U.S.
Government Obligations that, through the payment of interest, premium,
if any, and principal in respect thereof in accordance with their terms,
will provide, not later than one day before the due date of any payment
referred to in this clause (A), money in an amount or (3) a combination
thereof in an amount 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,
without consideration of the reinvestment of such interest and after
payment of all federal, state and local taxes or other charges and
assessments in respect thereof payable by the Trustee, the principal of,
premium, if any, and interest on the outstanding Notes on the Stated
Maturity of such principal or interest; provided that the Trustee shall
have been irrevocably instructed to apply such money or the proceeds of
such U.S. Government Obligations to the payment of such principal,
premium, if any, and interest with respect to the Notes;
(B) the Company has delivered to the Trustee (1) either (x) an
Opinion of Counsel to the effect that Holders will not recognize income,
gain or loss for federal income tax purposes as a result of the
Company's exercise of its option under this Section 8.02 and will be
subject to federal income tax on the same amount and in the same manner
and at the same times as would have been the case if such option had not
been exercised, which Opinion of Counsel shall be based upon (and
accompanied by a copy of) a ruling of the Internal Revenue Service to
the same effect unless there has been a change in applicable federal
income tax law after the Closing Date such that a ruling is no longer
required or (y) a ruling directed to the Trustee received from the
Internal Revenue Service to the same effect as the aforementioned
Opinion of Counsel and (2) an Opinion of Counsel to the effect that the
creation of the defeasance trust does not violate the Investment Company
Act of 1940 and that after the passage of 123 days following the deposit
(except, with respect to any trust funds for the account of any Holder
who may be deemed to be an "insider" for purposes of the United States
Bankruptcy Code, after one year following the deposit), the trust funds
will not be subject to the effect of Section 547 of the United States
Bankruptcy Code or Section 15 of the New York Debtor and Creditor Law in
a case commenced by or against the Company under either such statute,
and either (I) the trust funds will no longer remain the property of the
Company (and therefore will
<PAGE>
58
not be subject to the effect of any applicable bankruptcy, insolvency,
reorganization or similar laws affecting creditors' rights generally) or
(II) if a court were to rule under any such law in any case or
proceeding that the trust funds remained property of the Company, (a)
assuming such trust funds remained in the possession of the Trustee
prior to such court ruling to the extent not paid to the Holders, the
Trustee will hold, for the benefit of the Holders, a valid and perfected
security interest in such trust funds that is not avoidable in
bankruptcy or otherwise except for the effect of Section 552(b) of the
United States Bankruptcy Code on interest on the trust funds accruing
after the commencement of a case under such statute, (b) the Holders
will be entitled to receive adequate protection of their interests in
such trust funds if such trust funds are used in such case or proceeding
and (c) no property, rights in property or other interests granted to
the Trustee or the Holders in exchange for, or with respect to, such
trust funds will be subject to any prior rights of holders of other
Indebtedness of the Company or any of its Subsidiaries;
(C) immediately after giving effect to such deposit, on a pro
forma basis, no Default or Event of Default shall have occurred and be
continuing on the date of such deposit or during the period ending on
the 123rd day after such date of such deposit, and such deposit shall
not result in a breach or violation of, or constitute a default under,
this Indenture or any other agreement or instrument to which the Company
or any of its Subsidiaries is a party or by which the Company or any of
its Subsidiaries is bound;
(D) if the Notes are then listed on a national securities
exchange, the Company has delivered to the Trustee an Opinion of Counsel
to the effect that the Notes will not be delisted as a result of such
deposit, defeasance and discharge; and
(E) the Company has delivered to the Trustee an Officers'
Certificate and an Opinion of Counsel, in each case stating that all
conditions precedent provided for herein relating to the defeasance
contemplated by this Section 8.02 have been complied with.
Notwithstanding the foregoing, prior to the end of the 123-day (or one
year) period referred to in clause (B)(2) of this Section 8.02, none of the
Company's obligations under this Indenture shall be discharged. Subsequent to
the end of such 123-day (or one year) period with respect to this Section 8.02,
the Company's obligations in Sections 2.02, 2.03, 2.04, 2.05, 2.06, 2.11, 4.01,
4.02, 8.04, 8.05, 8.06 and the rights, powers, trusts, duties and immunities of
the Trustee hereunder shall survive until the Notes are no longer outstanding.
Thereafter, only the Company's obligations in Sections 7.07, 8.04, 8.05 and 8.06
shall survive. If and when a ruling from the Internal Revenue Service or an
Opinion of Counsel referred to in clause (B)(1) of this Section 8.02 is able to
be provided specifically without regard to, and not in reliance upon, the
continuance of the Company's obligations under Section 4.01, then the Company's
obligations under such Section 4.01 shall cease upon delivery to the Trustee of
such ruling or Opinion of Counsel and compliance with the other conditions
precedent provided for herein relating to the defeasance contemplated by this
Section 8.02.
<PAGE>
59
After any such irrevocable deposit, the Trustee upon request shall
acknowledge in writing the discharge of the Company's obligations under the
Notes and this Indenture except for those surviving obligations in the
immediately preceding paragraph.
SECTION 8.03. Defeasance of Certain Obligations. The Company may omit to
comply with any term, provision or condition set forth in clauses (iii) and (iv)
of Section 5.01 and Sections 4.03 through 4.11 and clause (c) of Section 6.01
with respect to clauses (iii) and (iv) of Section 5.01, clause (d) of Section
6.01 with respect to Sections 4.01, 4.02 and 4.12 through 4.20 and clauses (e)
and (f) of Section 6.01 shall be deemed not to be Events of Default, in each
case with respect to the outstanding Notes if:
(i) with reference to this Section 8.03, the Company has
irrevocably deposited or caused to be irrevocably deposited with the
Trustee (or another trustee satisfying the requirements of Section 7.10)
and conveyed all right, title and interest to the Trustee for the
benefit of the Holders, under the terms of an irrevocable trust
agreement in form and substance satisfactory to the Trustee as trust
funds in trust, specifically pledged to the Trustee for the benefit of
the Holders as security for payment of the principal of, premium, if
any, and interest, if any, on the Notes, and dedicated solely to, the
benefit of the Holders, in and to (A) money in an amount, (B) U.S.
Government Obligations that, through the payment of interest, premium,
if any, and principal in respect thereof in accordance with their terms,
will provide, not later than one day before the due date of any payment
referred to in this clause (i), money in an amount or (C) a combination
thereof in an amount 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,
without consideration of the reinvestment of such interest and after
payment of all federal, state and local taxes or other charges and
assessments in respect thereof payable by the Trustee, the principal of,
premium, if any, and interest on the outstanding Notes on the Stated
Maturity of such principal or interest; provided that the Trustee shall
have been irrevocably instructed to apply such money or the proceeds of
such U.S. Government Obligations to the payment of such principal,
premium, if any, and interest with respect to the Notes;
(ii) the Company has delivered to the Trustee an Opinion of
Counsel to the effect that (A) the creation of the defeasance trust does
not violate the Investment Company Act of 1940, (B) after the passage of
123 days following the deposit (except, with respect to any trust funds
for the account of any Holder who may be deemed to be an "insider" for
purposes of the United States Bankruptcy Code, after one year following
the deposit), the trust funds will not be subject to the effect of
Section 547 of the United States Bankruptcy Code or Section 15 of the
New York Debtor and Creditor Law in a case commenced by or against the
Company under either such statute, and either (1) the trust funds will
no longer remain the property of the Company (and therefore will not be
subject to the effect of any applicable bankruptcy, insolvency,
reorganization or similar laws
<PAGE>
60
affecting creditors' rights generally) or (2) if a court were to rule
under any such law in any case or proceeding that the trust funds
remained property of the Company, (x) assuming such trust funds remained
in the possession of the Trustee prior to such court ruling to the
extent not paid to the Holders, the Trustee will hold, for the benefit
of the Holders, a valid and perfected security interest in such trust
funds that is not avoidable in bankruptcy or otherwise (except for the
effect of Section 552(b) of the United States Bankruptcy Code on
interest on the trust funds accruing after the commencement of a case
under such statute) and (y) the Holders will be entitled to receive
adequate protection of their interests in such trust funds if such trust
funds are used in such case or proceeding, (C) the Holders will not
recognize income, gain or loss for federal income tax purposes as a
result of such deposit and defeasance of certain covenants and Events of
Default and will be subject to federal income tax on the same amount and
in the same manner and at the same times as would have been the case if
such deposit and defeasance had not occurred and (D) the Trustee, for
the benefit of the Holders, has a valid first-priority security interest
in the trust funds;
(iii) immediately after giving effect to such deposit on a pro
forma basis, no Default or Event of Default shall have occurred and be
continuing on the date of such deposit or during the period ending on
the 123rd day after such date of such deposit, and such deposit shall
not result in a breach or violation of, or constitute a default under,
this Indenture or any other agreement or instrument to which the Company
or any of its Subsidiaries is a party or by which the Company or any of
its Subsidiaries is bound;
(iv) if the Notes are then listed on a national securities
exchange, the Company has delivered to the Trustee an Opinion of Counsel
to the effect that the Notes will not be delisted as a result of such
deposit, defeasance and discharge; and
(v) the Company has delivered to the Trustee an Officers'
Certificate and an Opinion of Counsel, in each case stating that all
conditions precedent provided for herein relating to the defeasance
contemplated by this Section 8.03 have been complied with.
SECTION 8.04. Application of Trust Money. Subject to Section 8.06, the
Trustee or Paying Agent shall hold in trust money or U.S. Government Obligations
deposited with it pursuant to Section 8.01, 8.02 or 8.03, as the case may be,
and shall apply the deposited money and the money from U.S. Government
Obligations in accordance with the Notes and this Indenture to the payment of
principal of, premium, if any, and interest on the Notes; but such money need
not be segregated from other funds except to the extent required by law.
SECTION 8.05. Repayment to Company. Subject to Sections 7.07, 8.01, 8.02
and 8.03, the Trustee and the Paying Agent shall promptly pay to the Company
upon request set forth in an Officers' Certificate any excess money held by them
at any time and thereupon shall be relieved from all liability with respect to
such money. The Trustee and the Paying Agent shall pay to the
<PAGE>
61
Company upon 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 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 Security 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 or U.S. Government Obligations in accordance with Section 8.01,
8.02 or 8.03, as the case may be, 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 Section 8.01, 8.02 or 8.03, as the case may be,
until such time as the Trustee or Paying Agent is permitted to apply all such
money or U.S. Government Obligations in accordance with Section 8.01, 8.02 or
8.03, as the case may be; provided that, if the Company has made any payment of
principal of, premium, if any, or interest on 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 money or U.S.
Government Obligations held by the Trustee or Paying Agent.
ARTICLE NINE
AMENDMENTS, SUPPLEMENTS AND WAIVERS
SECTION 9.01. Without Consent of Holders. The Company, when authorized
by a resolution of its Board of Directors (as evidenced by a Board Resolution
delivered to the Trustee), and the Trustee may amend or supplement this
Indenture or the Notes without notice to or the consent of any Holder:
(1) to cure any ambiguity, defect or inconsistency in this
Indenture; provided that such amendments or supplements shall not, in
the good faith opinion of the Board of Directors as evidenced by a Board
Resolution, adversely affect the interests of the Holders in any
material respect;
(2) to comply with Article Five;
<PAGE>
62
(3) to comply with any requirements of the Commission in
connection with the qualification of this Indenture under the TIA;
(4) to evidence and provide for the acceptance of appointment
hereunder by a successor Trustee;
(5) to provide for uncertificated Notes in addition to or in
place of certificated Notes;
(6) to add one or more subsidiary guarantees on the terms
required by this Indenture; or
(7) to make any change that, in the good faith opinion of the
Board of Directors as evidenced by a Board Resolution, does not
materially and adversely affect the rights of any Holder.
SECTION 9.02. With Consent of Holders. Subject to Sections 6.04 and 6.07
and without prior notice to the Holders, the Company, when authorized by its
Board of Directors (as evidenced by a Board Resolution delivered to the
Trustee), and the Trustee may amend this Indenture and the Notes with the
written consent of the Holders of a majority in aggregate principal amount at
maturity of the Notes then outstanding, and the Holders of a majority in
aggregate principal amount at maturity of the Notes then outstanding by written
notice to the Trustee may waive future compliance by the Company with any
provision of this Indenture or the Notes.
Notwithstanding the provisions of this Section 9.02, without the consent
of each Holder affected, an amendment or waiver, including a waiver pursuant to
Section 6.04, may not:
(i) change the Stated Maturity of the principal of, or any
installment of interest on, any Note;
(ii) reduce the principal amount or Accreted Value of,
premium, if any, or interest, on any Note;
(iii) change the place or currency of payment of principal of,
or premium, if any, or interest on, any Note;
(iv) impair the right to institute suit for the enforcement of
any payment on or after the Stated Maturity (or, in the case of
redemption, on or after the Redemption Date) on any Note;
(v) reduce the above-stated percentage of outstanding Notes
the consent of whose Holders is necessary to modify or amend this
Indenture;
<PAGE>
63
(vi) waive a default in the payment of principal of, premium,
if any, or interest on, the Notes;
(vii) reduce the percentage or aggregate principal amount of
outstanding Notes the consent of whose Holders is necessary for waiver
of compliance with certain provisions of this Indenture or for waiver of
certain defaults; or
(viii) modify any of the provisions of this Section 9.02, except
to increase any such percentage 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 the consent of the Holders under this
Section 9.02 to approve the particular form of any proposed amendment,
supplement or waiver, but it shall be sufficient if such consent approves the
substance thereof.
After an amendment, supplement or waiver under this Section 9.02 becomes
effective, the Company shall mail to the Holders affected thereby a notice
briefly describing the amendment, supplement or waiver. The Company will mail
supplemental indentures to Holders upon request. Any failure of the Company to
mail such notice, or any defect therein, shall not, however, in any way impair
or affect the validity of any such supplemental indenture or waiver.
SECTION 9.03. Revocation and Effect of Consent. Until an amendment or
waiver becomes effective, a consent to it by a Holder is a continuing consent by
the Holder and every subsequent Holder of a Note or portion of a Note that
evidences the same debt as the Note of the consenting Holder, even if notation
of the consent is not made on any Note. However, any such Holder or subsequent
Holder may revoke the consent as to its Note or portion of its Note. Such
revocation shall be effective only if the Trustee receives the notice of
revocation before the date the amendment, supplement or waiver becomes
effective. An amendment, supplement or waiver shall become effective on receipt
by the Trustee of written consents from the Holders of the requisite percentage
in principal amount of the outstanding Notes.
The Company may, but shall not be obligated to, fix a record date for
the purpose of determining the Holders entitled to consent to any amendment,
supplement or waiver. If a record date is fixed, then, notwithstanding the last
two sentences of the immediately preceding paragraph, those persons who were
Holders at such record date (or their duly designated proxies) and only those
persons shall be entitled to consent to such amendment, supplement or waiver or
to revoke any consent previously given, whether or not such persons continue to
be Holders after such record date. No such consent shall be valid or effective
for more than 90 days after such record date.
<PAGE>
64
After an amendment, supplement or waiver becomes effective, it shall
bind every Holder unless it is of the type described in the second paragraph of
Section 9.02. In case of an amendment or waiver of the type described in the
second paragraph of Section 9.02, the amendment or waiver shall bind each Holder
who has consented to it and every subsequent Holder of a Note that evidences the
same indebtedness as the Note of the consenting Holder.
SECTION 9.04. Notation on or Exchange of Notes. If an amendment,
supplement or waiver changes the terms of a Note, the Trustee may require the
Holder to deliver such Note to the Trustee. At the Company's expense, the
Trustee may place an appropriate notation on the Note about the changed terms
and return it to the Holder and the Trustee may place an appropriate notation on
any Note thereafter authenticated. Alternatively, if the Company or the Trustee
so determines, the Company in exchange for the Note shall issue and the Trustee
shall authenticate a new Note that reflects the changed terms. Failure to make
the appropriate notation, or issue a new Note, shall not affect the validity and
effect of such amendment, supplement or waiver.
SECTION 9.05. Trustee to Sign Amendments, Etc. The Trustee shall be
entitled to receive, and shall be fully protected in relying upon, an Opinion of
Counsel stating that the execution of any amendment, supplement or waiver
authorized pursuant to this Article Nine is authorized or permitted by this
Indenture and that it will be valid and binding upon the Company. Subject to the
preceding sentence, the Trustee shall sign such amendment, supplement or waiver
if the same does not adversely affect the rights, duties, liabilities or
immunities of the Trustee. The Trustee may, but shall not be obligated to,
execute any such amendment, supplement or waiver that affects the Trustee's own
rights, duties or immunities under this Indenture or otherwise.
SECTION 9.06. Conformity with Trust Indenture Act. Every supplemental
indenture executed pursuant to this Article Nine shall conform to the
requirements of the TIA as then in effect.
ARTICLE TEN
MISCELLANEOUS
SECTION 10.01. Trust Indenture Act of 1939. This Indenture shall be
subject to the provisions of the TIA that are required to be a part of this
Indenture and shall, to the extent applicable, be governed by such provisions.
SECTION 10.02. Notices. Any notice or communication shall be
sufficiently given if in writing and delivered in person, mailed by first-class
mail or sent by telecopier transmission addressed as follows:
<PAGE>
65
if to the Company:
IPC Information Systems, Inc.
88 Pine Street
New York, New York 10036
Telecopier No.: (212) 509-7888
Attention: Brian Reach, Chief Financial Officer
if to the Trustee:
United States Trust Company of New York
114 West 47th Street
New York, New York 10036-1532
Telecopier No.: (212) 852-1626
Attention: Louis Young, Corporate Trust Department
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 mailed to it at
its address as it appears on the Security Register by first-class mail and shall
be sufficiently given to him if so mailed within the time prescribed. Any notice
or communication shall also be so mailed to any Person described in TIA Section
313(c), to the extent required by the TIA. Copies of any such communication or
notice to a Holder shall also be mailed to the Trustee and each Agent at the
same time.
Failure to mail notice or communication to a Holder as provided herein
or any defect in any such notice or communication shall not affect its
sufficiency with respect to other Holders. Except for a notice to the Trustee,
which is deemed given only when received, and except as otherwise provided in
this Indenture, if a notice or communication is mailed in the manner provided in
this Section 10.02, it is duly given, whether or not the addressee receives it.
Where this Indenture provides for notice in any manner, such notice may
be waived in writing by the Person entitled to receive such notice, either
before or after the event, and such waiver shall be the equivalent of such
notice. Waivers of notice by Holders shall be filed with the Trustee, but such
filing shall not be a condition precedent to the validity of any action taken in
reliance upon such waiver.
In case by reason of the suspension of regular mail service or by reason
of any other cause it shall be impracticable to give such notice by mail, then
such notification as shall be made with the approval of the Trustee shall
constitute a sufficient notification for every purpose hereunder.
<PAGE>
66
Holders may communicate pursuant to TIA Section 312(b) with other
Holders with respect to their rights under this Indenture or the Notes. The
Company, the Trustee, the Registrar and anyone else shall have the protection of
TIA Section 312(c).
SECTION 10.03. Certificate and Opinion as to Conditions Precedent. Upon
any request or application by the Company to the Trustee to take any action
under this Indenture, the Company shall furnish to the Trustee:
(i) an Officers' Certificate in form and substance satisfactory
to the Trustee 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;
(ii) an Opinion of Counsel in form and substance satisfactory to
the Trustee stating that, in the opinion of such Counsel, all such
conditions precedent have been complied with; and
(iii) where applicable, a certificate or opinion by an
independent certified public accountant satisfactory to the Trustee that
complies with TIA Section 314(c).
SECTION 10.04. Statements Required in Certificate or Opinion. Each
certificate or opinion with respect to compliance with a condition or covenant
provided for in this Indenture shall include:
(i) a statement that each person signing such certificate or
opinion has read such covenant or condition and the definitions herein
relating thereto;
(ii) a brief statement as to the nature and scope of the
examination or investigation upon which the statement or opinion
contained in such certificate or opinion is based;
(iii) a statement that, in the opinion of each such person, he
has made such examination or investigation as is necessary to enable him
to express an informed opinion as to whether or not such covenant or
condition has been complied with; and
(iv) a statement as to whether or not, in the opinion of each
such person, such condition or covenant has been complied with;
provided, however, that, with respect to matters of fact, an Opinion of
Counsel may rely on an Officers' Certificate or certificates of public
officials.
SECTION 10.05. Rules by Trustee, Paying Agent or Registrar. The Trustee
may make reasonable rules for action by or at a meeting of Holders. The Paying
Agent or Registrar may make reasonable rules for its functions.
<PAGE>
67
SECTION 10.06. Payment Date Other Than a Business Day. If an Interest
Payment Date, Redemption Date, Payment Date, Stated Maturity or date of maturity
of any Note shall not be a Business Day, then payment of principal of, premium,
if any, or interest on such Note, as the case may be, need not be made on such
date, but may be made on the next succeeding Business Day with the same force
and effect as if made on the Interest Payment Date, Payment Date or Redemption
Date, or at the Stated Maturity or date of maturity of such Note; provided that
no interest shall accrue for the period from and after such Interest Payment
Date, Payment Date, Redemption Date, Stated Maturity or date of maturity, as the
case may be.
SECTION 10.07. Governing Law. This Indenture and the Notes shall be
governed by the laws of the State of New York. The Trustee, the Company and the
Holders agree to submit to the jurisdiction of the courts of the State of New
York in any action or proceeding arising out of or relating to this Indenture or
the Notes.
SECTION 10.08. No Adverse Interpretation of Other Agreements. This
Indenture may not be used to interpret another indenture, loan or debt agreement
of the Company or any Subsidiary of the Company. Any such indenture, loan or
debt agreement may not be used to interpret this Indenture.
SECTION 10.09. No Recourse Against Others. No recourse for the payment
of the principal of, premium, if any, or interest on any of the Notes, or for
any claim based thereon or otherwise in respect thereof, and no recourse under
or upon any obligation, covenant or agreement of the Company contained in this
Indenture or in any of the Notes, or because of the creation of any Indebtedness
represented thereby, shall be had against any incorporator or against any past,
present or future partner, stockholder, other equity holder, officer, director,
employee or controlling person, as such, of the Company or of any successor
Person, either directly or through the Company or any successor Person, whether
by virtue of any constitution, statute or rule of law, or by the enforcement of
any assessment or penalty or otherwise; it being expressly understood that all
such liability is hereby expressly waived and released as a condition of, and as
a consideration for, the execution of this Indenture and the issue of the Notes.
SECTION 10.10. Successors. All agreements of the Company in this
Indenture and the Notes shall bind its successors. All agreements of the Trustee
in this Indenture shall bind its successor.
SECTION 10.11. Duplicate Originals. The parties may sign any number of
copies of this Indenture. Each signed copy shall be an original, but all of them
together represent the same agreement.
SECTION 10.12. Separability. 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.
<PAGE>
68
SECTION 10.13. Table of Contents, Headings, Etc. The Table of Contents,
Cross- Reference Table and headings of the Articles and Sections of this
Indenture have been inserted for convenience of reference only, are not to be
considered a part hereof and shall in no way modify or restrict any of the terms
and provisions hereof.
<PAGE>
SIGNATURES
IN WITNESS WHEREOF, the parties hereto have caused this Indenture to be
duly executed, all as of the date first written above.
IPC INFORMATION SYSTEMS, INC.
By:
---------------------------------------
Name: Daniel Utevsky
Title: General Counsel, Secretary
UNITED STATES TRUST COMPANY OF
NEW YORK
By:
---------------------------------------
Name: Louis Young
Title: Vice President
<PAGE>
EXHIBIT A
[FACE OF NOTE]
UNLESS THIS CERTIFICATE IS PRESENTED BY AN AUTHORIZED
REPRESENTATIVE OF THE DEPOSITORY TRUST COMPANY, TO THE COMPANY OR ITS AGENT FOR
REGISTRATION OF TRANSFER, EXCHANGE OR PAYMENT, AND ANY CERTIFICATE ISSUED IS
REGISTERED IN THE NAME OF CEDE & CO. OR IN SUCH OTHER ENTITY AS IS REQUESTED BY
AN AUTHORIZED REPRESENTATIVE OF THE DEPOSITORY TRUST COMPANY (AND ANY PAYMENT
HEREON IS MADE TO CEDE & CO. OR TO SUCH OTHER ENTITY AS IS REQUESTED BY AN
AUTHORIZED REPRESENTATIVE OF THE DEPOSITORY TRUST COMPANY), ANY TRANSFER, PLEDGE
OR OTHER USE HEREOF FOR VALUE OR OTHERWISE BY OR TO ANY PERSON IS WRONGFUL SINCE
THE REGISTERED OWNER HEREOF, CEDE & CO., HAS AN INTEREST HEREIN.
UNLESS AND UNTIL IT IS EXCHANGED IN WHOLE OR IN PART FOR
SECURITIES IN DEFINITIVE REGISTERED FORM, THIS CERTIFICATE MAY NOT BE
TRANSFERRED EXCEPT AS A WHOLE BY DTC TO A NOMINEE OF DTC OR BY A NOMINEE OF DTC
TO DTC OR ANOTHER NOMINEE OF DTC OR BY DTC OR ANY SUCH NOMINEE TO A SUCCESSOR
DEPOSITARY OR A NOMINEE OF SUCH SUCCESSOR DEPOSITARY.
IPC Information Systems, Inc.
107/8% Senior Discount Note due 2008
CUSIP 44980KAA5
No. [ ] [$ ]
The following information is supplied for purposes of Sections 1273 and
1275 of the Internal Revenue Code:
Issue Date: April 30,1998 Original issue discount under Section 1273
of the Internal Revenue Code (for each
Yield to maturity for period from $1,000 principal amount): $1,033.64
Issue Date to May 1, 2008: 107/8%,
compounded semi-annually on May 1 Issue Price (for each $1,000 principal
and November 1, commencing amount): $727.61
April 30, 1998
<PAGE>
A-2
IPC Information Systems, Inc., a Delaware corporation (the "Company",
which term includes any successor under the Indenture hereinafter referred to),
for value received, promises to pay to [ ], or its registered assigns, the
principal sum of [ ] dollars ($[ ]) on May 1, 2008.
Interest Payment Dates: May 1 and November 1, commencing November 1,
2001.
Regular Record Dates: April 15 and October 15.
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.
<PAGE>
A-3
IN WITNESS WHEREOF, the Company has caused this Note to be signed
manually or by facsimile by its duly authorized officer.
Date: IPC Information Systems, Inc.
By:
Name:
Title:
<PAGE>
A-4
Trustee's Certificate of Authentication
This is one of the 107/8% Senior Discount Notes due 2008 described in the
within-mentioned Indenture.
UNITED STATES TRUST COMPANY OF
NEW YORK,
as Trustee
By:
----------------------------
Authorized Signatory
<PAGE>
A-5
[REVERSE SIDE OF NOTE]
IPC Information Systems, Inc.
107/8% Senior Discount Note due 2008
1. Principal and Interest.
The Company will pay the principal of this Note on May 1, 2008.
The Company promises to pay interest on the principal amount of this
Note on each Interest Payment Date, as set forth below, at the rate per annum
shown above.
Interest will be payable semiannually (to the holders of record of the
Notes at the close of business on the April 15 or October 15 immediately
preceding the Interest Payment Date) on each Interest Payment Date, commencing
November 1, 2001; provided that no interest shall accrue on the principal amount
of this Note prior to May 1, 2001
Interest on the Notes will accrue from the most recent date to which
interest has been paid or, if no interest has been paid, from May 1, 2001;
provided that, if there is no existing default in the payment of interest and
this Note is authenticated between a Regular Record Date referred to on the face
hereof and the next succeeding Interest Payment Date, interest shall accrue from
such Interest Payment Date. Interest will be computed on the basis of a 360-day
year of twelve 30-day months.
The Company shall pay interest on overdue principal and premium, if any,
and interest on overdue installments of interest, to the extent lawful, at a
rate per annum that is 2% in excess of the rate otherwise payable.
2. Method of Payment.
The Company will pay interest (except defaulted interest) on the
principal amount of the Notes as provided above on each May 1 and November1,
commencing November 1, 2001 to the persons who are Holders (as reflected in the
Security Register at the close of business on the April 15 or October 15
immediately preceding the Interest Payment Date), in each case, even if the Note
is canceled on registration of transfer or registration of exchange after such
record date; provided that, with respect to the payment of principal, the
Company will make payment to the Holder that surrenders this Note to a Paying
Agent on or after May 1, 2008.
<PAGE>
A-6
The Company will pay principal, premium, if any, and as provided above,
interest in money of the United States that at the time of payment is legal
tender for payment of public and private debts. However, the Company may pay
principal, premium, if any, and interest by its check payable in such money. It
may mail an interest check to a Holder's registered address (as reflected in the
Security Register). If a payment date is a date other than a Business Day at a
place of payment, payment may be made at that place on the next succeeding day
that is a Business Day and no interest shall accrue for the intervening period.
3. Paying Agent and Registrar.
Initially, the Trustee will act as authenticating agent, Paying Agent
and Registrar. The Company may change any authenticating agent, Paying Agent or
Registrar without notice. The Company, any Subsidiary or any Affiliate of any of
them may act as Paying Agent, Registrar or co-Registrar.
4. Indenture; Limitations.
The Company issued the Notes under an Indenture dated as of April 30,
1998 (the "Indenture"), between the Company and United States Trust Company of
New York, as trustee (the "Trustee"). Capitalized terms herein are used as
defined in the Indenture unless otherwise indicated. The terms of the Notes
include those stated in the Indenture and those made part of the Indenture by
reference to the Trust Indenture Act. The Notes are subject to all such terms,
and Holders are referred to the Indenture and the Trust Indenture Act for a
statement of all such terms. To the extent permitted by applicable law, in the
event of any inconsistency between the terms of this Note and the terms of the
Indenture, the terms of the Indenture shall control.
The Notes are general unsecured obligations of the Company.
The Company may, subject to Article Four of the Indenture and applicable
law, issue additional Notes under the Indenture.
5. Optional Redemption.
The Notes are redeemable, at the Company's option, in whole or in part,
at any time or from time to time, on or after May 1, 2003 and prior to maturity,
upon not less than 30 nor more than 60 days' prior notice mailed by first class
mail to each Holder's last address, as it appears in the Security Register, at
the following Redemption Prices (expressed in percentages of principal amount at
maturity), plus accrued and unpaid interest to the Redemption Date (subject to
the right of Holders of record on the relevant Regular Record Date that is prior
to the Redemption Date to receive interest due on an Interest Payment Date), if
redeemed during the 12-month period commencing May 1 of the years set forth
below:
<PAGE>
A-7
Year Redemption Price
---- ----------------
2003............. 105.438%
2004............. 103.625%
2005............. 101.813%
2006 and thereafter 100.000%
In addition, at any time and from time to time prior to May 1, 2001, the
Company may redeem up to 35% of the principal amount at maturity of the Notes
with the proceeds of one or more Equity Offerings, at any time or from time to
time in part, at a Redemption Price (expressed as a percentage of Accreted Value
on the Redemption Date) of 110.875%, plus accrued and unpaid interest to the
Redemption Date (subject to the rights of Holders of record on the relevant
Regular Record Date that is prior to the Redemption Date to receive interest due
on an Interest Payment Date); provided that (i) Notes representing 65% of the
principal amount of notes initially issued remain outstanding after each such
redemption and (ii) notice of such redemption is mailed within 60 days of the
related Equity Offering.
Notes in original denominations larger than $1,000 may be redeemed in
part. On and after the Redemption Date, interest ceases to accrue on Notes or
portions of Notes called for redemption, unless the Company defaults in the
payment of the Redemption Price.
6. Repurchase upon Change of Control.
Upon the occurrence of any Change of Control, each Holder shall have the
right to require the repurchase of its Notes by the Company in cash pursuant to
the offer described in the Indenture at a purchase price equal to 101% of the
Accreted Value thereof plus accrued and unpaid interest, if any, to the date of
purchase (the "Payment Date").
A notice of such Change of Control will be mailed within 30 days after
any Change of Control occurs to each Holder at its last address as it appears in
the Security Register. Notes in original denominations larger than $1,000 may be
sold to the Company in part. On and after the Payment Date, interest ceases to
accrue and original issue discount ceases to accrete on Notes or portions of
Notes surrendered for purchase by the Company, unless the Company defaults in
the payment of the purchase price.
7. Denominations; Transfer; Exchange.
The Notes are in registered form without coupons in denominations of
$1,000 of principal amount at maturity and multiples of $1,000 in excess
thereof. A Holder may register the transfer or exchange of Notes in accordance
with the Indenture. The Registrar may require a Holder, among other things, to
furnish appropriate endorsements and transfer documents and to pay any taxes and
fees required by law or permitted by the Indenture. The Registrar need not
register the transfer or exchange of any Notes selected for redemption. Also, it
need not register the transfer
<PAGE>
A-8
or exchange of any Notes for a period of 15 days before the day of mailing of a
notice of redemption of Notes selected for redemption.
8. Persons Deemed Owners.
A Holder shall be treated as the owner of a Note for all purposes.
9. Unclaimed Money.
If money for the payment of principal, premium, if any, or interest
remains unclaimed for two years, the Trustee and the Paying Agent will pay the
money back to the Company at its request. After that, Holders entitled to the
money must look to the Company for payment, unless an abandoned property law
designates another Person, and all liability of the Trustee and such Paying
Agent with respect to such money shall cease.
10. Discharge Prior to Redemption or Maturity.
If the Company deposits with the Trustee money or U.S. Government
Obligations sufficient to pay the then outstanding principal of, premium, if
any, and accrued interest on the Notes (a) to redemption or maturity, the
Company will be discharged from the Indenture and the Notes, except in certain
circumstances for certain provisions thereof, and (b) to the Stated Maturity,
the Company will be discharged from certain covenants set forth in the
Indenture.
11. Amendment; Supplement; Waiver.
Subject to certain exceptions, the Indenture or the Notes may be amended
or supplemented with the consent of the Holders of at least a majority in
principal amount of the Notes then outstanding, and any existing default or
compliance with any provision may be waived with the consent of the Holders of
at least a majority in principal amount of the Notes then outstanding. Without
notice to or the consent of any Holder, the parties thereto may amend or
supplement the Indenture or the Notes to, among other things, cure any
ambiguity, defect or inconsistency and make any change that does not materially
and adversely affect the rights of any Holder.
12. Restrictive Covenants.
The Indenture imposes certain limitations on the ability of the Company
and its Restricted Subsidiaries, among other things, to Incur additional
Indebtedness, make Restricted Payments, suffer to exist restrictions on the
ability of Restricted Subsidiaries to make certain payments to the Company,
issue Capital Stock of Restricted Subsidiaries, Guarantee Indebtedness of the
Company, engage in transactions with Affiliates, suffer to exist or incur Liens,
enter into sale-leaseback transactions, use the proceeds from Asset Sales, or
merge, consolidate or transfer substantially all of its assets. Within 45 days
after the end of each fiscal quarter (90 days after the end of the last
<PAGE>
A-9
fiscal quarter of each year), the Company shall deliver to the Trustee an
Officers' Certificate stating whether or not the signers thereof know of any
Default or Event of Default under such restrictive covenants.
13. Successor Persons.
When a successor person or other entity assumes all the obligations of
its predecessor under the Notes and the Indenture, the predecessor person will
be released from those obligations.
14. Defaults and Remedies.
Any of the following events constitutes an "Event of Default" under the
Indenture: (a) default in the payment of principal of (or premium, if any, on)
any Note when the same becomes due and payable at maturity, upon acceleration,
redemption or otherwise; (b) default in the payment of interest on any Note when
the same becomes due and payable, and such default continues for a period of 30
days; (c) default in the performance or breach of the provisions of Article Five
or the failure to make or consummate an Offer to Purchase in accordance with
Section 4.11 or Section 4.12; (d) the Company defaults in the performance of or
breaches any other covenant or agreement of the Company in this Indenture or
under the Notes (other than a default specified in clause (a), (b) or (c) above)
and such default or breach continues for a period of 30 consecutive days after
written notice by the Trustee or the Holders of 25% or more in aggregate
principal amount of the Notes; (e) there occurs with respect to any issue or
issues of Indebtedness of the Company or any Significant Subsidiary having an
outstanding principal amount of $5 million or more in the aggregate for all such
issues of all such Persons, whether such Indebtedness now exists or shall
hereafter be created, (I) an event of default that has caused the holder thereof
to declare such Indebtedness to be due and payable prior to its Stated Maturity
and such Indebtedness has not been discharged in full or such acceleration has
not been rescinded or annulled within 30 days of such acceleration and/or (II)
the failure to make a principal payment at the final (but not any interim) fixed
maturity and such defaulted payment shall not have been made, waived or extended
within 30 days of such payment default; (f) any final judgment or order (not
covered by insurance) for the payment of money in excess of $5 million in the
aggregate for all such final judgments or orders against all such Persons
(treating any deductibles, self-insurance or retention as not so covered) shall
be rendered against the Company or any Significant Subsidiary and shall not be
paid or discharged, and there shall be any period of 30 consecutive days
following entry of the final judgment or order that causes the aggregate amount
for all such final judgments or orders outstanding and not paid or discharged
against all such Persons to exceed $5 million during which a stay of enforcement
of such final judgment or order, by reason of a pending appeal or otherwise,
shall not be in effect; (g) a court having jurisdiction in the premises enters a
decree or order for (A) relief in respect of the Company or any Significant
Subsidiary in an involuntary case under any applicable bankruptcy, insolvency or
other similar law now or hereafter in effect, (B) appointment of a receiver,
liquidator, assignee, custodian, trustee, sequestrator or similar official of
the Company or any Significant Subsidiary or for all or
<PAGE>
A-10
substantially all of the property and assets of the Company or any Significant
Subsidiary or (C) the winding up or liquidation of the affairs of the Company or
any Significant Subsidiary and, in each case, such decree or order shall remain
unstayed and in effect for a period of 60 consecutive days; or (h) the Company
or any Significant Subsidiary (A) commences a voluntary case under any
applicable bankruptcy, insolvency or other similar law now or hereafter in
effect, or consents to the entry of an order for relief in an involuntary case
under any such law, (B) consents to the appointment of or taking possession by a
receiver, liquidator, assignee, custodian, trustee, sequestrator or similar
official of the Company or any Significant Subsidiary or for all or
substantially all of the property and assets of the Company or any Significant
Subsidiary or (C) effects any general assignment for the benefit of creditors.
If an Event of Default, as defined in the Indenture, occurs and is
continuing, the Trustee may, and at the direction of the Holders of at least 25%
in aggregate principal amount of the Notes then outstanding shall, declare all
the Notes to be due and payable. If a bankruptcy or insolvency default with
respect to the Company occurs and is continuing, the Notes automatically become
due and payable. Holders may not enforce the Indenture or the Notes except as
provided in the Indenture. The Trustee may require indemnity satisfactory to it
before it enforces the Indenture or the Notes. Subject to certain limitations,
Holders of at least a majority in principal amount of the Notes then outstanding
may direct the Trustee in its exercise of any trust or power.
15. Trustee Dealings with the Company.
The Trustee under the Indenture, in its individual or any other
capacity, may make loans to, accept deposits from and perform services for the
Company or its Affiliates and may otherwise deal with the Company or its
Affiliates as if it were not the Trustee.
16. No Recourse Against Others.
No incorporator or any past, present or future partner, stockholder,
other equity holder, officer, director, employee or controlling person, as such,
of the Company or of any successor Person shall have any liability for any
obligations of the Company under the Notes or the Indenture or for any claim
based on, in respect of or by reason of, such obligations or their creation.
Each Holder by accepting a Note waives and releases all such liability. The
waiver and release are part of the consideration for the issuance of the Notes.
17. Authentication.
This Note shall not be valid until the Trustee or authenticating agent
signs the certificate of authentication on the other side of this Note.
18. Abbreviations.
<PAGE>
A-11
Customary abbreviations may be used in the name of a Holder or an
assignee, such as: TEN COM (= tenants in common), TEN ENT (= tenants by the
entireties), JT TEN (= joint tenants with right of survivorship and not as
tenants in common), CUST (= Custodian) and U/G/M/A (= Uniform Gifts to Minors
Act).
The Company will furnish a copy of the Indenture to any Holder upon
written request and without charge. Requests may be made to IPC Information
Systems, Inc., 88 Pine Street, New York, New York 10005; Attention: Chief
Financial Officer.
<PAGE>
A-12
ASSIGNMENT FORM
I or we assign and transfer this Note to:
Please insert social security or other identifying number of assignee
- -------------------------------------------
- -------------------------------------------
Print or type name, address and zip code of assignee and irrevocably
appoint , as agent, to transfer this Note on the books of the
Company.
The agent may substitute another to act for him.
Dated
--------------------------------------
Signed
------------------------------------
(Sign exactly as name appears on the other side of this Note)
Signature Guarantee
------------------------
<PAGE>
OPTION OF HOLDER TO ELECT PURCHASE
If you wish to have this Note purchased by the Company pursuant
to Section 4.11 or Section 4.12 of the Indenture, as applicable, check the Box:
[ ]
If you wish to have a portion of this Note purchased by the
Company pursuant to Section 4.11 or Section 4.12 of the Indenture, as
applicable, state the amount to be purchased (in principal amount at maturity):
$
-----------------------------.
Date:
--------------------------------
Signed
------------------------------
(Sign exactly as name appears on the other side of this Note)
Signature Guarantee
---------------------------
<PAGE>
Exhibit (b)(iii)
April 30, 1998
To The Board of Directors
IPC Information Systems, Inc.
To The Lenders (as hereinafter defined)
Dear Directors and Lenders:
We understand that IPC Information Systems, Inc. ( the "Company") has entered
into an Agreement and Plan of Merger (the "Merger Agreement") with Arizona
Acquisition Corp. ("AAC") whereby AAC will merge (the "Merger") with and into
the Company with the Company surviving the merger. Under the terms of the Merger
Agreement each share of the Company's common stock will be converted at the
election of the holder thereof into either (i) the right to receive $21.00 in
cash; or (ii) the right to retain one share of common stock of the surviving
corporation ("Surviving Corporation"). As a result of the Merger AAC's parent
Cable Systems Holdings, LLC. ("CSH"), a majority of whose membership interests
are owned by Citicorp Venture Capital, Ltd. ("CVC") and their respective
affiliates will receive in exchange for its shares of AAC not less than 54% nor
more than 90% of the number of shares of the Surviving Corporation. The Merger,
the financings referred to in the next sentence and other related transactions
disclosed to Houlihan Lokey are referred to collectively herein as the
"Transaction." In addition, we understand that in connection with the Merger the
Company will sell $180 million aggregate face amount of Senior Discount Notes
and will enter into a $55 million revolving credit facility which will be
undrawn at closing, but under which two letters of credit aggregating
approximately $4 million will be issued at closing. It is our under-
standing that a significant part of the financing for the Transaction will be
obtained by the Company from one or more institutional lenders (the "Lenders").
You have requested our written opinion (the "Opinion") as to the matters set
forth below. This Opinion values the Company as a going-concern (including
goodwill), on a pro forma basis, both immediately before and immediately after
and giving effect to the Transaction and the associated indebtedness. For
purposes of this Opinion, "fair value" shall be defined as the amount at which
the Company would change hands between a willing buyer and a willing seller,
each having reasonable knowledge of the relevant facts, neither being under any
compulsion to act, with equity to both; and "present fair saleable value" shall
be defined as the amount that may be realized if the Company's aggregate assets
(including goodwill) are sold as an entirety with reasonable promptness in an
arm's length transaction under present conditions for the sale of comparable
business enterprises, as such
<PAGE>
The Board of Directors
IPC Information Systems
The Lenders
April 30, 1998 -2-
conditions can be reasonably evaluated by Houlihan Lokey. We have used the same
valuation methodologies in determining fair value and present fair saleable
value for purposes of rendering this Opinion. The term "identified contingent
liabilities" shall mean the stated amount of contingent liabilities identified
to us and valued by responsible officers of the Company, upon whom we have
relied upon without independent verification; no other contingent liabilities
will be considered. The amount of contingent liabilities at any time shall be
computed by officers of the Company as the amount that, in the light of all the
facts and circumstances existing at such time, represents the amount that can
reasonably be expected to become an actual or matured liability whether or not
such liability meets the criteria for disclosure under FAS 5. Being "able to pay
its debts as they become absolute and mature" shall mean that, assuming the
Transaction has been consummated substantially as proposed, the Company's
financial forecasts for the period 1998 to 2002 indicate positive cash flow for
such period, including (and after giving effect to) the payment of installments
due under the indebtedness incurred in the Transaction, as such installments are
scheduled at the close of the Transaction. It is Houlihan Lokey's understanding,
upon which it is relying, that the Company's Board of Directors and any other
recipient of the Opinion will consult with and rely solely upon their own legal
counsel with respect to said definitions. No representation is made herein, or
directly or indirectly by the Opinion, as to any legal matter or as to the
sufficiency of said definitions for any purpose other than setting forth the
scope of Houlihan Lokey's Opinion hereunder.
Notwithstanding the use of the defined terms "fair value" and "present fair
saleable value," we have not been engaged to identify prospective purchasers or
to ascertain the actual prices at which and terms on which the Company can
currently be sold, and we know of no such efforts by others. Because the sale of
any business enterprise involves numerous assumptions and uncertainties, not all
of which can be quantified or ascertained prior to engaging in an actual selling
effort, we express no opinion as to whether the Company would actually be sold
for the amount we believe to be its fair value and present fair saleable value.
In connection with this Opinion, we have made such reviews, analyses and
inquiries as we have deemed necessary and appropriate under the circumstances.
Among other things, we have:
1. reviewed the Company's annual reports to shareholders on
Form 10-K for the two fiscal years ended September 30, 1997
and quarterly reports on Form 10-Q for the three months
ended December 31, 1997, which the Company's management has
identified as the most current information available;
2. reviewed copies of the following documents and agreements:
(i) Form S-3/A dated April 27, 1998;
(ii) Form S-4/A dated April 9, 1998;
<PAGE>
The Board of Directors
IPC Information Systems
The Lenders
April 30, 1998 -3-
(iii) Agreement and Plan of Merger between Arizona
Acquisition Corp. and IPC Information Systems,
Inc. dated December 18, 1997 as amended on April
9, 1998;
(iv) $55,000,000 Credit Agreement dated as of April
30, 1998 among IPC Information Systems, Inc. as
Parent Borrower and IPC Funding Corp. as Sub
Borrower and the Initial Lenders and the Initial
Issuing Bank named therein and Morgan Stanley
Senior Funding, Inc. as Administrative Agent,
Syndication Agent and Arranger, Goldman Sachs
Credit Partners L.P. as Documentation Agent and
General Electric Capital Corporation as
Collateral Agent;
(v) $247,400,000 aggregate principal amount at
maturity IPC Information Systems, Inc. 10 7/8%
Senior Discount Notes Due 2008;
(vi) Citicorp Venture Capital, Ltd. Commitment Letter
dated December 17, 1997 regarding the purchase of
up to 90% of the capital stock of IPC Information
Systems, Inc.;
(vii) Morgan Stanley Senior Funding, Inc. Commitment
Letter dated December 17, 1997 regarding the $75
million senior secured revolving credit facility
(it being understood that the revolving credit
facility has been reduced to $55 million) and
Morgan Stanley & Co. Incorporated Commitment
Letter dated December 17, 1997 regarding the
$157,000,000 (aggregate principal amount at
maturity) senior discount notes;
(viii) IPC Information Systems, Inc. Financial Plan,
1994-2002;
(ix) IPC Information Systems, Inc. Notice of Annual
Meeting of Stockholders dated April 10, 1998 and
the Proxy Statement/Prospectus dated the same
date.; and
(x) IPC Rating Agency Presentation March 1998.
3. met with certain members of the senior management of the
Company to discuss the operations, financial condition,
future prospects and projected operations and performance
of the Company, and met with representatives of the
Company's independent accounting firm and counsel to
discuss certain matters;
4. visited certain facilities and business offices of the
Company;
<PAGE>
The Board of Directors
IPC Information Systems
The Lenders
April 30, 1998 -4-
5. reviewed forecasts and projections prepared by the
Company's management with respect to the Company for the
years ended September 30, 1998 through 2002;
6. reviewed the historical market prices and trading volume
for the Company's publicly traded securities;
7. reviewed other publicly available financial data for the
Company and certain companies that we deem comparable to
the Company; and
8. conducted such other studies, analyses and investigations
as we have deemed appropriate.
We have relied upon and assumed, without independent verification, that the
financial forecasts and projections provided to us have been reasonably prepared
and reflect the best currently available estimates of the future financial
results and condition of the Company, and that there has been no material
adverse change in the assets, financial condition, business or prospects of the
Company since the date of the most recent financial statements made available to
us.
We have not independently verified the accuracy and completeness of the
information supplied to us with respect to the Company and do not assume any
responsibility with respect to it; provided, however, in the case of financial
projections contained in the information, such financial projections shall have
been prepared in good faith based upon reasonable assumptions and information
reasonably available and will be, to the best of the Company's knowledge, true,
complete and correct in all material respects, but no other representation is
made with respect thereto. We have not made any physical inspection or
independent appraisal of any of the properties or assets of the Company. Our
opinion is necessarily based on business, economic, market and other conditions
as they exist and can be evaluated by us at the date of this letter.
Based upon the foregoing, and in reliance thereon, it is our opinion as of the
date of this letter that, assuming the Transaction had been consummated
substantially as proposed, both immediately before and immediately after and
giving effect to the Transaction:
(a) on a pro forma basis, the fair value and present fair
saleable value of the Company's assets would exceed the
Company's stated liabilities and identified contingent
liabilities;
(b) the Company should be able to pay its debts as they become
absolute and mature; and
(c) the capital remaining in the Company after the Transaction
would not be unreasonably small for the business in which
the Company is engaged, as
<PAGE>
The Board of Directors
IPC Information Systems
The Lenders
April 30, 1998 -5-
management has indicated it is now conducted and is
proposed to be conducted following the consummation of the
Transaction.
This Opinion is furnished solely for your benefit and may not be relied upon by
any other person without our express, prior written consent. Information copies
of this Opinion may, however, be delivered to financial institutions that
purchase participations in loans constituting the financing incurred in
connection with the Transaction, subject to the understanding that this Opinion
speaks only as of the date hereof and that we assume no responsibility for the
effect of any event occurring after the date hereof. This Opinion is delivered
to each recipient subject to the conditions, scope of engagement, limitations
and understandings set forth in this Opinion and our engagement letter dated
January 9, 1998, and subject to the understanding that the obligations of
Houlihan Lokey in the Transactions are solely corporate obligations, and no
officer, director, employee, agent, shareholder or controlling person of
Houlihan Lokey shall be subjected to any personal liability whatsoever to any
person, nor will any such claim be asserted by or on behalf of you or your
affiliates.
HOULIHAN, LOKEY, HOWARD & ZUKIN FINANCIAL ADVISORS, INC.
<PAGE>
Exhibit (c)
EXECUTION COPY
- --------------------------------------------------------------------------------
- --------------------------------------------------------------------------------
AMENDED AND RESTATED
INVESTORS AGREEMENT
DATED AS OF
APRIL 9, 1998
AMONG
IPC INFORMATION SYSTEMS, INC.
CABLE SYSTEMS HOLDING, LLC
CABLE SYSTEMS INTERNATIONAL, INC.
AND
CERTAIN OTHER PERSONS NAMED HEREIN
- --------------------------------------------------------------------------------
- --------------------------------------------------------------------------------
NY02A/164456.13
<PAGE>
TABLE OF CONTENTS
----------------
<TABLE>
<CAPTION>
PAGE
----
<C> <S> <C>
ARTICLE 1 DEFINITIONS
Section 1.01. Definitions............................................. 1
ARTICLE 2 CORPORATE GOVERNANCE AND MANAGEMENT
Section 2.01. Composition of the Board................................ 5
Section 2.02. Removal................................................. 5
Section 2.03. Vacancies............................................... 5
Section 2.04. Action by the Board..................................... 5
Section 2.05. Conflicting Charter or Bylaw Provision.................. 6
Section 2.06. IXNET Board............................................. 6
ARTICLE 3 RESTRICTIONS ON TRANSFER
Section 3.01. General................................................. 6
Section 3.02. Legends................................................. 6
Section 3.03. Permitted Transferees................................... 6
Section 3.04. Restrictions on Transfers by Kleinknecht Shareholders... 6
Restrictions on Transfers by Walsh Shareholders and
Section 3.05. Servidio Shareholders................................... 7
ARTICLE 4 TAG-ALONG RIGHTS; DRAG-ALONG RIGHTS
Section 4.01. Rights to Participate in Transfer....................... 7
Section 4.02. Right to Compel Participation in Certain Transfers...... 8
ARTICLE 5 REGISTRATION RIGHTS
Section 5.01. Demand Registration..................................... 10
Section 5.02. Piggyback Registration.................................. 11
Section 5.03. Holdback Agreements..................................... 12
Section 5.04. Registration Procedures................................. 12
Section 5.05. Indemnification by the Company.......................... 14
Section 5.06. Indemnification by Participating Shareholders........... 15
Section 5.07. Conduct of Indemnification Proceedings.................. 15
Section 5.08. Contribution............................................ 16
Section 5.09. Participation in Public Offering........................ 16
Section 5.10. Rule 144................................................ 17
Section 5.11. No Transfer of Registration Rights...................... 17
ARTICLE 6 CERTAIN COVENANTS AND AGREEMENTS
Section 6.01. Limitations on Subsequent Registration.................. 17
Section 6.02. Limitation on Purchase of Common Stock.................. 17
ARTICLE 7 MISCELLANEOUS
Section 7.01. Entire Agreement........................................ 17
Section 7.02. Binding Effect; Benefit................................. 17
Section 7.03. Assignability........................................... 18
Section 7.04. Amendment; Waiver; Termination.......................... 18
Section 7.05. Notices................................................. 18
Section 7.06. Headings................................................ 20
Section 7.07. Counterparts............................................ 20
Section 7.08. Governing Law........................................... 20
Section 7.09. Specific Enforcement.................................... 20
Section 7.10. Certain Actions......................................... 20
Section 7.11. Consent to Jurisdiction; Expenses....................... 21
Section 7.12. Severability............................................ 21
Section 7.13. Schedule I.............................................. 21
Section 7.14. Effectiveness........................................... 21
</TABLE>
i
<PAGE>
<TABLE>
<C> <S> <C>
Schedule I Securities Ownership
</TABLE>
<TABLE>
<C> <S> <C>
Exhibit A Form of Joinder Agreement
</TABLE>
ii
<PAGE>
AMENDED AND RESTATED INVESTORS AGREEMENT
AMENDED AND RESTATED INVESTORS AGREEMENT, dated as of April 9, 1998, among
(i) IPC Information Systems, Inc. (the "Company"), (ii) Cable Systems Holding,
LLC, a Delaware limited liability company ("CSH"), (iii) Cable Systems
International, Inc., a Delaware Corporation, (iv) Richard Kleinknecht, (v)
David Walsh, (vi) Anthony Servidio and (vii) Lawrence, Smith & Horey III,
L.P., a Delaware limited partnership.
W I T N E S S E T H:
WHEREAS, pursuant to the terms of the Merger Agreement (as defined below),
Arizona Acquisition Corp. will be merged with and into the Company, with the
Company as the surviving corporation (the "Merger");
WHEREAS, at the Effective Time (as defined in the Merger Agreement) the
parties hereto will hold securities of the Company as set forth on Schedule I
to be attached hereto at the Effective Time;
WHEREAS, the parties hereto desire to enter into this Agreement to govern
certain of their rights, duties and obligations after consummation of the
transactions contemplated by the Merger Agreement;
The parties hereto agree as follows:
ARTICLE 1
DEFINITIONS
Section 1.01. Definitions. (a) The following terms, as used herein, have the
following meanings:
"Adverse Person" means any Person whom the Board of Directors of the Company
may reasonably determine to be a competitor or a potential competitor of the
Company or its Subsidiaries.
"Affiliate" means, with respect to any Person, any other Person directly or
indirectly controlling, controlled by, or under common control with such
Person, provided that no securityholder of the Company shall be deemed an
Affiliate of any other securityholder solely by reason of any investment in
the Company. For the purpose of this definition, the term "control" (including
with correlative meanings, the terms "controlling", "controlled by" and "under
common control with"), as used with respect to any Person, shall mean the
possession, directly or indirectly, of the power to direct or cause the
direction of the management and policies of such Person, whether through the
ownership of voting securities or by contract or otherwise.
"beneficially own" shall have the meaning set forth in Rule 13d-3 of the
Exchange Act.
"Board" means the board of directors of the Company.
"Business Day" means any day except a Saturday, Sunday or other day on which
commercial banks in New York City are authorized by law to close.
"Change of Control" means such time as (a) the CSH Shareholders shall own
less than 20% of the outstanding shares of Common Stock, (b) the transfer of
all or substantially all of the assets of the Company to any Person or group
shall have been consummated, or (c) the Company shall have been liquidated.
"Closing Date" shall have the meaning ascribed thereto in the Merger
Agreement.
"Common Stock" shall mean the common stock, par value $.01 per share, of the
Company and any stock into which such Common Stock may thereafter be converted
or changed; provided, however, that in the event of a stock dividend, split-
up, recapitalization, combination, exchange of stock or the like in respect of
such Common Stock, the term "Common Stock" shall be deemed to refer to and
include the stock as well as all stock dividends and distributions and any
stock into which or for which any or all of such stock may be changed or
exchanged.
<PAGE>
"CSH Entities" means (a) CSH and (b) Cable Systems International Inc., a
Delaware Corporation.
"CSH Shareholders" means the CSH Entities and their direct and indirect
Permitted Transferees so long as any such Person shall beneficially own any
Common Stock.
"Drag-Along Portion" means, with respect to any Kleinknecht Shareholder, any
Walsh Shareholder any Servidio Shareholder or any LSH Shareholder, the number
of Shares beneficially owned by such Kleinknecht Shareholder, Walsh
Shareholder, Servidio Shareholder or any LSH Shareholder multiplied by a
fraction, the numerator of which is the number of Shares to be sold by the CSH
Shareholders on behalf of the CSH Shareholders and the Kleinknecht
Shareholders, the Walsh Shareholders, the Servidio Shareholders and the LSH
Shareholders and the denominator of which is the total number of Shares then
beneficially owned by all of the Shareholders.
"Exchange Act" means the Securities Exchange Act of 1934, as amended.
"Fully Diluted" means all outstanding shares of Common Stock and all shares
issuable in respect of securities convertible into or exchangeable or
exercisable for such Common Stock, stock appreciation rights or options,
warrants and other irrevocable rights to purchase or subscribe for such Common
Stock or securities convertible into or exchangeable or exercisable for such
Common Stock; provided that no Person shall be deemed to own such number of
Fully Diluted shares of any Common Stock as such Person has the right to
acquire from any Person other than the Company.
"Initial Ownership" means, with respect to any Shareholder, the number of
shares of Common Stock beneficially owned (and (without duplication) which
such Persons have the right to acquire from any Person) as of the Effective
Time, or in the case of any Person that shall become a party to this Agreement
on a later date, as of such date, taking into account any stock split, stock
dividend, reverse stock split or similar event.
"Kleinknecht Shareholders" means Richard Kleinknecht and his direct and
indirect Permitted Transferees so long as any such Person shall beneficially
own any Common Stock.
"LSH" means Lawrence, Smith & Horey III, L.P.
"LSH Shareholders" means LSH and its direct and indirect Permitted
Transferee so long as any such Person shall beneficially own any Common Stock.
"Merger Agreement" means the Agreement and Plan of Merger dated as of the
date hereof, as subsequently amended, between the Company and Arizona
Acquisition Corp.
"Permitted Transferee" means (i) in the case of any Shareholder who is a
natural person, (a) a spouse or lineal descendent (including by adoption and
stepchildren), heir, executor, testamentary trustee or legatee of such
Shareholder or (b) any trust or estate the beneficiaries of which, or any
corporation, limited liability company or partnership, the stockholders,
members or partners of which include only the Persons described in clause (a)
above, (ii) in the case of any CSH Shareholder, (a) Citicorp Venture Capital,
Ltd., any stockholder, member, partner or Affiliate of any such CSH
Shareholder or of Citicorp Venture Capital, Ltd. and any officer, director, or
employee of any such CSH Shareholder, Citicorp Venture Capital, Ltd. or of any
such stockholder, member, partner or Affiliate, (b) a spouse or lineal
descendant (including by adoption and stepchildren), heir, executor,
testamentary trustee or legatee of the officers, directors and employees
referred to in clause (ii)(a) above, and any trust or estate (where a majority
in interest of the beneficiaries thereof are any of the Persons described in
this clause (b) and in clause (ii)(a) above), corporation, limited liability
company or partnership (where a majority in interest of the stockholders,
members or limited partners, or where the managing general partner, is one of
more of the Persons described in this clause (b) or in clause (ii)(a) above
and (iii) in the case of any LSH Shareholder, (a) any shareholder, member,
partner or Affiliate of such LSH Shareholder or (b) a spouse or lineal
descendant (including by adoption and stepchildren), heir, executor,
testamentary trustee or legatee of the shareholders, members and partners
referred to in clause (iii)(a) above, and any trust or estate (where a
majority
2
<PAGE>
in interest of the beneficiaries thereof are any of the Persons described in
this clause (b) and in clause (iii)(a) above), corporation, limited liability
company or partnership (where a majority in interest of the stockholders,
members or limited partners, or where the managing general partner, is one of
more of the Persons described in this clause (b) or in clause (iii)(a) above.
"Person" means an individual, corporation, limited liability company,
partnership, association, trust or other entity or organization, including a
government or political subdivision or an agency or instrumentality thereof.
"Pro Rata Portion" means the number of Shares a Shareholder holds multiplied
by a fraction, the numerator of which is the number of Shares to be sold by
the CSH Shareholders, the Kleinknecht Shareholders, the Walsh Shareholders,
the Servidio Shareholders and the LSH Shareholders in a Public Offering and
the denominator of which is the total number of Shares, on a Fully Diluted
basis, held in the aggregate by the CSH Shareholders, the Kleinknecht
Shareholders, the Walsh Shareholders, the Servidio Shareholders and the LSH
Shareholders immediately prior to such Public Offering.
"Public Offering" means any primary or secondary public offering of shares
of Common Stock pursuant to an effective registration statement under the
Securities Act other than pursuant to a registration statement filed in
connection with a transaction of the type described in Rule 145 of the
Securities Act or for the purpose of issuing securities pursuant to an
employee benefit plan.
"Registrable Securities" means at any time, with respect to any Shareholder,
any shares of Common Stock then owned by such Shareholder until (i) a
registration statement covering such securities has been declared effective by
the SEC and such securities have been disposed of pursuant to such effective
registration statement, (ii) such securities are sold to the public pursuant
to Rule 144 (or any similar provisions then in force) under the Securities Act
or (iii) such securities are otherwise transferred, the Company has delivered
a new certificate or other evidence of ownership for such securities not
bearing the legend required pursuant to this Agreement and such securities are
freely tradeable without restriction by the holder thereof under the
Securities Act.
"Registration Expenses" means (i) all registration and filing fees, (ii)
fees and expenses of compliance with securities or blue sky laws (including
reasonable fees and disbursements of counsel in connection with blue sky
qualifications of the securities registered), (iii) printing expenses, (iv)
internal expenses of the Company (including, without limitation, all salaries
and expenses of its officers and employees performing legal or accounting
duties), (v) reasonable fees and disbursements of counsel for the Company and
customary fees and expenses for independent certified public accountants
retained by the Company (including expenses relating to any comfort letters or
costs associated with the delivery by independent certified public accountants
of a comfort letter or comfort letters requested pursuant to Section 5.04(g)
hereof), (vi) the reasonable fees and expenses of any special experts retained
by the Company in connection with such registration, (vii) reasonable fees and
expenses of up to one counsel for the Shareholders participating in the
offering, (viii) fees and expenses in connection with any review of
underwriting arrangements by the National Association of Securities Dealers,
Inc. (the "NASD"), including fees and expenses of any "qualified independent
underwriter" and (ix) fees and disbursements of underwriters customarily paid
by issuers or sellers of securities, but shall not include any underwriting
fees, discounts or commissions attributable to the sale of Registrable
Securities, or any out-of-pocket expenses (except as set forth in clause (vii)
above) of the Shareholders.
"SEC" means the Securities and Exchange Commission.
"Securities Act" means the Securities Act of 1933, as amended.
"Servidio Shareholders" means Anthony Servidio and his direct and indirect
Permitted Transferees so long as any such Person shall beneficially own any
Common Stock.
"Shareholder" means each Person (other than the Company) who shall be a
party to this Agreement, whether in connection with the execution and delivery
hereof as of the date hereof, pursuant to Section 7.03 or otherwise, so long
as such Person shall beneficially own any Common Stock.
3
<PAGE>
"Shares" means shares of Common Stock held by the Shareholders.
"Subject Securities" means the Common Stock beneficially owned by the
Kleinknecht Shareholders, the Walsh Shareholders and the Servidio Shareholders
and the LSH Shareholders to be transferred in a Section 4.02 Sale.
"Subsidiary" means, with respect to any Person, any entity of which
securities or other ownership interests having ordinary voting power to elect
a majority of the board of directors or other persons performing similar
functions are at the time directly or indirectly owned by such Person.
"Tag-Along Portion" means the number of Shares held by the Tagging Person or
the Selling Person, as the case may be, multiplied by a fraction, the
numerator of which is the number of Shares proposed to be sold by the Selling
Person pursuant to Section 4.01, and the denominator of which is the aggregate
number of Shares, on a Fully Diluted basis, then owned by the Selling Person.
"Third Party" means a prospective purchaser of Common Stock from a
Shareholder where such purchaser is not a Permitted Transferee of such
Shareholder or an entity in which such Shareholder or any of its Permitted
Transferees directly or indirectly owns any outstanding securities or other
ownership interests having ordinary voting power.
"Underwritten Public Offering" means a firmly underwritten public offering
of Registrable Securities of the Company pursuant to an effective registration
statement under the Securities Act.
"Walsh Shareholders" means Walsh and his direct and indirect Permitted
Transferees so long as any such Person shall beneficially own any Common
Stock.
(b) Each of the following terms is defined in the Section set forth opposite
such term:
<TABLE>
<CAPTION>
TERM SECTION
---- -----------
<S> <C>
Cause......................................................... 2.02
Demand Registration........................................... 5.01(a)
Drag-Along Rights............................................. 4.02(a)
Free Percentage............................................... 4.01(a)
Holders....................................................... 5.01(a)(ii)
Indemnified Party............................................. 5.07
Indemnifying Party............................................ 5.07
Inspectors.................................................... 5.04(g)
Joinder Agreement............................................. 3.03
Maximum Offering Size......................................... 5.01(e)
Nominee....................................................... 2.03(a)
Piggyback Registration........................................ 5.02(a)
Records....................................................... 5.04(g)
Section 4.01 Response Notice.................................. 4.01(a)
Section 4.02 Sale............................................. 4.02(a)
Section 4.02 Notice........................................... 4.02(a)
Section 4.02 Sale Price....................................... 4.02(a)
Section 4.02 Notice Period.................................... 4.02(a)
Selling Person................................................ 4.01(a)
Selling Shareholder........................................... 5.01(a)
Tag-Along Notice.............................................. 4.01(a)
Tag-Along Notice Period....................................... 4.01(a)
Tag-Along Offer............................................... 4.01(a)
Tag-Along Right............................................... 4.01(a)
Tag-Along Sale................................................ 4.01(a)
Tagging Person................................................ 4.01(a)
Transfer...................................................... 3.01(a)
Walsh......................................................... Preamble
</TABLE>
4
<PAGE>
ARTICLE 2
CORPORATE GOVERNANCE AND MANAGEMENT
Section 2.01. Composition of the Board. The Board shall consist of nine
members, of whom (i) three shall be nominated by the CSH Shareholders, (ii)
two shall be nominated by the CSH Shareholders and shall be individuals which
are not "Affiliates" or "Associates" (as those terms are used within the
meaning of Rule 12b-2 of the General Rules and Regulations under the Exchange
Act) of any Shareholder or its Affiliates, (iii) two shall be nominated by the
CSH Shareholders and shall be individuals who are executive officers of the
Company or its Subsidiaries and (iv) two shall be nominated by the Kleinknecht
Shareholders. Each Shareholder entitled to vote for the election of directors
to the Board agrees that it will vote its shares of Common Stock or execute
consents, as the case may be, and take all other necessary action (including
causing the Company to call a special meeting of shareholders) in order to
ensure that the composition of the Board is as set forth in this Section 2.01;
provided that, no Shareholder shall be required to vote for the CSH
Shareholders' or the Kleinknecht Shareholders' nominee(s) , as applicable, if
the number of Shares held by the group of Shareholders, as applicable, making
the nomination is, at the close of business on the day preceding such vote or
execution of consents, (x) less than 5% of the outstanding number of Shares of
Common Stock, in the case of the CSH Shareholders or (y) less than 50% of its
Initial Ownership of Common Stock, in the case of the Kleinknecht
Shareholders.
Section 2.02. Removal. Subject to applicable law, each Shareholder agrees
that if, at any time, it is then entitled to vote for the removal of directors
of the Company, it will not vote any of its Shares in favor of the removal of
any director who shall have been designated or nominated pursuant to Section
2.01 unless such removal shall be for Cause or the Person(s) entitled to
designate or nominate such director shall have consented to such removal in
writing, provided that if the Persons entitled to designate or nominate any
director pursuant to Section 2.01 shall request the removal, with or without
Cause, of such director in writing, each such Shareholder shall vote its
shares of Common Stock in favor of such removal. Removal for "Cause" shall
mean removal of a director because of such director's (a) willful and
continued failure substantially to perform his duties with the Company in his
established position, (b) willful conduct which is injurious to the Company or
any of its Subsidiaries, monetarily or otherwise, (c) conviction for, or
guilty plea to, a felony or a crime involving moral turpitude, or (d) abuse of
illegal drugs or other controlled substances or habitual intoxication.
Section 2.03. Vacancies. If, as a result of death, disability, retirement,
resignation, removal (with or without Cause) or otherwise, there shall exist
or occur any vacancy on the Board:
(a) The Shareholder(s) entitled under Section 2.01 to nominate such
director whose death, disability, retirement, resignation or removal
resulted in such vacancy, may, subject to the provisions of Section 2.01,
nominate another individual (the "Nominee") to fill such vacancy and serve
as a director of the Company; and
(b) each Shareholder then entitled to vote for the election of the
Nominee as a director of the Company agrees that it will vote its Shares,
or execute a written consent, as the case may be, in order to ensure that
the Nominee be elected to the Board; provided that, no Shareholder shall be
required to vote for another party's Nominee(s) if the aggregate number of
Shares held by the Shareholder or group of Shareholders, as applicable,
making the nomination is, at the close of business of the day preceding
such vote or execution of consents, less than (x) 5% of the outstanding
number of Shares of Common Stock, in the case of the CSH Shareholders or
(y) less than 50% of the Initial Ownership of Common Stock, in the case of
the Kleinknecht Shareholders.
Section 2.04. Action by the Board. (a) A quorum at any meeting of the Board
shall consist of five directors.
(b) All actions of the Board shall require the affirmative vote of at least
a majority of the directors present at a duly convened meeting of the Board at
which a quorum is present or the unanimous written consent of the Board;
provided that, in the event there is a vacancy on the Board and an individual
has been nominated to fill such vacancy, the first order of business shall be
to fill such vacancy.
5
<PAGE>
Section 2.05. Conflicting Charter or Bylaw Provision. Each Shareholder shall
vote its Shares, and shall take all other actions reasonably necessary, to
ensure that the Company's certificate of incorporation and bylaws are
consistent with, facilitate and do not at any time conflict with any provision
of this Agreement.
Section 2.06. IXNET Board. For so long as (a) International Exchange Network
Ltd, a Delaware corporation ("IXNET") is a wholly-owned Subsidiary of the
Company and (b) David Walsh is an employee of IXNET, the Company shall cause
David Walsh to be a member of the board of directors of IXNET.
ARTICLE 3
RESTRICTIONS ON TRANSFER
Section 3.01. General. (a) Each Shareholder agrees that it will not,
directly or indirectly, sell, assign, transfer, grant a participation in,
pledge or otherwise dispose of ("transfer") any Common Stock (or solicit any
offers to buy or otherwise acquire, or take a pledge of any Common Stock)
except in compliance with the Securities Act and the terms and conditions of
this Agreement.
(b) Any attempt to transfer any Common Stock not in compliance with this
Agreement shall be null and void and the Company shall not, and shall cause
any transfer agent not to, give any effect in the Company's stock records to
such attempted transfer.
Section 3.02. Legends. (a) In addition to any other legend that may be
required, each certificate for shares of Common Stock that is issued to any
Shareholder shall bear a legend in substantially the following form:
"THE SHARES REPRESENTED BY THIS CERTIFICATE HAVE NOT BEEN REGISTERED UNDER
THE SECURITIES ACT OF 1933, AS AMENDED, AND MAY NOT BE SOLD, PLEDGED OR
OTHERWISE TRANSFERRED EXCEPT PURSUANT TO AN EFFECTIVE REGISTRATION
STATEMENT OR IN ACCORDANCE WITH AN EXEMPTION FROM THE REGISTRATION
REQUIREMENTS OF THE SECURITIES ACT OF 1933, AS AMENDED. SHARES REPRESENTED
BY THIS CERTIFICATE ARE SUBJECT TO RESTRICTIONS ON TRANSFER AS SET FORTH IN
THE INVESTORS AGREEMENT DATED AS OF DECEMBER 18, 1997, COPIES OF WHICH MAY
BE OBTAINED UPON REQUEST FROM IPC INFORMATION SYSTEMS, INC. OR ANY
SUCCESSOR THERETO."
(b) If any Common Stock shall cease to be subject to any and all
restrictions on transfer set forth in this Agreement, the Company shall, upon
the written request of the holder thereof, issue to such holder a new
certificate evidencing such Common Stock without the legend required by
Section 3.02(a) endorsed thereon.
Section 3.03. Permitted Transferees. Any Shareholder may at any time
transfer any or all of its Shares to one or more of its Permitted Transferees
without the consent of the Company or any Shareholder or group of Shareholders
and without compliance with Sections 3.04 and 4.01 so long as (a) such
Permitted Transferee shall have executed a Joinder Agreement substantially in
the form of Exhibit A hereto ("Joinder Agreement") and thereby agreed to be
bound by the terms of this Agreement and (b) the transfer to such Permitted
Transferee is not in violation of applicable federal or state securities laws.
Section 3.04. Restrictions on Transfers by Kleinknecht Shareholders. (a)
Except as provided in Section 3.03, the Kleinknecht Shareholders may transfer
their Common Stock only as follows:
(i) in a transfer made in compliance with Section 4.01 or Section 4.02;
(ii) in a Public Offering in connection with the exercise of their rights
under Article 5 hereof; or
(iii) following the earlier to occur of (i) the date on which the number
of Shares held by the Kleinknecht Shareholders is less than 5% of the
outstanding number of Shares of Common Stock and (ii) the fifth anniversary
of the Closing Date, to any Person other than any Adverse Person.
6
<PAGE>
(b) The restrictions set forth in Section 3.04 shall terminate at such time
as the aggregate number of Shares of Common stock held by the CSH Shareholders
is less than 50% of the CSH Shareholders' aggregate Initial Ownership of
Common Stock.
Section 3.05. Restrictions on Transfers by Walsh Shareholders and Servidio
Shareholders. Except as provided in Section 3.03, the Walsh Shareholders and
the Servidio Shareholders may transfer their Common Stock only as follows:
(i) in a transfer made in compliance with Section 4.01 of Section 4.02;
or
(ii) in any Public Offering; or
(iii) following the 30th month anniversary of the Closing Date, to any
Person other than any Adverse Person; or
(iv) to any Person, in a transfer through a broker or dealer in
compliance with Rule 144 (or any successor rule).
Section 3.06. Restrictions on Transfers by LSH Shareholders. Except as
provided in Section 3.03, the LSH Shareholders may transfer their Common Stock
only as follows:
(i) in a transfer made in compliance with Section 4.01 of Section 4.02;
or
(ii) in any Public Offering; or
(iii) to any Person, in a transfer through a broker or dealer in
compliance with Rule 144 (or any successor rule).
ARTICLE 4
TAG-ALONG RIGHTS; DRAG-ALONG RIGHTS
Section 4.01. Rights to Participate in Transfer. (a) If CSH Shareholders
(the "Selling Person") propose to, directly or indirectly, transfer (other
than transfers of Shares (i) in a Public Offering, (ii) to any Permitted
Transferee of any of the CSH Shareholders, (iii) up to 3% in the aggregate of
the securities of such class outstanding on the date of the first transfer of
any Shares by any of the CSH Shareholders (such percentage, the "Free
Percentage") or (iv) that will indirectly result from a sale of all or
substantially all of the capital stock or assets of CSH, CSI, Cable Systems
Holding Company, Citicorp or any of its Subsidiaries) shares of Common Stock
(a "Tag-Along Sale"), the Kleinknecht Shareholders and/or the Walsh
Shareholders and/or the Servidio Shareholders and/or the LSH Shareholders may,
at their option, elect to exercise their rights under this Section 4.01 (each
such Shareholder, a "Tagging Person"). In the event of such a proposed
transfer, the Selling Person shall provide each Kleinknecht Shareholder, each
Walsh Shareholder, each Servidio Shareholder, each LSH Shareholder and the
Company written notice of the material terms and conditions of such proposed
transfer ("Tag-Along Notice") and offer each Tagging Person the opportunity to
participate in such sale. The Tag-Along Notice shall identify the number of
shares of Common Stock subject to the offer ("Tag-Along Offer"), the
consideration for which the transfer is proposed to be made and all other
material terms and conditions of the Tag-Along Offer. Each Tagging Person
shall have the right (a "Tag-Along Right"), exercisable by irrevocable written
notice (a "Section 4.01 Response Notice") given within 10 Business Days from
receipt of the Tag-Along Notice (the "Tag-Along Notice Period") to participate
in such Tag-Along Sale on the same terms and conditions as set forth in the
Tag-Along Notice and to sell all or any portion of its Tag-Along Portion. If
the Tagging Persons exercise their Tag-Along Rights hereunder, each Tagging
Person shall deliver at least two business days prior to the date scheduled
for the closing of the Tag-Along Sale to the Selling Person for delivery to
the prospective transferee one or more certificates, in a proper form for
transfer, representing the Shares of such Tagging Person to be included in the
Tag-Along Sale. Such certificate or certificates that a Tagging Person
delivers to the Selling Person shall be delivered on the date scheduled for
the closing of the Tag-Along Sale to such transferee in consummation of the
Tag-Along Sale. Notwithstanding anything to the contrary contained in this
Section 4.01, except for the Selling Person's obligation to return to each
Tagging Person any certificates representing the Tagging Person's Shares there
shall be no liability on the part of the Selling Person to any Shareholder in
the event that the proposed Tag-Along Sale is not consummated for whatever
reason. Whether a Tag-Along Sale is effected pursuant to this Section 4.01 by
the Selling Person is in the sole and absolute discretion of the Selling
Person.
7
<PAGE>
(b) Concurrently with the consummation of the Tag-Along Sale, the Selling
Person shall notify the Tagging Persons thereof, shall remit to the Tagging
Persons the total consideration (by bank or certified check) for the Shares of
the Tagging Persons transferred pursuant thereto, and shall, promptly after
the consummation of such Tag-Along Sale, furnish such other evidence of the
completion and time of completion of such transfer and the terms thereof as
may be reasonably requested by the Tagging Persons.
(c) If at the termination of the Tag-Along Notice Period any Tagging Person
shall not have elected to participate in the Tag-Along Sale, such Tagging
Person will be deemed to have waived its rights under Section 4.01(a) with
respect to the transfer of its securities pursuant to such Tag-Along Sale.
(d) If any Tagging Person declines to exercise its Tag-Along Rights or
elects to exercise its Tag-Along Rights with respect to less than such Tagging
Person's Tag-Along Portion, the CSH Shareholders shall be entitled to
transfer, pursuant to the Tag-Along Offer, a number of Shares held by the CSH
Shareholders equal to the number of Shares constituting the portion of such
Tagging Person's Tag-Along Portion with respect to which Tag-Along Rights were
not exercised.
(e) The CSH Shareholders and any Tagging Person who exercises the Tag-Along
Rights pursuant to this Section 4.01 may consummate the Tag-Along Sale on
substantially the same terms and conditions set forth in the Tag-Along Notice
(provided, however, that the price payable in any such sale may exceed the
price specified in the Tag-Along Notice by up to 5%) within 120 days of the
date on which Tag-Along Rights shall have been waived, exercised or expire.
(f) The exercise or the non-exercise of the rights of the Tagging Persons to
participate in one or more Tag-Along Sales shall not adversely affect their
rights to participate in subsequent Tag-Along Sales subject to this Section
4.01.
(g) The sale of the Selling Person's Shares in any Tag-Along Sale shall be
effected on the same terms and conditions as the sale of any Tagging Person's
Shares and no Selling Person shall receive any form of special consideration
or control premium in addition to the price payable for the sold Shares.
(h) The right of the Kleinknecht Shareholders, the Walsh Shareholders, the
Servidio Shareholders and the LSH Shareholders to participate in a Tag-Along
Sale shall terminate at such time as the aggregate number of Shares held by
the Kleinknecht Shareholders, the Walsh Shareholders, the Servidio
Shareholders or the LSH Shareholders, as the case may be, is less than 50% of
their aggregate Initial Ownership of Common Stock.
Section 4.02. Right to Compel Participation in Certain Transfers. (a) If (i)
the CSH Shareholders propose to transfer Shares representing not less than 50%
of their aggregate Initial Ownership of Common Stock to a Third Party in a
bona fide sale for cash negotiated on an arms-length basis, and (ii) the CSH
Shareholders propose a transfer in which the Shares to be transferred by the
CSH Shareholders, the Kleinknecht Shareholders, the Walsh Shareholders, the
Servidio Shareholders and the LSH Shareholders would constitute more than 50%
of the outstanding shares of Common Stock determined on a fully diluted basis
(a "Section 4.02 Sale"), the CSH Shareholders may at their option require all
Kleinknecht Shareholders, Walsh Shareholders, Servidio Shareholders and the
LSH Shareholders to sell the Subject Securities ("Drag-Along Rights") then
held by every Kleinknecht Shareholder, Walsh Shareholder, Servidio
Shareholders and the LSH Shareholders to such Third Party, for the same
consideration per share of Common Stock and otherwise on the same terms and
conditions as the CSH Shareholders. CSH shall provide written notice of such
Section 4.02 Sale to the Kleinknecht Shareholders, the Walsh Shareholders, the
Servidio Shareholders, the LSH Shareholders and the Company (a "Section 4.02
Notice") not later than the 30th day prior to the proposed Section 4.02 Sale.
The Section 4.02 Notice shall identify the transferee, the number of Subject
Securities, the consideration for which a transfer is proposed to be made (the
"Section 4.02 Sale Price") and all other material terms and conditions of the
Section 4.02 Sale. The number of shares of Common Stock to be sold by each
Kleinknecht Shareholder, Walsh Shareholder, Servidio Shareholder and LSH
Shareholder shall not exceed the Drag-Along Portion of the shares of Common
Stock that such Kleinknecht Shareholder, Walsh Shareholder, Servidio
Shareholder and LSH
8
<PAGE>
Shareholder owns. Each Kleinknecht Shareholder, Walsh Shareholder, Servidio
Shareholder or LSH Shareholder shall be required to participate in the Section
4.02 Sale on the terms and conditions set forth in the Section 4.02 Notice and
to tender all its Subject Securities as set forth below. The price payable in
such transfer shall be the Section 4.02 Sale Price. Each of the Kleinknecht
Shareholders, Walsh Shareholders, Servidio Shareholders or LSH Shareholder
shall deliver not later than 2 Business Days prior to the date scheduled for
the Section 4.02 Sale to a representative of CSH designated in the Section
4.02 Notice certificates representing all Subject Securities held by such
Kleinknecht Shareholder, Walsh Shareholder, Servidio Shareholder and LSH
Shareholder duly endorsed, together with all other documents required to be
executed in connection with such Section 4.02 Sale or, if such delivery is not
permitted by applicable law, an unconditional agreement to deliver such
Subject Securities pursuant to this Section 4.02 at the closing for such
Section 4.02 Sale against delivery to such Kleinknecht Shareholder, Walsh
Shareholder, Servidio Shareholder and LSH Shareholder of the consideration
therefor. If a Kleinknecht Shareholder, Walsh Shareholder, Servidio
Shareholder or LSH Shareholder should fail to deliver such certificates to
CSH, the Company shall cause the books and records of the Company to show that
such Subject Securities are bound by the provisions of this Section 4.02 and
that such Subject Securities shall be transferred to the purchaser of the
Subject Securities immediately upon surrender for transfer by the holder
thereof.
(b) The CSH Shareholders shall have a period of 120 days from the date of
receipt of the Section 4.02 Notice to consummate the Section 4.02 Sale on the
terms and conditions set forth in such Section 4.02 Sale Notice. If the
Section 4.02 Sale shall not have been consummated during such period, CSH
shall return to each of the Kleinknecht Shareholders, each of the Walsh
Shareholders, each of the Servidio Shareholders and each of the LSH
Shareholders all certificates representing Shares that such Kleinknecht
Shareholder, Walsh Shareholder, Servidio Shareholder or LSH Shareholder, as
the case may be, may have delivered for transfer pursuant hereto, together
with any documents in the possession of CSH executed by the Kleinknecht
Shareholder, the Walsh Shareholder, the Servidio Shareholder or the LSH
Shareholder, as the case may be, in connection with such proposed transfer,
and all the restrictions on transfer contained in this Agreement or otherwise
applicable at such time with respect to Common Stock owned by the Kleinknecht
Shareholders, the Walsh Shareholders, the Servidio Shareholders and the LSH
Shareholders shall again be in effect.
(c) Concurrently with the consummation of the transfer of Shares pursuant to
this Section 4.02, CSH or the Company, as applicable, shall remit to each of
the Shareholders who have surrendered their certificates the total
consideration (by bank or certified check) for the Shares transferred pursuant
hereto and shall furnish such other evidence of the completion and time of
completion of such transfer and the terms thereof as may be reasonably
requested by such Shareholders.
(d) In furtherance of, and not in limitation of the foregoing provisions of
this Section 4.02, in connection with a Section 4.02 Sale (which Section 4.02
Sale may be structured as a merger, recapitalization, reorganization, sale of
assets or otherwise) each Kleinknecht Shareholder, Walsh Shareholder, Servidio
Shareholder or LSH Shareholder will (i) consent to and raise no objection
against the Section 4.02 Sale or the process pursuant to which it was
arranged, (ii) waive any appraisal rights and other similar rights and (iii)
execute all documents containing such terms and conditions as those executed
by other Shareholders as directed by the CSH Shareholders.
(e) The sale of the CSH Shareholders' Shares in any Section 4.02 Sale shall
be effected on the same terms and conditions as the sale of any Shares owned
by the Kleinknecht Shareholders, the Walsh Shareholders, the Servidio
Shareholders and the LSH Shareholders and no CSH Shareholder shall receive any
form of special consideration or control premium in addition to the price
payable for the sold Shares.
9
<PAGE>
ARTICLE 5
REGISTRATION RIGHTS
Section 5.01. Demand Registration. (a) If the Company shall receive a
written request by the CSH Shareholders (any such requesting Person, a
"Selling Shareholder") that the Company effect the registration under the
Securities Act of all or a portion of such Selling Shareholder's Registrable
Securities, and specifying the intended method of disposition thereof, then
the Company shall promptly give written notice of such requested registration
(a "Demand Registration") to the Kleinknecht Shareholders, the Walsh
Shareholders, the Servidio Shareholders and the LSH Shareholders, and
thereupon will use its best efforts to effect, as expeditiously as possible,
the registration under the Securities Act of:
(i) the Registrable Securities which the Company has been so requested to
register by the Selling Shareholders, then held by the Selling
Shareholders; and
(ii) all other Registrable Securities of the same type as that to which
the request by the Selling Shareholders relates which any Kleinknecht
Shareholder, any Walsh Shareholder, any Servidio Shareholder or any LSH
Shareholder (all such Shareholders, together with the Selling Shareholders,
the "Holders") has requested the Company to register by written request
received by the Company within 10 days (one of which shall be a Business
Day) after the receipt by such Holders of such written notice given by the
Company, all to the extent necessary to permit the disposition (in
accordance with the intended methods thereof as aforesaid) of the
Registrable Securities so to be registered; provided that, subject to
Section 5.01(d) hereof, the Company shall not be obligated to effect more
than five Demand Registrations for the CSH Shareholders; and provided
further that the Company shall not be obligated to effect a Demand
Registration unless the aggregate proceeds expected to be received from the
sale of the Common Stock requested to be included in such Demand
Registration, in the reasonable opinion of CSH exercised in good faith,
equals or exceeds $7,500,000. In no event will the Company be required to
effect more than one Demand Registration within any four-month period.
(b) Promptly after the expiration of the 10-day period referred to in
Section 5.01(a)(ii) hereof, the Company will notify all the Holders to be
included in the Demand Registration of the other Holders and the number of
Registrable Securities requested to be included therein. The Selling
Shareholders requesting a registration under Section 5.01(a) may, at any time
prior to the effective date of the registration statement relating to such
registration, revoke such request, without liability to any of the other
Holders, by providing a written notice to the Company revoking such request,
in which case such request, so revoked, shall be considered a Demand
Registration unless such revocation arose out of the fault of the Company or
unless the participating Shareholders reimburse the Company for all costs
incurred by the Company in connection with such registration, in which case
such request shall not be considered a Demand Registration.
(c) The Company will pay all Registration Expenses in connection with any
Demand Registration.
(d) A registration requested pursuant to this Section 5.01 shall not be
deemed to have been effected unless the registration statement relating
thereto (i) has become effective under the Securities Act and (ii) all of the
Registrable Securities registered thereunder have been sold; provided that if,
within 180 days after it has become effective, the offering of Registrable
Securities pursuant to such registration is interfered with by any stop order,
injunction or other order or requirement of the SEC or other governmental
agency or court such registration will be deemed not to have been effected.
(e) If a Demand Registration involves an Underwritten Public Offering and
the managing underwriter shall advise the Company and the Selling Shareholders
that, in its view, (i) the number of shares of Registrable Securities
requested to be included in such registration (including any securities which
the Company proposes to be included which are not Registrable Securities) or
(ii) the inclusion of some or all of the shares of Registrable Securities
owned by the Holders, in any such case, exceeds the largest number of shares
which can be sold without having an adverse effect on such offering, including
the price at which such shares can be sold (the
10
<PAGE>
"Maximum Offering Size"), the Company will include in such registration, in
the priority listed below, up to the Maximum Offering Size:
(A) first, all Registrable Securities requested to be registered by the
parties requesting such Demand Registration and all Registrable Securities
requested to be included in such registration by any other Holder
(allocated, if necessary for the offering not to exceed the Maximum
Offering Size, pro rata among such Holders on the basis of the relative
number of Registrable Securities so requested to be included in such
registration); and
(B) second, any securities proposed to be registered by the Company.
(f) Upon written notice to each Selling Shareholder, the Company may
postpone effecting a registration pursuant to this Section 5.01 on one
occasion during any period of six consecutive months for a reasonable time
specified in the notice but not exceeding 90 days (which period may not be
extended or renewed), if (1) an investment banking firm of recognized national
standing shall advise the Company and the Selling Shareholders in writing that
effecting the registration would materially and adversely affect an offering
of securities of such Company the preparation of which had then been commenced
or (2) the Company is in possession of material non-public information the
disclosure of which during the period specified in such notice the Company
believes, in its reasonable judgment, would not be in the best interests of
the Company.
(g) After the Company has effected one Demand Registration by the CSH
Shareholders pursuant to this Section 5.01 of Common Stock, the Kleinknecht
Shareholders, upon request of the Kleinknecht Shareholders owning a majority
of the Shares acquired by the Kleinknecht Shareholders on the Closing Date may
request that the Company register Common Stock which are Registrable
Securities then owned by such Kleinknecht Shareholders. In no event will the
Company be required to effect more than two such Demand Registrations by the
Kleinknecht Shareholders. The other provisions of this Article 5 applicable to
Demand Registrations requested by the CSH Shareholders shall apply, mutatis
mutandis, to any such Demand Registration by the Kleinknecht Shareholders.
(h) If any registration requested pursuant to this Section 5.01 which is
proposed by the Company to be effected by the filing of a registration
statement on form S-3 (or any successor or similar short-form registration
statement) shall be in connection with an Underwritten Public Offering, and if
the managing underwriter shall advise the Company in writing that, in its
opinion, the use of another form of registration statement is of material
importance to the success of such proposed offering, then such registration
shall be effected on such other form.
Section 5.02. Piggyback Registration. Piggyback Registration. (a) If the
Company proposes to register any of its Common Stock under the Securities Act
(other than pursuant to a Demand Registration), it will each such time,
subject to the provisions of Section 5.02(b) hereof, give prompt written
notice at least 15 days prior to the anticipated filing date of the
registration statement relating to such registration to all Shareholders which
notice shall set forth such Shareholders' rights under this Section 5.02 and
shall offer all Shareholders the opportunity to include in such registration
statement such number of shares of Common Stock as each such Shareholder may
request (a "Piggyback Registration"). Upon the written request of any such
Shareholder made within 10 days after the receipt of notice from the Company
(which request shall specify the number of shares of Common Stock intended to
be disposed of by such Shareholder), the Company will use its reasonable best
efforts to effect the registration under the Securities Act of all shares of
Common Stock which the Company has been so requested to register by such
Shareholders, to the extent requisite to permit the disposition of the shares
of Common Stock so to be registered; provided that (i) if such registration
involves an Underwritten Public Offering, all such Shareholders requesting to
be included in the Company's registration must sell their Registrable
Securities to the underwriters selected as provided in Section 5.04(f) on the
same terms and conditions as apply to the Company or the Selling Shareholder,
as applicable, and (ii) if, at any time after giving written notice of its
intention to register any stock pursuant to this Section 5.02(a) and prior to
the effective date of the registration statement filed in connection with such
registration, the Company shall determine for any reason not to register such
stock, the Company shall give written notice to all such Shareholders and,
thereupon, shall be relieved of its obligation to register any Registrable
Securities in connection with such registration. No
11
<PAGE>
registration effected under this Section 5.02 shall relieve the Company of its
obligations to effect a Demand Registration to the extent required by Section
5.01 hereof. The Company will pay all Registration Expenses in connection with
each registration of Registrable Securities requested pursuant to this Section
5.02.
(b) If a registration pursuant to this Section 5.02 involves an Underwritten
Public Offering and the managing underwriter advises the Company that, in its
view, the number of shares of Common Stock which the Company and the selling
Shareholders intend to include in such registration exceeds the Maximum
Offering Size, the Company will include in such registration, in the following
priority, up to the Maximum Offering Size:
(i) first, so much of the Common Stock proposed to be registered for the
account of the Company as would not cause the offering to exceed the
Maximum Offering Size; and
(ii) second, all Registrable Securities requested to be included in such
registration by any Shareholder pursuant to Section 5.02 (allocated, if
necessary for the offering not to exceed the Maximum Offering Size, pro
rata among such Shareholders on the basis of the relative number of shares
of Registrable Securities so requested to be included in such
registration).
Section 5.03. Holdback Agreements. With respect to each and every firmly
underwritten Public Offering, each Shareholder agrees not to offer or sell any
shares of Common Stock (except for shares of Common Stock, if any, sold in
that Public Offering) during the 14 days prior to the effective date of the
applicable registration statement for a public offering of shares of Common
Stock (except as part of such registration) and during the period after such
effective date equal to the lesser of: (i) 180 days or (ii) any such shorter
period as the Company and the lead managing underwriter of an Underwritten
Public Offering agree.
Section 5.04. Registration Procedures. Whenever Shareholders request that
any Registrable Securities be registered pursuant to Section 5.01 or 5.02
hereof, the Company will, subject to the provisions of such Sections, use its
reasonable best efforts to effect the registration and the sale of such
Registrable Securities in accordance with the intended method of disposition
thereof as quickly as practicable, and in connection with any such request:
(a) The Company will as expeditiously as possible prepare and file with
the SEC a registration statement on any form selected by counsel for the
Company and which form shall be available for the sale of the Registrable
Securities to be registered thereunder in accordance with the intended
method of distribution thereof, and use its reasonable best efforts to
cause such filed registration statement to become and remain effective for
a period of not less than 180 days (or such shorter period in which all of
the Registrable Securities of the Holders included in such registration
statement shall have actually been sold thereunder).
(b) The Company will, if requested, prior to filing a registration
statement or prospectus or any amendment or supplement thereto, furnish to
each Shareholder and each underwriter, if any, of the Registrable
Securities covered by such registration statement copies of such
registration statement as proposed to be filed, and thereafter the Company
will furnish to such Shareholder and underwriter, if any, such number of
copies of such registration statement, each amendment and supplement
thereto (in each case including all exhibits thereto and documents
incorporated by reference therein), the prospectus included in such
registration statement (including each preliminary prospectus) and such
other documents as such Shareholder or underwriter may reasonably request
in order to facilitate the disposition of the Registrable Securities owned
by such Shareholder. Each Shareholder shall have the right to request that
the Company modify any information contained in such registration
statement, amendment and supplement thereto pertaining to such Shareholder
and the Company shall use its reasonable best efforts to comply with such
request, provided, however, that the Company shall not have any obligation
to so modify any information if so doing would cause the prospectus to
contain an untrue statement of a material fact or omit to state any
material fact required to be stated therein or necessary to make the
statements therein not misleading.
(c) After the filing of the registration statement, the Company will (i)
cause the related prospectus to be supplemented by any required prospectus
supplement, and as so supplemented to be filed pursuant to
12
<PAGE>
Rule 424 under the Securities Act, (ii) comply with the provisions of the
Securities Act with respect to the disposition of all Registrable
Securities covered by such registration statement during the applicable
period in accordance with the intended methods of disposition by the
sellers thereof set forth in such registration statement or supplement to
such prospectus and (iii) promptly notify each Shareholder holding
Registrable Securities covered by such registration statement of any stop
order issued or threatened by the SEC or any state securities commission
under state blue sky laws and take all reasonable actions required to
prevent the entry of such stop order or to remove it if entered.
(d) The Company will use its reasonable best efforts to (i) register or
qualify the Registrable Securities covered by such registration statement
under such other securities or blue sky laws of such jurisdictions in the
United States as any Shareholder holding such Registrable Securities
reasonably (in light of such Shareholder's intended plan of distribution)
requests and (ii) cause such Registrable Securities to be registered with
or approved by such other governmental agencies or authorities as may be
necessary by virtue of the business and operations of the Company and do
any and all other acts and things that may be reasonably necessary or
advisable to enable such Shareholder to consummate the disposition of the
Registrable Securities owned by such Shareholder; provided that the Company
will not be required to (A) qualify generally to do business in any
jurisdiction where it would not otherwise be required to qualify but for
this paragraph (d), (B) subject itself to taxation in any such jurisdiction
or (C) consent to general service of process in any such jurisdiction.
(e) The Company will immediately notify each Shareholder holding such
Registrable Securities covered by such registration statement, at any time
when a prospectus relating thereto is required to be delivered under the
Securities Act, of the occurrence of an event requiring the preparation of
a supplement or amendment to such prospectus so that, as thereafter
delivered to the purchasers of such Registrable Securities, such prospectus
will not contain an untrue statement of a material fact or omit to state
any material fact required to be stated therein or necessary to make the
statements therein not misleading and promptly prepare and make available
to each such Shareholder and file with the SEC any such supplement or
amendment.
(f) In connection with any Demand Registration requested by the CSH
Shareholders, the Company shall appoint the underwriter or underwriters
chosen by CSH. The Company will enter into customary agreements (including
an underwriting agreement in customary form) and take such other actions as
are reasonably required in order to expedite or facilitate the disposition
of such Registrable Securities, including the engagement of a "qualified
independent underwriter" in connection with the qualification of the
underwriting arrangements with the NASD.
(g) Upon execution of confidentiality agreements in form and substance
reasonably satisfactory to the Company, the Company will make available for
inspection by any Shareholder and any underwriter participating in any
disposition pursuant to a registration statement being filed by the Company
pursuant to this Section 5.04 and any attorney, accountant or other
professional retained by any such Shareholder or underwriter (collectively,
the "Inspectors"), all financial and other records, pertinent corporate
documents and properties of the Company (collectively, the "Records") as
shall be reasonably requested by any such Person, and cause the Company's
officers, directors and employees to supply all information reasonably
requested by any Inspectors in connection with such registration statement.
(h) The Company will furnish to each such Shareholder (if requested by
such Shareholder) and to each such underwriter, if any, a signed
counterpart, addressed to such underwriter and the participating
Shareholders, of (i) an opinion or opinions of counsel to the Company and
(ii) a comfort letter or comfort letters from the Company's independent
public accountants, each in customary form and covering such matters of the
type customarily covered by opinions or comfort letters, as the case may
be, as a majority of such Shareholders or the managing underwriter therefor
reasonably requests.
(i) The Company will otherwise use its reasonable best efforts to comply
with all applicable rules and regulations of the SEC and the relevant state
blue sky commissions, and make available to its securityholders, as soon as
reasonably practicable, an earnings statement covering a period of 12
months,
13
<PAGE>
beginning within three months after the effective date of the registration
statement, which earnings statement shall satisfy the provisions of Section
11(a) of the Securities Act.
(j) The Company may require each such Shareholder to promptly furnish in
writing to the Company information regarding the distribution of the
Registrable Securities as the Company may from time to time reasonably
request and such other information as may be legally required in connection
with such registration.
(k) Each such Shareholder agrees that, upon receipt of any notice from
the Company of the happening of any event of the kind described in Section
5.04(e) hereof, such Shareholder will forthwith discontinue disposition of
Registrable Securities pursuant to the registration statement covering such
Registrable Securities until such Shareholder's receipt of the copies of
the supplemented or amended prospectus contemplated by Section 5.04(e)
hereof, and, if so directed by the Company, such Shareholder will deliver
to the Company all copies, other than any permanent file copies then in
such Shareholder's possession, of the most recent prospectus covering such
Registrable Securities at the time of receipt of such notice. In the event
that the Company shall give such notice, the Company shall extend the
period during which such registration statement shall be maintained
effective (including the period referred to in Section 5.04(a) hereof) by
the number of days during the period from and including the date of the
giving of notice pursuant to Section 5.04(e) hereof to the date when the
Company shall make available to such Shareholder a prospectus supplemented
or amended to conform with the requirements of Section 5.04(e) hereof.
(l) The Company will use its reasonable best efforts to list such
Registrable Securities on any securities exchange on which the Common Stock
is then listed or on NASDAQ if the Common Stock is then quoted on NASDAQ
not later than the effective date of such registration statement.
Section 5.05. Indemnification by the Company. The Company agrees to
indemnify and hold harmless each Shareholder holding Registrable Securities
covered by a registration statement, its officers, directors, employees,
members, partners and agents, any affiliate of such Shareholder and each
Person, if any, who controls such Shareholder within the meaning of the
Securities Act or Section 20 of the Exchange Act (and officers, directors,
employees, members, partners and agents of any such affiliate or controlling
Persons) from and against any and all losses, claims, damages and liabilities,
joint or several, and expenses (including reasonable attorneys fees and costs
and expenses of investigation) caused by any untrue statement or alleged
untrue statement of a material fact contained in any registration statement or
prospectus relating to the Registrable Securities (as amended or supplemented
if the Company shall have furnished any amendments or supplements thereto) or
any preliminary prospectus, or caused by any omission or alleged omission to
state therein a material fact required to be stated therein or necessary to
make the statements therein not misleading, except insofar as such losses,
claims, damages or liabilities are caused by any such untrue statement or
omission or alleged untrue statement or omission so made in strict conformity
with information furnished in writing to the Company by such Shareholder or on
such Shareholder's behalf expressly for use therein; provided that with
respect to any untrue statement or omission or alleged untrue statement or
omission made in any preliminary prospectus, or in any prospectus, as the case
may be, the indemnity agreement contained in this paragraph shall not apply to
the extent that any such loss, claim, damage, liability or expense results
from the fact that a current copy of the prospectus (or, in the case of a
prospectus, the prospectus as amended or supplemented) was not sent or given
to the Person asserting any such loss, claim, damage, liability or expense at
or prior to the written confirmation of the sale of the Registrable Securities
concerned to such Person if it is determined that the Company has provided
such current copy of such prospectus (or such amended or supplemented
prospectus, as the case may be) to such Shareholder in a timely manner prior
to such sale and it was the responsibility of such Shareholder under the
Securities Act to provide such Person with a current copy of the prospectus
(or such amended or supplemented prospectus, as the case may be) and such
current copy of the prospectus (or such amended or supplemented prospectus, as
the case may be) would have cured the defect giving rise to such loss, claim,
damage, liability or expense. The Company also agrees to indemnify any
underwriters of the Registrable Securities, their officers and directors and
each person who controls such underwriters on substantially the same basis as
that of the indemnification of the Shareholders provided in this Section 5.05.
14
<PAGE>
Section 5.06. Indemnification by Participating Shareholders. Each
Shareholder holding Registrable Securities included in any registration
statement agrees, severally but not jointly, to indemnify and hold harmless
the Company, its officers, directors and agents and each Person (other than
such Shareholder) if any, who controls the Company within the meaning of
either Section 15 of the Securities Act or Section 20 of the Exchange Act to
the same extent as the foregoing indemnity from the Company to such
Shareholder, but only (i) with respect to information furnished in writing by
such Shareholder or on such Shareholder's behalf expressly for use in any
registration statement or prospectus relating to the Registrable Securities,
or any amendment or supplement thereto, or any preliminary prospectus or (ii)
to the extent that any loss, claim, damage, liability or expense described in
Section 5.05 results from the fact that a current copy of the prospectus (or,
in the case of a prospectus, the prospectus as amended or supplemented) was
not sent or given to the Person asserting any such loss, claim, damage,
liability or expense at or prior to the written confirmation of the sale of
the Registrable Securities concerned to such Person if it is determined that
it was the responsibility of such Shareholder to provide such Person with a
current copy of the prospectus (or such amended or supplemented prospectus, as
the case may be) and such current copy of the prospectus (or such amended or
supplemented prospectus, as the case may be) would have cured the defect
giving rise to such loss, claim, damage, liability or expense. Each such
Shareholder shall be prepared, if required by the underwriting agreement, to
indemnify and hold harmless underwriters of the Registrable Securities, their
officers and directors and each person who controls such underwriters on
substantially the same basis as that of the indemnification of the Company
provided in this Section 5.06. As a condition to including Registrable
Securities in any registration statement filed in accordance with Article 5
hereof, the Company may require that it shall have received an undertaking
reasonably satisfactory to it from any underwriter to indemnify and hold it
harmless to the extent customarily provided by underwriters with respect to
similar securities.
No Shareholder shall be liable under Section 5.06 for any damage thereunder
in excess of the net proceeds realized by such Shareholder in the sale of the
Registrable Securities of such Shareholder.
Section 5.07. Conduct of Indemnification Proceedings. In case any proceeding
(including any governmental investigation) shall be instituted involving any
Person in respect of which indemnity may be sought pursuant to this Article 5,
such Person (an "Indemnified Party") shall promptly notify the Person against
whom such indemnity may be sought (the "Indemnifying Party") in writing and
the Indemnifying Party shall assume the defense thereof, including the
employment of counsel reasonably satisfactory to such Indemnified Party, and
shall assume the payment of all fees and expenses; provided that the failure
of any Indemnified Party so to notify the Indemnifying Party shall not relieve
the Indemnifying Party of its obligations hereunder except to the extent that
the Indemnifying Party is materially and actually prejudiced by such failure
to notify. In any such proceeding, any Indemnified Party shall have the right
to retain its own counsel, but the fees and expenses of such counsel shall be
at the expense of such Indemnified Party unless (i) the Indemnifying Party and
the Indemnified Party shall have mutually agreed to the retention of such
counsel or (ii) in the reasonable judgment of such Indemnified Party
representation of both parties by the same counsel would be inappropriate due
to actual or potential differing interests between them. It is understood that
the Indemnifying Party shall not, in connection with any proceeding or related
proceedings in the same jurisdiction, be liable for the reasonable fees and
expenses of more than one separate firm of attorneys (in addition to any local
counsel) at any time for all such Indemnified Parties, and that all such fees
and expenses shall be reimbursed as they are incurred. In the case of any such
separate firm for the Indemnified Parties, such firm shall be designated in
writing by the Indemnified Parties. The Indemnifying Party shall not be liable
for any settlement of any proceeding effected without its written consent, but
if settled with such consent, or if there be a final judgment for the
plaintiff, the Indemnifying Party shall indemnify and hold harmless such
Indemnified Parties from and against any and all losses, claims, damages,
liabilities and expenses or liability (to the extent stated above) by reason
of such settlement or judgment. No Indemnifying Party shall, without the prior
written consent of the Indemnified Party, effect any settlement of any pending
or threatened proceeding in respect of which any Indemnified Party is or could
have been a party and indemnity could have been sought hereunder by such
Indemnified Party, unless such settlement includes an unconditional release of
such Indemnified Party from all liability arising out of such proceeding.
15
<PAGE>
Section 5.08. Contribution. If the indemnification provided for in this
Article 5 is held by a court of competent jurisdiction to be unavailable to
the Indemnified Parties in respect of any losses, claims, damages, liabilities
or expenses referred to herein, then each such Indemnifying Party, in lieu of
indemnifying such Indemnified Party, shall contribute to the amount paid or
payable by such Indemnified Party as a result of such losses, claims, damages
or liabilities (i) as between the Company and the Shareholders holding
Registrable Securities covered by a registration statement and their related
Indemnified Parties on the one hand and the underwriters and their related
Indemnified Parties on the other, in such proportion as is appropriate to
reflect the relative benefits received by the Company and such Shareholders on
the one hand and the underwriters on the other, from the offering of the
Shareholders' Registrable Securities, or if such allocation is not permitted
by applicable law, in such proportion as is appropriate to reflect not only
the relative benefits but also the relative fault of the Company and such
Shareholders on the one hand and of such underwriters on the other in
connection with the statements or omissions which resulted in such losses,
claims, damages or liabilities, as well as any other relevant equitable
considerations and (ii) as between the Company and their related Indemnified
Parties on the one hand and each such Shareholder and their related
Indemnified Parties on the other, in such proportion as is appropriate to
reflect the relative fault of the Company and of each such Shareholder in
connection with such statements or omissions, as well as any other relevant
equitable considerations. The relative benefits received by the Company and
such Shareholders on the one hand and such underwriters on the other shall be
deemed to be in the same proportion as the total proceeds from the offering
(net of underwriting discounts and commissions but before deducting expenses)
received by the Company and such Shareholders bear to the total underwriting
discounts and commissions received by such underwriters, in each case as set
forth in the table on the cover page of the prospectus. The relative fault of
the Company and such Shareholders on the one hand and of such underwriters on
the other shall be determined by reference to, among other things, whether the
untrue or alleged untrue statement of a material fact or the omission or
alleged omission to state a material fact relates to information supplied by
the Company and such Shareholders or by such underwriters. The relative fault
of the Company on the one hand and of each such Shareholder on the other shall
be determined by reference to, among other things, whether the untrue or
alleged untrue statement of a material fact or the omission or alleged
omission to state a material fact relates to information supplied by such
party, and the parties' relative intent, knowledge, access to information and
opportunity to correct or prevent such statement or omission.
The Company and the Shareholders agree that it would not be just and
equitable if contribution pursuant to this Section 5.08 were determined by pro
rata allocation or by any other method of allocation which does not take
account of the equitable considerations referred to in the immediately
preceding paragraph. The amount paid or payable by an Indemnified Party as a
result of the losses, claims, damages, liabilities or expenses referred to in
the immediately preceding paragraph shall be deemed to include, subject to the
limitations set forth above, any legal or other expenses reasonably incurred
by such Indemnified Party in connection with investigating or defending any
such action or claim. Notwithstanding the provisions of this Section 5.08 no
underwriter shall be required to contribute any amount in excess of the
underwriting discount applicable to securities purchased by such underwriter
in such offering, less the aggregate amount of any damages which such
underwriter has otherwise been required to pay by reason of such untrue or
alleged untrue statement or omission or alleged omission, and no Shareholder
shall be required to contribute any amount in excess of the amount by which
the net proceeds realized on the sale of the Registrable Securities of such
Shareholder exceeds the amount of any damages which such Shareholder has
otherwise been required to pay by reason of such untrue or alleged untrue
statement or omission or alleged omission. No person guilty of fraudulent
misrepresentation (within the meaning of Section 11(f) of the Securities Act)
shall be entitled to contribution from any person who was not guilty of such
fraudulent misrepresentation. Each Shareholder's obligation to contribute
pursuant to this Section 5.08 is several in the proportion that the proceeds
of the offering received by such Shareholder bears to the total proceeds of
the offering received by all such Shareholders and not joint.
Section 5.09. Participation in Public Offering. No Person may participate in
any Underwritten Public Offering hereunder unless such Person (a) agrees to
sell such Person's securities on the basis provided in any underwriting
arrangements to be entered into in connection with such Underwritten Public
Offering and (b) completes and executes all questionnaires, powers of
attorney, indemnities, underwriting agreements and other
16
<PAGE>
documents reasonably required under the terms of such underwriting
arrangements and the provisions of this Agreement in respect of registration
rights.
Section 5.10. Rule 144. The Company covenants that it will file the reports
required to be filed by it under the Securities Act and the Exchange Act and
the rules and regulations adopted by the SEC thereunder (or, if the Company is
not required to file such reports, it will, upon the request of any holder of
Registrable Securities, make publicly available such information), and it will
take such further action as any holder of Registrable Securities may
reasonably request, all to the extent required from time to time to enable
such holder to sell shares of Registrable Securities without registration
under the Securities Act within the limitation of the exemptions provided by
(i) Rule 144 under the Securities Act, as such Rule may be amended from time
to time, or (ii) any similar rule or regulation hereafter adopted by the SEC.
Upon the request of any holder of Registrable Securities, the Company will
deliver to such holder a written statement as to whether it has complied with
such requirements. Notwithstanding anything contained in this Section 5.10,
the Company may de-register under Section 12 of the Exchange Act if it then is
permitted to do so pursuant to the Exchange Act and the rules and regulations
thereunder and, in such circumstances, shall not be required hereby to file
any reports which may be necessary in order for Rule 144 or any similar rule
or regulation to be available.
Section 5.11. No Transfer of Registration Rights. None of the rights of
Shareholders under this Article 5 shall be assignable by any Shareholder to
any Person acquiring securities of such Shareholder in any Public Offering or
pursuant to a distribution to the public under Rule 144 under the Securities
Act.
ARTICLE 6
RETAIN COVENANTS AND AGREEMENTS
Section 6.01. Limitations on Subsequent Registration. Without the prior
written consent of Shareholders holding at least 51% of the Shares held by all
Shareholders, the Company shall not enter into any agreement with any holder
or prospective holder of any securities of the Company (a) that would allow
such holder or prospective holder to include such securities in any
registration filed pursuant to Section 5.01 or 5.02 hereof, unless under the
terms of such agreement, such holder or prospective holder may include such
securities in any such registration only to the extent that the inclusion of
such securities would not reduce the amount of the Registrable Securities of
the Shareholders included therein or (b) on terms otherwise more favorable
than this Agreement.
Section 6.02. Limitation on Purchase of Common Stock. Until the earlier to
occur of (i) the fifth anniversary of the Closing Date or (ii) the occurrence
of a Change in Control no Kleinknecht Shareholder shall acquire any shares of
Common Stock or securities convertible into or exercisable or exchangeable for
Common Stock except (x) as a Permitted Transferee in a transfer from any other
Kleinknecht Shareholder which is otherwise permitted under the terms of
Article 3 hereof or (y) pursuant to stock options granted by the Company.
ARTICLE 7
MISCELLANEOUS
Section 7.01. Entire Agreement. This Agreement, including all exhibits
hereto, constitutes the entire agreement and supersedes all prior agreements
and undertakings, both written and oral, among the parties, or any of them,
with respect to the subject matter hereof and except as otherwise expressly
provided herein.
Section 7.02. Binding Effect; Benefit. This Agreement shall inure to the
benefit of and be binding upon the parties hereto and their respective heirs,
successors, legal representatives and permitted assigns. Except as expressly
provided in Sections 5.05 and 5.06, nothing in this Agreement, expressed or
implied, is intended to confer on any Person other than the parties hereto,
and their respective heirs, successors, legal representatives and permitted
assigns, any rights, remedies, obligations or liabilities under or by reason
of this Agreement.
17
<PAGE>
Section 7.03. Assignability. (a) Neither this Agreement nor any right,
remedy, obligation or liability arising hereunder or by reason hereof shall be
assignable by the Company or any Shareholder; provided that (i) any Permitted
Transferee acquiring shares of Common Stock in a transfer permitted under this
Agreement shall execute and deliver to the Company a Joinder Agreement, and
(ii) with the prior written consent of Shareholders holding at least 50% of
the Shares held by all Shareholders, the rights and obligations of the
Shareholders under Article 5 shall be assignable by the Shareholders to any
Third Party acquiring Registrable Securities in a transfer permitted under
this Agreement.
Section 7.04. Amendment; Waiver; Termination. (a) No provision of this
Agreement may be waived except by an instrument in writing executed by the
party against whom the waiver is to be effective. No provision of this
Agreement may be amended or otherwise modified except by an instrument in
writing executed by the Company and holders of at least 50% of the Shares held
by the Shareholders at the time of such proposed amendment or modification.
(b) In addition, any amendment or modification of any provision of this
Agreement that would adversely affect any (i) CSH Shareholder may be effected
only with the consent of CSH Shareholders holding at least 50% of the Shares
held by the CSH Shareholders, (ii) Kleinknecht Shareholder may be effected
only with the consent of Kleinknecht Shareholders holding at least 50% of the
Shares held by the Kleinknecht Shareholders, (iii) Walsh Shareholder may be
effected only with the consent of Walsh Shareholders holding at least 50% of
the Shares held by the Walsh Shareholders, (iv) Servidio Shareholder may be
effected only with the consent of Servidio Shareholders holding at least 50%
of the Shares held by the Servidio Shareholders or (v) LSH Shareholder may be
effected only with the consent of LSH Shareholders holding at least 50% of the
Shares held by the LSH Shareholders.
(c) This Agreement shall terminate on the tenth anniversary of the date
hereof unless earlier terminated.
Section 7.05. Notices. All notices, requests, claims, demands and other
communications hereunder shall be in writing and shall be given (and shall be
deemed to have been duly received if so given) by hand delivery, telegram,
telex or telecopy, or by mail (registered or certified mail, postage prepaid,
return receipt requested) or by any courier service providing proof of
delivery. All communications hereunder shall be delivered to the respective
parties at the following addresses:
(i) if to the Company, to:
IPC Information Systems, Inc.
Wall Street Plaza
88 Pine Street
New York, NY 10005
Attention: General Counsel
Fax: (212) 858-7959
with copies to:
Citicorp Venture Capital, Ltd.
399 Park Avenue--14th Floor
New York, NY 10043
Attention: Richard M. Cashin, Jr.
Fax: (212) 888-2940
and
Morgan, Lewis & Bockius LLP
101 Park Avenue
New York, NY 10178
Attention: Philip H. Werner, Esq.
Fax: (212) 309-6273
18
<PAGE>
and
Thacher, Proffitt & Wood
Two World Trade Center
New York, NY 10048
Attention: Thomas N. Talley, Esq.
Fax: (212) 432-7152
(ii) if to any CSH Shareholder, to:
Cable Systems Holding, LLC
505 North 51st Avenue
Phoenix, Arizona 85043-2701
Attention: Peter Woog
Fax: (602) 233-5782
with copies to:
Citicorp Venture Capital, Ltd.
399 Park Avenue--14th Floor
New York, NY 10043
Attention: Richard M. Cashin, Jr.
Fax: (212) 888-2940
and
Morgan, Lewis & Bockius LLP
101 Park Avenue
New York, NY 10178
Attention: Philip H. Werner, Esq.
Fax: (212) 309-6273
and
Dechert Price & Rhoads
4000 Bell Atlantic Tower
1717 Arch Street
Philadelphia, PA 19103
Attn: Carmen Romano, Esq.
Fax: (215) 994-2222
(iii) If to any Kleinknecht Shareholder, to:
Richard P. Kleinknecht
15 Banbury Lane
Huntington, NY 11745
with a copy to:
White & Case
1155 Avenue of the Americas
New York, New York
Attention: Edward F. Rover, Esq.
Fax: (212) 354-8113
(iv) If to any Walsh Shareholder, to:
IPC Information Systems, Inc.
Wall Street Plaza
19
<PAGE>
88 Pine Street
New York, NY 10005
Attention: David Walsh
Fax: (212) 344-5106
(v) If to any Servidio Shareholder, to:
IPC Information Systems, Inc.
Wall Street Plaza
88 Pine Street
New York, NY 10005
Attention: Anthony Servidio
Fax: (212) 344-5106
with a copy to:
Cahill Gordon & Reindel
80 Pine Street
New York, NY 10005
Attention: Jonathan Schaffzin, Esq.
Fax: (212) 269-5420
(vi) If to any LSH Shareholder, to:
Lawrence, Smith & Horey III, L.P.
515 Madison Avenue
New York, NY 10022-5403
Attention: Richard W. Smith
Fax: (212) 759-2561
or to such other address as the person to whom notice is given may have
previously furnished to the others in writing in the manner set forth above.
Section 7.06. Headings. The headings contained in this Agreement are for the
convenience of reference purposes only and shall not affect in any way the
meaning or interpretation of this Agreement.
Section 7.07. Counterparts. This Agreement may be executed in one or more
counterparts, and by the different parties hereto in separate counterparts,
each of which when executed shall be deemed to be an original but all of which
taken together shall constitute one and the same agreement.
Section 7.08. Governing Law. This Agreement shall be governed and construed
in accordance with the laws of the State of New York, without giving effect to
any choice of law or conflict of law provision or rule that would cause the
application of the laws of any jurisdiction other than the State of New York,
except to the extent that the General Corporation Law of the State of Delaware
applies as a result of the Company being incorporated in the State of
Delaware, in which case such General Corporation Law shall apply.
Section 7.09. Specific Enforcement. The parties hereto agree that
irreparable damage would occur in the event that any of the provisions of this
Agreement were not performed in accordance with their specific terms. It is
accordingly agreed that the parties hereto shall be entitled to specific
performance of the terms hereof, this being in addition to any other remedy to
which they are entitled at law or in equity.
Section 7.10. Certain Actions. Unless otherwise expressly provided herein,
whenever any action is required under this Agreement by:
(a) the CSH Shareholders (as a group, as opposed to the exercise by a CSH
Shareholder of its individual rights hereunder), it shall be by the
affirmative vote of the holders of at least 51% of the Shares then held by
the CSH Shareholders as a group; or
20
<PAGE>
(b) the Kleinknecht Shareholders (as a group, as opposed to the exercise
by a Kleinknecht Shareholder of its individual rights hereunder), it shall
be by the affirmative vote of the holders of at least 51% of the Shares
then held by the Kleinknecht Shareholders as a group.
(c) the Walsh Shareholders (as a group, as opposed to the exercise by a
Walsh Shareholder of its individual rights hereunder), it shall be by the
affirmative vote of the holders of at least 51% of the Shares then held by
the Walsh Shareholders as a group.
(d) the Servidio Shareholders (as a group, as opposed to the exercise by
a Servidio Shareholder of its individual rights hereunder), it shall be by
the affirmative vote of the holders of at least 51% of the Shares then held
by the Servidio Shareholders as a group.
(e) the LSH Shareholders (as a group, as opposed to the exercise by a LSH
Shareholder of its individual rights hereunder), it shall be by the
affirmative vote of the holders of at least 51% of the Shares then held by
the LSH Shareholders as a group.
Section 7.11. Consent to Jurisdiction; Expenses. (a) Any suit, action or
proceeding seeking to enforce any provision of, or based on any matter arising
out of or in connection with, this Agreement or the transactions contemplated
hereby shall be brought in any Federal Court sitting in New York, New York, or
any New York State court sitting in New York, New York, and each of the
parties hereby consents to the exclusive jurisdiction of such courts (and of
the appropriate appellate courts therefrom) in any such suit, action or
proceeding and irrevocably waives, to the fullest extent permitted by law, any
objection which it may now or hereafter have to the laying of the venue of any
such suit, action or proceeding in any such court or that any such suit,
action or proceeding which is brought in any such court has been brought in an
inconvenient forum. Process in any such suit, action or proceeding may be
served on any party anywhere in the world, whether within or without the
jurisdiction of any such court. Without limiting the foregoing, each party
agrees that service of process on such party by any method provided in Section
7.05 shall be deemed effective service of process on such party and consents
to the personal jurisdiction of any Federal Court sitting in New York, New
York, or any New York State court sitting in New York, New York.
(b) In any dispute arising under this Agreement among any of the parties
hereto, the costs and expenses (including, without limitation, the reasonable
fees and expenses of counsel) incurred by the prevailing party shall be paid
by the party that does not prevail.
Section 7.12. Severability. If any term or other provision of this Agreement
is invalid, illegal or incapable of being enforced by any rule of law or
public policy, all other conditions and provisions of this Agreement shall
nevertheless remain in full force and effect so long as the economic or legal
substance of the transactions contemplated by the Merger Agreement is not
affected in any manner adverse to any party. Upon such determination that any
term or other provision is invalid, illegal or incapable of being enforced,
the parties hereto shall negotiate in good faith to modify this Agreement so
as to effect the original intent of the parties as closely as possible in an
acceptable manner.
Section 7.13. Schedule I. The parties hereto shall cooperate in causing
Schedule I hereto to set forth the securities of the Company held by them.
Section 7.14. Effectiveness. It is a condition precedent to the
effectiveness of this Agreement that the "Merger" under and as defined in the
Merger Agreement shall have been consummated.
[Signature Page to Follow]
21
<PAGE>
IN WITNESS WHEREOF, the parties hereto have caused this Agreement to be duly
executed by their respective authorized officers as of the day and year first
above written.
IPC Information Systems Inc.
/s/ S.T. Clontz
By: _________________________________
Name: S. Terry Clontz
Title:President & C.E.O.
Cable Systems Holding, LLC
/s/ Peter A. Woog
By: _________________________________
Name: Peter A. Woog
Title:Manager
Cable Systems International, Inc.
/s/ Peter A. Woog
By: _________________________________
Name: Peter A. Woog
Title:President & C.E.O.
/s/ Richard Kleinknecht
-------------------------------------
Richard Kleinknecht
/s/ David Walsh
-------------------------------------
David Walsh
/s/ Anthony Servidio
-------------------------------------
Anthony Servidio
Lawrence, Smith & Horey III, L.P.
Its General Partner:
LSH Partners III, L.P.
/s/ Richard W. Smith
By: _________________________________
Name: Richard W. Smith
Title:General Partner
22
<PAGE>
SCHEDULE I
SECURITIES OWNERSHIP
<PAGE>
EXHIBIT A
FORM OF JOINDER AGREEMENT
IPC Information Systems, Inc.
88 Pine Street
New York, New York 10005
Attention: Chief Executive Officer
Gentlemen:
In consideration of the transfer to the undersigned of Shares of
Common Stock, par value $.01 per share, [Describe any other security being
transferred] of IPC Information Systems, Inc., a Delaware corporation (the
"Company"), the undersigned represents that it is a Permitted Transferee of
[Insert name of transferor] and agrees that, as of the date written below,
[he] [she] [it] shall become a party to, and a Permitted Transferee as defined
in, that certain Investors Agreement dated as of December 18, 1998, as such
agreement may have been or may be amended from time to time (the "Agreement"),
among the Company and the persons named therein, and as a Permitted transferee
shall be fully bound by, and subject to, all of the covenants, terms and
conditions of the Agreement that were applicable to the undersigned's
transferor as though an original party thereto and shall be deemed a
[Kleinknecht Shareholder] [CSH Shareholder] [Walsh Shareholder] [Servidio
Shareholder] [LSH Shareholder] for purposes thereof.
Executed as of the day of ,
TRANSFEREE:
Address:
A-1
