SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
FORM 8-K
Current Report Pursuant to Section 13 or 15(d)
of the Securities Exchange Act of 1934
Date of Report (Date of earliest event reported) November 3, 1998
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PSINet Inc.
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(Exact name of registrant as specified in its charter)
New York 0-25812 16-1353600
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(State or other jurisdiction (Commission (IRS Employer
of incorporation) File Number) Identification No.)
510 Huntmar Park Drive, Herndon, Virginia 20170
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(Address of principal executive offices) (Zip Code)
Registrant's telephone number, including area code (703) 904-4100
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(Former name or former address, if changed since last report)
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Item 5. Other Events
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On November 3, 1998, PSINet Inc. (the "Company") completed its previously
announced offering of $200 million aggregate principal amount of 11 1/2% Senior
Notes due 2008 (the "Notes"). The Notes were issued and sold in accordance with
Securities and Exchange Commission Rule 144A and have not been registered under
the Securities Act of 1933, as amended (the "Securities Act"), and may not be
offered or sold in the United States absent registration under the Securities
Act or an applicable exemption from the registration requirements thereof.
The Notes are senior unsecured obligations of the Company ranking pari
passu in right of payment with all existing and future unsecured and
unsubordinated indebtedness of the Company and senior in right of payment to all
existing and future subordinated indebtedness of the Company.
The Notes will mature on November 1, 2008. Interest on the Notes will be
payable semi-annually on May 1 and November 1 of each year, commencing May 1,
1999. The Notes will be redeemable at the option of the Company, in whole or in
part, at any time on or after November 1 of 2003, 2004, 2005 and 2006 at
105.750%, 103.833%, 101.917% and 100% of the principal amount thereof,
respectively, in each case, plus accrued and unpaid interest to the date of
redemption. In addition, on or prior to November 1, 2001, the Company may
redeem up to 35% of the original aggregate principal amount of the Notes at a
redemption price of 111.5% of the principal amount thereof, plus accrued and
unpaid interest to the date of redemption, with the net cash proceeds of certain
public equity offerings or the sale of stock to one or more strategic investors,
provided that at least 65% of the original aggregate principal amount of the
Notes remains outstanding immediately after such redemption. Upon the occurrence
of certain change of control events, the Company will be required to make an
offer to purchase the Notes at a purchase price equal to 101% of the principal
amount thereof, plus accrued and unpaid interest, if any, to the date of
repurchase.
The net proceeds of the offering, after deducting underwriting discounts
and commissions and expenses payable by the Company, were approximately $194.1
million. The Company expects to use the net proceeds of the offering to finance
capital expenditures, including the acquisition of additional telecommunications
bandwidth and related facilities and equipment and the construction of Internet
data centers, and general corporate purposes. In addition, a portion of the net
proceeds is expected to be used to make strategic investments in or acquisitions
of businesses or assets related or complementary to the Company's existing
business. The Notes were sold to certain "qualified institutional buyers" (as
defined in Rule 144A under the Securities Act) through Donaldson, Lufkin &
Jenrette Securities Corporation, Chase Securities Inc. and Morgan Stanley & Co.
Incorporated as Initial Purchasers. The Notes have been rated B3 by Moody's
Investors Service and B- by Standard & Poor's.
There is no established trading market for the Notes and the Company does
not intend to apply for listing on any securities exchange; however, the Notes
are eligible for trading in the Private Offerings, Resale and Trading through
Automated Linkages ("PORTAL") market of the National Association of Securities
Dealers, Inc.
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Item 7. Financial Statements, Pro Forma Financial Information and Exhibits
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(c) Exhibits
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Exhibit 4.1 Indenture, dated as of November 3, 1998
between PSINet Inc. and Wilmington Trust
Company, as trustee
Exhibit 4.2 Form of 11 1/2% Senior Note Due 2008, Series A
Exhibit 10.1 Registration Rights Agreement, dated as of
November 3, 1998, among PSINet Inc. and
Donaldson, Lufkin & Jenrette Securities
Corporation, Chase Securities Inc. and Morgan
Stanley & Co. Incorporated
Exhibit 10.2 First Amendment dated as of October 27, 1998
to the Credit Agreement, dated as of
September 29, 1998, among the Company, the
Lenders party thereto, the Chase Manhattan
Bank, as Administrative Agent, Fleet National
Bank, as Syndication Agent, and The Bank of
New York, as Documentation Agent.
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SIGNATURES
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Pursuant to the requirements of the Securities Exchange Act of 1934, the
registrant has duly caused this report to be signed on its behalf by the
undersigned hereunto duly authorized.
Dated: November 10, 1998 PSINET INC.
By: /s/ Kathleen B. Horne
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Kathleen B. Horne
Vice President and Deputy
General Counsel
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EXHIBIT INDEX
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Exhibit
Number Exhibit Name Location
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4.1 Indenture, dated as of November 3, 1998, between 7
PSINet Inc. and Wilmington Trust Company, as trustee
4.2 Form of 11 1/2% Senior Note Due 2008, Series A 152
10.1 Registration Rights Agreement, dated as of November 166
3, 1998, among PSINet Inc. and Donaldson, Lufkin &
Jenrette Securities Corporation, Chase Securities
Inc. and Morgan Stanley & Co. Incorporated
10.2 First Amendment dated as of October 27, 1998 to the 191
Credit Agreement, dated as of September 29, 1998,
among the Company, the Lenders party thereto, the
Chase Manhattan Bank, as Administrative Agent, Fleet
National Bank, as Syndication Agent, and The Bank of
New York, as Documentation Agent.
PSINET INC.
$200,000,000
11 1/2% SENIOR NOTES DUE 2008
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INDENTURE
Dated As Of November 3, 1998
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WILMINGTON TRUST COMPANY
Trustee
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CROSS-REFERENCE TABLE
Reconciliation and tie between Trust Indenture Act of 1939, as amended, and
Indenture, dated as of November 3, 1998
Trust Indenture Indenture
ACT SECTION SECTION
310(a)(1).............................. 6.09
(a)(2)................................. 6.09
(b).................................... 6.08
311(a)................................. 6.13
312(a)................................. 7.01
(b).................................... 7.02
(c).................................... 7.02
313(a)................................. 7.03
(b)(2)................................. 7.03
(c).................................... 7.03, 7.04
(d).................................... 7.03
314(a)................................. 7.04
(c)(1)................................. 1.03
(c)(2)................................. 1.03
(e).................................... 1.03
315(a)................................. 6.01(b)
(b).................................... 6.02
(c).................................... 6.01(a)
(d).................................... 6.01(c), 6.03
(e).................................... 5.14
316(a)(last sentence).................. 1.01("Outstanding")
(a)(1)(A).............................. 5.12
(a)(1)(B).............................. 5.13
(b).................................... 5.08
(c).................................... 1.05
317(a)(1).............................. 5.03
(a)(2)................................. 5.04
(b).................................... 6.05
318(a)................................. 1.08
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TABLE OF CONTENTS
PAGE
ARTICLE I Definitions And Other Provisions of General Application....1
Section 1.01. Construction...............................................1
Section 1.02. Definitions................................................2
Section 1.03. Compliance Certificates and Opinions......................27
Section 1.04. Form of Documents Delivered to Trustee....................28
Section 1.05. Acts of Holders...........................................29
Section 1.06. Notices, etc., to the Trustee, the Company
and any Guarantor.........................................30
Section 1.07. Notice to Holders; Waiver.................................31
Section 1.08. Conflict with Trust Indenture Act.........................32
Section 1.09. Effect of Headings and Table of Contents..................32
Section 1.10. Successors and Assigns....................................32
Section 1.11. Separability Clause.......................................32
Section 1.12. Benefits of Indenture.....................................32
Section 1.13. Governing Law.............................................32
Section 1.14. Legal Holidays............................................33
Section 1.15. Independence of Covenants.................................33
Section 1.16. Schedules and Exhibits....................................33
Section 1.17. Counterparts..............................................33
Section 1.18. No Adverse Interpretation of Other Agreements.............33
Section 1.19. No Recourse against Others................................33
ARTICLE II Notes Forms...............................................34
Section 2.01. Forms Generally...........................................34
Section 2.02. Form of Face of Note......................................35
ARTICLE III The Notes.................................................54
Section 3.01. Title and Terms...........................................54
Section 3.02. Denominations.............................................55
Section 3.03. Execution, Authentication, Delivery and Dating............56
Section 3.04. Temporary Notes...........................................57
Section 3.05. Registration, Registration of Transfer and Exchange.......58
Section 3.06. Book Entry Provisions for Global Notes....................59
Section 3.07. Special Transfer and Exchange Provisions..................61
Section 3.08. Mutilated, Destroyed, Lost and Stolen Notes...............64
Section 3.09. Payment of Interest; Interest Rights Preserved............64
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Section 3.10. CUSIP Numbers.............................................66
Section 3.11. Persons Deemed Owners.....................................66
Section 3.12. Cancellation..............................................66
Section 3.13. Computation of Interest...................................66
ARTICLE IV Defeasance and Covenant Defeasance........................67
Section 4.01. Company's Option to Effect Defeasance
or Covenant Defeasance....................................67
Section 4.02. Defeasance and Discharge..................................67
Section 4.03. Covenant Defeasance.......................................67
Section 4.04. Conditions to Defeasance or Covenant Defeasance...........68
Section 4.05. Deposited Money and U.S. Government Obligations to
Be Held in Trust; Other Miscellaneous Provisions..........70
Section 4.06. Reinstatement.............................................71
ARTICLE V Remedies..................................................72
Section 5.01. Events of Default.........................................72
Section 5.02. Acceleration of Maturity; Rescission and Annulment........74
Section 5.03. Collection of Indebtedness and Suits for
Enforcement by Trustee....................................75
Section 5.04. Trustee May File Proofs of Claim..........................76
Section 5.05. Trustee May Enforce Claims without Possession of Notes....77
Section 5.06. Application of Money Collected............................77
Section 5.07. Limitation on Suits.......................................78
Section 5.08. Unconditional Right of Holders to Receive Principal,
Premium and Interest......................................79
Section 5.09. Restoration of Rights and Remedies........................79
Section 5.10. Rights and Remedies Cumulative............................79
Section 5.11. Delay or Omission Not Waiver..............................79
Section 5.12. Control by Holders........................................80
Section 5.13. Waiver of Past Defaults...................................80
Section 5.14. Undertaking for Costs.....................................80
Section 5.15. Waiver of Stay, Extension or Usury Laws...................81
Section 5.16. Remedies Subject to Applicable Law........................81
ARTICLE VI The Trustee...............................................81
Section 6.01. Duties of Trustee.........................................81
Section 6.02. Notice of Defaults........................................83
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PAGE
Section 6.03. Certain Rights of Trustee.................................83
Section 6.04. Trustee Not Responsible for Recitals, Dispositions
of Notes or Application of Proceeds Thereof...............85
Section 6.05. Trustee and Agents May Hold Notes; Collections; etc.......85
Section 6.06. Money Held in Trust.......................................85
Section 6.07. Compensation and Indemnification of Trustee and Its
Prior Claim...............................................86
Section 6.08. Conflicting Interests.....................................87
Section 6.09. Trustee Eligibility.......................................87
Section 6.10. Resignation and Removal; Appointment of
Successor Trustee.........................................87
Section 6.11. Acceptance of Appointment by Successor....................89
Section 6.12. Merger, Conversion, Consolidation or
Succession to Business....................................90
Section 6.13. Preferential Collection of Claims Against Company.........90
ARTICLE VII Holders' Lists and Reports by Trustee and Company.........91
Section 7.01. Company to Furnish Trustee Names and Addresses
of Holders................................................91
Section 7.02. Disclosure of Names and Addresses of Holders..............91
Section 7.03. Reports by Trustee........................................91
Section 7.04. Reports by Company........................................92
ARTICLE VIII Consolidation, Merger, Sale of Assets.....................93
Section 8.01. Company and Guarantors May Consolidate, etc.,
Only on Certain Terms.....................................93
Section 8.02. Successor Substituted.....................................94
ARTICLE IX Supplemental Indentures...................................94
Section 9.01. Supplemental Indentures and Agreements
without Consent of Holders................................94
Section 9.02. Supplemental Indentures and Agreements
with Consent of Holders...................................95
Section 9.03. Execution of Supplemental Indentures and Agreements.......97
Section 9.04. Effect of Supplemental Indentures.........................97
Section 9.05. Conformity with Trust Indenture Act.......................98
Section 9.06. Reference in Notes to Supplemental Indentures.............98
Section 9.07. Notice of Supplemental Indentures.........................98
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PAGE
ARTICLE X Covenants.................................................98
Section 10.01. Payment of Principal, Premium and Interest................98
Section 10.02. Maintenance of Office or Agency...........................98
Section 10.03. Money for Note Payments to Be Held in Trust...............99
Section 10.04. Corporate Existence......................................101
Section 10.05. Payment of Taxes and Other Claims........................101
Section 10.06. Maintenance of Properties................................101
Section 10.07. Maintenance of Insurance.................................102
Section 10.08. Limitation on Indebtedness...............................102
Section 10.09. Limitation on Restricted Payments........................105
Section 10.10. Limitation on Transactions with Affiliates...............109
Section 10.11. Limitation on Liens......................................111
Section 10.12. Limitation on Sale of Assets.............................111
Section 10.13. Limitation on Issuances of Guarantees of Indebtedness....112
Section 10.14. Purchase of Notes upon a Change of Control...............113
Section 10.15. Limitation on SaleLeaseback Transactions.................117
Section 10.16. Limitation on Issuance and Sale of Subsidiary
Capital Stock............................................117
Section 10.17. Limitation on Dividends and Other Payment
Restrictions Affecting Subsidiaries.....................118
Section 10.18. Limitations on Unrestricted Subsidiaries.................119
Section 10.19. Provision of Financial Statements........................119
Section 10.20. Statement by Officers as to Default......................120
Section 10.21. Waiver of Certain Covenants..............................121
Section 10.22. Limitation on Business...................................121
ARTICLE XI Redemption of Notes......................................121
Section 11.01. Rights of Redemption.....................................121
Section 11.02. Applicability of Article.................................122
Section 11.03. Election to Redeem; Notice to Trustee....................122
Section 11.04. Selection by Trustee of Notes to Be Redeemed.............122
Section 11.05. Notice of Redemption.....................................122
Section 11.06. Deposit of Redemption Price..............................124
Section 11.07. Notes Payable on Redemption Date.........................124
Section 11.08. Notes Redeemed in Part...................................125
ARTICLE XII Satisfaction and Discharge...............................125
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PAGE
Section 12.01. Satisfaction and Discharge of Indenture..................125
Section 12.02. Application of Trust Money...............................126
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<PAGE>
INDENTURE, dated as of November 3, 1998, between PSINET INC., a New York
corporation ("Company"), and WILMINGTON TRUST COMPANY, a Delaware banking
corporation, as trustee ("Trustee").
RECITALS OF THE COMPANY
The Company has duly authorized the issuance of $200,000,000 aggregate
principal amount of its 11 1/2% Senior Notes due 2008 ("Notes"), of
substantially the tenor and amount hereinafter set forth, and to provide
therefor the Company has duly authorized the execution and delivery of this
Indenture.
This Indenture is subject to, and shall be governed by, the provisions of
the Trust Indenture Act that are required to be part of and to govern indentures
qualified under the Trust Indenture Act.
All acts and things necessary have been done to make the Notes, when duly
issued and executed by the Company and authenticated and delivered hereunder,
the valid obligations of the Company and to make this Indenture a valid
instrument of the Company, in accordance with the terms of this Indenture.
NOW, THEREFORE, THIS INDENTURE 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 of the Notes, as follows:
ARTICLE I
DEFINITIONS AND OTHER PROVISIONS OF GENERAL APPLICATION
Section 1.01. CONSTRUCTION. For all purposes of this Indenture, except as
otherwise expressly provided or unless the context otherwise requires:
(a) the terms defined in this Article have the meanings assigned to them in
this Article, and include the plural as well as the singular;
(b) all other terms used herein which are defined in the Trust Indenture
Act, either directly or by reference therein, have the meanings assigned to them
therein;
<PAGE>
(c) all accounting terms not otherwise defined herein have the meanings
assigned to them in accordance with GAAP;
(d) the words "herein", "hereof" and "hereunder" and other words of similar
import refer to this Indenture as a whole and not to any particular Article,
Section or other subdivision;
(e) all references to $, US$, dollars or United States dollars shall refer
to the lawful currency of the United States of America; and
(f) all references herein to particular Sections or Articles refer to this
Indenture unless otherwise so indicated.
Section 1.02. DEFINITIONS. Certain terms used principally in Article IV are
defined in Article IV. Certain other terms are defined elsewhere in the
Indenture.
"ACQUIRED INDEBTEDNESS" means Indebtedness of a Person (i) existing at the
time such Person becomes a Subsidiary or (ii) assumed in connection with the
acquisition of assets from (or merger or consolidation with or into) such
Person, in each case, other than Indebtedness incurred in connection with, or in
contemplation of, such Person becoming a Subsidiary or such acquisition, as the
case may be, provided that Indebtedness of such Person which is redeemed,
defeased, retired or otherwise repaid at the time of, or substantially
contemporaneously with, the consummation of the transactions by which such
Person becomes a Subsidiary or such asset acquisition shall not constitute
Acquired Indebtedness.
"ACQUIRED PERSON" means, with respect to any specified Person, any other
Person which merges with or into or becomes a Subsidiary of such specified
Person.
"ACQUISITION" means (i) any capital contribution (by means of transfers of
cash or other property to others or payments for property or services for the
account or use of others, or otherwise) by the Company or any Subsidiary to any
other Person, or any acquisition or purchase of Capital Stock of any other
Person by the Company or any Subsidiary, in either case pursuant to which such
Person shall become a Subsidiary or shall be consolidated, merged with or into
the Company or any Subsidiary or (ii) any acquisition by the Company or any
Subsidiary of the assets of any Person which constitute substantially all of an
operating unit or line of business of such Person or which is otherwise outside
of the ordinary course of business of the Company or such Subsidiary.
"AFFILIATE" means, with respect to any specified Person, any other Person
directly or indirectly controlling or controlled by or under direct or indirect
common control
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with such specified Person. For the purposes of this definition, "control" when
used with respect to any specified Person means the power to direct the
management and policies of such Person, directly or indirectly, whether through
ownership of voting securities, by contract or otherwise; and the terms
"controlling" and "controlled" have meanings correlative to the foregoing.
"APPLICABLE PROCEDURES" means, with respect to any transfer or transaction
involving a Global Note or beneficial interest therein, the rules and procedures
of the Depositary for such Note to the extent applicable to such transaction and
as in effect at the time of such transfer or transaction.
"ASSET SALE" means any sale, issuance, conveyance, transfer, lease or other
disposition (including, without limitation, by way of merger, consolidation or
sale and leaseback transaction) (collectively, a "transfer"), directly or
indirectly, in one or a series of related transactions, of: (i) any Capital
Stock of any Subsidiary; (ii) all or substantially all of the properties and
assets of any division or line of business of the Company or its Subsidiaries;
or (iii) any other properties or assets of the Company or any Subsidiary other
than in the ordinary course of business. For the purposes of this definition,
the term "Asset Sale" shall not include any transfer of properties and assets
(A) that is governed by the provisions of Section 8.01, (B) that is by the
Company to any Wholly-Owned Subsidiary or by any Wholly-Owned Subsidiary to the
Company or any other Wholly-Owned Subsidiary in a manner that does not violate
the terms of this Indenture, (C) that is of obsolete equipment in the ordinary
course of business, (D) the Fair Market Value of which in the aggregate does not
exceed $5 million in any transaction or series of related transactions, (E) that
is made in accordance with the provisions described in Section 10.09, (F) which
constitutes the granting of any Permitted Lien and (G) that is transferred in
exchange for Telecommunications Assets; provided that if the Fair Market Value
of the assets to be transferred by the Company or such Subsidiary under this
clause (G), plus the Fair Market Value of any other consideration paid or
credited by the Company or such Subsidiary exceeds $10 million, such transaction
shall require approval of the Board of Directors of the Company.
"AVERAGE LIFE TO STATED MATURITY" means, as of the date of determination
with respect to any Indebtedness, the quotient obtained by dividing (i) the sum
of the products of (a) the number of years from the date of determination to the
date or dates of each successive scheduled principal payment of such
Indebtedness multiplied by (b) the amount of each such principal payment; by
(ii) the sum of all such principal payments.
"BANKRUPTCY LAW" means Title 11, United States Bankruptcy Code of 1978, as
amended, or any similar United States federal or state law relating to
bankruptcy,
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insolvency, receivership, winding up, liquidation, reorganization or relief of
debtors or any amendment to, succession to or change in any such law.
"BOARD OF DIRECTORS" means the board of directors of the Company or any
Guarantor, as the case may be, or any duly authorized committee of such board.
"BOARD RESOLUTION" means a copy of a resolution certified by the Secretary
or an Assistant Secretary of the Company or any Guarantor, as the case may be,
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.
"BOOK-ENTRY NOTE" means any Global Notes bearing the legend specified in
Section 2.02 evidencing all or part of a series of Notes, authenticated and
delivered to the Depositary for such series or its nominee, and registered in
the name of such Depositary or nominee.
"BUSINESS DAY" means each Monday, Tuesday, Wednesday, Thursday and Friday
which is not a day on which banking institutions or trust companies in The City
of New York or the city in which the Corporate Trust Office of the Trustee is
located are authorized or obligated by law, regulation or executive order to
close.
"CAPITAL LEASE OBLIGATION" of any Person means any obligation of such
Person and its subsidiaries on a Consolidated basis under any capital lease of
real or personal property which, in accordance with GAAP, has been recorded as a
capital lease obligation.
"CAPITAL STOCK" means (i) with respect to any Person that is a corporation,
any and all shares, interests, participations or other equivalents (however
designated and whether or not voting) of corporate stock, including each class
of common stock and preferred stock of such Person and (ii) with respect to any
Person that is not a corporation, any and all partnership, membership or other
equity interests of such Person.
"CASH EQUIVALENTS" means (i) any evidence of Indebtedness, maturing not
more than one year after the date of acquisition, issued by the United States of
America, or an instrumentality or agency thereof, and guaranteed fully as to
principal, premium, if any, and interest by the United States of America, (ii)
any certificate of deposit, maturing not more than one year after the date of
acquisition, issued by, or time deposit of, a commercial banking institution
that is a member of the Federal Reserve System and that has combined capital and
surplus and undivided profits of not less than $500 million, whose short term
debt has a rating, at the time as of which any investment therein is made, of
"P-1" (or higher) according to Moody's Investors Service, Inc. ("Moody's") or
any successor rating agency
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or "A-1" (or higher) according to Standard & Poor's Corporation ("S&P") or any
successor rating agency, (iii) commercial paper, maturing not more than 270 days
after the date of acquisition, issued by a corporation (other than an Affiliate
or Subsidiary of the Company) organized and existing under the laws of 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 (iv) any money market deposit accounts issued or offered by
a domestic commercial bank having capital and surplus in excess of $500 million;
provided that the short term debt of such commercial bank has a rating, at the
time of Investment, of "P-1" (or higher) according to Moody's or "A-1" (or
higher) according to S&P.
"CHANGE OF CONTROL" means the occurrence of any of the following events:
(i) any "person" or "group" (as such terms are used in Sections 13(d) and 14(d)
of the Exchange Act) is or becomes the "beneficial owner" (as defined in Rules
13d-3 and 13d-5 under the Exchange Act, except that a Person shall be deemed to
have beneficial ownership of all shares that such Person has the right to
acquire, whether such right is exercisable immediately or only after the passage
of time), directly or indirectly, of more than 50% of the total outstanding
Voting Stock of the Company (other than IXC Internet Services, Inc., IXC
Communications, Inc. or any controlled affiliate thereof, in any case pursuant
to the issuance by the Company of shares of Capital Stock in satisfaction of any
obligations under the terms of the IXC Agreement); (ii) during any period of two
consecutive years, individuals who at the beginning of such period constituted
the Board of Directors of the Company (together with any new directors whose
election to such board or whose nomination for election by the stockholders of
the Company was approved by a vote of a majority of the directors then still in
office who were either directors at the beginning of such period or whose
election or nomination for election was previously so approved), cease for any
reason to constitute a majority of such Board of Directors then in office; (iii)
the Company consolidates with or merges with or into any Person or conveys,
transfers or leases all or substantially all of its assets to any Person, or any
corporation consolidates with or merges into or with the Company in any such
event pursuant to a transaction in which the outstanding Voting Stock of the
Company is changed into or exchanged for cash, securities or other property,
other than any such transaction where the outstanding Voting Stock of the
Company is not changed or exchanged at all (except to the extent necessary to
reflect a change in the jurisdiction of incorporation of the Company or where no
"person" or "group" owns, immediately after such transaction, directly or
indirectly, more than 50% of the total outstanding Voting Stock of the surviving
corporation); or (iv) the Company is liquidated or dissolved or adopts a plan of
liquidation or dissolution other than in a transaction which complies with the
provisions described under Section 8.01. The good faith determination of the
Board, based upon the advice of outside counsel, of the beneficial ownership of
securities of the Company within the meaning of Rules 13d-3 and 13d-5 under the
Exchange
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<PAGE>
Act shall be conclusive, absent contrary controlling judicial precedent on
contrary written interpretation published by the Commission.
"CODE" means the Internal Revenue Code of 1986, as amended.
"COMMISSION" means the Securities and Exchange Commission, as from time to
time constituted, created under the Exchange Act, or if at any time after the
execution of this Indenture such Commission is not existing and performing the
duties now assigned to it under the Trust Indenture Act then the body performing
such duties at such time.
"COMMODITY PRICE PROTECTION AGREEMENT" means any forward contract,
commodity swap, commodity option or other similar financial agreement or
arrangement relating to, or the value which is dependent upon, fluctuations in
commodity prices.
"COMMON STOCK" means the common stock, par value $0.01 per share, of the
Company.
"COMPANY" means PSINet Inc., a corporation incorporated under the laws of
New York, until a successor Person shall have become such pursuant to the
applicable provisions of this Indenture, and thereafter "Company" shall mean
such successor Person.
"COMPANY REQUEST" or "COMPANY ORDER" means a written request or order
signed in the name of the Company by any one of its Chairman of the Board, its
President, its Chief Executive Officer, its Chief Financial Officer or a Vice
President (regardless of Vice Presidential designation), and by any one of its
Treasurer, an Assistant Treasurer, its Secretary or an Assistant Secretary, and
delivered to the Trustee.
"COMPANY RIGHTS AGREEMENT" means the Rights Agreement, dated as of May 8,
1996, between the Company and First Chicago Trust Company of New York, as in
effect on the date of the Indenture (or as amended, from time to time, to the
extent that such amendment has been determined by the Board of Directors, in
good faith, not to adversely affect the holders of the Notes).
"CONSOLIDATED" means consolidated in accordance with GAAP.
"CONSOLIDATED INCOME TAX EXPENSE" of any Person means, for any period, the
provision for federal, state, local and foreign income taxes of such Person and
its Consolidated subsidiaries for such period as determined in accordance with
GAAP.
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"CONSOLIDATED INTEREST EXPENSE" of any Person means, without duplication,
for any period, the sum of (a) the interest expense of such Person and its
subsidiaries for such period, on a Consolidated basis in accordance with GAAP,
including, without limitation, (i) amortization of debt discount, (ii) the net
costs associated with Interest Rate Agreements, Currency Hedging Agreements and
Commodity Price Protection Agreements (including amortization of discounts),
(iii) the interest portion of any deferred payment obligation and (iv) accrued
interest, plus (b) (i) the interest component of the Capital Lease Obligations
paid, accrued and/or scheduled to be paid or accrued by such Person and its
subsidiaries during such period and (ii) all capitalized interest of such Person
and its subsidiaries plus (c) the interest expense actually paid by such Person
under any Guaranteed Debt of such Person and any subsidiary to the extent not
included under clause (a)(iv) above, plus (d) the aggregate amount for such
period of cash or non-cash dividends on any Redeemable Capital Stock or
Preferred Stock of the Company and its Subsidiaries, in each case as determined
on a Consolidated basis in accordance with GAAP.
"CONSOLIDATED NET INCOME" means, with respect to any period, the net income
of the Company and any Subsidiary for such period determined on a Consolidated
basis in accordance with GAAP, adjusted, to the extent included in calculating
such net income, by excluding, without duplication, (a) all extraordinary gains
or losses for such period, (b) all gains or losses from the sales or other
dispositions of assets out of the ordinary course of business (net of taxes,
fees and expenses relating to the transaction giving rise thereto) for such
period: (c) that portion of such net income derived from or in respect of
investments in Persons other than Subsidiaries, except to the extent actually
received in cash by the Company or any Subsidiary (subject, in the case of any
Subsidiary, to the provisions of clause (f) of this definition); (d) the portion
of such net income (or loss) allocable to minority interests in any Person
(other than a Subsidiary) for such period, except to the extent the Company's
allocation portion of such Person's net income for such period is actually
received in cash by the Company or any Subsidiary (subject, in the case of any
Subsidiary, to the provisions of clause (f) of this definition); (e) the net
income (or loss) of any other Person combined with the Company or any Subsidiary
on a "pooling of interests" basis attributable to any period prior to the date
of combination; and (f) the net income of any Subsidiary to the extent that the
declaration of dividends or similar distributions by that Subsidiary of that
income is not at the time (regardless of any waiver) permitted, directly or
indirectly, by operation of the terms of its charter or any agreement,
instrument, judgment, decree, order, statute, rule or governmental regulations
applicable to that Subsidiary or its Capital Stock holders.
"CONSOLIDATED OPERATING CASH FLOW" means, with respect to any period,
Consolidated Net Income for such period increased (without duplication), to the
extent deducted in calculating such Consolidated Net Income, by (a) Consolidated
Income Tax
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Expense for such period; (b) Consolidated Interest Expense for such period; and
(c) depreciation, amortization and any other non-cash items for such period
(other than any non-cash item which requires the accrual of, or a reserve for,
cash charges for any future period) of the Company and any Subsidiary,
including, without limitation, amortization of capitalized debt issuance costs
for such period, all of the foregoing determined on a consolidated basis in
accordance with GAAP minus non-cash items to the extent they increase
Consolidated Net Income (including the partial or entire reversal of reserves
taken in prior periods) for such period.
"CORPORATE TRUST OFFICE" means the office of the Trustee or an affiliate or
agent thereof at which at any particular time the corporate trust business for
the purposes of this Indenture shall be principally administered, which office
at the date of execution of this Indenture is located at Rodney Square North,
1100 North Market Street, Wilmington, Delaware 19890-0001.
"CUMULATIVE OPERATING CASH FLOW" means, as at any date of determination,
the positive cumulative Consolidated Operating Cash Flow realized during the
period commencing on April 13, 1998 and ending on the last day of the most
recent fiscal quarter immediately preceding the date of determination for which
consolidated financial information of the Company is available or, if such
cumulative Consolidated Operating Cash Flow for such period is negative, the
negative amount by which cumulative Consolidated Operating Cash Flow is less
than zero.
"CURRENCY HEDGING ARRANGEMENTS" means one or more of the following
agreements which shall be entered into by one or more financial institutions:
foreign exchange contracts, currency swap agreements or other similar agreements
or arrangements designed to protect against the fluctuations in currency values.
"DEBT SECURITIES" means any debt securities issued by the Company in a
public offering or private placement.
"DEBT TO ANNUALIZED OPERATING CASH FLOW RATIO" means the ratio of (a) the
Total Consolidated Indebtedness as of the date of calculation (the
"Determination Date") to (b) four times the Consolidated Operating Cash Flow for
the latest fiscal quarter for which financial information is available
immediately preceding such Determination Date (the "Measurement Period"). For
purposes of calculating Consolidated Operating Cash Flow for the Measurement
Period immediately prior to the relevant Determination Date, (i) any Person that
is a Subsidiary on the Determination Date (or would become a Subsidiary on such
Determination Date in connection with the transaction that requires the
determination of such Consolidated Operating Cash Flow) will be deemed to have
been a Subsidiary at all
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times during such Measurement Period, (ii) any Person that is not a Subsidiary
on such Determination Date (or would cease to be a Subsidiary on such
Determination Date in connection with the transaction that requires the
determination of such Consolidated Operating Cash Flow) will be deemed not to
have been a Subsidiary at any time during such Measurement Period, and (iii) if
the Company or any Subsidiary shall have in any manner (x) acquired (through an
Acquisition or the commencement of activities constituting such operating
business) or (y) disposed of (by an Asset Sale or the termination or
discontinuance of activities constituting such operating business) any operating
business during such Measurement Period or after the end of such period and on
or prior to such Determination Date, such calculation will be made on a pro
forma basis in accordance with GAAP as if, in the case of an Acquisition or the
commencement of activities constituting such operating business, all such
transactions had been consummated prior to the first day of such Measurement
Period (it being understood that in calculating Consolidated Operating Cash Flow
the exclusions set forth in clauses (a) through (f) of the definition of
Consolidated Net Income shall apply to an Acquired Person as if it were a
Subsidiary).
"DEFAULT" means any event which is, or after notice or passage of any time
or both would be, an Event of Default.
"DEPOSITARY" means, with respect to the Notes issued in the form of one or
more Book-Entry Notes, The Depository Trust Company ("DTC"), its nominees and
successors, or another Person designated as Depositary by the Company, which
must be a clearing agency registered under the Exchange Act.
"DISINTERESTED DIRECTOR" means, with respect to any transaction or series
of related transactions, a member of the Board of Directors of the Company who
does not have any material direct or indirect financial interest in or with
respect to such transaction or series of related transactions.
"DISQUALIFIED STOCK" means, with respect to any person, any Capital Stock
which, by its terms (or by the terms of any security into which it is
convertible or for which it is exchangeable), or upon the happening of any
event, matures or becomes mandatorily redeemable, pursuant to a sinking fund
obligation or otherwise, or becomes exchangeable for Indebtedness at the option
of the holder thereof, or becomes redeemable at the option of the holder
thereof, in whole or in part, on or prior to the final maturity date of the
Notes; provided such Capital Stock shall only constitute Disqualified Stock to
the extent it so matures or becomes so redeemable or exchangeable on or prior to
the final maturity date of the Notes; provided, further, 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
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of control" occurring prior to the final maturity date 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 10.12 and Section
10.14 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 10.12 and Section 10.14.
"EVENT OF DEFAULT" has the meaning specified in Section 5.01.
"EXCHANGE ACT" means the Securities Exchange Act of 1934, as amended, or
any successor statute.
"EXCHANGE OFFER" means the exchange offer by the Company of Series B Notes
for Series A Notes to be effected pursuant to the Registration Rights Agreement.
"EXCHANGE OFFER REGISTRATION STATEMENT" has the meaning set forth in the
Registration Rights Agreement.
"FAIR MARKET VALUE" means, with respect to any asset or property, the sale
value that would be reasonably expected to be obtained in an arm's-length
transaction between an informed and willing seller under no compulsion to sell
and an informed and willing buyer under no compulsion to buy. Fair Market Value
shall be determined by the Board of Directors of the Company acting in good
faith and shall be evidenced by a Board Resolution.
"GENERALLY ACCEPTED ACCOUNTING PRINCIPLES" or "GAAP" means generally
accepted accounting principles in the United States, consistently applied, which
are in effect on the date hereof.
"GLOBAL NOTES" means the Rule 144A Global Notes, the Regulation S Global
Notes and the Series B Global Notes to be issued as Book-Entry Notes issued to
the Depositary in accordance with Section 3.06.
"GUARANTEE" means the guarantee by any Guarantor of the Company's Indenture
Obligations.
"GUARANTEED DEBT" of any Person means, without duplication, all
Indebtedness of any other Person guaranteed directly or indirectly in any manner
by such Person, or in effect guaranteed directly or indirectly by such Person
through an agreement
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(i) to pay or purchase such Indebtedness or to advance or supply funds for the
payment or purchase of such Indebtedness, (ii) to purchase, sell or lease (as
lessee or lessor) property, or to purchase or sell services, primarily for the
purpose of enabling the debtor to make payment of such Indebtedness or to assure
the holder of such Indebtedness against loss, (iii) to supply funds to, or in
any other manner invest in, the debtor (including any agreement to pay for
property or services without requiring that such property be received or such
services be rendered), (iv) to maintain working capital or equity capital of the
debtor, or otherwise to maintain the net worth, solvency or other financial
condition of the debtor or (v) otherwise to assure a creditor against loss;
provided that the term "guarantee" shall not include endorsements for collection
or deposit, in either case in the ordinary course of business.
"GUARANTOR" means any Subsidiary which is a guarantor of the Notes,
including any Person that is required after the date hereof to execute a
guarantee of the Notes pursuant to Section 10.13 until a successor replaces such
party pursuant to the applicable provisions of this Indenture and, thereafter,
shall mean such successor.
"HOLDER" means a Person in whose name a Note is registered in the Note
Register.
"INCUR" means, with respect to any Indebtedness or other obligation of any
Person, to create, issue, incur (including by conversion, exchange or
otherwise), assume, guarantee or otherwise become liable in respect of such
Indebtedness or other obligation or the recording, as required pursuant to GAAP
or otherwise, of any such Indebtedness or other obligation on the balance sheet
of such Person (and "Incurrence", "Incurred" and "Incurring" shall have meanings
correlative to the foregoing). Indebtedness of a Person existing at the time
such Person becomes a Subsidiary or is merged or consolidated with or into the
Company or any Subsidiary shall be deemed to be Incurred at such time.
"INDEBTEDNESS" means, with respect to any Person, without duplication, (i)
all indebtedness of such Person for borrowed money or for the deferred purchase
price of property or services, excluding any trade payables and other accrued
current liabilities arising in the ordinary course of business, (ii) all
obligations of such Person evidenced by bonds, notes, debentures or other
similar instruments, (iii) all indebtedness created or arising under any
conditional sale or other title retention agreement with respect to property
acquired by such Person (unless the rights and remedies of the seller or lender
under such agreement in the event of default are limited to repossession or sale
of such property), but excluding trade payables arising in the ordinary course
of business, (iv) all obligations under Interest Rate Agreements, Currency
Hedging Agreements or Commodity Price Protection Agreements of such Person, (v)
all Capital Lease Obligations of such Person, (vi) all Indebtedness referred
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to in clauses (i) through (v) above of other Persons and all dividends of other
Persons, the payment of which is guaranteed by such Person or which is otherwise
secured by (or for which the holder of such Indebtedness has an existing right,
contingent or otherwise, to be secured by) any Lien, upon or with respect to
property (including, without limitation, accounts and contract rights) owned by
such Person, even though such Person has not directly assumed or become liable
for the payment of such Indebtedness, (vii) all Redeemable Capital Stock issued
by such Person valued at the greater of its voluntary or involuntary maximum
fixed repurchase price plus accrued and unpaid dividends, and (viii) any
refinancing of any liability of the types referred to in clauses (i) through
(vii) above. For purposes hereof, the "maximum fixed repurchase price" of any
Redeemable Capital Stock which does not have a fixed repurchase price shall be
calculated in accordance with the terms of such Redeemable Capital Stock as if
such Redeemable Capital Stock were purchased on any date on which Indebtedness
shall be required to be determined pursuant to this Indenture, and if such price
is based upon, or measured by, the Fair Market Value of such Redeemable Capital
Stock, such Fair Market Value to be determined in good faith by the Board of
Directors of the issuer of such Redeemable Capital Stock. In no event shall
"Indebtedness" include any trade payable or other current liabilities arising in
the ordinary course of business. The amount of any item of Indebtedness shall be
the amount of such Indebtedness properly classified as a liability on a balance
sheet prepared in accordance with GAAP.
"INDENTURE" means this instrument as originally executed (including all
exhibits and schedules thereto) and as it may from time to time be supplemented
or amended by one or more indentures supplemental hereto entered into pursuant
to the applicable provisions hereof.
"INDENTURE OBLIGATIONS" means the obligations of the Company and any other
obligor under this Indenture or under the Notes, including any Guarantor, to pay
principal of, premium, if any, and interest when due and payable, and all other
amounts due or to become due under or in connection with this Indenture, the
Notes and the performance of all other obligations to the Trustee and the
holders under this Indenture and the Notes, according to the respective terms
thereof.
"INITIAL PURCHASERS" means Donaldson, Lufkin & Jenrette Securities
Corporation, Chase Securities Inc. and Morgan Stanley & Co. Incorporated.
"INTEREST PAYMENT DATE" means the Stated Maturity of an installment of
interest on the Notes.
"INTEREST RATE AGREEMENTS" means one or more of the following agreements
which shall be entered into by one or more financial institutions: interest rate
protection
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agreements (including, without limitation, interest rate swaps, caps, floors,
collars and similar agreements) and/or other types of interest rate hedging
agreements from time to time.
"INVESTMENT" means, with respect to any Person, directly or indirectly, any
advance, loan (including guarantees), or other extension of credit 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, acquisition or ownership by such Person of any Capital Stock, bonds,
notes, debentures or other securities issued or owned by any other Person and
all other items that would be classified as investments on a balance sheet
prepared in accordance with GAAP.
"ISSUE DATE" means the date on which the Notes are originally issued under
this Indenture.
"IXC" means IXC Internet Services, Inc., a Delaware corporation, and any
successors or assigns under the IXC Agreement.
"IXC AGREEMENT" means the IRU and Stock Purchase Agreement, dated as of
July 22, 1997, between the Company and IXC, as amended, pursuant to which the
Company acquired from IXC 20-year noncancellable indefeasible rights of use, as
in effect on the date of the Indenture (or as further amended, from time to
time, to the extent that such amendment has been determined by the Board of
Directors, in good faith, not to adversely affect the Holders of the Notes).
"LIEN" means any mortgage or deed of trust, pledge, lien (statutory or
otherwise), security interest, hypothecation, or other encumbrance upon or with
respect to any property of any kind, real or personal, movable or immovable, now
owned or hereafter acquired. A Person shall be deemed to own subject to a Lien
any property which such Person has acquired or holds subject to the interest of
a vendor or lessor under any conditional sale agreement, capital lease or other
title retention agreement, other than (i) any lease properly classified as an
operating lease under GAAP, (ii) intellectual property licensing arrangements,
or (iii) cancellation or termination rights or provisions contained in
agreements governing any indefeasible rights of use or similar property rights
which do not materially impair the use of the property or interest which is the
subject of such cancellation or termination rights or provisions.
"LIQUIDATED DAMAGES" has the meaning provided in Section 5 of the
Registration Rights Agreement.
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"MATURITY" means, when used with respect to the Notes, the date on which
the principal of the Notes becomes due and payable as therein provided or as
provided in this Indenture, whether at Stated Maturity, the Offer Date or the
redemption date and whether by declaration of acceleration, Offer in respect of
Excess Proceeds, Change of Control Offer in respect of a Change of Control, call
for redemption or otherwise.
"MOODY'S" means Moody's Investors Service, Inc., or any successor rating
agency.
"NET CASH PROCEEDS" means (a) with respect to any Asset Sale by any Person,
the proceeds thereof (without duplication in respect of all Asset Sales) in the
form of cash or Cash Equivalents including payments in respect of deferred
payment obligations when received in the form of, or stock or other assets when
disposed of for, cash or Cash Equivalents (except to the extent that such
obligations are financed or sold with recourse to the Company or any
Wholly-Owned Subsidiary) 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 payable as a result of such
Asset Sale, (iii) payments made to retire Indebtedness where payment of such
Indebtedness is secured by the assets or properties the subject of such Asset
Sale, (iv) amounts required to be paid to any Person (other than the Company or
any Subsidiary) owning a beneficial interest in the assets subject to the Asset
Sale and (v) amounts contractually required to be deposited into escrow or
similar trust arrangements and other appropriate amounts to be provided by the
Company or any Subsidiary, as the case may be, as a reserve, in accordance with
GAAP, against any liabilities associated with such Asset Sale and retained by
the Company or any Subsidiary, as the case may be, after 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 or reimbursement
obligations related to letters of credit issued against liabilities associated
therewith, all as reflected in an officers' certificate delivered to the Trustee
(which amounts shall become Net Cash Proceeds only at such time as they are
released from escrow or such trust arrangements or otherwise cease to be
reserved or subject to other obligations to third parties) and (b) with respect
to any issuance or sale of Capital Stock or options, warrants or rights to
purchase Capital Stock, or debt securities or Capital Stock that have been
converted into or exchanged for Capital Stock as referred to in Section 10.09,
the proceeds of such issuance or sale in the form of cash or Cash Equivalents
including payments in respect of deferred payment obligations when received in
the form of, or stock or other assets when disposed of for, cash or Cash
Equivalents (except to the extent that such obligations are financed or sold
with recourse to the Company or any Subsidiary), net of attorney's fees,
accountant's fees and brokerage, consultation, underwriting and other fees and
expenses actually incurred in
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connection with such issuance or sale (or conversion in the case of debt
securities or Capital Stock that have been converted) and net of taxes paid or
payable as a result thereof.
"NON-U.S. PERSON" means a Person that is not a "U.S. Person" as defined in
Regulation S under the Securities Act.
"NOTES" has the meaning stated in the first recital of this Indenture.
"OFFICERS' CERTIFICATE" means a certificate signed by the Chairman of the
Board, the President, the Chief Executive Officer, the Chief Financial Officer
or a Vice President (regardless of Vice Presidential designation), and by the
Treasurer, an Assistant Treasurer, the Secretary or an Assistant Secretary, of
the Company or any Guarantor, as the case may be, and in form and substance
reasonably satisfactory to, and delivered to, the Trustee.
"OPINION OF COUNSEL" means a written opinion of counsel, who may be counsel
for the Company, any Guarantor or the Trustee, unless an Opinion of Independent
Counsel is required pursuant to the terms of this Indenture, and who shall be
reasonably acceptable to the Trustee, and which opinion shall be in form and
substance reasonably satisfactory to the Trustee.
"OPINION OF INDEPENDENT COUNSEL" means a written opinion of counsel, who
may be regular outside counsel for the Company, but which is issued by a Person
who is not an employee or consultant (other than non-employee legal counsel) of
the Company, or any Guarantor and who shall be reasonably acceptable to the
Trustee, and which opinion shall be in form and substance reasonably
satisfactory to the Trustee.
"OUTSTANDING" when used with respect to Notes means, as of the date of
determination, all Notes theretofore authenticated and delivered under this
Indenture, except:
(a) Notes theretofore canceled by the Trustee or delivered to the Trustee
for cancellation;
(b) Notes, or portions thereof, for whose payment or redemption money in
the necessary amount has been theretofore deposited with the Trustee or any
Paying Agent (other than the Company) in trust or set aside and segregated in
trust by the Company (if the Company shall act as its own Paying Agent) for the
Holders of such Notes; provided that if such Notes are to be redeemed, notice of
such redemption has been duly given pursuant to this Indenture or provision
therefor reasonably satisfactory to the Trustee has been made;
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(c) Notes, except to the extent provided in Sections 4.02 and 4.03, with
respect to which the Company has effected defeasance or covenant defeasance as
provided in Article IV; and
(d) Notes in exchange for or in lieu of which other Notes have been
authenticated and delivered pursuant to this Indenture, other than any such
Notes in respect of which there shall have been presented to the Trustee and the
Company proof reasonably satisfactory to each of them that such Notes are held
by a bona fide purchaser in whose hands the Notes are valid obligations of the
Company; provided, however, that in determining whether the Holders of the
requisite principal amount of Outstanding Notes have given any request, demand,
authorization, direction, notice, consent or waiver hereunder, Notes owned by
the Company, any Guarantor, or any other obligor upon the Notes or any Affiliate
of the Company, any Guarantor or 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 knows 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
reasonable satisfaction of the Trustee the pledgee's right so to act with
respect to such Notes and that the pledgee is not the Company, any Guarantor or
any other obligor upon the Notes or any Affiliate of the Company, any Guarantor
or such other obligor.
"PARI PASSU INDEBTEDNESS" means (a) any Indebtedness of the Company which
ranks pari passu in right of payment to the Notes and (b) with respect to any
Guarantee, Indebtedness which ranks pari passu in right of payment to such
Guarantee.
"PAYING AGENT" means any Person (including the Company) authorized by the
Company to pay the principal of, premium, if any, or interest on, any Notes on
behalf of the Company.
"PERMITTED CREDIT FACILITY" means any unsubordinated commercial term loan
and/or revolving credit facility entered into principally with commercial banks
and/or other financial institutions typically party to commercial loan
agreements and any refinancing thereof.
"PERMITTED INVESTMENT" means (i) Investments in any Wholly-Owned Subsidiary
or any Person which, as a result of, or in connection with, such Investment, (a)
becomes a Wholly-Owned Subsidiary or (b) is merged or consolidated with or into,
or transfers or conveys all or substantially all of its assets to, or is
liquidated into, the Company or any Wholly-Owned Subsidiary; (ii) Indebtedness
of the Company or a Subsidiary described under clauses (iv) and (vii) of
paragraph (b) of Section 10.08; (iii) Investments in
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any of the Notes; (iv) Investments in Cash Equivalents; (v) Investments acquired
by the Company or any Subsidiary in connection with an Asset Sale permitted
under Section 10.12 to the extent such Investments are non-cash proceeds as
permitted under such covenant; (vi) Investments in existence or contractually
committed to on or after April 13, 1998 and any extension, modification or
renewal of any such Investment that does not increase the amount of such
Investment; (vii) guarantees of Indebtedness of a Wholly-Owned Subsidiary given
by the Company or another Wholly-Owned Subsidiary and guarantees of Indebtedness
of the Company given by any Subsidiary, in each case, not otherwise in violation
of the terms of the Indenture; (viii) advances to employees or officers of the
Company in the ordinary course of business so long as the aggregate amount of
such advances shall not exceed $2 million outstanding at any one time; (ix) any
Investment in the Company by any Subsidiary of the Company; provided, that any
such Investment in the form of Indebtedness shall be Subordinated Indebtedness;
(x) accounts receivable created or acquired in the ordinary course of business
of the Company or any Subsidiary and Investments arising from transactions by
the Company or any Subsidiary with trade creditors or customers in the ordinary
course of business (including any such Investment received pursuant to any plan
of reorganization or similar arrangement pursuant to the bankruptcy or
insolvency of such trade creditors or customers or otherwise in settlement of a
claim); (xi) loans in the ordinary course of business to employees, officers or
directors of the Company or a Subsidiary to purchase Capital Stock of the
Company pursuant to the terms of stock benefit plans; (xii) Investments the
consideration of which is Capital Stock of the Company; (xiii) Investments in or
acquisitions of Capital Stock or other obligations, property or securities of
Persons (other than Affiliates) received in the bankruptcy or reorganization of
or by such Person or otherwise taken in settlement or satisfaction of claims,
disputes or judgments, and, in each case, extensions, modifications and renewals
thereof; (xiv) Investments in prepaid expenses, negotiable instruments held for
collection, and lease, utility and workers' compensation, performance and other
similar deposits; (xv) Investments, not to exceed $100 million at any one time
outstanding, to obtain noncancellable indefeasible rights of use to, or capacity
in, fiber-based bandwidth (or similar network bandwidth), related equipment
and/or other Telecommunications Assets in the ordinary course of the Company's
business; and (xvi) any other Investments in an aggregate amount not to exceed
$50 million at any one time outstanding. In connection with any assets or
property contributed or transferred to any Person as an Investment, such
property and assets shall be equal to the Fair Market Value (as determined by
the Company's Board of Directors) at the time of such Investment.
"PERMITTED JOINT VENTURE" means a corporation, partnership or other Person
engaged in a Telecommunications Business over which the Company has, directly or
indirectly, the power to direct the policies, management and affairs in all
material respects.
"PERMITTED LIEN" means:
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(a) any Lien existing as of the date of this Indenture;
(b) any Lien arising by reason of (I) any judgment, decree or order of any
court, so long as such Lien is adequately bonded and any appropriate legal
proceedings which may have been duly initiated for the review of such judgment,
decree or order shall not have been finally terminated or the period within
which such proceedings may be initiated shall not have expired; (II) taxes not
yet delinquent or which are being contested in good faith; (III) security for
payment of workers' compensation or other insurance or arising under worker's
compensation laws or similar legislation; (IV) good faith deposits in connection
with bids, tenders, leases, contracts (other than contracts evidencing
Indebtedness); (V) zoning restrictions, easements, licenses, reservations, title
defects, rights of others for rights of way, utilities, sewers, electric lines,
telephone or telegraph lines, and other similar purposes, provisions, covenants,
conditions, waivers, restrictions on the use of property or irregularities of
title (and with respect to leasehold interests, mortgages, obligations, liens
and other encumbrances incurred, created, assumed or permitted to exist and
arising by, through or under a landlord or owner of the leased property, with or
without consent of the lessee), none of which materially impairs the use of any
parcel of property material to the operation of the business of the Company or
any Subsidiary or the value of such property for the purpose of such business;
(VI) deposits to secure public or statutory obligations, or in lieu of surety or
appeal bonds; or (VII) operation of law in favor of landlords, carriers,
warehousemen, bankers, mechanics, materialmen, laborers, employees or suppliers,
incurred in the ordinary course of business for sums which are not yet
delinquent or are being contested in good faith by negotiations or by
appropriate proceedings which suspend the collection thereof;
(c) any Lien to secure the performance bids, trade contracts, leases
(including, without limitation, statutory and common law landlord's liens),
statutory obligations, surety and appeal bonds, letters of credit and other
obligations of a like nature and incurred in the ordinary course of business of
the Company or any Subsidiary;
(d) any Lien securing obligations in connection with Indebtedness permitted
under clause (i) of paragraph (b) of Section 10.08 which are incurred or assumed
in connection with the acquisition, development or construction of real or
personal, moveable or immovable property within 180 days of such incurrence or
assumption; provided that such Liens only extend to such acquired, developed or
constructed property and any accessories, accessions, additions, replacements
and proceeds thereof;
(e) any Lien arising from judgments, decrees or attachments in
circumstances not constituting an Event of Default;
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(f) any Lien securing obligations in connection with Indebtedness permitted
in clauses (ii), (iv) or (viii) of paragraph (b) of Section 10.08;
(g) any Lien in favor of the Company or any Wholly-Owned Subsidiary;
(h) any Lien securing obligations in connection with Acquired Indebtedness;
provided that any such Lien does not extend to or cover any property or assets
of the Company or any of its Subsidiaries other than the property or assets of
the Acquired Person covered thereby or the property assets so acquired;
(i) any Lien in favor of the Trustee for the benefit of the Holders or the
Trustee arising under the provisions in the Indenture;
(j) any Lien encumbering deposits made to secure obligations arising from
statutory, regulatory, contractual or warranty requirements of the Company or
any Subsidiary if and to the extent arising in the ordinary course of business,
including rights of offset and set-off;
(k) any Lien in favor of customs or revenue authorities to secure payment
of customs duties in connection with the importation of goods in the ordinary
course of business;
(l) leases, subleases, licenses or other similar rights granted to third
Persons not interfering with the ordinary course of business of the Company or
its Subsidiaries;
(m) any Lien securing reimbursement obligations with respect to letters of
credit that encumber documents and other property relating to such letters of
credit; and
(n) any Lien securing any refinancing, in whole or in part, of any
obligation or Indebtedness described in the foregoing clauses (a) through (d)
and (f) through (m) so long as no additional collateral is granted as security
thereby.
"PERSON" means any individual, corporation, limited liability company,
partnership, joint venture, association, joint-stock company, trust,
unincorporated organization or government or any agency or political subdivision
thereof.
"PREDECESSOR NOTE" of any particular Note means every previous Note
evidencing all or a portion of the same debt as that evidenced by such
particular Note; and, for the purposes of this definition, any Note
authenticated and delivered under Section 3.08
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in exchange for a mutilated Note or in lieu of a lost, destroyed or stolen Note
shall be deemed to evidence the same debt as the mutilated, lost, destroyed or
stolen Note.
"PREFERRED STOCK" means, with respect to any Person, any Capital Stock of
any class or classes (however designated) which is preferred as to the payment
of dividends or distributions, or as to the distribution of assets upon any
voluntary or involuntary liquidation or dissolution of such Person, over the
Capital Stock of any other class in such Person.
"PROSPECTUS" means the prospectus included in a Registration Statement,
including any preliminary prospectus, and any such prospectus as amended or
supplemented by any prospectus supplement, including any such prospectus
supplement with respect to the terms of the offering of any portion of the Notes
covered by a Shelf Registration Statement, and by all other amendments and
supplements to a prospectus, including post-effective amendments, and in each
case including all material incorporated by reference therein.
"PUBLIC EQUITY OFFERING" means an underwritten offering of Capital Stock
(other than Disqualified Stock) of the Company with gross proceeds to the
Company of at least $25 million pursuant to a registration statement that has
been declared effective by the Commission pursuant to the Securities Act (other
than a registration statement on Form S-8 or otherwise relating to equity
securities issuable under any employee benefit plan of the Company).
"PURCHASE MONEY OBLIGATION" means any Indebtedness secured by a Lien on
assets related to the business of the Company and any additions, replacements,
modifications and accessions thereto, which are purchased by the Company at any
time after the Notes are issued; provided that (i) the security agreement or
conditional sales or other title retention contract pursuant to which the Lien
on such assets is created (collectively a "Purchase Money Security Agreement")
shall be entered into within 180 days after the purchase or substantial
completion of the construction of such assets and shall at all times be confined
solely to the assets so purchased or acquired, any additions, replacements,
modifications and accessions thereto and any proceeds and products therefrom,
(ii) at no time shall the aggregate principal amount of the outstanding
Indebtedness secured thereby be increased, except in connection with the
purchase of additions and accessions thereto and except in respect of fees and
other obligations in respect of such Indebtedness and (iii) (A) the aggregate
outstanding principal amount of Indebtedness secured thereby (determined on a
per asset basis in the case of any additions and accessions) shall not at the
time such Purchase Money Security Agreement is entered into exceed 100% of the
purchase price to the Company of the assets subject thereto or (B) the
Indebtedness secured thereby shall be with recourse solely to the assets so
purchased or acquired, any additions, replacements, modifications and accessions
thereto and any proceeds and products therefrom.
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"QIB" means a "Qualified Institutional Buyer" under Rule 144A under the
Securities Act.
"QUALIFIED CAPITAL STOCK" of any Person means any and all Capital Stock of
such Person other than Redeemable Capital Stock.
"REDEEMABLE CAPITAL STOCK" means any Capital Stock that, either by its
terms or by the terms of any security into which it is convertible or
exchangeable or otherwise, is or upon the happening of an event or passage of
time would be, required to be redeemed prior to the Stated Maturity of the
principal of the Notes or is redeemable at the option of the holder thereof at
any time prior to any such Stated Maturity, or is convertible into or
exchangeable for debt securities at any time prior to any such Stated Maturity
at the option of the holder thereof.
"REDEMPTION DATE" when used with respect to any Note to be redeemed
pursuant to any provision in this Indenture means the date fixed for such
redemption by or pursuant to this Indenture.
"REDEMPTION PRICE" when used with respect to any Note to be redeemed
pursuant to any provision in this Indenture means the price at which it is to be
redeemed pursuant to this Indenture.
"REGISTRATION RIGHTS AGREEMENT" means the Registration Rights Agreement,
dated as of November 3, 1998, between the Company and the Initial Purchasers.
"REGISTRATION STATEMENT" has the meaning set forth in the Registration
Rights Agreement.
"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) next preceding
such Interest Payment Date.
"REGULATION S" means Regulation S under the Securities Act, as amended from
time to time.
"REGULATION S GLOBAL NOTES" means one or more permanent Global Notes in
registered form representing the aggregate principal amount of Notes sold in
reliance on Regulation S under the Securities Act.
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"RESPONSIBLE OFFICER" when used with respect to the Trustee means any
officer or employee assigned to the Corporate Trust Office or any agent of the
Trustee appointed hereunder, including any vice president, assistant vice
president, secretary, assistant secretary, or any other officer or assistant
officer of the Trustee or any agent of the Trustee appointed hereunder to whom
any corporate trust matter is referred because of his or her knowledge of and
familiarity with the particular subject.
"RULE 144A" means Rule 144A under the Securities Act, as amended from time
to time.
"RULE 144A GLOBAL NOTES" means one or more permanent Global Notes in
registered form representing the aggregate principal amount of Notes sold in
reliance on Rule 144A under the Securities Act.
"SALE-LEASEBACK TRANSACTION" means any transaction or series of related
transactions pursuant to which the Company or a Subsidiary sells or transfers
any property or asset in connection with the leasing, or the resale against
installment payments, of such property or asset to the seller or transferor.
"S&P" means Standard & Poor's Rating Group, a division of McGraw Hill, Inc.
or any successor rating agency.
"SECURITIES ACT" means the Securities Act of 1933, as amended, or any
successor statute.
"SERIES A GLOBAL NOTES" means one or more Global Notes in registered form
representing Series A Notes.
"SERIES A NOTES" means the Notes issued by the Company in the offering
pursuant to which the Notes have been sold to the Initial Purchasers.
"SERIES B GLOBAL NOTES" means one or more Global Notes in registered form
representing the aggregate principal amount of Series B Notes exchanged for
Series A Notes pursuant to the Exchange Offer.
"SERIES B NOTES" means Notes issued in exchange for Series A Notes in the
Exchange Offer.
"SHELF REGISTRATION STATEMENT" has the meaning set forth in Section 4 of
the Registration Rights Agreement.
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"SPECIAL RECORD DATE" for the payment of any Defaulted Interest means a
date fixed by the Trustee pursuant to Section 3.09.
"STATED MATURITY" means, when used with respect to any Indebtedness or any
installment of interest thereon, the dates specified in such Indebtedness as the
fixed date on which the principal of such Indebtedness or such installment of
interest, as the case may be, is due and payable.
"STRATEGIC INVESTOR" means any Person which is (or a controlled Affiliate
of any Person which is or a controlled Affiliate of which is) engaged
principally in the Telecommunications Business and which has a Total Market
Capitalization of at least $500 million.
"SUBORDINATED INDEBTEDNESS" means Indebtedness of the Company or a
Guarantor expressly subordinated by its terms in right of payment to the Notes
or the Guarantee of such Guarantor, as the case may be.
"SUBSIDIARY" means, with respect to any Person, a corporation, association
or other business entity (i) of which outstanding Capital Stock having at least
the majority of the votes entitled to be cast in the election of directors is
owned, directly or indirectly, by such Person and/or any one or more
subsidiaries of such Person, or (ii) of which at least a majority of voting
interest is owned, directly or indirectly, by such Person and/or one or more
subsidiaries of such Person.
"SUBSIDIARY" means any subsidiary of the Company other than an Unrestricted
Subsidiary.
"SUCCESSOR NOTE" of any particular Note means every Note issued after, and
evidencing all or a portion of the same debt as that evidenced by, such
particular Note; and, for the purposes of this definition, any Note
authenticated and delivered under Section 3.08 in exchange for or in lieu of a
mutilated, destroyed, lost or stolen Note shall be deemed to evidence the same
debt as the mutilated, destroyed, lost or stolen Note.
"TELECOMMUNICATIONS ASSETS" means all assets (including Capital Stock),
rights (contractual or otherwise) and properties, real or personal, whether
tangible or intangible, used or intended for use in connection with a
Telecommunications Business.
"TELECOMMUNICATIONS BUSINESS" means, when used in reference to any Person,
that such Person is engaged primarily in (i) the business of transmitting or
providing services relating to the transmission of, voice, video or data through
owned or leased
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transmission facilities, (ii) the business of creating, developing or marketing
communications related network equipment or services or computer-based
information or (iii) businesses reasonably related thereto, which determination
shall, in any such case, be made in good faith by the Board of Directors.
"TOTAL CONSOLIDATED INDEBTEDNESS" means, as at any date of determination,
an amount equal to the aggregate amount of all Indebtedness of the Company and
any Subsidiary, on a Consolidated basis in accordance with GAAP, outstanding as
of such date of determination, after giving effect to any Incurrence of
Indebtedness and the application of the proceeds therefrom giving rise to such
determination.
"TOTAL MARKET CAPITALIZATION" of any Person means, as of any day of
determination, the sum of (a) the consolidated Indebtedness of such Person and
any Subsidiaries on such day, plus (b) the product of (i) the aggregate number
of outstanding shares of common stock of such Person on such day (which shall
not include any options or warrants on, or securities convertible or
exchangeable into, shares of common stock of such Person) and (ii) the average
closing price of such common stock over the ten consecutive Trading Days ending
not earlier than ten Trading Days immediately prior to such date of
determination, plus (c) the liquidation value of any outstanding shares of
preferred stock of such Person on such day. If no such closing price exists with
respect to shares of any such class, the value of such shares for purposes of
clause (b) of the preceding sentence shall be determined by the Board of
Directors in good faith and evidenced by a Board Resolution filed with the
Trustee. Notwithstanding the foregoing, unless the Person's Common Stock is
listed on any national securities exchange or on the NASDAQ National Market, the
"Total Market Capitalization" of the Person shall mean, as of any day of
determination, the enterprise value (without duplication) of the Person and any
subsidiaries (including the Fair Market Value of their debt and equity), as
determined by an independent banking firm of national standing with experience
in such valuations and evidenced by a written opinion in customary form filed
with the Trustee; provided that for purposes of any such determination, the
enterprise value of the Person shall be calculated as if the Person were a
publicly held corporation without a controlling stockholder. For purposes of any
such determination, such banking firm's written opinion may state that such Fair
Market Value is no less than a specified amount and such opinion may be as of a
date no earlier than 90 days prior to the date of such determination.
"TRADING DAY" with respect to a securities exchange or automated quotation
system means a day on which such exchange or system is open for a full day of
trading.
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"TRUSTEE" means the Person named as the "Trustee" in the first paragraph of
this Indenture, until a successor trustee shall have become such pursuant to the
applicable provisions of this Indenture, and thereafter "Trustee" shall mean
such successor trustee.
"TRUST INDENTURE ACT" or "TIA" means the Trust Indenture Act of 1939, as
amended, or any successor statute.
"UNRESTRICTED SUBSIDIARY" means (i) any subsidiary of the Company that at
the time of determination shall be an Unrestricted Subsidiary (as designated by
the Board of Directors of the Company, as provided below) and (ii) any
subsidiary of an Unrestricted Subsidiary. The Board of Directors of the Company
may designate any subsidiary of the Company (including any newly acquired or
newly formed subsidiary) to be an Unrestricted Subsidiary if all of the
following conditions apply: (a) neither the Company nor any of its Subsidiaries
provides credit support for Indebtedness of such subsidiary (including any
undertaking, agreement or instrument evidencing such Indebtedness), (b) such
subsidiary is not liable, directly or indirectly, with respect to any
Indebtedness other than Unrestricted Subsidiary Indebtedness, (c) any Investment
in such subsidiary made as a result of designating such subsidiary an
Unrestricted Subsidiary shall not violate the provisions of Section 10.18 and
such Unrestricted Subsidiary is not party to any agreement, contract,
arrangement or understanding at such time with the Company or any Subsidiary of
the Company unless the terms of any such agreement, contract, arrangement or
understanding are no less favorable to the Company or such Subsidiary than those
that might be obtained at the time from Persons who are not Affiliates of the
Company; and (v) such Unrestricted Subsidiary does not own any Capital Stock in
any Subsidiary of the Company which is not simultaneously being designated an
Unrestricted Subsidiary. Any such designation by the Board of Directors of the
Company shall be evidenced to the Trustee by filing with the Trustee a board
resolution giving effect to such designation and an Officers' Certificate
certifying that such designation complies with the foregoing conditions and
shall be deemed a Restricted Payment on the date of designation in an amount
equal to the greater of (I) the net book value of such Investment or (II) the
fair market value of such Investment as determined in good faith by the
Company's Board of Directors. The Board of Directors of the Company may
designate any Unrestricted Subsidiary as a Subsidiary; provided that (i)
immediately after giving effect to such designation, the Company could incur
$1.00 of additional Indebtedness (other than Permitted Indebtedness) pursuant to
Section 10.08(a) and (ii) all Indebtedness of such Subsidiary shall be deemed to
be incurred on the date such Unrestricted Subsidiary becomes a Subsidiary.
"UNRESTRICTED SUBSIDIARY INDEBTEDNESS" of any Unrestricted Subsidiary means
Indebtedness of such Unrestricted Subsidiary (i) as to which neither the Company
nor any Subsidiary is directly or indirectly liable (by virtue of the Company or
any such Subsidiary
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being the primary obligor on, guarantor of, or otherwise liable in any respect
to, such Indebtedness), except Guaranteed Debt of the Company or any Subsidiary
to any Affiliate, in which case (unless the incurrence of such Guaranteed Debt
resulted in a Restricted Payment at the time of incurrence) the Company shall be
deemed to have made a Restricted Payment equal to the principal amount of any
such Indebtedness to the extent guaranteed at the time such Affiliate is
designated an Unrestricted Subsidiary and (ii) which, upon the occurrence of a
default with respect thereto, does not result in, or permit any holder of any
Indebtedness of the Company or any Subsidiary to declare, a default on such
Indebtedness of the Company or any Subsidiary or cause the payment thereof to be
accelerated or payable prior to its Stated Maturity.
"VOTING STOCK" means Capital Stock of the class or classes pursuant to
which the holders thereof have the general voting power under ordinary
circumstances to elect at least a majority of the Board of Directors, managers
or trustees of a corporation (irrespective of whether or not at the time Capital
Stock of any other class or classes shall have or might have voting power by
reason of the happening of any contingency).
"WHOLLY-OWNED SUBSIDIARY" means a Subsidiary all the Capital Stock of which
is owned by the Company or another Wholly-Owned Subsidiary. For the purposes of
this definition, any director qualifying shares or investments by foreign
nationals mandated by or required to maintain its limited liability status
under, applicable law shall be disregarded in determining the ownership of a
Subsidiary.
OTHER DEFINITIONS.
TERM DEFINED IN SECTION
"ACT".................................................. 1.05
"AGENT MEMBERS"........................................ 3.06
"CHANGE OF CONTROL OFFER".............................. 10.14
"CHANGE OF CONTROL PURCHASE DATE"...................... 10.14
"CHANGE OF CONTROL PURCHASE NOTICE".................... 10.14
"CHANGE OF CONTROL PURCHASE PRICE"..................... 10.14
"COVENANT DEFEASANCE".................................. 4.03
"DEFAULTED INTEREST"................................... 3.09
"DEFEASANCE"........................................... 4.02
"DEFEASANCE REDEMPTION DATE"........................... 4.04
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TERM DEFINED IN SECTION
"DEFEASED NOTES"....................................... 4.01
"EXCESS PROCEEDS"...................................... 10.12
"NOTE AMOUNT".......................................... 10.12
"NOTE REGISTER"........................................ 3.05
"NOTE REGISTRAR"....................................... 3.05
"OFFER"................................................ 10.12
"OFFER DATE"........................................... 10.12
"OFFERED PRICE"........................................ 10.12
"PARI PASSU DEBT AMOUNT"............................... 10.12
"PARI PASSU OFFER"..................................... 10.12
"PERMITTED INDEBTEDNESS"............................... 10.08
"PERMITTED PAYMENT".................................... 10.09
"PRIVATE PLACEMENT LEGEND"............................. 2.02
"REFINANCING".......................................... 10.08
"REQUIRED FILING DATE"................................. 10.19
"RESTRICTED PAYMENTS".................................. 10.09
"SPECIAL PAYMENT DATE"................................. 3.09
"SURVIVING ENTITY"..................................... 8.01
"U.S. GOVERNMENT OBLIGATIONS".......................... 4.04
SECTION 1.03. COMPLIANCE CERTIFICATES AND OPINIONS.
Upon any application or request by the Company to the Trustee to take any
action under any provision of this Indenture, the Company and any Guarantor (if
applicable) and any other obligor on the Notes (if applicable) shall furnish to
the Trustee an Officers' Certificate in a form and substance reasonably
acceptable to the Trustee stating that all conditions precedent, if any,
provided for in this Indenture (including any covenant compliance with which
constitutes a condition precedent) relating to the proposed action have been
complied with, and an Opinion of Counsel in a form and substance reasonably
acceptable to the Trustee stating that in the opinion of such counsel all such
conditions precedent, if any, have been complied with, except that, in the case
of any such application or request as to which the furnishing of such
certificates or opinions is specifically required by any provision of this
Indenture relating to such particular application or request, no additional
certificate or opinion need be furnished.
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Every certificate or Opinion of Counsel with respect to compliance with a
condition or covenant provided for in this Indenture shall include:
(a) a statement that each individual signing such certificate or individual
or firm signing such opinion has read and understands such covenant or condition
and the definitions herein relating thereto;
(b) a brief statement as to the nature and scope of the examination or
investigation upon which the statements or opinions contained in such
certificate or opinion are based;
(c) a statement that, in the opinion of each such individual or such firm,
he or it has made such examination or investigation as is necessary to enable
him or it to express an informed opinion as to whether or not such covenant or
condition has been complied with; and
(d) a statement as to whether, in the opinion of each such individual or
such firm, such condition or covenant has been complied with.
Section 1.04. FORM OF DOCUMENTS DELIVERED TO TRUSTEE.
In any case where several matters are required to be certified by, or
covered by an opinion of, any specified Person, it is not necessary that all
such matters be certified by, or covered by the opinion of, only one such
Person, or that they be so certified or covered by only one document, but one
such Person may certify or give an opinion with respect to some matters and one
or more other such Persons as to other matters, and any such Person may certify
or give an opinion as to such matters in one or several documents.
Any certificate of an officer of the Company, any Guarantor or other
obligor on the Notes may be based, insofar as it relates to legal matters, upon
a certificate or opinion of, or representations by, counsel, unless such officer
knows, or in the exercise of reasonable care should know, that the certificate
or opinion or representations with respect to the matters upon which his or her
certificate or opinion is based are erroneous. Any such certificate or opinion
may be based, insofar as it relates to factual matters, upon a certificate or
opinion of, or representations by, an officer or officers of the Company, any
Guarantor or other obligor on the Notes stating that the information with
respect to such factual matters is in the possession of the Company, any
Guarantor or other obligor on the Notes, unless such officer or counsel knows,
or in the exercise of reasonable care should know, that the certificate or
opinion or representations with respect to such matters are erroneous. Opinions
of Counsel required to be delivered to the Trustee may have qualifications
customary for opinions of the
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type required and counsel delivering such Opinions of Counsel may rely on
certificates of the Company or government or other officials customary for
opinions of the type required, including certificates certifying as to matters
of fact, including that various financial covenants have been complied with.
Any certificate or opinion of an officer of the Company, any Guarantor or
other obligor on the Notes may be based, insofar as it relates to accounting
matters, upon a certificate or opinion of, or representations by, an accountant
or firm of accountants in the employ of the Company, unless such officer knows,
or in the exercise of reasonable care should know, that the certificate or
opinion or representations with respect to the accounting matters upon which his
certificate or opinion may be based are erroneous. Any certificate or opinion of
any independent firm of public accountants filed with the Trustee shall contain
a statement that such firm is independent with respect to the Company.
Where any Person is required to make, give or execute two or more
applications, requests, consents, certificates, statements, opinions or other
instruments under this Indenture, they may, but need not, be consolidated and
form one instrument.
Section 1.05. ACTS OF HOLDERS.
(a) Any request, demand, authorization, direction, notice, consent, waiver
or other action provided by this Indenture to be given or taken by Holders may
be embodied in and evidenced by one or more instruments of substantially similar
tenor signed by such Holders in person or by an agent duly appointed in writing;
and, except as herein otherwise expressly provided, such action shall become
effective when such instrument or instruments are delivered to the Trustee and,
where it is hereby expressly required, to the Company. Such instrument or
instruments (and the action embodied therein and evidenced thereby) are herein
sometimes referred to as the "Act" of the Holders signing such instrument or
instruments. Proof of execution of any such instrument or of a writing
appointing any such agent shall be sufficient for any purpose of this Indenture
and conclusive in favor of the Trustee and the Company, if made in the manner
provided in this Section 1.05.
(b) The ownership of Notes shall be proved by the Note Register.
(c) Any request, demand, authorization, direction, notice, consent, waiver
or other Act by the Holder of any Note shall bind every future Holder of the
same Note or the Holder of every Note issued upon the transfer thereof or in
exchange therefor or in lieu thereof, in respect of anything done, suffered or
omitted to be done by the Trustee, any Paying Agent or the Company, any
Guarantor or any other obligor of the Notes in reliance thereon, whether or not
notation of such action is made upon such Note.
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(d) The fact and date of the execution by any Person of any such instrument
or writing may be proved by the affidavit of a witness of such execution or by a
certificate of a notary public or other officer authorized by law to take
acknowledgments of deeds, certifying that the individual signing such instrument
or writing acknowledged to him the execution thereof. Where such execution is by
a signer acting in a capacity other than his individual capacity, such
certificate or affidavit shall also constitute sufficient proof of his
authority. The fact and date of the execution of any such instrument or writing,
or the authority of the Person executing the same, may also be proved in any
other manner which the Trustee deems sufficient.
(e) If the Company shall solicit from the Holders any request, demand,
authorization, direction, notice, consent, waiver or other Act, the Company may,
at its option, by or pursuant to a Board Resolution, fix in advance a record
date for the determination of such Holders entitled to give such request,
demand, authorization, direction, notice, consent, waiver or other Act, but the
Company shall have no obligation to do so. Notwithstanding Trust Indenture Act
Section 316(c), any such record date shall be the record date specified in or
pursuant to such Board Resolution, which shall be a date not more than 30 days
prior to the first solicitation of Holders generally in connection therewith and
no later than the date such first solicitation is completed.
If such a record date is fixed, such request, demand, authorization,
direction, notice, consent, waiver or other Act may be given before or after
such record date, but only the Holders of record at the close of business on
such record date shall be deemed to be Holders for purposes of determining
whether Holders of the requisite proportion of Notes then Outstanding have
authorized or agreed or consented to such request, demand, authorization,
direction, notice, consent, waiver or other Act, and for this purpose the Notes
then Outstanding shall be computed as of such record date; provided that no such
request, demand, authorization, direction, notice, consent, waiver or other Act
by the Holders on such record date shall be deemed effective unless it shall
become effective pursuant to the provisions of this Indenture not later than six
months after such record date.
(f) For purposes of this Indenture, any action by the Holders which may be
taken in writing may be taken by electronic means or as otherwise reasonably
acceptable to the Trustee.
Section 1.06. NOTICES, ETC., TO THE TRUSTEE, THE COMPANY AND ANY GUARANTOR.
Any request, demand, authorization, direction, notice, consent, waiver or
Act of Holders or other document provided or permitted by this Indenture to be
made upon, given or furnished to, or filed with:
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(a) the Trustee by any Holder or by the Company or any Guarantor or any
other obligor on the Notes shall be sufficient for every purpose (except as
provided in Section 5.01(c)) hereunder if in writing and mailed, first-class
postage prepaid, or delivered by recognized overnight courier, to or with the
Trustee at its Corporate Trust Office, Attention: Corporate Trust
Administration, or at any other address previously furnished in writing to the
Holders or the Company, any Guarantor or any other obligor on the Notes by the
Trustee; or
(b) the Company or any Guarantor by the Trustee or any Holder shall be
sufficient for every purpose (except as provided in Section 5.01(c)) hereunder
if in writing and mailed, first-class postage prepaid, or delivered by
recognized overnight courier, to the Company or such Guarantor addressed to
PSINet Inc., 510 Huntmar Park Drive, Herndon, VA 20170-5100, Attention: Chief
Financial Officer, with a copy to Nixon, Hargrave, Devans & Doyle LLP, 437
Madison Avenue, New York, NY 10022, Attention: Richard F. Langan, Jr., Esq., or
at any other address previously furnished in writing to the Trustee by the
Company or such Guarantor.
Section 1.07. NOTICE TO HOLDERS; WAIVER.
Where this Indenture provides for notice to Holders of any event, such
notice shall be sufficiently given (unless otherwise herein expressly provided)
if in writing and mailed, first-class postage prepaid, or delivered by
recognized overnight courier, to each Holder affected by such event, at its
address as it appears in the Note Register, not later than the latest date, and
not earlier than the earliest date, prescribed for the giving of such notice. In
any case where notice to Holders is given by mail, neither the failure to mail
such notice, nor any defect in any notice so mailed, to any particular Holder
shall affect the sufficiency of such notice with respect to other Holders. Any
notice when mailed to a Holder in the aforesaid manner shall be conclusively
deemed to have been received by such Holder whether or not actually received by
such Holder. 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 mail notice of any event as
required by any provision of this Indenture, then any method of giving such
notice as shall be reasonably satisfactory to the Trustee shall be deemed to be
a sufficient giving of such notice.
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Section 1.08. CONFLICT WITH TRUST INDENTURE ACT.
If any provision hereof limits, qualifies or conflicts with any provision
of the Trust Indenture Act or another provision which is required or deemed to
be included in this Indenture by any of the provisions of the Trust Indenture
Act, the provision or requirement of the Trust Indenture Act shall control. If
any provision of this Indenture modifies or excludes any provision of the Trust
Indenture Act that may be so modified or excluded, the latter provision shall be
deemed to apply to this Indenture as so modified or to be excluded, as the case
may be.
Section 1.09. EFFECT OF HEADINGS AND TABLE OF CONTENTS.
The Article and Section headings herein and the Table of Contents are for
convenience only and shall not affect the construction hereof.
Section 1.10. SUCCESSORS AND ASSIGNS.
All covenants and agreements in this Indenture by the Company, the
Guarantors, if any, and the Trustee shall bind their respective successors and
assigns, whether so expressed or not.
Section 1.11. SEPARABILITY CLAUSE.
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.
Section 1.12. BENEFITS OF INDENTURE.
Nothing in this Indenture or in the Notes, express or implied, shall give
to any Person (other than the parties hereto and their successors hereunder, any
Paying Agent and the Holders) any benefit or any legal or equitable right,
remedy or claim under this Indenture.
Section 1.13. GOVERNING LAW.
THIS INDENTURE, THE NOTES AND ANY GUARANTEE SHALL BE GOVERNED BY, AND
CONSTRUED IN ACCORDANCE WITH, THE LAWS OF THE STATE OF NEW YORK, WITHOUT GIVING
EFFECT TO THE CONFLICTS OF LAWS PRINCIPLES THEREOF.
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Section 1.14. LEGAL HOLIDAYS.
In any case where any Interest Payment Date, Redemption Date, Maturity or
Stated Maturity of any Note shall not be a Business Day, then (notwithstanding
any other provision of this Indenture or of the Notes) payment of interest or
principal or premium, if any, 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
such Interest Payment Date or Redemption Date, or at the Maturity or Stated
Maturity and no interest shall accrue with respect to such payment for the
period from and after such Interest Payment Date, Redemption Date, Maturity or
Stated Maturity, as the case may be, to the next succeeding Business Day.
Section 1.15. INDEPENDENCE OF COVENANTS.
All covenants and agreements in this Indenture shall be given
independent effect so that if a particular action or condition is not permitted
by any such covenants, the fact that it would be permitted by an exception to,
or be otherwise within the limitations of, another covenant shall not avoid the
occurrence of a Default or an Event of Default if such action is taken or
condition exists.
Section 1.16. SCHEDULES AND EXHIBITS.
All schedules and exhibits attached hereto are by this reference made a
part hereof with the same effect as if herein set forth in full.
Section 1.17. COUNTERPARTS.
This Indenture may be executed in any number of counterparts, each of which
shall be deemed an original; but all such counterparts shall together constitute
but one and the same instrument.
Section 1.18. NO ADVERSE INTERPRETATION OF OTHER AGREEMENTS.
This Indenture may not be used to interpret another indenture, loan or debt
agreement or instrument of the Company or a Subsidiary. Any such indenture, loan
or debt agreement or instrument may not be used to interpret this Indenture.
Section 1.19. NO RECOURSE AGAINST OTHERS.
A director, officer, employee or shareholder, as such, of the Company or
any Guarantor shall not have any liability for any obligations of the Company or
any
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Guarantor under the Notes, any Guarantee or the Indenture or for any claim based
on, in respect of or by reason of, such obligations or their creation; provided,
however, that the foregoing shall not relieve the Company from any of its
liabilities or obligations under the Notes or this Indenture. Each Holder by
accepting any of the Notes and Guarantees waives and releases all such
liability. The waiver and release are part of the consideration for the issue of
the Notes and Guarantees.
ARTICLE II
Notes Forms
Section 2.01. FORMS GENERALLY.
The Notes and the Trustee's certificate of authentication thereon shall be
in substantially the forms set forth in this Article II, with such appropriate
insertions, omissions, substitutions and other variations as are required or
permitted hereby and may have such letters, numbers or other marks of
identification and such legends or endorsements placed thereon as may be
required to comply with the rules of any securities exchange, any organizational
document or governing instrument or applicable law or as may, consistently
herewith, be determined by the officers executing such Notes as evidenced by
their execution of the Notes. Any portion of the text of any Notes may be set
forth on the reverse thereof, with an appropriate reference thereto on the face
of the Notes.
The definitive Notes shall be 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 officers executing such Notes, as evidenced by
their execution of such Notes.
Series A Notes offered and sold in reliance on Rule 144A shall be issued
initially in the form of one or more Rule 144A Global Notes, substantially in
the form set forth in Section 2.02, deposited upon issuance with the Trustee, as
custodian for the Depositary, registered in the name of the Depositary, or its
nominee, in each case for credit to an account of a direct or indirect
participant of the Depositary, duly executed by the Company and authenticated by
the Trustee as hereinafter provided. The aggregate principal amount of the Rule
144A Global Notes may from time to time be increased or decreased by adjustments
made on the records of the Trustee, as custodian for the Depositary or its
nominee, as hereinafter provided.
Series A Notes offered and sold in reliance on Regulation S shall be issued
in the form of one or more Regulation S Global Notes, substantially in the form
set forth in
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Section 2.02, deposited upon issuance with the Trustee, as custodian for the
Depositary, registered in the name of the Depositary, or its nominee in each
case for credit by the Depositary to an account of a direct or indirect
participant of the Depositary, duly executed by the Company and authenticated by
the Trustee as hereinafter provided; provided, however, that upon such deposit
through and including the 40th day after the later of the commencement of the
Offering and the original issue date of the Notes (such period through and
including such 40th day, the "Restricted Period"), all such Notes shall be
credited to or through accounts maintained at the Depositary unless exchanged
for interests in the Rule 144A Global Notes in accordance with the transfer and
certification requirements described below. The aggregate principal amount of
the Regulation S Global Notes may from time to time be increased or decreased by
adjustments made on the records of the Trustee, as custodian for the Depositary
or its nominee, as hereinafter provided.
Series B Notes exchanged for Series A Notes shall be issued initially in
the form of one or more Series B Global Notes, substantially in the form set
forth in Section 2.02, deposited upon issuance with the Trustee, as custodian
for the Depositary, registered in the name of the Depositary or its nominee, in
each case for credit to an account of a direct or indirect participant of the
Depositary, duly executed by the Company and authenticated by the Trustee as
hereinafter provided. The aggregate principal amount of the Series B Global
Notes may from time to time be increased or decreased by adjustments made on the
records of the Trustee, as custodian for the Depositary or its nominee, as
hereinafter provided.
Section 2.02. FORM OF FACE OF NOTE.
(a) The form of the face of any Series A Notes authenticated and delivered
hereunder shall be substantially as follows:
Unless and until (i) a Series A Note is sold under an effective
Registration Statement or (ii) a Series A Note is exchanged for a Series B Note
in connection with an effective Registration Statement, in each case pursuant to
the Registration Rights Agreement, then such Series A Note shall bear the legend
set forth below (the "Private Placement Legend") on the face thereof:
THIS NOTE (OR ITS PREDECESSOR) HAS NOT BEEN REGISTERED UNDER THE U.S.
SECURITIES ACT OF 1933, AS AMENDED (THE "SECURITIES ACT"), AND, ACCORDINGLY, MAY
NOT BE OFFERED, SOLD, PLEDGED OR OTHERWISE TRANSFERRED WITHIN THE UNITED STATES
OR TO, OR FOR THE ACCOUNT OR BENEFIT OF, U.S. PERSONS, EXCEPT AS SET FORTH IN
THE NEXT SENTENCE. BY ITS ACQUISITION HEREOF OR OF A BENEFICIAL INTEREST HEREIN,
THE HOLDER:
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(1) REPRESENTS THAT (A) IT IS A "QUALIFIED INSTITUTIONAL
BUYER" (AS DEFINED IN RULE 144A UNDER THE SECURITIES ACT) (A
"QIB") OR (B) IT HAS ACQUIRED THIS NOTE IN AN OFFSHORE
TRANSACTION IN COMPLIANCE WITH REGULATION S UNDER THE
SECURITIES ACT,
(2) AGREES THAT IT WILL NOT RESELL OR OTHERWISE TRANSFER THIS
NOTE EXCEPT (A) TO THE COMPANY OR ANY OF ITS SUBSIDIARIES, (B)
TO A PERSON WHOM THE SELLER REASONABLY BELIEVES IS A QIB
PURCHASING FOR ITS OWN ACCOUNT OR FOR THE ACCOUNT OF A QIB IN
A TRANSACTION MEETING THE REQUIREMENTS OF RULE 144A, (C) IN AN
OFFSHORE TRANSACTION MEETING THE REQUIREMENTS OF RULE 903 OR
904 OF THE SECURITIES ACT, (D) IN A TRANSACTION MEETING THE
REQUIREMENTS OF RULE 144 UNDER THE SECURITIES ACT, (E) IN
ACCORDANCE WITH ANOTHER EXEMPTION FROM THE REGISTRATION
REQUIREMENTS OF THE SECURITIES ACT (AND BASED UPON AN OPINION
OF COUNSEL ACCEPTABLE TO THE COMPANY) OR (F) PURSUANT TO AN
EFFECTIVE REGISTRATION STATEMENT AND, IN EACH CASE, IN
ACCORDANCE WITH THE APPLICABLE SECURITIES LAWS OF ANY STATE OF
THE UNITED STATES OR ANY OTHER APPLICABLE JURISDICTION AND
(3) AGREES THAT IT WILL DELIVER TO EACH PERSON TO WHOM THIS
NOTE OR AN INTEREST HEREIN IS TRANSFERRED A NOTICE
SUBSTANTIALLY TO THE EFFECT OF THIS LEGEND.
AS USED HEREIN, THE TERMS "OFFSHORE TRANSACTION" AND "UNITED STATES" HAVE
THE MEANINGS GIVEN TO THEM BY RULE 902 OF REGULATION S UNDER THE SECURITIES ACT.
THE INDENTURE CONTAINS A PROVISION REQUIRING THE TRUSTEE TO REFUSE TO REGISTER
ANY TRANSFER OF THIS NOTE IN VIOLATION OF THE FOREGOING.
Each Global Note, whether or not a Series A Note, shall also bear the
following legend on the face thereof:
THIS NOTE IS A GLOBAL NOTE WITHIN THE MEANING OF THE INDENTURE HEREINAFTER
REFERRED TO AND IS REGISTERED IN THE NAME OF A DEPOSITARY OR A NOMINEE OF A
DEPOSITARY OR A SUCCESSOR DEPOSITARY. TRANSFERS OF THIS GLOBAL NOTE SHALL BE
LIMITED TO TRANSFERS IN WHOLE, BUT NOT IN PART, TO NOMINEES OF CEDE & CO. OR
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TO A SUCCESSOR THEREOF OR SUCH SUCCESSOR'S NOMINEE AND TRANSFERS OF PORTIONS OF
THIS GLOBAL NOTE SHALL BE LIMITED TO TRANSFERS MADE IN ACCORDANCE WITH THE
RESTRICTIONS SET FORTH IN SECTIONS 3.06 AND 3.07 OF THE INDENTURE.
UNLESS THIS CERTIFICATE IS PRESENTED BY AN AUTHORIZED REPRESENTATIVE OF THE
DEPOSITORY TRUST COMPANY, A NEW YORK CORPORATION ("DTC"), TO THE COMPANY OR ITS
AGENT FOR REGISTRATION OF TRANSFER, EXCHANGE, OR PAYMENT AND ANY SUCH
CERTIFICATE ISSUED IS REGISTERED IN THE NAME OF CEDE & CO. OR IN SUCH OTHER NAME
AS IS REQUESTED BY AN AUTHORIZED REPRESENTATIVE OF DTC (AND ANY PAYMENT IS MADE
TO CEDE & CO. OR TO SUCH OTHER ENTITY AS IS REQUESTED BY AN AUTHORIZED
REPRESENTATIVE OF DTC), ANY TRANSFER, PLEDGE, OR OTHER USE HEREOF FOR VALUE OR
OTHERWISE BY OR TO ANY PERSON IS WRONGFUL INASMUCH AS THE REGISTERED OWNER
HEREOF, CEDE & CO., HAS AN INTEREST HEREIN.
PSINET INC.
___________________
11 1/2% SENIOR NOTE DUE 2008, SERIES A
CUSIP NO.
No. __________ $_______________________
PSINet Inc., a New York corporation (herein called the "Company", which
term includes any successor Person under the Indenture hereinafter referred to),
for value received, hereby promises to pay to _______________ or registered
assigns, the principal sum of _______________ United States dollars on November
1, 2008, at the office or agency of the Company referred to below, and to pay
interest thereon from November 3, 1998, or from the most recent Interest Payment
Date to which interest has been paid or duly provided for, semiannually on May 1
and November 1, in each year, commencing May 1, 1999 at the rate of 11 1/2% per
annum, subject to adjustments as described in the second following paragraph, in
United States dollars, until the principal hereof is paid or duly
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provided for. Interest shall be computed on the basis of a 360-day year
comprised of twelve 30-day months.
The Holder of this Series A Note is entitled to the benefits of the
Registration Rights Agreement between the Company and the Initial Purchasers,
dated as of November 3, 1998, pursuant to which, subject to the terms and
conditions thereof, the Company is obligated to consummate the Exchange Offer
pursuant to which the Holder of this Note shall have the right to exchange this
Note for 11 1/2% Senior Notes due 2008, Series B (herein called the "Series B
Notes") in like principal amount as provided therein. The Series A Notes and the
Series B Notes are together referred to as the "Notes". The Series A Notes rank
pari passu in right of payment with the Series B Notes.
In the event that (a) the Exchange Offer Registration Statement is not
filed with the Commission on or prior to the date specified in the Registration
Rights Agreement, (b) the Exchange Offer Registration Statement is not declared
effective on or prior to the date specified in the Registration Rights
Agreement, (c) the Exchange Offer is not consummated on or prior to the date
specified in the Registration Rights Agreement, (d) if obligated to file the
Shelf Registration Statement, the Company fails to file the Shelf Registration
Statement with the Commission on or prior to the date specified in the
Registration Rights Agreement, (e) if obligated to file the Shelf Registration
Statement, the Shelf Registration Statement is not declared effective on or
prior to the date specified in the Registration Rights Agreement, or (f) the
Shelf Registration Statement or the Exchange Offer Registration Statement is
declared effective but thereafter ceases to be effective or usable in connection
with resales of the Series A Notes during the periods specified in the
Registration Rights Agreement (each such event referred to in clauses (a)
through (f) above, a "Registration Default"), the Company agrees to pay to each
Holder of Series A Notes liquidated damages ("Liquidated Damages") in an amount
equal to $0.05 per week per $1,000 in principal amount of Series A Notes held by
such Holder for each week or portion thereof that the Registration Default
continues for the first 90 day period immediately following the occurrence of
such Registration Default. The amount of Liquidated Damages shall increase by an
additional $0.05 per week per $1,000 in principal amount of Series A Notes with
respect to each subsequent 90 day period until all Registration Defaults have
been cured, up to a maximum amount of Liquidated Damages of $0.50 per week per
$1,000 in principal amount of Series A Notes. The Company shall not be required
to pay Liquidated Damages for more than one Registration Default at any given
time. Following the cure of all Registration Defaults, the accrual of Liquidated
Damages shall cease. All accrued Liquidated Damages shall be paid by the Company
to holders entitled thereto by wire transfer to the accounts specified by them
or by mailing checks to their registered address if no such accounts have been
specified.
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The interest so payable, and punctually paid or duly provided for, on any
Interest Payment Date will, as provided in the Indenture hereinafter referred
to, be paid to the Person in whose name this Note (or any Predecessor Notes) is
registered at the close of business on the Regular Record Date for such
interest, which shall be the April 15 or October 15 (whether or not a Business
Day), as the case may be, next preceding such Interest Payment Date. Any such
interest not so punctually paid, or duly provided for, and interest on such
defaulted interest at the interest rate borne by the Series A Notes, to the
extent lawful, shall forthwith cease to be payable to the Holder on such Regular
Record Date, and may either be paid to the Person in whose name this Note (or
any Predecessor Notes) is registered at the close of business on a Special
Record Date for the payment of such defaulted interest to be fixed by the
Trustee, notice whereof shall be given to Holders of Notes not less than 10 days
prior to such Special Record Date, or be paid at any time in any other lawful
manner not inconsistent with the requirements of any securities exchange on
which the Notes may be listed, and upon such notice as may be required by this
Indenture not inconsistent with the requirements of such exchange, all as more
fully provided in this Indenture.
Payment of the principal of, premium, if any, and interest on, this Note,
and exchange or transfer of the Note, will be made at the office or agency of
the Company in the City of New York maintained for that purpose (which initially
will be the Trustee c/o Harris Trust Company of New York, 77 Water Street, New
York, NY 10005), or at such other office or agency as may be maintained for such
purpose, or, at the option of the Company, payment of interest may be made by
check mailed to the address of the Person entitled thereto as such address shall
appear on the Note Register, and provided, that payment by wire transfer of
immediately available funds will be required with respect to principal of and
interest on all Global Notes and all other Notes the Holders of which shall have
provided wire transfer instructions to the Company or the Paying Agent. Such
payment shall be in such coin or currency of the United States of America as at
the time of payment is legal tender for payment of public and private debts.
Reference is hereby made to the further provisions of this Note set forth
on the reverse hereof, which further provisions shall for all purposes have the
same effect as if set forth at this place.
Unless the certificate of authentication hereon has been duly executed by
the Trustee referred to on the reverse hereof or by the authenticating agent
appointed as provided in the Indenture by manual signature of an authorized
signer, this Note shall not be entitled to any benefit under the Indenture, or
be valid or obligatory for any purpose.
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IN WITNESS WHEREOF, the Company has caused this instrument to be duly
executed by the manual or facsimile signature of its authorized officers and its
corporate seal to be affixed or reproduced hereon.
PSINET INC.
[Seal] By:___________________________
Title:________________________
Attest:
__________________________
Authorized Officer
TRUSTEE'S CERTIFICATE OF AUTHENTICATION
This is one of the 11 1/2% Senior Notes due 2008, Series A referred to in
the within-mentioned Indenture.
WILMINGTON TRUST COMPANY,
as Trustee
By: _________________________________
Authorized Signer
Dated:
OPTION OF HOLDER TO ELECT PURCHASE
If you wish to have this Note purchased by the Company pursuant to Section
10.12 or Section 10.14, as applicable, of the Indenture, check the Box: [_].
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If you wish to have a portion of this Note purchased by the Company
pursuant to Section 10.12 or Section 10.14 as applicable, of the Indenture,
state the amount (in original principal amount):
$ ____________________.
Date: ___________________
Your Signature: _____________________
(Sign exactly as your name appears on the other side of this Note)
Signature Guarantee: __________________________________
[Signature must be guaranteed by an eligible Guarantor Institution (banks, stock
brokers, savings and loan associations and credit unions) with membership in an
approved guarantee medallion program pursuant to Securities and Exchange
Commission Rule 17Ad-15]
The form of the face of any Series B Notes authenticated and delivered
hereunder shall be substantially as follows:
[Legend if Note is a Global Note]
THIS SECURITY IS A GLOBAL SECURITY WITHIN THE MEANING OF THE INDENTURE
HEREINAFTER REFERRED TO AND IS REGISTERED IN THE NAME OF A DEPOSITARY OR A
NOMINEE OF A DEPOSITARY OR A SUCCESSOR DEPOSITARY. TRANSFERS OF THIS GLOBAL
SECURITY SHALL BE LIMITED TO TRANSFERS IN WHOLE, BUT NOT IN PART, TO NOMINEES OF
CEDE & CO. OR TO A SUCCESSOR THEREOF OR SUCH SUCCESSOR'S NOMINEE AND TRANSFERS
OF PORTIONS OF THIS GLOBAL SECURITY SHALL BE LIMITED TO TRANSFERS MADE IN
ACCORDANCE WITH THE RESTRICTIONS SET FORTH IN SECTIONS 3.06 AND 3.07 OF THE
INDENTURE.
UNLESS THIS CERTIFICATE IS PRESENTED BY AN AUTHORIZED REPRESENTATIVE OF THE
DEPOSITORY TRUST COMPANY, A NEW YORK
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CORPORATION ("DTC"), TO THE COMPANY OR ITS AGENT FOR REGISTRATION OF TRANSFER,
EXCHANGE, OR PAYMENT AND ANY SUCH CERTIFICATE ISSUED IS REGISTERED IN THE NAME
OF CEDE & CO. OR IN SUCH OTHER NAME AS IS REQUESTED BY AN AUTHORIZED
REPRESENTATIVE OF DTC (AND ANY PAYMENT IS MADE TO CEDE & CO. OR TO SUCH OTHER
ENTITY AS IS REQUESTED BY AN AUTHORIZED REPRESENTATIVE OF DTC), ANY TRANSFER,
PLEDGE, OR OTHER USE HEREOF FOR VALUE OR OTHERWISE BY OR TO ANY PERSON IS
WRONGFUL INASMUCH AS THE REGISTERED OWNER HEREOF, CEDE & CO., HAS AN INTEREST
HEREIN.
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PSINET INC.
___________________
11 1/2% SENIOR NOTE DUE 2008, SERIES B
CUSIP NO. ______________
No. __________ $_______________________
PSINET INC., a New York corporation (herein called the "Company," which
term includes any successor Person under the Indenture hereinafter referred to),
for value received, hereby promises to pay to _____________ or registered
assigns, the principal sum of _______________ United States dollars on November
1, 2008, at the office or agency of the Company referred to below, and to pay
interest thereon from November 3, 1998, or from the most recent Interest Payment
Date to which interest has been paid or duly provided for, semiannually on May 1
and November 1 in each year, commencing May 1, 1999 at the rate of 11 1/2% per
annum, in United States dollars, until the principal hereof is paid or duly
provided for; provided that to the extent interest has not been paid or duly
provided for with respect to the Series A Note exchanged for this Series B Note,
interest on this Series B Note shall accrue from the most recent Interest
Payment Date to which interest on the Series A Note which was exchanged for this
Series B Note has been paid or duly provided for. Interest shall be computed on
the basis of a 360-day year comprised of twelve 30-day months.
This Series B Note was issued pursuant to the Exchange Offer pursuant to
which the 11 1/2% Senior Notes due 2008, Series A (herein called the "Series A
Notes") in like principal amount were exchanged for the Series B Notes. The
Series B Notes rank pari passu in right of payment with the Series A Notes.
The interest so payable, and punctually paid or duly provided for, on any
Interest Payment Date will, as provided in the Indenture hereinafter referred
to, be paid to the Person in whose name this Note (or any Predecessor Notes) is
registered at the close of business on the Regular Record Date for such
interest, which shall be the April 15 or October
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15 (whether or not a Business Day), as the case may be, next preceding such
Interest Payment Date. Any such interest not so punctually paid, or duly
provided for, and interest on such defaulted interest at the interest rate borne
by the Series B Notes, to the extent lawful, shall forthwith cease to be payable
to the Holder on such Regular Record Date, and may either be paid to the Person
in whose name this Note (or any Predecessor Notes) is registered at the close of
business on a Special Record Date for the payment of such defaulted interest to
be fixed by the Trustee, notice whereof shall be given to Holders of Notes not
less than 10 days prior to such Special Record Date, or be paid at any time in
any other lawful manner not inconsistent with the requirements of any securities
exchange on which the Notes may be listed, and upon such notice as may be
required by such exchange, all as more fully provided in this Indenture.
Payment of the principal of, premium, if any, and interest on, this Note,
and exchange or transfer of the Note, will be made at the office or agency of
the Company in the City of New York maintained for such purpose (which initially
will be the Trustee c/o Harris Trust Company of New York, 77 Water Street, New
York, NY 10005), or at such other office or agency as may be maintained for such
purpose, or at such other office or agency as may be maintained for such
purpose, or, at the option of the Company, payment of interest may be made by
check mailed to the address of the Person entitled thereto as such address shall
appear on the Note Register, and provided, that payment by wire transfer of
immediately available funds will be required with respect to principal of and
interest on all Global Notes and all other Notes the Holders of which shall have
provided wire transfer instructions to the Company or the Paying Agent. Such
payment shall be in such coin or currency of the United States of America as at
the time of payment is legal tender for payment of public and private debts.
Reference is hereby made to the further provisions of this Note set forth
on the reverse hereof, which further provisions shall for all purposes have the
same effect as if set forth at this place.
Unless the certificate of authentication hereon has been duly executed by
the Trustee referred to on the reverse hereof or by the authenticating agent
appointed as provided in the Indenture by manual signature of an authorized
signer, this Note shall not be entitled to any benefit under the Indenture, or
be valid or obligatory for any purpose.
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IN WITNESS WHEREOF, the Company has caused this instrument to be duly
executed by the manual or facsimile signature of its authorized officers and its
corporate seal to be affixed or reproduced hereon.
PSINET INC.
[Seal] By:__________________________________
Title:_________________________________
Attest:
___________________________
Authorized Officer
TRUSTEE'S CERTIFICATE OF AUTHENTICATION
This is one of the 11 1/2% Senior Notes due 2008, Series B referred to in
the within-mentioned Indenture.
WILMINGTON TRUST COMPANY
as Trustee
By: ________________________________
Authorized Signer
Dated:
OPTION OF HOLDER TO ELECT PURCHASE
If you wish to have this Note purchased by the Company pursuant to Section
10.12 or Section 10.14, as applicable, of the Indenture, check the Box: [_].
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If you wish to have a portion of this Note purchased by the Company
pursuant to Section 10.12 or Section 10.14 as applicable, of the Indenture,
state the amount (in original principal amount):
$ ___________________.
Date: ___________________ Your Signature: _____________________
(Sign exactly as your name appears on the other side of this Note)
Signature Guarantee: __________________________________
[Signature must be guaranteed by an eligible Guarantor Institution (banks, stock
brokers, savings and loan associations and credit unions) with membership in an
approved guarantee medallion program pursuant to Securities and Exchange
Commission Rule 17Ad-15]
FORM OF REVERSE OF NOTES.
The form of the reverse of the Series A Notes shall be substantially as
follows:
PSINET INC.
11 1/2% Senior Note due 2008, Series A
This Note is one of a duly authorized issue of Notes of the Company
designated as its 11 1/2% Senior Notes due 2008, Series A (herein called the
"Notes"), limited (except as otherwise provided in the Indenture referred to
below) in aggregate principal amount to $200,000,000, issued under, entitled to
the benefits of and subject to the terms of an indenture (herein called the
"Indenture") dated as of November 3, 1998, between the Company and Wilmington
Trust Company, as trustee (herein called the "Trustee," which term includes any
successor trustee under the Indenture), to which Indenture and all indentures
supplemental thereto reference is hereby made for a statement of the respective
rights, limitations of rights, duties, obligations and immunities thereunder of
the Company, any Guarantors, the Trustee and the Holders of the Notes, and of
the terms upon which the Notes are, and are to be, authenticated and delivered.
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The Indenture contains provisions for defeasance at any time of (a) the
entire Indebtedness on the Notes and (b) certain restrictive covenants and
related Defaults and Events of Default, in each case upon compliance with
certain conditions set forth therein.
The Notes are subject to redemption at any time on or after November 1,
2003, at the option of the Company, in whole or in part, on not less than 30 nor
more than 60 days' prior notice, in amounts of $1,000 or an integral multiple
thereof, at the following redemption prices (expressed as percentages of the
principal amount), if redeemed during the 12-month period beginning November 1
of the years indicated below:
REDEMPTION
YEAR PRICE
---- ----------
2003 105.750%
2004 103.833%
2005 101.917%
2006 100.000%
and thereafter at 100% of the principal amount, in each case, together with
accrued and unpaid interest, if any, to the Redemption Date (subject to the
rights of Holders of record on relevant record dates to receive interest due on
an Interest Payment Date).
In addition, at any time on or prior to November 1, 2001, the Company may,
at its option, use the net proceeds of one or more Public Equity Offerings or
the sale of Capital Stock (other than Disqualified Stock) of the Company to a
Strategic Investor in a single transaction or in a series of related
transactions, to redeem up to an aggregate of 35% of the aggregate principal
amount of Notes originally issued under the Indenture at a redemption price
equal to 111.5% of the aggregate principal amount thereof, plus accrued and
unpaid interest thereon, if any, to the Redemption Date; provided that at least
65% aggregate principal amount of Notes remains outstanding immediately after
the occurrence of such redemption. In order to effect the foregoing redemption,
the Company must mail a notice of redemption no later than 45 days after the
closing of the related Public Equity Offering or to a Strategic Investor and
must consummate such redemption within 60 days of the closing of the Public
Equity Offering or sale to a Strategic Investor.
If less than all of the Notes are to be redeemed, the Trustee shall select
the Notes or portions thereof to be redeemed pro rata, by lot or by any other
method the Trustee shall deem fair and reasonable.
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Upon the occurrence of a Change of Control, subject to the terms of the
Indenture, each Holder may require the Company to purchase such Holder's Notes
in whole or in part in integral multiples of $1,000, at a purchase price in cash
in an amount equal to 101% of the principal amount thereof, plus accrued and
unpaid interest, if any, to the date of purchase, pursuant to a Change of
Control Offer in accordance with the procedures set forth in the Indenture.
Under certain circumstances, subject to the terms of the Indenture, in the
event the Net Cash Proceeds received by the Company from any Asset Sale, which
proceeds are not used to repay any Pari Passu Indebtedness of the Company or any
Subsidiary (including the repurchase of Notes) or which will be invested in
Telecommunications Assets, exceeds a specified amount the Company will be
required to apply such proceeds by making an offer to purchase Notes and certain
Indebtedness ranking pari passu in right of payment to the Notes.
In the case of any redemption of Notes in accordance with the Indenture,
interest installments whose Stated Maturity is on or prior to the Redemption
Date will be payable to the Holders of such Notes of record as of the close of
business on the relevant Regular Record Date or Special Record Date referred to
on the face hereof. Notes (or portions thereof) for whose redemption and payment
provision is made in accordance with the Indenture shall cease to bear interest
from and after the Redemption Date.
In the event of redemption of this Note in accordance with the
Indenture in part only, a new Note or Notes for the unredeemed portion hereof
shall be issued in the name of the Holder hereof upon the cancellation hereof.
If an Event of Default shall occur and be continuing, the
principal amount of all the Notes may be declared due and payable in the manner
and with the effect provided in the Indenture.
The Indenture permits, with certain exceptions (including certain
amendments permitted without the consent of any Holders and certain amendments
which require the consent of all the Holders) as therein provided, the amendment
thereof and the modification of the rights and obligations of the Company and
any Guarantors and the rights of the Holders under the Indenture and the Notes
and any Guarantees at any time by the Company and the Trustee with the consent
of the Holders of at least a majority in aggregate principal amount of the Notes
at the time Outstanding. The Indenture also contains provisions permitting the
Holders of at least a majority in aggregate principal amount of the Notes (100%
of the Holders in certain circumstances) at the time Outstanding, on behalf of
the Holders of all the Notes, to waive compliance by the Company and any
Guarantors with
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certain provisions of the Indenture and the Notes and any Guarantees and certain
past Defaults under the Indenture and the Notes and any Guarantees and their
consequences. Any such consent or waiver by or on behalf of the Holder of this
Note shall be conclusive and binding upon such Holder and upon all future
Holders of this Note and of any Note issued upon the registration of transfer
hereof or in exchange herefor or in lieu hereof whether or not notation of such
consent or waiver is made upon this Note.
No reference herein to the Indenture and no provision of this Note or of
the Indenture shall alter or impair the obligation of the Company, any Guarantor
or any other obligor on the Notes (in the event such Guarantor or such other
obligor is obligated to make payments in respect of the Notes), which is
absolute and unconditional, to pay the principal of, premium, if any, and
interest on, this Note at the times, place, and rate, and in the coin or
currency, herein prescribed.
As provided in the Indenture and subject to certain limitations therein set
forth, the transfer of this Note is registrable in the Note Register, upon
surrender of this Note for registration of transfer at the office or agency of
the Company in the Borough of Manhattan, The City of New York, duly endorsed by,
or accompanied by a written instrument of transfer in form satisfactory to the
Company and the Note Registrar duly executed by, the Holder hereof or its
attorney duly authorized in writing, and thereupon one or more new Notes, of
authorized denominations and for the same aggregate principal amount, will be
issued to the designated transferee or transferees.
Certificated securities shall be transferred to all beneficial holders in
exchange for their beneficial interests in the Rule 144A Global Notes or the
Regulation S Global Notes if (x) the Depositary notifies the Company that it is
unwilling or unable to continue as depository for such Global Note and a
successor depository is not appointed by the Company within 90 days or (y) there
shall have occurred and be continuing an Event of Default and the Note Registrar
has received a request from the Depositary. Upon any such issuance, the Trustee
is required to register such certificated Series A Notes in the name of, and
cause the same to be delivered to, such Person or Persons (or the nominee of any
thereof). All such certificated Series A Notes would be required to include the
Private Placement Legend.
Series A Notes in certificated form are issuable only in registered form
without coupons in denominations of $1,000 and any integral multiple thereof. As
provided in the Indenture and subject to certain limitations therein set forth,
the Series A Notes are exchangeable for a like aggregate principal amount of
Notes of a differing authorized denomination, as requested by the Holder
surrendering the same.
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At any time when the Company is not subject to Sections 13 or 15(d) of the
Exchange Act, upon the written request of a Holder of a Series A Note, the
Company will promptly furnish or cause to be furnished such information as is
specified pursuant to Rule 144A(d)(4) under the Securities Act (or any successor
provision thereto) to such Holder or to a prospective purchaser of such Series A
Note who such Holder informs the Company is reasonably believed to be a
"Qualified Institutional Buyer" within the meaning of Rule 144A under the
Securities Act, as the case may be, in order to permit compliance by such Holder
with Rule 144A under the Securities Act.
No service charge shall be made for any registration of transfer or
exchange of Notes, but the Company may require payment of a sum sufficient to
cover any tax or other governmental charge payable in connection therewith.
Prior to due presentment of this Note for registration of transfer, the
Company, any Guarantor, the Trustee and any agent of the Company, any Guarantor
or the Trustee may treat the Person in whose name this Note is registered as the
owner hereof for all purposes, whether or not this Note is overdue, and neither
the Company, any Guarantor, the Trustee nor any such agent shall be affected by
notice to the contrary.
THIS NOTE SHALL BE GOVERNED BY AND CONSTRUED IN ACCORDANCE WITH THE LAWS OF
THE STATE OF NEW YORK, WITHOUT REGARD TO CONFLICTS OF LAW PRINCIPLES THEREOF.
All terms used in this Note which are defined in the Indenture and not
otherwise defined herein shall have the meanings assigned to them in the
Indenture.
[The Transferee Certificate, in the form of Appendix I hereto, will be
attached to the Series A Note.]
The form of the reverse of the Series B Notes shall be substantially as
follows:
PSINET INC.
11 1/2% Senior Note due 2008, Series B
This Note is one of a duly authorized issue of Notes of the Company
designated as its 11 1/2% Senior Notes due 2008, Series B (herein called the
"Notes"), limited (except as otherwise provided in the Indenture referred to
below) in aggregate principal amount to $200,000,000, issued under, entitled to
the benefits of and subject to the terms of an indenture (herein called the
"Indenture") dated as of November 3, 1998, between the Company and Wilmington
Trust Company, as trustee (herein called the "Trustee," which
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term includes any successor trustee under the Indenture), to which Indenture and
all indentures supplemental thereto reference is hereby made for a statement of
the respective rights, limitations of rights, duties, obligations and immunities
thereunder of the Company, any Guarantors, the Trustee and the Holders of the
Notes, and of the terms upon which the Notes are, and are to be, authenticated
and delivered.
The Indenture contains provisions for defeasance at any time of (a) the
entire Indebtedness on the Notes and (b) certain restrictive covenants and
related Defaults and Events of Default, in each case upon compliance with
certain conditions set forth therein.
The Notes are subject to redemption at any time on or after November 1,
2003, at the option of the Company, in whole or in part, on not less than 30 nor
more than 60 days' prior notice, in amounts of $1,000 or an integral multiple
thereof, at the following redemption prices (expressed as percentages of the
principal amount), if redeemed during the 12-month period beginning November 1
of the years indicated below:
REDEMPTION
YEAR PRICE
---- ----------
2003 105.750%
2004 103.833%
2005 101.917%
2006 100.000%
and thereafter at 100% of the principal amount, in each case, together with
accrued and unpaid interest, if any, to the Redemption Date (subject to the
rights of Holders of record on relevant record dates to receive interest due on
an Interest Payment Date).
In addition, at any time on or prior to November 1, 2001, the
Company may, at its option, use the net proceeds of one or more Public Equity
Offerings or the sale of Capital Stock (other than Disqualified Stock) of the
Company to a Strategic Investor in a single transaction or in a series of
related transactions, to redeem up to an aggregate of 35% of the aggregate
principal amount of Notes originally issued under the Indenture at a redemption
price equal to 111.5% of the aggregate principal amount thereof, plus accrued
and unpaid interest thereon, if any, to the Redemption Date; provided that at
least 65% aggregate principal amount of Notes remains outstanding immediately
after the occurrence of such redemption. In order to effect the foregoing
redemption, the Company must mail a notice of redemption no later than 45 days
after the closing of the related Public Equity
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Offering or to a Strategic Investor and must consummate such redemption within
60 days of the closing of the Public Equity Offering or sale to a Strategic
Investor.
If less than all of the Notes are to be redeemed, the Trustee shall select
the Notes or portions thereof to be redeemed pro rata, by lot or by any other
method the Trustee shall deem fair and reasonable.
Upon the occurrence of a Change of Control, subject to the terms of the
Indenture, each Holder may require the Company to purchase such Holder's Notes
in whole or in part in integral multiples of $1,000, at a purchase price in cash
in an amount equal to 101% of the principal amount thereof, plus accrued and
unpaid interest if any, to the date of purchase, pursuant to Change of Control
Offer and in accordance with the procedures set forth in the Indenture.
Under certain circumstances, subject to the terms of the Indenture, in the
event the Net Cash Proceeds received by the Company from any Asset Sale, which
proceeds are not used to repay any Pari Passu Indebtedness of the Company or any
Subsidiary (including the repurchase of Notes) or which will be invested in
Telecommunications Assets, exceeds a specified amount, the Company will be
required to apply such proceeds by making an offer to purchase Notes and certain
Indebtedness ranking pari passu in right of payment to the Notes.
In the case of any redemption of Notes in accordance with the Indenture,
interest installments whose Stated Maturity is on or prior to the Redemption
Date will be payable to the Holders of such Notes of record as of the close of
business on the relevant Regular Record Date or Special Record Date referred to
on the face hereof. Notes (or portions thereof) for whose redemption and payment
provision is made in accordance with the Indenture shall cease to bear interest
from and after the Redemption Date.
In the event of redemption of this Note in accordance with the Indenture in
part only, a new Note or Notes for the unredeemed portion hereof shall be issued
in the name of the Holder hereof upon the cancellation hereof.
If an Event of Default shall occur and be continuing, the principal amount
of all the Notes may be declared due and payable in the manner and with the
effect provided in the Indenture.
The Indenture permits, with certain exceptions (including certain
amendments permitted without the consent of any Holders and certain amendments
which required the consent of all of the Holders) as therein provided, the
amendment thereof and the
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modification of the rights and obligations of the Company and any Guarantors and
the rights of the Holders under the Indenture and the Notes and any Guarantees
at any time by the Company and the Trustee with the consent of the Holders of at
least a majority in aggregate principal amount of the Notes at the time
Outstanding. The Indenture also contains provisions permitting the Holders of at
least a majority in aggregate principal amount of the Notes (100% of the Holders
in certain circumstances) at the time Outstanding, on behalf of the Holders of
all the Notes, to waive compliance by the Company and any Guarantors with
certain provisions of the Indenture and the Notes and any Guarantees and certain
past Defaults under the Indenture and the Notes and any Guarantees and their
consequences. Any such consent or waiver by or on behalf of the Holder of this
Note shall be conclusive and binding upon such Holder and upon all future
Holders of this Note and of any Note issued upon the registration of transfer
hereof or in exchange herefor or in lieu hereof whether or not notation of such
consent or waiver is made upon this Note.
No reference herein to the Indenture and no provision of this Note or of
the Indenture shall alter or impair the obligation of the Company, any Guarantor
or any other obligor on the Notes (in the event such Guarantor or such other
obligor is obligated to make payments in respect of the Notes), which is
absolute and unconditional, to pay the principal of, and premium, if any, and
interest on, this Note at the times, place, and rate, and in the coin or
currency, herein prescribed.
As provided in the Indenture and subject to certain limitations therein set
forth, the transfer of this Note is registrable in the Note Register, upon
surrender of this Note for registration of transfer at the office or agency of
the Company in the Borough of Manhattan, The City of New York, duly endorsed by,
or accompanied by a written instrument of transfer in form satisfactory to the
Company and the Note Registrar duly executed by, the Holder hereof or its
attorney duly authorized in writing, and thereupon one or more new Notes, of
authorized denominations and for the same aggregate .
Certificated securities shall be transferred to all beneficial holders in
exchange for their beneficial interests in the Series B Global Notes if (x) the
Depositary notifies the Company that it is unwilling or unable to continue as
depository for such Global Note and a successor depository is not appointed by
the Company within 90 days or (y) there shall have occurred and be continuing an
Event of Default and the Note Registrar has received a request from the
Depositary. Upon any such issuance, the Trustee is required to register such
certificated Series B Notes in the name of, and cause the same to be delivered
to, such Person or Persons (or the nominee of any thereof).
Series B Notes in certificated form are issuable only in registered form
without coupons in denominations of $1,000 and any integral multiple thereof. As
provided
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in the Indenture and subject to certain limitations therein set forth, the
Series B Notes are exchangeable for a like aggregate principal amount of Notes
of a differing authorized denomination, as requested by the Holder surrendering
the same.
No service charge shall be made for any registration of transfer or
exchange of Notes, but the Company may require payment of a sum sufficient to
cover any tax or other governmental charge payable in connection therewith.
Prior to due presentment of this Note for registration of transfer, the
Company, any Guarantor, the Trustee and any agent of the Company, any Guarantor
or the Trustee may treat the Person in whose name this Note is registered as the
owner hereof for all purposes, whether or not this Note is overdue, and neither
the Company, any Guarantor, the Trustee nor any such agent shall be affected by
notice to the contrary.
THIS NOTE SHALL BE GOVERNED BY AND CONSTRUED IN ACCORDANCE WITH THE LAWS OF
THE STATE OF NEW YORK, WITHOUT REGARD TO CONFLICTS OF LAW PRINCIPLES THEREOF.
All terms used in this Note which are defined in the Indenture and not
otherwise defined herein shall have the meanings assigned to them in the
Indenture.
[The Transferee Certificate, in the form of Appendix II hereto, will be
attached to the Series B Note.]
ARTICLE III
The Notes
Section 3.01. TITLE AND TERMS.
The aggregate principal amount of Notes which may be authenticated and
delivered under this Indenture is limited to $200,000,000 in principal amount of
Notes, except for Notes authenticated and delivered upon registration of
transfer of, or in exchange for, or in lieu of, other Notes pursuant to Section
3.03, 3.04, 3.05, 3.06, 3.07, 3.08, 9.06, 10.12, 10.14 or 11.08.
The Notes shall be known and designated as the "11 1/2% Senior Notes due
2008" of the Company. The Stated Maturity of the Notes shall be November 1,
2008, and the Notes shall each bear interest at the rate of 11 1/2% per annum,
as such interest rate may be adjusted as set forth in the Notes, from November
3, 1998, or from the most recent
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Interest Payment Date to which interest has been paid, payable semiannually on
May 1 and November 1 in each year, commencing May 1, 1999, until the principal
thereof is paid or duly provided for. Interest on any overdue principal,
interest (to the extent lawful) or premium, if any, shall be payable on demand.
The principal of, premium, if any, and interest on, the Notes shall be
payable and the Notes shall be exchangeable and transferable at an office or
agency of the Company in the City of New York maintained for such purposes
(which initially will be the Trustee c/o Harris Trust Company of New York, 88
Pine Street, 19th Floor, Wall Street Plaza, New York, NY 10005); provided,
however, that payment of interest may be made at the option of the Company by
check mailed to addresses of the Persons entitled thereto as shown on the Note
Register.
For all purposes hereunder, the Series A Notes and the Series B Notes will
be treated as one class and are together referred to as the "Notes." The Series
A Notes rank pari passu in right of payment with the Series B Notes.
The Notes shall be subject to repurchase by the Company pursuant to an
Offer as provided in Section 10.12.
Holders shall have the right to require the Company to purchase their
Notes, in whole or in part, in the event of a Change of Control pursuant to
Section 10.14.
The Notes shall be redeemable as provided in Article XI and in the Notes.
At the election of the Company, the entire Indebtedness on the Notes or
certain of the Company's obligations and covenants and certain Events of Default
thereunder may be defeased as provided in Article IV.
Section 3.02. DENOMINATIONS.
The Notes shall be issuable only in fully registered form without coupons
and only in denominations of $1,000 and any integral multiple thereof.
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Section 3.03. EXECUTION, AUTHENTICATION, DELIVERY AND DATING.
The Notes shall be executed on behalf of the Company by one of its Chairman
of the Board, its President, its Chief Executive Officer, its Chief Financial
Officer or one of its Vice Presidents under its corporate seal reproduced
thereon attested by its Secretary or one of its Assistant Secretaries. The
signatures of any of these officers on the Notes may be manual or facsimile.
Notes bearing the manual or facsimile signatures of individuals who were at
any time the proper officers of the Company shall bind the Company,
notwithstanding that such individuals or any of them have ceased to hold such
offices prior to the authentication and delivery of such Notes or did not hold
such offices at the date of such Notes.
At any time and from time to time after the execution and delivery of this
Indenture, the Company may deliver Notes executed by the Company to the Trustee
(with or without Guarantees endorsed thereon) for authentication, together with
a Company Order for the authentication and delivery of such Notes; and the
Trustee in accordance with such Company Order shall authenticate and make
available for delivery such Notes as provided in this Indenture and not
otherwise.
Each Note shall be dated the date of its authentication.
No Note or Guarantee endorsed thereon shall be entitled to any benefit
under this Indenture or be valid or obligatory for any purpose unless there
appears on such Note a certificate of authentication substantially in the form
provided for herein duly executed by the Trustee by manual signature of an
authorized officer, and such certificate upon any Note shall be conclusive
evidence, and the only evidence, that such Note has been duly authenticated and
delivered hereunder and is entitled to the benefits of this Indenture.
In case the Company or any Guarantor, pursuant to Article VIII, shall, in a
single transaction or through a series of related transactions, be consolidated
or merged with or into any other Person or shall sell, assign, convey, transfer,
lease or otherwise dispose of all or substantially all of its properties and
assets to any Person, and the successor Person resulting from such consolidation
or surviving such merger, or into which the Company or such Guarantor shall have
been merged, or the successor Person which shall have participated in the sale,
assignment, conveyance, transfer, lease or other disposition as aforesaid, shall
have executed an indenture supplemental hereto with the Trustee pursuant to
Article VIII, any of the Notes authenticated or delivered prior to such
consolidation, merger, sale, assignment, conveyance, transfer, lease or other
disposition may, from time to time, at the request of the successor Person, be
exchanged for other Notes executed in the
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name of the successor Person with such changes in phraseology and form as may be
appropriate, but otherwise in substance of like tenor as the Notes surrendered
for such exchange and of like principal amount; and the Trustee, upon Company
Request of the successor Person, shall authenticate and deliver Notes as
specified in such request for the purpose of such exchange. If Notes shall at
any time be authenticated and delivered in any new name of a successor Person
pursuant to this Section 3.03 in exchange or substitution for or upon
registration of transfer of any Notes, such successor Person, at the option of
the Holders but without expense to them, shall provide for the exchange of all
Notes at the time Outstanding for Notes authenticated and delivered in such new
name.
The Trustee may appoint an authenticating agent acceptable to the Company
to authenticate Notes on behalf of the Trustee. Unless limited by the terms of
such appointment, an authenticating agent may authenticate Notes whenever the
Trustee may do so. Each reference in this Indenture to authentication by the
Trustee includes authentication by such agent. An authenticating agent has the
same rights as any Note Registrar or Paying Agent to deal with the Company and
its Affiliates.
If an officer whose signature is on a Note no longer holds that office at
the time the Trustee authenticates such Note such Note shall be valid
nevertheless.
Section 3.04. TEMPORARY NOTES.
Pending the preparation of definitive Notes, the Company may execute, and
upon Company Order the Trustee shall authenticate and make available for
delivery, temporary Notes which are printed, lithographed, typewritten or
otherwise produced, in any authorized denomination, substantially of the tenor
of the definitive Notes in lieu of which they are issued and with such
appropriate insertions, omissions, substitutions and other variations as the
officers executing such Notes may determine, as conclusively evidenced by their
execution of such 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 10.02, without charge to the
Holder. Upon surrender for cancellation of any one or more temporary Notes, the
Company shall execute and the Trustee (in accordance with a Company Order for
the authentication of such Notes) shall authenticate and make available for
delivery in exchange therefor a like principal amount of definitive Notes of
authorized denominations. Until so exchanged the temporary Notes shall in all
respects be entitled to the same benefits under this Indenture as definitive
Notes.
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Section 3.05. REGISTRATION, REGISTRATION OF TRANSFER AND EXCHANGE.
The Company shall cause the Trustee to keep, so long as it is the Note
Registrar, at the Corporate Trust Office of the Trustee, or such other office as
the Trustee may designate, a register (the register maintained in such office or
in any other office or agency designated pursuant to Section 10.02 being herein
sometimes referred to as the "Note Register") in which, subject to such
reasonable regulations as the Note Registrar may prescribe, the Company shall
provide for the registration of Notes and of transfers of Notes. The Trustee
shall initially be the "Note Registrar" for the purpose of registering Notes and
transfers of Notes as herein provided. The Company may change the Note Registrar
or appoint one or more co-Note Registrars without notice.
Upon surrender for registration of transfer of any Note at the office or
agency of the Company designated pursuant to Section 10.02, the Company shall
execute, and the Trustee shall (in accordance with a Company Order for the
authentication of such Notes) authenticate and make available for delivery, in
the name of the designated transferee or transferees, one or more new Notes of
the same series of any authorized denomination or denominations, of a like
aggregate principal amount.
Furthermore, any Holder of the Global Note shall, by acceptance of such
Global Note, agree that transfers of beneficial interests in such Global Note
may be effected only through a book-entry system maintained by the Holder of
such Global Note (or its agent), and that ownership of a beneficial interest in
a Note shall be required to be reflected in a book entry.
At the option of the Holder, Notes may be exchanged for other Notes of any
authorized denomination or denominations, of a like aggregate principal amount,
upon surrender of the Notes to be exchanged at such office or agency. Whenever
any Notes are so surrendered for exchange, the Company shall execute, and the
Trustee shall (in accordance with a Company Order for the authentication of such
Notes) authenticate and make available for delivery, Notes of the same series
which the Holder making the exchange is entitled to receive; provided that
Series A Notes may be exchanged for Series B Notes pursuant to the terms of the
Exchange Offer; and provided further, that no exchange of Series A Notes for
Series B Notes shall occur until an Exchange Offer Registration Statement shall
have been declared effective by the Commission and the Company shall have
provided to the Trustee an Opinion of Counsel that the Exchange Offer
Registration Statement is effective. The Series A Notes exchanged for Series B
Notes shall be canceled.
All Notes issued upon any registration of transfer or exchange of Notes
shall be the valid obligations of the Company, evidencing the same Indebtedness,
and entitled to
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the same benefits under this Indenture, as the Notes surrendered upon such
registration of transfer or exchange.
Every Note presented or surrendered for registration of transfer, or for
exchange, repurchase or redemption, shall (if so required by the Company or the
Trustee) be duly endorsed, or be accompanied by a written instrument of transfer
in form satisfactory to the Company and the Note Registrar, duly executed by the
Holder thereof or his attorney duly authorized in writing.
No service charge shall be made to a Holder for any registration of
transfer, exchange or redemption of Notes, except for any tax or other
governmental charge that may be imposed in connection therewith, other than
exchanges pursuant to Sections 3.03, 3.04, 3.05, 9.06, 10.12, 10.15 or 11.08 not
involving any transfer.
Neither the Company nor the Trustee shall be required (a) to issue,
register the transfer of or exchange any Note during a period beginning at the
opening of business 15 days before the mailing of a notice of redemption of the
Notes selected for redemption under Section 11.04 and ending at the close of
business on the day of such mailing or (b) to register the transfer of or
exchange any Note so selected for redemption in whole or in part, except the
unredeemed portion of Notes being redeemed in part.
Every Note shall be subject to the restrictions on transfer provided in the
legend required to be set forth on the face of each Note pursuant to Section
2.02, and the restrictions set forth in this Section 3.05, and the Holder of
each Note, by such Holder's acceptance thereof (or interest therein), agrees to
be bound by such restrictions on transfer.
Except as provided in the preceding paragraph, any Note authenticated and
delivered upon registration of transfer of, or in exchange for, or in lieu of,
any Global Note, whether pursuant to this Section 3.05, Section 3.04, 3.08, 9.06
or 11.08 or otherwise, shall also be a Global Note and bear the legend specified
in Section 2.02.
Section 3.06. BOOK ENTRY PROVISIONS FOR GLOBAL NOTES.
(a) Each Global Note initially shall (i) be registered in the name of the
nominee of the Depositary, (ii) be deposited with, or on behalf of, the
Depositary or with the Trustee, as custodian for such Depositary, and (iii) bear
legends as set forth in Section 2.02.
Members of, or participants in, the Depositary ("Agent Members") shall
have no rights under this Indenture with respect to any Global Note held on
their behalf by the Depositary, or the Trustee as its custodian, or under such
Global Note, and the
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Depositary may be treated by the Company, the Trustee and any agent of the
Company or the Trustee as the absolute owner of such Global Note for all
purposes whatsoever. Notwithstanding the foregoing, nothing herein shall prevent
the Company, the Trustee or any agent of the Company or the Trustee from giving
effect to any written certification, proxy or other authorization furnished by
the Depositary or shall impair, as between the Depositary and its Agent Members
the operation of customary practices governing the exercise of the rights of a
holder of any Note.
(b) Interests of beneficial owners in a Global Note may be transferred in
accordance with the applicable rules and procedures of the Depositary and the
provisions of Section 3.12. Transfers of a Global Note shall be limited to
transfers of such Global Note in whole, but not in part, to the Depositary, its
successors or their respective nominees, except (i) as otherwise provided in
Section 3.12, and (ii) certificated notes shall be transferred to all beneficial
owners in exchange for their beneficial interests in the Global Note in the
event that (A) the Depositary notifies the Company that it is unwilling or
unable to continue as Depositary for the Global Notes and the Company is unable
to locate a qualified successor within 90 days, (B) the Depositary ceases to be
a "Clearing Agency" registered under the Exchange Act, (C) the Company, at its
option, notifies the Trustee in writing that it elects to cause the issuance of
certificated Notes, or (D) an Event of Default has occurred and is continuing
and the Trustee has received a request from the Depositary.
(c) If any Global Note is to be exchanged for other Notes or canceled in
whole, it shall be surrendered by or on behalf of the Depositary or its nominee
to the Trustee, as Note Registrar, for exchange or cancellation as provided in
this Article III. If any Global Note is to be exchanged for other Notes or
canceled in part, or if another Note is to be exchanged in whole or in part for
a beneficial interest in any Global Note, then either (i) such Global Note shall
be so surrendered for exchange or cancellation as provided in this Article III
or (ii) the principal amount thereof shall be reduced or increased by an amount
equal to the portion thereof to be so exchanged or canceled, or equal to the
principal amount of such other Note to be so exchanged for a beneficial interest
therein, as the case may be, by means of an appropriate adjustment made on the
records of the Trustee, as Note Registrar, whereupon the Trustee, in accordance
with the Applicable Procedures, shall instruct the Depositary or its authorized
representative to make a corresponding adjustment to its records. Upon any such
surrender or adjustment of a Global Note, the Trustee shall, subject to this
Section 3.06(c) and as otherwise provided in this Article III, authenticate and
deliver any Notes issuable in exchange for such Global Note (or any portion
thereof) to or upon the order of, and registered in such names as may be
directed by, the Depositary or its authorized representative. Upon the request
of the Trustee in connection with the occurrence of any of the events specified
in the preceding paragraph, the Company shall promptly make available to the
Trustee a reasonable supply of Notes that are not in the form of Global Notes.
The
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Trustee shall be entitled to rely upon any order, direction or request of the
Depositary or its authorized representative which is given or made pursuant to
this Article III if such order, direction or request is given or made in
accordance with the Applicable Procedures.
(d) Every certificated Note authenticated and delivered upon registration
of transfer of, or in exchange for or in lieu of, a Global Note or any portion
thereof, whether pursuant to this Article III or otherwise, shall be
authenticated and delivered in the form of, and shall be, a Global Note, unless
such certificated Note is registered in the name of a Person other than the
Depositary for such Global Note or a nominee thereof.
(e) The Depositary or its nominee, as registered owner of a Global Note,
shall be the Holder of such Global Note for all purposes under the Indenture and
the Notes, and owners of beneficial interests in a Global Note shall hold such
interests pursuant to the Applicable Procedures. Accordingly, any such owner's
beneficial interest in a Global Note will be shown only on, and the transfer of
such interest shall be effected only through, records maintained by the
Depositary or its nominee or its Participants.
Section 3.07. SPECIAL TRANSFER AND EXCHANGE PROVISIONS.
(a) Certain Transfers and Exchanges. Transfers and exchanges of Notes and
beneficial interests in a Global Note of the kinds specified in this Section
3.07 shall be made only in accordance with this Section 3.07.
(i) Rule 144A Global Note to Regulation S Global Note. If the owner of
a beneficial interest in the Rule 144A Global Note wishes at any time to
transfer such interest to a Person who wishes to acquire the same in the form of
a beneficial interest in the Regulation S Global Note, such transfer may be
effected only in accordance with the provisions of this paragraph and subject to
the Applicable Procedures. Upon receipt by the Trustee, as Note Registrar, of
(a) an order given by the Depositary or its authorized representative directing
that a beneficial interest in the Regulation S Global Note in a specified
principal amount be credited to a specified Participant's account and that a
beneficial interest in the Rule 144A Global Note in an equal principal amount be
debited from another specified Participant's account and (b) a Regulation S
Certificate in the form of Exhibit A hereto, satisfactory to the Trustee and
duly executed by the owner of such beneficial interest in the Rule 144A Global
Note or his attorney duly authorized in writing, then the Trustee, as Note
Registrar, shall reduce the principal amount of the Rule 144A Global Note and
increase the principal amount of the Regulation S Global Note by such specified
principal amount as provided in Section 3.06(c).
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(ii) Regulation S Global Note to Rule 144A Global Note. If the owner
of a beneficial interest in the Regulation S Global Note wishes at any time to
transfer such interest to a Person who wishes to acquire the same in the form of
a beneficial interest in the Rule 144A Global Note, such transfer may be
effected only in accordance with this paragraph (ii) and subject to the
Applicable Procedures. Upon receipt by the Trustee, as Note Registrar, of (a) an
order given by the Depositary or its authorized representative directing that a
beneficial interest in the Rule 144A Global Note in a specified principal amount
be credited to a specified Participant's account and that a beneficial interest
in the Regulation S Global Note in an equal principal amount be debited from
another specified Participant's account and (b) if such transfer is to occur
during the Restricted Period, a Restricted Notes Certificate in the form of
Exhibit B hereto, satisfactory to the Trustee and duly executed by the owner of
such beneficial interest in the Regulation S Global Note or his attorney duly
authorized in writing, then the Trustee, as Note Registrar, shall reduce the
principal amount of the Regulation S Global Note and increase the principal
amount of the Rule 144A Global Note by such specified principal amount as
provided in Section 3.06(c).
(iii) Exchanges between Global Note and Non-Global Note. A beneficial
interest in a Global Note may be exchanged for a Note that is not a Global Note
as provided in Section 3.07(b), provided that, if such interest is a beneficial
interest in the Rule 144A Global Note, or if such interest is a beneficial
interest in the Regulation S Global Note and such exchange is to occur during
the Restricted Period, then such interest shall bear the Private Placement
Legend (subject in each case to Section 3.07(b)).
(b) Private Placement Legends. Rule 144A Notes and their Successor Notes
and Regulation S Notes and their Successor Notes shall bear a Private Placement
Legend, subject to the following:
(i) subject to the following clauses of this Section 3.07(b), a Note
or any portion thereof which is exchanged, upon transfer or otherwise, for a
Global Note or any portion thereof shall bear the Private Placement Legend borne
by such Global Note while represented thereby;
(ii) subject to the following clauses of this Section 3.07(b), a new
Note which is not a Global Note and is issued in exchange for another Note
(including a Global Note) or any portion thereof, upon transfer or otherwise,
shall bear the Private Placement Legend borne by such other Note;
(iii) Series B Notes, and all other Notes sold or otherwise disposed
of pursuant to an effective registration statement under the Securities Act,
together with their respective Successor Notes, shall not bear a Private
Placement Legend;
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(iv) at any time after the Notes may be freely transferred without
registration under the Securities Act or without being subject to transfer
restrictions pursuant to the Securities Act, a new Note which does not bear a
Private Placement Legend may be issued in exchange for or in lieu of a Note
(other than a Global Note) or any portion thereof which bears such a legend if
the Trustee has received an Unrestricted Notes Certificate substantially in the
form of Exhibit C hereto, satisfactory to the Trustee and duly executed by the
Holder of such legended Note or his attorney duly authorized in writing, and
after such date and receipt of such certificate, the Trustee shall authenticate
and deliver such a new Note in exchange for or in lieu of such other Note as
provided in this Article III;
(v) a new Note which does not bear a Private Placement Legend may be
issued in exchange for or in lieu of a Note (other than a Global Note) or any
portion thereof which bears such a legend if, in the Company's judgment, placing
such a legend upon such new Note is not necessary to ensure compliance with the
registration requirements of the Securities Act, and the Trustee, at the
direction of the Company, shall authenticate and deliver such a new Note as
provided in this Article III; and
(vi) notwithstanding the foregoing provisions of this Section
3.07(b), a Successor Note of a Note that does not bear a particular form of
Private Placement Legend shall not bear such form of legend unless the Company
has reasonable cause to believe that such Successor Note is a "restricted
security" within the meaning of Rule 144, in which case the Trustee, at the
direction of the Company, shall authenticate and deliver a new Note bearing a
Private Placement Legend in exchange for such Successor Note as provided in this
Article III. By its acceptance of any Note bearing the Private Placement Legend,
each Holder of such a Note acknowledges the restrictions on transfer of such
Note set forth in this Indenture and in the Private Placement Legend and agrees
that it will transfer such Note only as provided in this Indenture.
The Note Registrar shall retain copies of all letters, notices and other
written communications received pursuant to Section 3.06 or this Section 3.07.
The Company shall have the right to inspect and make copies of all such letters,
notices or other written communications at any reasonable time upon the giving
of reasonable written notice to the Note Registrar.
In the event that Regulation S is amended during the term of this Indenture
to alter the applicable holding period, all reference in this Indenture to a
holding period for Non-U.S. Persons will be deemed to include such amendment.
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Section 3.08. MUTILATED, DESTROYED, LOST AND STOLEN NOTES.
If (a) any mutilated Note is surrendered to the Trustee, or (b) the Company
and the Trustee receive evidence to their satisfaction of the destruction, loss
or theft of any Note, and there is delivered to the Company, any Guarantor or
the Trustee, such security or indemnity, in each case, as may be required by
them to save each of them harmless, then, in the absence of notice to the
Company, any Guarantor or the Trustee that such Note has been acquired by a bona
fide purchaser, the Company shall execute and upon a Company Request the Trustee
shall authenticate and make available for delivery, in exchange for any such
mutilated Note or in lieu of any such destroyed, lost or stolen Note, a
replacement Note of like tenor and principal amount, bearing a number not
contemporaneously outstanding.
In case any such mutilated, destroyed, lost or stolen Note has become or is
about to become due and payable, the Company in its discretion may, instead of
issuing a replacement Note, pay such Note.
Upon the issuance of any replacement Notes under this Section, the Company
may require the payment of a sum sufficient to pay all documentary, stamp or
similar issue or transfer taxes or other governmental charges that may be
imposed in relation thereto and any other expenses (including the fees and
expenses of the Trustee) connected therewith.
Every replacement Note issued pursuant to this Section in lieu of any
destroyed, lost or stolen Note shall constitute an original additional
contractual obligation of the Company and any Guarantor, whether or not the
destroyed, lost or stolen Note shall be at any time enforceable by anyone, and
shall be entitled to all benefits of this Indenture equally and proportionately
with any and all other Notes duly issued hereunder.
The provisions of this Section are exclusive and shall preclude (to the
extent lawful) all other rights and remedies with respect to the replacement or
payment of mutilated, destroyed, lost or stolen Notes.
Section 3.09. PAYMENT OF INTEREST; INTEREST RIGHTS PRESERVED.
Interest on any Note which is payable, and is punctually paid or duly
provided for, on the Stated Maturity of such interest shall be paid to the
Person in whose name the Note (or any Predecessor Notes) is registered at the
close of business on the Regular Record Date for such interest payment.
Any interest on any Note which is payable, but is not punctually paid or
duly provided for, on the Stated Maturity of such interest, and interest on such
defaulted interest
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at the then applicable interest rate borne by the Notes, to the extent lawful
(such defaulted interest and interest thereon herein collectively called
"Defaulted Interest"), shall forthwith cease to be payable to the Holder on the
Regular Record Date; and such Defaulted Interest may be paid by the Company, at
its election in each case, as provided in Subsection (a) or (b) below:
(a) The Company may elect to make payment of any Defaulted Interest to the
Persons in whose names the Notes (or any relevant Predecessor Notes) are
registered at the close of business on a Special Record Date for the payment of
such Defaulted Interest, which shall be fixed in the following manner. The
Company shall notify the Trustee in writing of the amount of Defaulted Interest
proposed to be paid on each Note and the date (not less than 30 days after such
notice) of the proposed payment (the "Special Payment Date"), and at the same
time the Company shall deposit with the Trustee an amount of money equal to the
aggregate amount proposed to be paid in respect of such Defaulted Interest or
shall make arrangements satisfactory to the Trustee for such deposit prior to
the Special Payment Date, such money when deposited to be held in trust for the
benefit of the Persons entitled to such Defaulted Interest as in this Subsection
provided. Thereupon the Trustee shall fix a Special Record Date for the payment
of such Defaulted Interest which shall be not more than 15 days and not less
than 10 days prior to the date of the Special Payment Date and not less than 10
days after the receipt by the Trustee of the notice of the proposed payment. The
Trustee shall promptly notify the Company in writing of such Special Record
Date. In the name and at the expense of the Company, the Trustee shall cause
notice of the proposed payment of such Defaulted Interest and the Special Record
Date therefor to be mailed, first-class postage prepaid, to each Holder at its
address as it appears in the Note Register, not less than 10 days prior to such
Special Record Date. Notice of the proposed payment of such Defaulted Interest
and the Special Record Date and Special Payment Date therefor having been so
mailed, such Defaulted Interest shall be paid to the Persons in whose names the
Notes are registered on such Special Record Date and shall no longer be payable
pursuant to the following Subsection (b).
(b) The Company may make payment of any Defaulted Interest in any other
lawful manner not inconsistent with the requirements of any securities exchange
on which the Notes may be listed, and upon such notice as may be required by
this Indenture not inconsistent with the requirements of such exchange, if,
after written notice given by the Company to the Trustee of the proposed payment
pursuant to this Subsection, such payment shall be deemed practicable by the
Trustee. Subject to the foregoing provisions of this Section 3.09, each Note
delivered under this Indenture upon registration of transfer of or in exchange
for or in lieu of any other Note shall carry the rights to interest accrued and
unpaid, and to accrue, which were carried by such other Note.
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Section 3.10. CUSIP NUMBERS.
The Company in issuing the Notes may use "CUSIP" numbers (if then generally
in use), and the Company, or the Trustee on behalf of the Company, shall use
CUSIP numbers in notices of redemption or exchange as a convenience to Holders;
provided, however, that any such notice shall state that no representation is
made as to the correctness of such numbers 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; and
provided further, however, that failure to use CUSIP numbers in any notice of
redemption or exchange shall not affect the validity or sufficiency of such
notice.
Section 3.11. PERSONS DEEMED OWNERS.
Prior to due presentment of a Note for registration of transfer, the
Company, any Guarantor, the Trustee and any agent of the Company, any Guarantor
or the Trustee may treat the Person in whose name any Note is registered as the
owner of such Note for the purpose of receiving payment of principal of,
premium, if any, and (subject to Section 3.09) interest on, such Note and for
all other purposes whatsoever, whether or not such Note is overdue, and neither
the Company, any Guarantor, the Trustee nor any agent of the Company, any
Guarantor or the Trustee shall be affected by notice to the contrary.
Section 3.12. CANCELLATION.
All Notes surrendered for payment, purchase, redemption, registration of
transfer or exchange shall be delivered to the Trustee and, if not already
canceled, shall be promptly canceled by it. The Company and any Guarantor may at
any time deliver to the Trustee for cancellation any Notes previously
authenticated and delivered hereunder which the Company or such Guarantor may
have acquired in any manner whatsoever, and all Notes so delivered shall be
promptly canceled by the Trustee. No Notes shall be authenticated in lieu of or
in exchange for any Notes canceled as provided in this Section 3.12, except as
expressly permitted by this Indenture. All canceled Notes held by the Trustee
shall, at the option of the Trustee, be (a) returned to the Company or (b)
destroyed, in which case the Trustee shall provide a certificate to the Company
identifying the Notes that have been destroyed. The Trustee shall provide the
Company a list of all Notes that have been canceled from time to time as
requested by the Company.
Section 3.13. COMPUTATION OF INTEREST.
Interest on the Notes shall be computed on the basis of a 360-day year
comprised of twelve 30-day months.
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ARTICLE IV
Defeasance and Covenant Defeasance
Section 4.01. COMPANY'S OPTION TO EFFECT DEFEASANCE OR COVENANT DEFEASANCE.
The Company may, at its option by Board Resolution, at any time, with
respect to the Notes, elect to have either Section 4.02 or Section 4.03 be
applied to all of the Outstanding Notes (the "Defeased Notes"), upon compliance
with the conditions set forth below in this Article IV.
Section 4.02. DEFEASANCE AND DISCHARGE.
Upon the Company's exercise under Section 4.01 of the option applicable to
this Section 4.02, the Company, each Guarantor and any other obligor upon the
Notes, if any, shall be deemed to have been discharged from its obligations with
respect to the Defeased Notes on the date the conditions set forth in Section
4.04 below are satisfied (hereinafter, "defeasance"). For this purpose, such
defeasance means that the Company, each Guarantor and any other obligor upon the
Notes shall be deemed to have paid and discharged the entire Indebtedness
represented by the Defeased Notes, which shall thereafter be deemed to be
"Outstanding" only for the purposes of Section 4.05 and the other Sections of
this Indenture referred to in (a) and (b) below, and to have satisfied all its
other obligations under such Notes and this Indenture insofar as such Notes are
concerned (and the Trustee, at the expense of the Company and upon Company
Request, shall execute proper instruments acknowledging the same), except for
the following which shall survive until otherwise terminated or discharged
hereunder: (a) the rights of Holders of Defeased Notes to receive, solely from
the trust fund described in Section 4.04 and as more fully set forth in such
Section, payments in respect of the principal of, premium, if any, and interest
on, such Notes, when such payments are due, (b) the Company's obligations with
respect to such Defeased Notes under Sections 3.04, 3.05, 3.08, 10.02 and 10.03,
(c) the rights, powers, trusts, duties and immunities of the Trustee hereunder,
including, without limitation, the Trustee's rights under Section 6.07, and (d)
this Article IV. Subject to compliance with this Article IV, the Company may
exercise its option under this Section 4.02 notwithstanding the prior exercise
of its option under Section 4.03 with respect to the Notes.
Section 4.03. COVENANT DEFEASANCE.
Upon the Company's exercise under Section 4.01 of the option applicable to
this Section 4.03, the Company and each Guarantor shall be released from its
obligations
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under any covenant or provision contained or referred to in Sections 10.05
through 10.22, inclusive, and the provisions of clauses (iii) and (v) of Section
8.01(a) with respect to the Defeased Notes on and after the date the conditions
set forth in Section 4.04 below are satisfied (hereinafter, "covenant
defeasance"), and the Defeased Notes shall thereafter be deemed to be not
"Outstanding" for the purposes of any direction, waiver, consent or declaration
or Act of Holders (and the consequences of any thereof) in connection with such
covenants, but shall continue to be deemed "Outstanding" for all other purposes
hereunder. For this purpose, such covenant defeasance means that, with respect
to the Defeased Notes, the Company and each Guarantor may omit to comply with
and shall have no liability in respect of any term, condition or limitation set
forth in any such Section, whether directly or indirectly, by reason of any
reference elsewhere herein to any such Section or by reason of any reference in
any such Section to any other provision herein or in any other document and such
omission to comply shall not constitute a Default or an Event of Default under
Section 5.01(c) but, except as specified above, the remainder of this Indenture
and such Defeased Notes shall be unaffected thereby.
Section 4.04. CONDITIONS TO DEFEASANCE OR COVENANT DEFEASANCE.
The following shall be the conditions to application of either Section 4.02
or Section 4.03 to the Defeased Notes:
(a) The Company shall irrevocably have deposited or caused to be deposited
with the Trustee as trust funds in trust for the purpose of making the following
payments, specifically pledged as security for, and dedicated solely to, the
benefit of the Holders of such Notes, (1) cash in United States dollars, (2)
U.S. Government Obligations, (as defined below) or (3) a combination thereof, in
such amounts as will be sufficient, in the opinion of a nationally recognized
firm of independent public accountants or a nationally recognized investment
banking firm expressed in a written certification thereof delivered to the
Trustee, to pay and discharge, and which shall be applied by the Trustee to pay
and discharge, the principal of, premium, if any, and interest on, the Defeased
Notes, on the Stated Maturity of such principal or interest (or on any date
after November 1, 2003 (such date being referred to as the "Defeasance
Redemption Date"), if at or prior to electing to exercise either its option
applicable to Section 4.02 or its option applicable to Section 4.03, the Company
has delivered to the Trustee an irrevocable notice to redeem the Defeased Notes
on the Defeasance Redemption Date). For this purpose, "U.S. Government
Obligations" means securities that are (I) direct obligations of the United
States of America for the timely 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 timely
payment of which is unconditionally guaranteed as a full faith and credit
obligation by the United States of America, which, in either case, are not
callable
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or redeemable at the option of the issuer thereof, and shall also include a
depository receipt issued by a bank (as defined in Section 3(a)(2) of the
Securities Act), as custodian with respect to any such U.S. Government
Obligation or a specific payment of principal of or interest on any such U.S.
Government Obligation held by such custodian for the account of the holder of
such depository receipt, provided that (except as required by law) such
custodian is not authorized to make any deduction from the amount payable to the
holder of such depository receipt from any amount received by the custodian in
respect of the U.S. Government Obligation or the specific payment of principal
of or interest on the U.S.Government Obligation evidenced by such depository
receipt;
(b) In the case of an election under Section 4.02, the Company shall have
delivered to the Trustee an Opinion of Independent Counsel in the United States
stating that (1) the Company has received from, or there has been published by,
the Internal Revenue Service a ruling or (2) since the date hereof, there has
been a change in the applicable federal income tax law, in either case to the
effect that, and based thereon such Opinion of Independent Counsel in the United
States shall confirm that, the Holders of the Outstanding Notes will not
recognize income, gain or loss for federal income tax purposes as a result of
such defeasance and will be subject to federal income tax on the same amounts,
in the same manner and at the same times as would have been the case if such
defeasance had not occurred;
(c) In the case of an election under Section 4.03, the Company shall have
delivered to the Trustee an Opinion of Independent Counsel in the United States
to the effect that the Holders of the Outstanding Notes will not recognize
income, gain or loss for federal income tax purposes as a result of such
covenant defeasance and will be subject to federal income tax on the same
amounts, in the same manner and at the same times as would have been the case if
such covenant defeasance had not occurred;
(d) No Default or Event of Default (other than a Default or Event of
Default under this Indenture resulting from the borrowing of funds to be applied
to such deposit) shall have occurred and be continuing on the date of such
deposit or insofar as Section 5.01(h) or (i) is concerned, at any time during
the period ending on the 91st day after the date of deposit (it being understood
that this condition shall not be deemed satisfied until the expiration of such
period);
(e) Such defeasance or covenant defeasance shall not cause the Trustee for
the Notes to have a conflicting interest for purposes of the Trust Indenture Act
with respect to any other securities of the Company or any Guarantor;
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(f) Such defeasance or covenant defeasance shall not result in a breach or
violation of, or constitute a Default under, this Indenture or any other
material agreement or instrument to which the Company, any Guarantor or any
Subsidiary is a party or by which it is bound;
(g) Such defeasance or covenant defeasance shall not result in the trust
arising from such deposit constituting an investment company within the meaning
of the Investment Company Act of 1940, as amended, unless such trust shall be
registered under such Act or exempt from registration thereunder;
(h) The Company shall have delivered to the Trustee an Opinion of
Independent Counsel in the United States to the effect that after the 91st day
following the deposit, the trust funds will not be subject to the effect of any
applicable bankruptcy, insolvency, reorganization or similar laws affecting
creditors' rights generally;
(i) The Company shall have delivered to the Trustee an Officers'
Certificate stating that the deposit was not made by the Company with the intent
of preferring the holders of the Notes or any Guarantee over the other creditors
of the Company or any Guarantor with the intent of defeating, hindering,
delaying or defrauding creditors of the Company, any Guarantor or others;
(j) No event or condition shall exist that would prevent the Company from
making payments of the principal of, premium, if any, and interest on the Notes
on the date of such deposit or at any time ending on the 91st day after the date
of such deposit; and
(k) The Company shall have delivered to the Trustee an Officers'
Certificate and an Opinion of Independent Counsel, each stating that all
conditions precedent provided for relating to either the defeasance under
Section 4.02 or the covenant defeasance under Section 4.03 (as the case may be)
have been complied with. Opinions of Counsel or Opinions of Independent Counsel
required to be delivered under this Section shall be in form and substance
reasonably satisfactory to the Trustee may have qualifications customary for
opinions of the type required and counsel delivering such opinions may rely on
certificates of the Company or government or other officials customary for
opinions of the type required, which certificates shall be limited as to matters
of fact, including that various financial covenants have been complied with.
Section 4.05. DEPOSITED MONEY AND U.S. GOVERNMENT OBLIGATIONS TO BE HELD IN
TRUST; OTHER MISCELLANEOUS PROVISIONS.
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Subject to the provisions of the last paragraph of Section 10.03, all
United States dollars and U.S. Government Obligations (including the proceeds
thereof) deposited with the Trustee pursuant to Section 4.04 in respect of the
Defeased Notes shall be held in trust and applied by the Trustee, in accordance
with the provisions of such Notes and this Indenture, to the payment, either
directly or through any Paying Agent (excluding the Company or any of its
Affiliates acting as Paying Agent), as the Trustee may determine, to the Holders
of such Notes of all sums due and to become due thereon in respect of principal,
premium, if any, and interest, but such money need not be segregated from other
funds except to the extent required by law.
The Company shall pay and indemnify the Trustee against any tax, fee or
other charge imposed on or assessed against the U.S. Government Securities
deposited pursuant to Section 4.04 or the principal and interest received in
respect thereof other than any such tax, fee or other charge which by law is
imposed, assessed or for the account of the Holders of the Defeased Notes.
Anything in this Article IV to the contrary notwithstanding, the Trustee
shall deliver or pay to the Company from time to time upon Company Request any
United States dollars or U.S. Government Obligations held by it as provided in
Section 4.04 which, in the opinion of a nationally recognized firm of
independent public accountants expressed in a written certification thereof
delivered to the Trustee, are in excess of the amount thereof which would then
be required to be deposited to effect defeasance or covenant defeasance.
Section 4.06. REINSTATEMENT.
If the Trustee or Paying Agent is unable to apply any United States dollars
or U.S. Government Obligations in accordance with Section 4.02 or 4.03, as the
case may be, by reason of any order or judgment of any court or governmental
authority enjoining, restraining or otherwise prohibiting such application, then
the Company's obligations under this Indenture and the Notes and any Guarantor's
obligations under any Guarantee shall be revived and reinstated, with present
and prospective effect, as though no deposit had occurred pursuant to Section
4.02 or 4.03, as the case may be, until such time as the Trustee or Paying Agent
is permitted to apply all such United States dollars or U.S. Government
Obligations in accordance with Section 4.02 or 4.03, as the case may be;
provided, however, that if the Company makes any payment to the Trustee or
Paying Agent of principal of, premium, if any, or interest on any Note following
the reinstatement of its obligations, the Trustee or Paying Agent shall promptly
pay any such amount to the Holders of the Notes and the Company shall be
subrogated to the rights of the Holders of such Notes to receive such payment
from the United States dollars and U.S. Government Obligations held by the
Trustee or Paying Agent.
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ARTICLE V
Remedies
Section 5.01. EVENTS OF DEFAULT.
"Event of Default," wherever used herein, means any one of the following
events (whatever the reason for such Event of Default and whether it shall be
voluntary or involuntary or be effected by operation of law or pursuant to any
judgment, decree or order of any court or any order, rule or regulation of any
administrative or governmental body):
(a) there shall be a default in the payment of any interest on any Note
when it becomes due and payable, and such default shall continue for a period of
30 days;
(b) there shall be a default in the payment of the principal of (or
premium, if any, on) any Note at its Maturity (upon acceleration, optional or
mandatory redemption, required repurchase or otherwise);
(c) (i) there shall be a default in the performance, or breach, of any
covenant or agreement of the Company or any Guarantor under this Indenture, the
Registration Rights Agreement or any Guarantee (other than a default in the
performance, or breach, of a covenant or agreement which is specifically dealt
with in clause (a), (b) or in clause (ii), (iii) or (iv) of this clause (c)) and
such default or breach shall continue for a period of 30 days after written
notice has been given, by certified mail, (x) to the Company by the Trustee or
(y) to the Company and the Trustee by the Holders of at least 25% in aggregate
principal amount of the outstanding Notes; (ii) there shall be a default in the
performance or breach of the provisions of Article VIII; (iii) the Company shall
have failed to make or consummate an Offer in accordance with the provisions of
Section 10.12; or (iv) the Company shall have failed to make or consummate a
Change of Control Offer in accordance with the provisions of Section 10.14;
(d) (i) any default by the Company or any Subsidiary in the payment of the
principal, premium, if any, or interest has occurred with respect to amounts in
excess of $10 million under any agreement, indenture or instrument evidencing
Indebtedness when the same shall become due and payable in full and such default
shall have continued after any applicable grace period and shall not have been
cured or waived and, if not already matured at its final maturity in accordance
with its terms, the holder of such Indebtedness shall have the right to
accelerate such Indebtedness or (ii) any event of default as defined in any
agreement, indenture or instrument of the Company evidencing Indebtedness in
excess of
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$10 million shall have occurred and the Indebtedness thereunder, if not already
matured at its final maturity in accordance with its terms, shall have been
accelerated;
(e) any Guarantee shall for any reason cease to be, or shall for any reason
be asserted in writing by any Guarantor or the Company not to be, in full force
and effect and enforceable in accordance with its terms, except to the extent
contemplated by this Indenture and any such Guarantee;
(f) one or more judgments, orders or decrees for the payment of money in
excess of $10 million, either individually or in the aggregate, shall be
rendered against the Company not paid or covered by financially sound third-
party insurers, or any Subsidiary or any of their respective properties and is
not discharged and there shall have been a period of 60 consecutive days during
which a stay of enforcement of such judgment or order, by reason of an appeal or
otherwise, shall not be in effect;
(g) any holder or holders of at least $10 million in aggregate principal
amount of Indebtedness of the Company or any Subsidiary after a default under
such Indebtedness shall notify the Trustee of its commencement of proceedings to
foreclose on any assets of the Company or any Subsidiary that have been pledged
to or for the benefit of such holder or holders to secure such Indebtedness or
shall commence proceedings, or take any action (including by way of set-off), to
retain in satisfaction of such Indebtedness or to collect on, seize, dispose of
or apply in satisfaction of Indebtedness, assets of the Company or any
Subsidiary (including funds on deposit or held pursuant to lock- box and other
similar arrangements);
(h) there shall have been the entry by a court of competent jurisdiction of
(i) a decree or order for relief in respect of the Company or any Significant
Subsidiary in an involuntary case or proceeding under any applicable Bankruptcy
Law or (ii) a decree or order adjudging the Company or any Significant
Subsidiary bankrupt or insolvent, or seeking reorganization, arrangement,
adjustment or composition of or in respect of the Company or any Significant
Subsidiary under any applicable federal or state law, or appointing a custodian,
receiver, liquidator, assignee, trustee, sequestrator (or other similar
official) of the Company or any Significant Subsidiary or of any substantial
part of their respective properties, or ordering the winding up or liquidation
of their respective affairs, and any such decree or order for relief shall
continue to be in effect, or any such other decree or order shall be unstayed
and in effect, for a period of 60 consecutive days; or
(i) (i) the Company or any Significant Subsidiary commences a voluntary
case or proceeding under any applicable Bankruptcy Law or any other case or
proceeding to be adjudicated bankrupt or insolvent, (ii) the Company or any
Significant Subsidiary
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consents to the entry of a decree or order for relief in respect of the Company
or such Significant Subsidiary in an involuntary case or proceeding under any
applicable Bankruptcy Law or to the commencement of any bankruptcy or insolvency
case or proceeding against it, (iii) the Company or any Significant Subsidiary
files a petition or answer or consent seeking reorganization or relief under any
applicable federal or state law, (iv) the Company or any Significant Subsidiary
(1) consents to the filing of such petition or the appointment of, or taking
possession by, a custodian, receiver, liquidator, assignee, trustee,
sequestrator or similar official of the Company or such Significant Subsidiary
or of any substantial part of the Company's Consolidated properties, (2) makes
an assignment for the benefit of creditors or (3) admits in writing its
inability to pay its debts generally as they become due or (v) the Company or
any Significant Subsidiary takes any corporate action in furtherance of any such
actions in this paragraph (i).
Section 5.02. ACCELERATION OF MATURITY; RESCISSION AND ANNULMENT.
(a) If an Event of Default (other than an Event of Default specified in
Sections 5.01(h) and (i) with respect to the Company) shall occur and be
continuing with respect to this Indenture, the Trustee or the Holders of not
less than 25% in aggregate principal amount of the Notes then Outstanding may,
and the Trustee at the request of such Holders shall, declare all unpaid
principal of, premium, if any, and accrued interest on all Notes to be due and
payable, by a notice in writing to the Company (and to the Trustee if given by
the Holders of the Notes) and upon any such declaration, such principal,
premium, if any, and interest shall become due and payable immediately. If an
Event of Default specified in clause (h) or (i) of Section 5.01 occurs with
respect to the Company and is continuing, then all the Notes shall IPSO FACTO
become and be due and payable immediately in an amount equal to the principal
amount of the Notes, together with accrued and unpaid interest, if any, to the
date the Notes become due and payable, without any declaration or other act on
the part of the Trustee or any Holder. Thereupon, the Trustee may, at its
discretion, proceed to protect and enforce the rights of the Holders of the
Notes by appropriate judicial proceedings.
(b) After a declaration of acceleration with respect to the Notes, but
before a judgment or decree for payment of the money due has been obtained by
the Trustee as hereinafter in this Article provided, the Holders of a majority
in aggregate principal amount of the Notes Outstanding, by written notice to the
Company and the Trustee, may rescind and annul such declaration and its
consequences if:
(i) the Company has paid or deposited with the Trustee a sum
sufficient to pay:
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(1) all sums paid or advanced by the Trustee under this Indenture
and the reasonable compensation, expenses, disbursements and advances of the
Trustee, its agents and counsel,
(2) all overdue interest on all Outstanding Notes,
(3) the principal of and premium, if any, on any Outstanding
Notes which have become due otherwise than by such declaration of acceleration
and interest thereon at a rate borne by the Notes, and
(4) to the extent that payment of such interest is lawful,
interest upon overdue interest at the rate borne by the Notes; and
(ii) all Events of Default, other than the non-payment of principal of
the Notes which have become due solely by such declaration of acceleration, have
been cured or waived as provided in Section 5.13. No such rescission shall
affect any subsequent Default or impair any right consequent thereon.
(c) The Company shall notify the Trustee within 30 days of the occurrence
of any Default unless such Default shall have been cured. The Company shall
deliver to the Trustee, on or before a date not more than 60 days after the end
of each fiscal quarter and not more than 120 days after the end of each fiscal
year, a written statement as to compliance with the Indenture, including whether
or not any default has occurred that is not cured.
Section 5.03. COLLECTION OF INDEBTEDNESS AND SUITS FOR ENFORCEMENT BY
TRUSTEE.
The Company and each Guarantor covenant that if
(a) default is made in the payment of any interest on any Note when such
interest becomes due and payable and such default continues for a period of 30
days, or
(b) default is made in the payment of the principal of or premium, if any,
on any Note at the Stated Maturity thereof, the Company and such Guarantor will,
upon demand of the Trustee, pay to it, for the benefit of the Holders of such
Notes, the whole amount then due and payable on such Notes for principal and
premium, if any, and interest, with interest upon the overdue principal and
premium, if any, and, to the extent that payment of such interest shall be
legally enforceable, upon overdue installments of interest, at the rate borne by
the Notes; and, in addition thereto, such further amount as shall be sufficient
to
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cover the costs and expenses of collection, including the reasonable
compensation, expenses, disbursements and advances of the Trustee, its agents
and counsel.
If the Company or any Guarantor, as the case may be, fails to pay such
amounts forthwith upon such demand, the Trustee, in its own name and as trustee
of an express trust, may institute a judicial proceeding for the collection of
the sums so due and unpaid and may prosecute such proceeding to judgment or
final decree, and may enforce the same against the Company or any Guarantor or
any other obligor upon the Notes and collect the moneys adjudged or decreed to
be payable in the manner provided by law out of the property of the Company, any
Guarantor or any other obligor upon the Notes, wherever situated.
If an Event of Default occurs and is continuing, the Trustee may in its
discretion proceed to protect and enforce its rights and the rights of the
Holders under this Indenture or any Guarantee by such appropriate private or
judicial proceedings as the Trustee shall deem most effectual to protect and
enforce such rights, including seeking recourse against any Guarantor pursuant
to the terms of any Guarantee, whether for the specific enforcement of any
covenant or agreement in this Indenture or in aid of the exercise of any power
granted herein or therein, or to enforce any other proper remedy, including,
without limitation, seeking recourse against any Guarantor pursuant to the terms
of a Guarantee, or to enforce any other proper remedy, subject however to
Section 5.12. No recovery of any such judgment upon any property of the Company
or any Guarantor shall affect or impair any rights, powers or remedies of the
Trustee or the Holders.
Section 5.04. TRUSTEE MAY FILE PROOFS OF CLAIM.
In case of the pendency of any receivership, insolvency, liquidation,
bankruptcy, reorganization, arrangement, adjustment, composition or other
judicial proceeding relative to the Company or any other obligor, including any
Guarantor, upon the Notes or the property of the Company or of such other
obligor or their creditors, the Trustee (irrespective of whether the principal
of the Notes shall then be due and payable as therein expressed or by
declaration or otherwise and irrespective of whether the Trustee shall have made
any demand on the Company for the payment of overdue principal or interest)
shall be entitled and empowered, by intervention in such proceeding or
otherwise,
(a) to file and prove a claim for the whole amount of principal, and
premium, if any, and interest owing and unpaid in respect of the Notes and to
file such other papers or documents as may be necessary or advisable in order to
have the claims of the Trustee (including any claim for the reasonable
compensation, expenses, disbursements and
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advances of the Trustee, its agents and counsel) and of the Holders allowed in
such judicial proceeding, and
(b) to collect and receive any moneys or other property payable or
deliverable on any such claims and to distribute the same; and any custodian,
receiver, assignee, trustee, liquidator, sequestrator or similar official in any
such judicial proceeding is hereby authorized by each Holder to make such
payments to the Trustee and, in the event that the Trustee shall consent to the
making of such payments directly to the Holders, to pay the Trustee any amount
due it for the reasonable compensation, expenses, disbursements and advances of
the Trustee, its agents and counsel, and any other amounts due the Trustee under
Section 6.07.
Nothing herein contained shall be deemed to authorize the Trustee to
authorize or consent to or accept or adopt on behalf of any Holder any plan of
reorganization, arrangement, adjustment or composition affecting the 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 5.05. TRUSTEE MAY ENFORCE CLAIMS WITHOUT POSSESSION OF NOTES.
All rights of action and claims under this Indenture, the Notes or the
Guarantees may be prosecuted and enforced by the Trustee without the possession
of any of the Notes or the production thereof in any proceeding relating
thereto, and any such proceeding instituted by the Trustee shall be brought in
its own name and as trustee of an express trust, and any recovery of judgment
shall, after provision for the payment of the reasonable compensation, expenses,
disbursements and advances of the Trustee, its agents and counsel, be for the
ratable benefit of the Holders of the Notes in respect of which such judgment
has been recovered.
Section 5.06. APPLICATION OF MONEY COLLECTED.
Any money collected by the Trustee pursuant to this Article or otherwise on
behalf of the Holders or the Trustee pursuant to this Article or through any
proceeding or any arrangement or restructuring in anticipation or in lieu of any
proceeding contemplated by this Article shall be applied, subject to applicable
law, in the following order, at the date or dates fixed by the Trustee and, in
case of the distribution of such money on account of principal, premium, if any,
or interest, upon presentation of the Notes and the notation thereon of the
payment if only partially paid and upon surrender thereof if fully paid:
FIRST: To the payment of all amounts due the Trustee under Section 6.07;
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SECOND: To the payment of the amounts then due and unpaid upon the Notes
for principal, premium, if any, and interest, 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; and
THIRD: The balance, if any, to the Person or Persons entitled thereto,
including the Company, provided that all sums due and owing to the Holders and
the Trustee have been paid in full as required by this Indenture.
Section 5.07. LIMITATION ON SUITS.
No Holder of any Notes shall have any right to 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
(a) such Holder has previously given written notice to the Trustee of a
continuing Event of Default and
(b) the Holders of not less than 25% in principal amount of the Outstanding
Notes shall have made written request to the Trustee to institute proceedings in
respect of such Event of Default in its own name as trustee hereunder;
(c) such Holder or Holders have offered to the Trustee an indemnity
satisfactory to the Trustee against the costs, expenses and liabilities to be
incurred in compliance with such request;
(d) the Trustee for 30 days after its receipt of such notice, request and
offer (and if requested, provision) of indemnity has failed to institute any
such proceeding; and
(e) no direction inconsistent with such written request has been given to
the Trustee during such 30-day period by the Holders of a majority in principal
amount of the Outstanding Notes; it being understood and intended that no one or
more Holders shall have any right in any manner whatever by virtue of, or by
availing of, any provision of this Indenture, any Note or any Guarantee to
affect, disturb or prejudice the rights of any other Holders, or to obtain or to
seek to obtain priority or preference over any other Holders or to enforce any
right under this Indenture, any Note or any Guarantee, except in the manner
provided in this Indenture and for the equal and ratable benefit of all the
Holders.
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Section 5.08. UNCONDITIONAL RIGHT OF HOLDERS TO RECEIVE PRINCIPAL, PREMIUM
AND INTEREST.
Notwithstanding any other provision in this Indenture, the Holder of any
Note shall have the right based on the terms stated herein, which is absolute
and unconditional, to receive payment of the principal of, premium, if any, and
(subject to Section 3.09) interest on such Note on the respective Stated
Maturities expressed in such Note (or, in the case of redemption or repurchase,
on the Redemption Date or the repurchase date) and to institute suit for the
enforcement of any such payment, and such rights shall not be impaired without
the consent of such Holder.
Section 5.09. RESTORATION OF RIGHTS AND REMEDIES.
If the Trustee or any Holder has instituted any proceeding to enforce any
right or remedy under this Indenture or any Guarantee and such proceeding has
been discontinued or abandoned for any reason, or has been determined adversely
to the Trustee or to such Holder, then and in every such case the Company, any
Guarantor, any other obligor on the Notes, the Trustee and the Holders shall,
subject to any determination in such proceeding, be restored severally and
respectively to their former positions hereunder, and thereafter all rights and
remedies of the Trustee and the Holders shall continue as though no such
proceeding had been instituted.
Section 5.10. RIGHTS AND REMEDIES CUMULATIVE.
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 5.11. DELAY OR OMISSION NOT WAIVER.
No delay or omission of the Trustee or of any Holder of any Note to
exercise any right or remedy accruing upon any Event of Default shall impair any
such right or remedy or constitute a waiver of any such Event of Default or an
acquiescence therein. Every right and remedy given by this Article or by law to
the Trustee or to the Holders may be exercised from time to time, and as often
as may be deemed expedient, by the Trustee or by the Holders, as the case may
be.
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Section 5.12. CONTROL BY HOLDERS.
The Holders of not less than a majority in aggregate principal amount of
the Outstanding Notes shall have the right to direct the time, method and place
of conducting any proceeding for exercising any remedy available to the Trustee,
or exercising any trust or power conferred on the Trustee, provided that
(a) such direction shall not be in conflict with any rule of law or with
this Indenture (including, without limitation, Section 5.07) or any Guarantee,
expose the Trustee to liability, or be unduly prejudicial to Holders not joining
therein; and
(b) subject to the provisions of Section 315 of the Trust Indenture Act,
the Trustee may take any other action deemed proper by the Trustee which is not
inconsistent with such direction.
Section 5.13. WAIVER OF PAST DEFAULTS.
The Holders of not less than a majority in aggregate principal amount of
the Outstanding Notes may on behalf of the Holders of all Outstanding Notes
waive any past Default hereunder and its consequences, except a Default
(a) in the payment of the principal of, premium, if any, or interest on any
Note; or
(b) in respect of a covenant or a provision hereof which under this
Indenture cannot be modified or amended without the consent of the Holder of
each Note Outstanding affected by such modification or amendment.
Upon any such waiver, such Default shall cease to exist, and any Event of
Default arising therefrom shall be deemed to have been cured, for every purpose
of this Indenture; but no such waiver shall extend to any subsequent or other
Default or impair any right consequent thereon.
Section 5.14. UNDERTAKING FOR COSTS.
All parties to this Indenture agree, and each Holder of any Note by his
acceptance thereof shall be deemed to have agreed, that any court may in its
discretion require, in any suit for the enforcement of any right or remedy under
this Indenture, or in any suit against the Trustee for any action taken,
suffered or omitted by it as Trustee, the filing by any party litigant in such
suit of an undertaking to pay the costs of such suit, and that such
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court may in its discretion assess reasonable costs, including reasonable
attorneys' fees, against any party litigant in such suit, having due regard to
the merits and good faith of the claims or defenses made by such party litigant,
but the provisions of this Section shall not apply to any suit instituted by the
Trustee, to any suit instituted by any Holder or group of Holders holding in the
aggregate more than 10% in principal amount of the Outstanding Notes, or to any
suit instituted by any Holder for the enforcement of the payment of the
principal of, premium, if any, or interest on, any Note on or after the
respective Stated Maturities expressed in such Note (or, in the case of
redemption, on or after the Redemption Date).
Section 5.15. WAIVER OF STAY, EXTENSION OR USURY LAWS.
Each of the Company and the Guarantors, if any, 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 or other law wherever enacted, now or at any time
hereafter in force, which would prohibit or forgive the Company or any Guarantor
from paying all or any portion of the principal of, premium, if any, or interest
on the Notes contemplated herein or in the Notes or which may affect the
covenants or the performance of this Indenture; and each of the Company and the
Guarantors, if any (to the extent that it may lawfully do so) 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 5.16. REMEDIES SUBJECT TO APPLICABLE LAW.
All rights, remedies and powers provided by this Article V may be exercised
only to the extent that the exercise thereof does not violate any applicable
provision of law in the premises, and all the provisions of this Indenture are
intended to be subject to all applicable mandatory provisions of law which may
be controlling in the premises and to be limited to the extent necessary so that
they will not render this Indenture invalid, unenforceable or not entitled to be
recorded, registered or filed under the provisions of any applicable law.
ARTICLE VI
The Trustee
Section 6.01. DUTIES OF TRUSTEE.
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Subject to the provisions of Trust Indenture Act Sections 315(a) through
315(d):
(a) if an Event of Default has occurred and is continuing, the Trustee
shall exercise such of the rights and powers vested in it by this Indenture and
use the same degree of care and skill in its exercise thereof as a prudent
person would exercise or use under the circumstances in the conduct of his own
affairs;
(b) except during the continuance of an Event of Default:
(1) the Trustee need perform only those duties as are specifically set
forth in this Indenture and no covenants or Obligations shall be implied in this
Indenture that are adverse to the Trustee; and
(2) in the absence of bad faith or willful misconduct on its part, the
Trustee may conclusively rely, as to the truth of the statements and the
correctness of the opinions expressed therein, upon certificates or opinions
furnished to the Trustee and conforming to the requirements of this Indenture.
However, the Trustee shall examine the certificates and opinions to determine
whether or not they conform to the requirements of this Indenture;
(c) the Trustee may not be relieved from liability for its own negligent
action, its own negligent failure to act, or its own willful misconduct, except
that:
(1) this Subsection (c) does not limit the effect of Subsection (b) of
this Section 6.01;
(2) the Trustee shall not be liable for any error of judgment made in
good faith by a Responsible Officer, unless it is proved that the Trustee was
negligent in ascertaining the pertinent facts; and
(3) the Trustee shall not be liable with respect to any action it
takes or omits to take in good faith, in accordance with a direction of the
Holders of a majority in principal amount of Outstanding Notes relating to the
time, method and place of conducting any proceeding for any remedy available to
the Trustee, or exercising any trust or power confirmed upon the Trustee under
this Indenture;
(d) no provision of this Indenture shall require the Trustee to expend or
risk its own funds or otherwise incur any liability. The Trustee shall be under
no obligation to exercise any of its rights or powers, or to perform any duty
under this Indenture at the
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request of any Holders unless such Holders shall have offered to the Trustee
security and indemnity, satisfactory to the Trustee, against any loss, liability
or expense;
(e) whether or not therein expressly so provided, every provision of this
Indenture that in any way relates to the Trustee is subject to Subsections (a),
(b), (c), (d) and (f) of this Section 6.01; and
(f) the Trustee shall not be liable for interest on any money or assets
received by it except as the Trustee may agree in writing with the Company.
Assets held in trust by the Trustee need not be segregated from other assets
except to the extent required by law.
Section 6.02. NOTICE OF DEFAULTS.
Within 90 days after a Responsible Officer of the Trustee receives notice
of the occurrence of any Default, the Trustee shall transmit by mail to all
Holders and any other Persons entitled to receive reports pursuant to Section
313(c) of the Trust Indenture Act, as their names and addresses appear in the
Note Register, notice of such Default hereunder known to the Trustee, unless
such Default shall have been cured or waived; provided, 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 a trust committee of Responsible Officers of the Trustee in
good faith determines that the withholding of such notice is in the interest of
the Holders.
Section 6.03. CERTAIN RIGHTS OF TRUSTEE.
Subject to the provisions of Section 6.01 hereof and Trust Indenture Act
Sections 315(a) through 315(d):
(a) the Trustee may rely and shall be protected in acting or refraining
from acting upon receipt by it of any resolution, certificate, statement,
instrument, opinion, report, notice, request, direction, consent, order, bond,
debenture, note, other evidence of Indebtedness or other paper or document
believed by it to be genuine and to have been signed or presented by the proper
party or parties, and the Trustee need not investigate any fact or matter stated
therein;
(b) any request or direction of the Company mentioned herein shall be
sufficiently evidenced by a Company Request or Company Order and any resolution
of the Board of Directors may be sufficiently evidenced by a Board Resolution;
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(c) before the Trustee acts or refrains from acting, it may require an
Officer's Certificate or an Opinion of Counsel or both. The Trustee shall not be
liable for any action it takes or omits to take in good faith reliance on such
Officer's Certificate or Opinion of Counsel. The Trustee may consult with
counsel of its selection and any advice of such counsel or any Opinion of
Counsel shall be full and complete authorization and protection in respect of
any action taken, suffered or omitted by it hereunder in good faith and in
reliance thereon in accordance with such advice or Opinion of Counsel;
(d) the Trustee shall be under no obligation to exercise any of the rights
or powers vested in it by this Indenture at the request or direction of any of
the Holders pursuant to this Indenture, unless such Holders shall have offered
to the Trustee security or indemnity satisfactory to the Trustee against the
costs, expenses and liabilities which might be incurred thereby;
(e) the Trustee shall not be liable for any action taken or omitted by it
in good faith and believed by it to be authorized or within the discretion,
rights or powers conferred upon it by this Indenture other than any liabilities
arising out of the negligence, bad faith or willful misconduct of the Trustee;
(f) 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, approval,
appraisal, bond, debenture, note, coupon, security or other paper or document
unless requested in writing to do so by the Holders of not less than a majority
in aggregate principal amount of the Notes then Outstanding; provided that, if
the payment within a reasonable time to the Trustee of the costs, expenses or
liabilities likely to be incurred by it in the making of such investigation is,
in the opinion of the Trustee, not reasonably assured to the Trustee by the
security afforded to it by the terms of this Indenture, the Trustee may require
reasonable indemnity against such expenses or liabilities as a condition to
proceeding; the reasonable expenses of every such investigation so requested by
the Holders of not less than 25% in aggregate principal amount of the Notes
Outstanding shall be paid by the Company or, if paid by the Trustee or any
predecessor Trustee, shall be repaid by the Company upon demand; provided,
further, the Trustee in its discretion may make such further inquiry or
investigation into such facts or matters as it may deem 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; provided, further, that no permissive power, right or
remedy conferred upon the Trustee under this Indenture shall be construed to
impose a duty to exercise such power, right or remedy; and
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(g) the Trustee may execute any of the trusts or powers hereunder or
perform any duties hereunder either directly or by or through agents or
attorneys and the Trustee shall not be responsible for any misconduct or
negligence on the part of any agent or attorney appointed with due care by it.
Section 6.04. TRUSTEE NOT RESPONSIBLE FOR RECITALS, DISPOSITIONS OF NOTES
OR APPLICATION OF PROCEEDS THEREOF.
The recitals contained herein and in the Notes, except the Trustee's
certificates of authentication, shall be taken as the statements of the Company,
and the Trustee assumes no responsibility for their correctness. The Trustee
shall not be responsible for and makes no representations as to the validity or
sufficiency of this Indenture or of the Notes, and it shall not be responsible
for any statement or recital in this Indenture or any statement in the Notes or
any other document executed in connection with the sale of the Notes or pursuant
to this Indenture, except that the Trustee represents that it is duly authorized
to execute and deliver this Indenture, authenticate the Notes and perform its
obligations hereunder and that the statements made by it in any Statement of
Eligibility and Qualification on Form T-1 supplied to the Company are true and
accurate subject to the qualifications set forth therein. The Trustee shall not
be accountable for the use or application by the Company of Notes or the
proceeds thereof.
Section 6.05. TRUSTEE AND AGENTS MAY HOLD NOTES; COLLECTIONS; ETC.
The Trustee, any Paying Agent, Note Registrar or any other agent of the
Company, in its individual or any other capacity, may become the owner or
pledgee of Notes, with the same rights it would have if it were not the Trustee,
Paying Agent, Note Registrar or such other agent and, subject to Trust Indenture
Act Sections 310 and 311, may otherwise deal with the Company and receive,
collect, hold and retain collections from the Company with the same rights it
would have if it were not the Trustee, Paying Agent, Note Registrar or such
other agent. Any Paying Agent, other than the Trustee, holding funds or
securities in trust for the benefit of the Holders or the Trustee shall give to
the Trustee notice of any default by any obligor upon the Notes in the making of
any such payment.
Section 6.06. MONEY HELD IN TRUST.
All moneys received by the Trustee shall, until used or applied as herein
provided, be held in trust for the purposes for which they were received, but
need not be segregated from other funds except to the extent required by
mandatory provisions of law. Except for funds or securities deposited with the
Trustee pursuant to Article IV, the Trustee shall be required to invest all
moneys received by the Trustee, until used or applied as herein
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provided, in Cash Equivalents in accordance with the directions of the Company;
provided, however, that nothing herein shall be deemed to require the Trustee or
any other Person acting as Paying Agent to invest or pay interest on funds held
for the payment of any Notes after the Maturity thereof. The Trustee shall not
be liable for any gain or loss on funds or securities deposited with the Trustee
and invested or maintained by the Trustee in accordance with the directions of
the Company.
Section 6.07. COMPENSATION AND INDEMNIFICATION OF TRUSTEE AND ITS PRIOR
CLAIM.
The Company covenants and agrees to pay to the Trustee from time to time,
and the Trustee shall be entitled to, such compensation as the parties shall
agree in writing from time to time for all services rendered by it hereunder
(which compensation shall not be limited by any provision of law in regard to
the compensation of a trustee of an express trust) and the Company covenants and
agrees to pay or reimburse the Trustee and each predecessor Trustee upon its
request for all reasonable expenses, disbursements and advances incurred or made
by or on behalf of the Trustee in accordance with any of the provisions of this
Indenture (including the reasonable compensation and the expenses and
disbursements of its counsel and of all agents and other persons not regularly
in its employ) except any such expense, disbursement or advance as may arise
from its negligence, bad faith or willful misconduct.
The Company also covenants and agrees to indemnify the Trustee and each
predecessor Trustee, and their respective officers, directors, agents and
employees, for, and to hold it harmless against, any claim, loss, liability,
tax, assessment or other governmental charge (other than taxes applicable to the
Trustee's compensation hereunder) or expense incurred without negligence, bad
faith or willful misconduct on its part, arising out of or in connection with
the acceptance or administration of this Indenture or the trusts hereunder and
its duties hereunder, including enforcement of this Section 6.07, and also
including any liability which the Trustee may incur as a result of failure to
withhold, pay or report any tax, assessment or other governmental charge, and
the costs and expenses of defending itself against or investigating any claim or
liability in connection with the exercise or performance of any of its powers or
duties hereunder.
The obligations of the Company under this Section 6.07 to compensate and
indemnify the Trustee and each predecessor Trustee and to pay or reimburse the
Trustee and each predecessor Trustee for reasonable expenses, disbursements and
advances shall constitute an additional obligation hereunder and shall survive
the satisfaction and discharge of this Indenture and the resignation or removal
of the Trustee and each predecessor Trustee. As security for the performance of
the obligations of the Company under this Section 6.07,
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the Trustee shall have a lien prior to the Notes upon all property and funds
held or collected by the Trustee as such, except funds held in trust for the
benefit of the Holders of particular Notes.
When the Trustee incurs expenses or renders services after an Event of
Default specified in Section 5.01(i) occurs, the expenses and the compensation
for the services (including the fees and expenses of its agents and counsel) are
intended to constitute administrative expenses under any Bankruptcy Law without
any need to demonstrate substantial contribution under Bankruptcy Law.
Section 6.08. CONFLICTING INTERESTS.
The Trustee shall comply with the provisions of Section 310(b) of the Trust
Indenture Act.
Section 6.09. TRUSTEE ELIGIBILITY.
There shall at all times be a Trustee hereunder which shall be eligible to
act as trustee under Trust Indenture Act Section 310(a) and which shall have a
combined capital and surplus of at least $100,000,000, to the extent there is an
institution eligible and willing to serve. If the Trustee does not have a
Corporate Trust Office in The City of New York, the Trustee may appoint an agent
in The City of New York reasonably acceptable to the Company to conduct any
activities which the Trustee may be required under this Indenture to conduct in
The City of New York. If such Trustee publishes reports of condition at least
annually, pursuant to law or to the requirements of federal, state, territorial
or District of Columbia supervising or examining authority, then for the
purposes of this Section 6.09, the combined capital and surplus of such
corporation shall be deemed to be its combined capital and surplus as set forth
in its most recent report of condition so published. If at any time the Trustee
shall cease to be eligible in accordance with the provisions of this Section
6.09, the Trustee shall resign immediately in the manner and with the effect
hereinafter specified in this Article.
Section 6.10. RESIGNATION AND REMOVAL; APPOINTMENT OF SUCCESSOR TRUSTEE.
(a) No resignation or removal of the Trustee and no appointment of a
successor trustee pursuant to this Article shall become effective until the
acceptance of appointment by the successor trustee under Section 6.11.
(b) The Trustee, or any trustee or trustees hereafter appointed, may at any
time resign by giving written notice thereof to the Company. Upon receiving such
notice or
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resignation, the Company shall promptly appoint a successor trustee by written
instrument executed by authority of the Board of Directors of the Company, a
copy of which shall be delivered to the resigning Trustee and a copy to the
successor trustee. If an instrument of acceptance by a successor trustee shall
not have been delivered to the Trustee within 30 days after the giving of such
notice of resignation, the resigning Trustee may, or any Holder who has been a
bona fide Holder of a Note for at least six months may, on behalf of himself and
all others similarly situated, petition any court of competent jurisdiction for
the appointment of a successor trustee. Such court may thereupon, after such
notice, if any, as it may deem proper, appoint and prescribe a successor
trustee.
(c) The Trustee may be removed at any time for any cause or for no cause by
an Act of the Holders of not less than a majority in aggregate principal amount
of the Outstanding Notes, delivered to the Trustee and to the Company.
(d) If at any time:
(1) the Trustee shall fail to comply with the provisions of Trust
Indenture Act Section 310(b) after written request therefor by the Company or by
any Holder who has been a bona fide Holder of a Note for at least six months,
(2) the Trustee shall cease to be eligible under Section 6.09 and
shall fail to resign after written request therefor by the Company or by any
Holder who has been a bona fide Holder of a Note for at least six months, or
(3) the Trustee shall become incapable of acting or shall be adjudged
a bankrupt or insolvent, or a receiver of the Trustee or of its property shall
be appointed or any public officer shall take charge or control of the Trustee
or of its property or affairs for the purpose of rehabilitation, conservation or
liquidation, then, in any case, (i) the Company by a Board Resolution may remove
the Trustee, or (ii) subject to Section 5.14, the Holder of any Note who has
been a bona fide Holder of a Note for at least six months may, on behalf of
himself and all others similarly situated, petition any court of competent
jurisdiction for the removal of the Trustee and the appointment of a successor
trustee. Such court may thereupon, after such notice, if any, as it may deem
proper and prescribe, remove the Trustee and appoint a successor trustee.
(e) If the Trustee shall resign, be removed or become incapable of acting,
or if a vacancy shall occur in the office of Trustee for any cause, the Company,
by a Board Resolution, shall promptly appoint a successor trustee and shall
comply with the applicable requirements of Section 6.11. If, within 60 days
after such resignation, removal or incapability, or the occurrence of such
vacancy, the Company has not appointed a successor
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Trustee, a successor trustee shall be appointed by the Act of the Holders of a
majority in principal amount of the Outstanding Notes delivered to the Company
and the retiring Trustee. Such successor trustee so appointed shall forthwith
upon its acceptance of such appointment become the successor trustee and
supersede the successor trustee appointed by the Company. If no successor
trustee shall have been so appointed by the Company or the Holders of the Notes
and accepted appointment in the manner hereinafter provided, the Trustee or the
Holder of any Note who has been a bona fide Holder for at least six months may,
subject to Section 5.14, on behalf of himself and all others similarly situated,
petition any court of competent jurisdiction for the appointment of a successor
trustee.
The Company shall give notice of each resignation and each removal of the
Trustee and each appointment of a successor trustee by mailing written notice of
such event by first-class mail, postage prepaid, to the Holders of Notes as
their names and addresses appear in the Note Register. Each notice shall include
the name of the successor trustee and the address of its Corporate Trust Office
or agent hereunder.
Section 6.11. ACCEPTANCE OF APPOINTMENT BY SUCCESSOR.
Every successor trustee appointed hereunder shall execute, acknowledge and
deliver to the Company and to the retiring Trustee an instrument accepting such
appointment, and thereupon the resignation or removal of the retiring Trustee
shall become effective and such successor trustee, without any further act, deed
or conveyance, shall become vested with all the rights, powers, trusts and
duties of the retiring Trustee as if originally named as Trustee hereunder; but,
nevertheless, on the written request of the Company or the successor trustee,
upon payment of its charges pursuant to Section 6.07 then unpaid, such retiring
Trustee shall pay over to the successor trustee all moneys at the time held by
it hereunder and shall execute and deliver an instrument transferring to such
successor trustee all such rights, powers, duties and obligations. Upon request
of any such successor trustee, the Company shall execute any and all instruments
for more fully and certainly vesting in and confirming to such successor trustee
all such rights and powers.
No successor trustee with respect to the Notes shall accept appointment as
provided in this Section 6.11 unless at the time of such acceptance such
successor trustee shall be eligible to act as trustee under the provisions of
Trust Indenture Act Section 310(a) and this Article VI and shall have a combined
capital and surplus of at least $10,000,000 and have a Corporate Trust Office or
an agent selected in accordance with Section 6.09.
Upon acceptance of appointment by any successor trustee as provided in this
Section 6.11, the Company shall give notice thereof to the Holders of the Notes,
by mailing such notice to such Holders at their addresses as they shall appear
on the Note Register. If
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the acceptance of appointment is substantially contemporaneous with the
appointment, then the notice called for by the preceding sentence may be
combined with the notice called for by Section 6.10. If the Company fails to
give such notice within 10 days after acceptance of appointment by the successor
trustee, the successor trustee shall cause such notice to be given at the
expense of the Company.
Section 6.12. MERGER, CONVERSION, CONSOLIDATION OR SUCCESSION TO BUSINESS.
Any corporation into which the Trustee may be merged or converted or with
which it may be consolidated, or any corporation resulting from any merger,
conversion or consolidation to which the Trustee shall be a party, or any
corporation succeeding to all or substantially all of the corporate trust
business of the Trustee (including the trust created by this Indenture) shall be
the successor of the Trustee hereunder, provided that such corporation shall be
eligible under Trust Indenture Act Section 310(a) and this Article VI and shall
have a combined capital and surplus of at least $100,000,000 and have a
Corporate Trust Office or an agent selected in accordance with Section 6.09,
without the execution or filing of any paper or any further act on the part of
any of the parties hereto.
In case at the time such successor to the Trustee shall succeed to the
trusts created by this Indenture any of the Notes shall have been authenticated
but not delivered, any such successor to the Trustee may adopt the certificate
of authentication of any predecessor Trustee and deliver such Notes so
authenticated; and, in case at that time any of the Notes shall not have been
authenticated, any successor to the Trustee may authenticate such Notes either
in the name of any predecessor hereunder or in the name of the successor
trustee; and in all such cases such certificate shall have the full force which
it is anywhere in the Notes or in this Indenture provided that the certificate
of the Trustee shall have; provided that the right to adopt the certificate of
authentication of any predecessor Trustee or to authenticate Notes in the name
of any predecessor Trustee shall apply only to its successor or successors by
merger, conversion or consolidation.
Section 6.13. PREFERENTIAL COLLECTION OF CLAIMS AGAINST COMPANY.
If and when the Trustee shall be or become a creditor of the Company (or
other obligor under the Notes), the Trustee shall be subject to the provisions
of the Trust Indenture Act regarding the collection of claims against the
Company (or any such other obligor). A Trustee who has resigned or been removed
shall be subject to Trust Indenture Act Section 311(a) to the extent indicated
therein.
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ARTICLE VII
Holders' Lists and Reports by Trustee and Company
Section 7.01. COMPANY TO FURNISH TRUSTEE NAMES AND ADDRESSES OF HOLDERS.
The Company will furnish or cause to be furnished to the Trustee
(a) semiannually, not more than 15 days after each Regular Record Date, a
list, in such form as the Trustee may reasonably require, of the names and
addresses of the Holders as of such Regular Record Date; and
(b) at such other times as the Trustee may reasonably request in writing,
within 30 days after receipt by the Company of any such request, a list of
similar form and content to that in subsection (a) hereof as of a date not more
than 15 days prior to the time such list is furnished;
provided, however, that if and so long as the Trustee shall be the Note
Registrar, no such list need be furnished.
Section 7.02. DISCLOSURE OF NAMES AND ADDRESSES OF HOLDERS.
Holders may communicate pursuant to Trust Indenture Act Section 312(b) with
other Holders with respect to their rights under this Indenture or the Notes,
and the Trustee shall comply with Trust Indenture Act Section 312(b). The
Company, the Trustee, the Note Registrar and any other Person shall have the
protection of Trust Indenture Act Section 312(c). Further, every Holder of
Notes, by receiving and holding the same, agrees with the Company and the
Trustee that neither the Company nor the Trustee or any agent of either of them
shall be held accountable by reason of the disclosure of any information as to
the names and addresses of the Holders in accordance with Trust Indenture Act
Section 312, regardless of the source from which such information was derived,
and that the Trustee shall not be held accountable by reason of mailing any
material pursuant to a request made under Trust Indenture Act Section 312.
Section 7.03. REPORTS BY TRUSTEE.
(a) Within 60 days after May 15 of each year commencing with the first May
15 after the issuance of Notes, the Trustee, if so required under the Trust
Indenture Act, shall transmit by mail to all Holders, in the manner and to the
extent provided in Trust Indenture Act Section 313(c), a brief report dated as
of such May 15 in accordance with and with respect to the matters required by
Trust Indenture Act Section 313(a). The Trustee shall
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also transmit by mail to all Holders, in the manner and to the extent provided
in Trust Indenture Act Section 313(c), a brief report in accordance with and
with respect to the matters required by Trust Indenture Act Section 313(b)(2).
(b) A copy of each report transmitted to Holders pursuant to this Section
7.03 shall, at the time of such transmission, be mailed to the Company and filed
with each stock exchange, if any, upon which the Notes are listed and also with
the Commission. The Company will notify the Trustee promptly if the Notes are
listed on any stock exchange.
Section 7.04. REPORTS BY COMPANY.
The Company and any Guarantor, as the case may be, shall:
(a) file with the Trustee, within 15 days after the Company or any
Guarantor, as the case may be, is required to file the same with the Commission,
copies of the annual reports and of the information, documents and other reports
(or copies of such portions of any of the foregoing as the Commission may from
time to time by rules and regulations prescribe) which the Company or any
Guarantor may be required to file with the Commission pursuant to Section 13 or
Section 15(d) of the Exchange Act; or, if the Company or any Guarantor, as the
case may be, is not required to file information, documents or reports pursuant
to either of said Sections, then it shall (i) deliver to the Trustee annual
audited financial statements of the Company and its Subsidiaries, prepared on a
Consolidated basis in conformity with GAAP, within 120 days after the end of
each fiscal year of the Company, and (ii) file with the Trustee and, to the
extent permitted by law, the Commission, in accordance with the rules and
regulations prescribed from time to time by the Commission, such of the
supplementary and periodic information, documents and reports which may be
required pursuant to Section 13 of the Exchange Act in respect of a security
listed and registered on a national securities exchange as may be prescribed
from time to time in such rules and regulations;
(b) file with the Trustee and the Commission, in accordance with the rules
and regulations prescribed from time to time by the Commission, such additional
information, documents and reports with respect to compliance by the Company or
any Guarantor, as the case may be, with the conditions and covenants of this
Indenture as are required from time to time by such rules and regulations
(including such information, documents and reports referred to in Trust
Indenture Act Section 314(a)); and
(c) within 15 days after the filing thereof with the Trustee, transmit by
mail to all Holders in the manner and to the extent provided in Trust Indenture
Act Section 313(c), such summaries of any information, documents and reports
required to be filed by
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the Company or any Guarantor, as the case may be, pursuant to Section 10.20
hereunder and subsections (a) and (b) of this Section as are required by rules
and regulations prescribed from time to time by the Commission.
ARTICLE VIII
Consolidation, Merger, Sale of Assets
Section 8.01. COMPANY AND GUARANTORS MAY CONSOLIDATE, ETC., ONLY ON CERTAIN
TERMS.
(a) The Company will not, in a single transaction or through a series of
related transactions, consolidate with or merge with or into any other Person or
sell, assign, convey, transfer, lease or otherwise dispose of all or
substantially all of its properties and assets to any Person or group of
affiliated Persons, or permit any of its Subsidiaries to enter into any such
transaction or series of related transactions if such transaction or series of
related transactions, in the aggregate, would result in a sale, assignment,
conveyance, transfer, lease or disposition of all or substantially all of the
properties and assets of the Company and its Subsidiaries on a Consolidated
basis to any other Person or group of affiliated Persons, unless at the time and
after giving effect thereto:
(i) either (a) the Company will be the continuing corporation in the
case of a consolidation or merger involving the Company or (b) the Person (if
other than the Company) formed by such consolidation or into which the Company
is merged or the Person which acquires by sale, assignment, conveyance,
transfer, lease or disposition all or substantially all of the properties and
assets of the Company and its Subsidiaries on a Consolidated basis (the
"Surviving Entity") will be a corporation duly organized and validly existing
under the laws of the United States of America, any state thereof or the
District of Columbia and such Person expressly assumes, by a supplemental
indenture, in a form reasonably satisfactory to the Trustee, all the obligations
of the Company under the Notes, this Indenture and the Registration Rights
Agreement, as the case may be, and the Notes, this Indenture and the
Registration Rights Agreement will remain in full force and effect as so
supplemented;
(ii) immediately after giving effect to such transaction on a pro
forma basis (and treating any Indebtedness not previously an obligation of the
Company or any of its Subsidiaries which becomes the obligation of the Company
or any of its Subsidiaries as a result of such transaction as having been
incurred at the time of such transaction), no Default or Event of Default will
have occurred and be continuing;
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(iii) immediately after giving effect to such transaction on a pro
forma basis, the Company (or the Surviving Entity if the Company is not the
continuing obligor hereunder) could incur $1.00 of additional Indebtedness
(other than Permitted Indebtedness) under Section 10.08(a);
(iv) at the time of the transaction, each Guarantor, if any, unless it
is the other party to the transactions described above, will have by
supplemental indenture confirmed that its Guarantee shall apply to such Person's
obligations under this Indenture and under the Notes; and
(v) at the time of the transaction the Company or the Surviving Entity
will have delivered, or caused to be delivered, to the Trustee, in form and
substance reasonably satisfactory to the Trustee, an Officers' Certificate and
an Opinion of Counsel, each to the effect that such consolidation, merger, sale,
assignment, conveyance, transfer, lease or other transaction and the
supplemental indenture in respect thereof comply with this Indenture.
(b) Notwithstanding the foregoing, the provisions of Section 8.01(a) shall
not apply to (i) a merger or consolidation between or among the Company and any
one or more of its Wholly-Owned Subsidiaries, and (ii) a merger or consolidation
of the Company into any Person in a transaction designed solely for the purpose
of effecting a change in the jurisdiction of incorporation of the Company within
the United States of America.
Section 8.02. SUCCESSOR SUBSTITUTED.
In the event of any transaction (other than a lease) described in and
complying with the conditions listed in Section 8.01 in which the Company is not
the Surviving Person, such Surviving Person shall succeed to, and be substituted
for, and may exercise every right and power of, the Company and the Company
shall be discharged from all obligations and covenants under this Indenture, the
Notes and the Registration Rights Agreement.
ARTICLE IX
Supplemental Indentures
Section 9.01. SUPPLEMENTAL INDENTURES AND AGREEMENTS WITHOUT CONSENT OF
HOLDERS.
Without the consent of any Holders, the Company, the Guarantors, if any,
and any other obligor under the Notes when authorized by a Board Resolution, and
the Trustee,
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at any time and from time to time, may enter into one or more indentures
supplemental hereto or agreements or other instruments with respect to any
Guarantee, in form and substance satisfactory to the Trustee, for any of the
following purposes:
(a) to evidence the succession of another Person to the Company or a
Guarantor and the assumption by any such successor of the covenants of the
Company or such Guarantor herein and in the Notes, the Registration Rights
Agreement and in any Guarantee in accordance with Article VIII;
(b) to add to the covenants of the Company, any Guarantor or any other
obligor upon the Notes for the benefit of the Holders, or to surrender any right
or power conferred upon the Company or any Guarantor or any other obligor upon
the Notes, as applicable, herein, in the Notes or in any Guarantee;
(c) to cure any ambiguity, or to correct or supplement any provision herein
or in any supplemental indenture, the Notes or any Guarantee which may be
defective or inconsistent with any other provision herein or any supplemental
indenture or in the Notes or any Guarantee or to make any other provisions with
respect to matters or questions arising under this Indenture, any supplemental
indenture, the Notes or any Guarantee; provided that, in each case, such
provisions shall not adversely affect the interest of the Holders;
(d) to comply with the requirements of the Commission in order to effect or
maintain the qualification of this Indenture under the Trust Indenture Act, as
contemplated by Section 9.05 or otherwise;
(e) to add a Guarantor pursuant to the requirements of Section 10.13;
(f) to evidence and provide the acceptance of the appointment of a
successor trustee hereunder; or
(g) to mortgage, pledge, hypothecate or grant a security interest in favor
of the Trustee for the benefit of the Holders as additional security for the
payment and performance of the Company's or any Guarantor's Indenture
Obligations, in any property, or assets, including any of which are required to
be mortgaged, pledged or hypothecated, or in which a security interest is
required to be granted to the Trustee pursuant to this Indenture or otherwise.
Section 9.02. SUPPLEMENTAL INDENTURES AND AGREEMENTS WITH CONSENT OF
HOLDERS.
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Except as permitted by Section 9.01, with the consent of the Holders of at
least a majority in aggregate principal amount of the Outstanding Notes, by Act
of said Holders delivered to the Company, each Guarantor, if any, and the
Trustee, the Company and each Guarantor (if a party thereto) when authorized by
Board Resolutions, and the Trustee may (i) enter into an indenture or indentures
supplemental hereto or agreements or other instruments with respect to any
Guarantee in form and substance satisfactory to the Trustee, for the purpose of
adding any provisions to or amending, modifying or changing in any manner or
eliminating any of the provisions of this Indenture, the Notes or any Guarantee
(including but not limited to, for the purpose of modifying in any manner the
rights of the Holders under this Indenture, the Notes or any Guarantee) or (ii)
waive compliance with any provision in this Indenture, the Notes or any
Guarantee (other than waivers of past Defaults covered by Section 5.13 and
waivers of covenants which are covered by Section 10.21); provided, however,
that no such supplemental indenture, agreement or instrument shall, without the
consent of the Holder of each Outstanding Note affected thereby:
(a) change the Stated Maturity of the principal of, or any installment of
interest on, or change to an earlier date any redemption date of, or waive a
default in the payment of the principal or interest on, any such Note or reduce
the principal amount thereof or the rate of interest thereon or any premium
payable upon the redemption thereof, or change the coin or currency in which the
principal of any Note or any premium or the interest thereon is payable, or
impair the right to institute suit for the enforcement of any such payment on or
after the Stated Maturity thereof (or, in the case of redemption, on or after
the Redemption Date);
(b) amend, change or modify the obligation of the Company to make and
consummate an Offer with respect to any Asset Sale or Asset Sales in accordance
with Section 10.12 or the obligation of the Company to make and consummate a
Change of Control Offer in the event of a Change of Control in accordance with
Section 10.14, including, in each case, amending, changing or modifying any
definitions relating thereto;
(c) reduce the percentage in principal amount of the Outstanding Notes, the
consent of whose Holders is required for any such supplemental indenture, or the
consent of whose Holders is required for any waiver or compliance with certain
provisions of this Indenture;
(d) modify any of the provisions of this Section 9.02 or Section 5.13 or
10.21, except to increase the percentage of such Outstanding Notes required for
any such actions or to provide that certain other provisions of this Indenture
cannot be modified or waived without the consent of the Holder of each such Note
affected thereby;
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(e) except as otherwise permitted under Article VIII, consent to the
assignment or transfer by the Company or any Guarantor of any of its rights and
obligations hereunder; or
(f) amend or modify any of the provisions of this Indenture in any manner
which subordinates the Notes issued hereunder in right of payment to any other
Indebtedness of the Company or which subordinates any Guarantee in right of
payment to any other Indebtedness of the Guarantor issuing such Guarantee.
Upon the written request of the Company and each Guarantor, if any,
accompanied by a copy of Board Resolutions authorizing the execution of any such
supplemental indenture or Guarantee, and upon the filing with the Trustee of
evidence of the consent of Holders as aforesaid, the Trustee shall join with the
Company and each Guarantor in the execution of such supplemental indenture or
Guarantee.
It shall not be necessary for any Act of Holders under this Section 9.02 to
approve the particular form of any proposed supplemental indenture or Guarantee
or agreement or instrument relating to any Guarantee, but it shall be sufficient
if such Act shall approve the substance thereof.
Section 9.03. EXECUTION OF SUPPLEMENTAL INDENTURES AND AGREEMENTS.
In executing, or accepting the additional trusts created by, any
supplemental indenture, agreement, instrument or waiver permitted by this
Article IX or the modifications thereby of the trusts created by this Indenture,
the Trustee shall be entitled to receive, and (subject to Trust Indenture Act
Sections 315(a) through 315(d) and Section 6.03 hereof) shall be fully protected
in relying upon, an Opinion of Counsel and an Officers' Certificate stating that
the execution of such supplemental indenture, agreement or instrument is
authorized or permitted by this Indenture. The Trustee may, but shall not be
obligated to, enter into any such supplemental indenture, agreement or
instrument which affects the Trustee's own rights, duties or immunities under
this Indenture, any Guarantee or otherwise.
Section 9.04. EFFECT OF SUPPLEMENTAL INDENTURES.
Upon the execution of any supplemental indenture under this Article, this
Indenture shall be modified in accordance therewith, and such supplemental
indenture shall form a part of this Indenture for all purposes; and every Holder
of Notes theretofore or thereafter authenticated and delivered hereunder shall
be bound thereby.
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Section 9.05. CONFORMITY WITH TRUST INDENTURE ACT.
Every supplemental indenture executed pursuant to this Article IX shall
conform to the requirements of the Trust Indenture Act as then in effect.
Section 9.06. REFERENCE IN NOTES TO SUPPLEMENTAL INDENTURES.
Notes authenticated and delivered after the execution of any supplemental
indenture pursuant to this Article IX may, and shall if required by the Trustee,
bear a notation in form approved by the Trustee as to any matter provided for in
such supplemental indenture. If the Company shall so determine, new Notes so
modified as to conform, in the opinion of the Trustee and the Board of
Directors, to any such supplemental indenture may be prepared and executed by
the Company and each Guarantor and authenticated and delivered by.
Section 9.07. NOTICE OF SUPPLEMENTAL INDENTURES.
Promptly after the execution by the Company, any Guarantor and the Trustee
of any supplemental indenture pursuant to the provisions of Section 9.02, the
Company shall give notice thereof to the Holders of each Outstanding Note
affected, in the manner provided for in Section 1.06, setting forth in general
terms the substance of such supplemental indenture. 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.
ARTICLE X
Covenants
Section 10.01. PAYMENT OF PRINCIPAL, PREMIUM AND INTEREST.
The Company shall duly and punctually pay the principal of, premium, if
any, and interest on the Notes in accordance with the terms of the Notes and
this Indenture.
Section 10.02. MAINTENANCE OF OFFICE OR AGENCY.
The Company shall maintain an office or agency where Notes may be presented
or surrendered for payment. The Company also will maintain an office or agency
(which shall be located in the Borough of Manhattan, in the City of New York,
State of New York) where Notes may be surrendered for registration of transfer,
redemption or exchange and an office or agency where notices and demands to or
upon the Company in respect of the
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Notes and this Indenture may be served. The Company hereby initially designates
the office of Wilmington Trust Company, c/o Harris Trust Company of New York, 88
Pine Street, 19th Floor, Wall Street Plaza, New York, New York 10005 as its
office or agency in the Borough of Manhattan, City of New York. The Company will
give prompt written notice to the Trustee of the location and any change in the
location of any such offices or agencies. If at any time the Company shall fail
to maintain any such required offices or agencies or shall fail to furnish the
Trustee with the address thereof, such presentations, surrenders, notices and
demands may be made or served at the office of the Trustee and the Company
hereby appoints the Trustee such agent as its agent to receive all such
presentations, surrenders, notices and demands.
The Company may from time to time designate one or more other offices or
agencies (in or outside of The City of New York) where the Notes may be
presented or surrendered for any or all such purposes, and may from time to time
rescind such designation. The Company will give prompt written notice to the
Trustee of any such designation or rescission and any change in the location of
any such office or agency.
The Trustee shall initially act as Paying Agent for the Notes.
Section 10.03. MONEY FOR NOTE PAYMENTS TO BE HELD IN TRUST.
If the Company or any of its Affiliates shall at any time act as Paying
Agent, it will, on or before each due date of the principal of, premium, if any,
or interest on any of the Notes, segregate and hold in trust for the benefit of
the Holders entitled thereto a sum sufficient to pay the principal, premium, if
any, or interest so becoming due until such sums shall be paid to such Persons
or otherwise disposed of as herein provided, and will promptly notify the
Trustee of its action or failure so to act.
If the Company or any of its Affiliates is not acting as Paying Agent, the
Company will, on or before each due date of the principal of, premium, if any,
or interest on any of the Notes, deposit with a Paying Agent a sum in same day
funds sufficient to pay the principal, premium, if any, or interest so becoming
due, such sum to be held in trust for the benefit of the Persons entitled to
such principal, premium or interest, and (unless such Paying Agent is the
Trustee) the Company will promptly notify the Trustee of such action or any
failure so to act.
If the Company is not acting as Paying Agent, the Company will cause each
Paying Agent other than the Trustee to execute and deliver to the Trustee an
instrument in which such Paying Agent shall agree with the Trustee, subject to
the provisions of this Section, that such Paying Agent will:
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(a) hold all sums held by it for the payment of the principal of, premium,
if any, or interest on the Notes in trust for the benefit of the Persons
entitled thereto until such sums shall be paid to such Persons or otherwise
disposed of as herein provided;
(b) give the Trustee notice of any Default by the Company or any Guarantor
(or any other obligor upon the Notes) in the making of any payment of principal,
premium, if any, or interest on the Notes;
(c) at any time during the continuance of any such Default, upon the
written request of the Trustee, forthwith pay to the Trustee all sums so held in
trust by such Paying Agent; and
(d) acknowledge, accept and agree to comply in all aspects with the
provisions of this Indenture relating to the duties, rights and disabilities of
such Paying Agent.
The Company may at any time, for the purpose of obtaining the satisfaction
and discharge of this Indenture or for any other purpose, pay, or by Company
Order direct any Paying Agent to pay, to the Trustee all sums held in trust by
the Company or such Paying Agent, such sums to be held by the Trustee upon the
same trusts as those upon which such sums were held by the Company or such
Paying Agent; and, upon such payment by any Paying Agent to the Trustee, such
Paying Agent shall be released from all further liability with respect to such
money.
Any money deposited with the Trustee or any Paying Agent, or then held by
the Company, in trust for the payment of the principal of, premium, if any, or
interest on any Note and remaining unclaimed for two years after such principal
and premium, if any, or interest has become due and payable shall promptly be
paid to the Company on Company Request, net of any amounts due the Trustee or
such Paying Agent, as the case may be, or (if then held by the Company) shall be
discharged from such trust; and the Holder of such Note shall thereafter, as an
unsecured general creditor, look only to the Company for payment thereof, and
all liability of the Trustee or such Paying Agent with respect to such trust
money, and all liability of the Company as trustee thereof, shall thereupon
cease; provided, however, that the Trustee or such Paying Agent, before being
required to make any such repayment, may at the expense of the Company cause to
be published once, in the New York Times and The Wall Street Journal (national
edition), and mail to each such Holder, notice that such money remains unclaimed
and that, after a date specified therein, which shall not be less than 30 days
from the date of such notification, publication and mailing, any unclaimed
balance of such money then remaining will promptly be repaid to the Company.
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Section 10.04. CORPORATE EXISTENCE.
Subject to Article VIII, the Company shall do or cause to be done all
things necessary to preserve and keep in full force and effect the corporate
existence and related rights and franchises (charter and statutory) of the
Company and each Subsidiary; provided, however, that the Company shall not be
required to preserve any such right or franchise or the corporate existence of
any such Subsidiary if the Board of Directors of the Company shall determine
that the preservation thereof is no longer necessary or desirable in the conduct
of the business of the Company and its Subsidiaries as a whole; and provided,
further, however, that the foregoing shall not prohibit a sale, transfer or
conveyance of a Subsidiary or any of the assets of the Company or any Subsidiary
not in violation of the terms of this Indenture.
Section 10.05. PAYMENT OF TAXES AND OTHER CLAIMS.
The Company shall pay or discharge or cause to be paid or discharged, on or
before the date the same shall become due and payable, (a) all taxes,
assessments and governmental charges levied or imposed upon the Company or any
of its Subsidiaries shown to be due on any return of the Company or any of its
Subsidiaries or otherwise assessed or upon the income, profits or property of
the Company or any of its Subsidiaries if failure to pay or discharge the same
could reasonably be expected to have a material adverse effect on the ability of
the Company or any Guarantor to perform its obligations hereunder and (b) all
lawful claims for labor, materials and supplies, which, if unpaid, would by law
become a Lien upon the property of the Company or any of its Subsidiaries,
except for any Lien permitted to be incurred under Section 10.11, if failure to
pay or discharge the same could reasonably be expected to have a material
adverse effect on the ability of the Company or any Guarantor to perform its
obligations hereunder; provided, however, that the Company shall not be required
to pay or discharge or cause to be paid or discharged any such tax, assessment,
charge or claim whose amount, applicability or validity is being contested in
good faith by appropriate proceedings properly instituted and diligently
conducted and in respect of which appropriate reserves (in the good faith
judgment of management of the Company) are being maintained in accordance with
GAAP.
Section 10.06. MAINTENANCE OF PROPERTIES.
The Company shall cause all material properties owned by the Company or any
of its Subsidiaries or used or held for use in the conduct of its business or
the business of any of its Subsidiaries to be maintained and kept in good
condition, repair and working order (ordinary wear and tear excepted) and
supplied with all necessary equipment and will cause to be made all necessary
repairs, renewals, replacements, betterments and
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improvements thereof, all as in the reasonable judgment of the Company may be
consistent with sound business practice and necessary so that the business
carried on in connection therewith may be properly conducted at all times;
provided, however, that nothing in this Section shall prevent the Company from
discontinuing the maintenance of any of such properties if such discontinuance
is, in the reasonable judgment of the Company, desirable in the conduct of its
business or the business of any of its Subsidiaries; and provided, further,
however, that the foregoing shall not prohibit a sale, transfer or conveyance of
a Subsidiary or any of its properties or assets in compliance with the terms of
this Indenture.
Section 10.07. MAINTENANCE OF INSURANCE.
The Company shall at all times keep all of its and its Subsidiaries'
properties which are of an insurable nature insured with insurers, believed by
the Company in good faith to be financially sound and responsible, against loss
or damage to the extent that property of similar character is usually so insured
by corporations similarly situated and owning like properties in the same
general geographic areas in which the Company and its Subsidiaries operate,
except where the failure to do so could not reasonably be expected to have a
material adverse effect on the condition (financial or otherwise), earnings,
business affairs or prospects of the Company and its Subsidiaries, taken as a
whole.
Section 10.08. LIMITATION ON INDEBTEDNESS.
(a) The Company shall not, and shall not cause or permit any Subsidiary to,
directly or indirectly, Incur any Indebtedness (other than the Notes); provided,
however, that the Company may Incur Indebtedness, and the Company or any
Subsidiary may Incur Acquired Indebtedness, if, at the time of such Incurrence,
the Debt to Annualized Operating Cash Flow Ratio would be less than or equal to
6.0 to 1.0 prior to April 1, 2001, or less than or equal to 5.5 to 1.0 after
April 1, 2001.
(b) The foregoing limitations of paragraph (a) of this Section 10.08 will
not apply to any of the following (collectively, "Permitted Indebtedness"), each
of which shall be given independent effect:
(i) the Incurrence by the Company or any of its Subsidiaries of
Indebtedness (other than Acquired Indebtedness) consisting of Capital Lease
Obligations, Purchase Money Obligations, installment sales, mortgage financings
or other obligations incurred for the purpose of financing all or any part of
the purchase price, cost of design, development, acquisition, construction or
improvement of real or personal property (including, without limitation,
indefeasible rights of use or similar rights), tangible or intangible, used or
to be used in connection with the Telecommunications Business or a
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credit facility or a master lease arrangement entered into for the purpose of
providing such financing, provided that such Indebtedness (exclusive of the
interest portion thereof and reasonable costs of financing) does not exceed the
lesser of Fair Market Value or the purchase price and related costs of design,
development, acquisition, construction or improvement of such assets or property
at the time of such Incurrence.
(ii) the Incurrence by the Company or any of its Subsidiaries of any
Indebtedness, and any refinancings (as defined below) of such Indebtedness, so
long as the aggregate principal amount of such Indebtedness shall not exceed $50
million at any one time outstanding;
(iii) the Incurrence by the Company of Indebtedness (other than
Acquired Indebtedness) in an aggregate principal amount not to exceed 2.0 times
the sum of the Net Cash Proceeds received by the Company after April 13, 1998
(other than from the issuance of Disqualified Stock in any case) in connection
with any Public Equity Offerings or sale of Capital Stock (other than
Disqualified Stock) to any Strategic Investor to the extent that such Net Cash
Proceeds have not been used pursuant to clause (a)(ii) or (b)(viii) of Section
10.09; provided that such Indebtedness does not mature prior to the Stated
Maturity of the Notes or has an Average Life to Stated Maturity at least equal
to the Notes;
(iv) the Incurrence by the Company or any Subsidiary of any
Indebtedness entered into in the ordinary course of business (a) pursuant to
Interest Rate Agreements entered into to protect the Company or any Subsidiary
against fluctuations in interest rates in respect of Indebtedness of the Company
or any Subsidiary as long as the notional principal amount of such Interest Rate
Agreements do not exceed the aggregate principal amount of such Indebtedness
then outstanding, (b) under any Currency Hedging Arrangements entered into to
protect the Company or any Subsidiary against fluctuations in the value of any
currency or (c) under any Commodity Price Protection Agreements entered into to
protect the Company or any Subsidiary against fluctuations in the price of any
commodity;
(v) the Incurrence by the Company or any of its Subsidiaries of
Indebtedness in respect of bid, performance or advance payment bonds, standby
letters of credit and appeal or surety bonds entered into in the ordinary course
of business and not in connection with the borrowing of money;
1. (vi) Indebtedness outstanding under the Notes or the Indenture (or
Guarantees of the Notes issued under the Indenture), other
Indebtedness existing on the date of this Indenture (other than
Indebtedness incurred pursuant to clause
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(viii) below) or other Indebtedness represented by shares of
Series B Preferred Stock issued on or after the date of the
Indenture as a dividend on shares of Series B Preferred Stock
outstanding on the date of the Indenture (or shares of Series B
Preferred Stock issued as a dividend in respect of any such shares
of additional Series B Preferred Stock so issued);
(vii) the Incurrence of (a) Indebtedness of any Subsidiary owed to and
held by the Company or another Subsidiary and (b) Indebtedness of the Company
owed to and held by any Subsidiary or represented by a guarantee of Indebtedness
of any Subsidiary which such Subsidiary is otherwise permitted to Incur under
the Indenture; PROVIDED that upon either (i) the transfer or other disposition
by a Subsidiary or the Company of any Indebtedness so permitted to a Person
other than the Company or a Subsidiary or (ii) the issuance, sale, transfer or
other disposition of Capital Stock (including by amalgamation, consolidation or
merger) of a Subsidiary (such that upon such sale, transfer or other disposition
such Subsidiary would no longer meet the definition of a Subsidiary) to a Person
other than the Company or a Subsidiary, the provisions of this clause (vii)
shall no longer be applicable to such Indebtedness and such Indebtedness shall
be deemed to have been Incurred at the time of such issue, sale, transfer or
other disposition;
(viii) Indebtedness incurred by the Company or any Subsidiary under a
Permitted Credit Facility or Debt Securities, provided that the aggregate
principal amount at any time outstanding under this clause (viii) does not
exceed $150 million;
(ix) any amendments, supplements, modifications, deferrals, renewals,
extensions, substitutions, refundings, refinancings or replacements
(collectively, a "refinancing") of any Indebtedness described in clauses (i),
(ii), (iii), (vi), (vii) and (viii) above, and this clause (ix), including any
successive refinancings so long as the borrower under such refinancing is the
Company or, if not the Company, the same as the borrower (or its successor) of
the Indebtedness being refinanced and the aggregate principal amount of
Indebtedness and accrued interest represented thereby (or the accreted value
thereof as of the date of refinancing) is not increased by such refinancing plus
the lesser of (I) the stated amount of any premium or other payment required to
be paid in connection with such a refinancing pursuant to the terms of the
Indebtedness being refinanced or (II) the amount of premium or other payment
actually paid at such time to refinance the Indebtedness, plus, in either case,
the amount of expenses of the Company or such borrower incurred in connection
with such refinancing and, in the case of any refinancing of Indebtedness that
is Subordinated Indebtedness, such new Indebtedness is made subordinated to the
Notes at least to the same extent as the Indebtedness being refinanced and such
refinancing does not reduce the Average Life to Stated Maturity or the Stated
Maturity of such Subordinated Indebtedness.
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(c) For purposes of determining any particular amount of Indebtedness under
this covenant, Guarantees, Liens or obligations with respect to letters of
credit supporting Indebtedness otherwise included in the determination of such
particular amount shall not be included; provided, however, that the foregoing
shall not in any way be deemed to limit the provisions of Section 10.13.
(d) For purposes of determining compliance with this covenant, in the event
that an item of Indebtedness may be Incurred through the first paragraph of this
covenant or by meeting the criteria of one or more of the types of Indebtedness
described in the second paragraph of this covenant (or the definitions of the
terms used therein), the Company, in its sole discretion, (i) may classify such
item of Indebtedness under and comply with either of such paragraphs (or any of
such definitions), as applicable, (ii) may classify and divide such item of
Indebtedness into more than one of such paragraphs (or definitions), as
applicable, and (iii) may elect to comply with such paragraphs (or definitions),
as applicable, in any order.
Section 10.09. LIMITATION ON RESTRICTED PAYMENTS.
(a) The Company shall not, and shall not permit any Subsidiary to, directly
or indirectly:
(i) declare or pay any dividend on, or make any distribution on any
shares of the Company's Capital Stock (other than dividends or distributions
payable solely in shares of its Qualified Capital Stock or in options, warrants
or other rights to acquire shares of such Qualified Capital Stock);
(ii) purchase, redeem or otherwise acquire or retire for value,
directly or indirectly, the Company's Capital Stock or any Capital Stock of any
Affiliate of the Company (other than Capital Stock of any Wholly-Owned
Subsidiary of the Company) or options, warrants or other rights to acquire such
Capital Stock;
(iii) make any principal payment on, or repurchase, redeem, defease,
retire or otherwise acquire for value, prior to any scheduled principal payment,
sinking fund payment or maturity, any Subordinated Indebtedness;
(iv) declare or pay any dividend or distribution on any Capital Stock
of any Subsidiary to any Person (other than (a) to the Company or any of its
Wholly-Owned Subsidiaries or (b) to all holders of any class, series or the same
type of Capital Stock of such Subsidiary on a pro rata basis; provided that in
the case of this clause (b) such dividend or distribution shall not constitute
Indebtedness or Disqualified Stock);
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(v) make any Investment in any Person (other than any Permitted
Investments) (any of the foregoing actions described in clauses (i) through (v),
other than any such action that is a Permitted Payment (as defined below),
collectively, "Restricted Payments") (the amount of any such Restricted Payment,
if other than cash, as determined, in good faith, by the Board of Directors of
the Company, whose determination shall be conclusive and evidenced by a board
resolution), unless (1) immediately before and immediately after giving effect
to such proposed Restricted Payment on a PRO FORMA basis, no Default or Event of
Default shall have occurred and be continuing; (2) immediately before and
immediately after giving effect to such Restricted Payment on a pro forma basis,
the Company could incur $1.00 of additional Indebtedness (other than Permitted
Indebtedness) under the provisions described in Section 10.08(a); and (3) after
giving effect to the proposed Restricted Payment, the aggregate amount of all
such Restricted Payments declared or made after April 13, 1998, does not exceed
the sum of the following:
(A) (i) the Cumulative Operating Cash Flow determined at the time
of such Restricted Payment less (ii) 150% of cumulative Consolidated Interest
Expense determined for the period (treated as one accounting period) commencing
on April 13, 1998 and ending on the last day of the most recent fiscal quarter
immediately preceding the date of such Restricted Payment for which consolidated
financial information of the Company is required to be available;
(B) the aggregate Net Cash Proceeds received after the date of
this Indenture by the Company from the issuance or sale (other than to any of
its Subsidiaries) of Qualified Capital Stock of the Company or any options,
warrants or rights to purchase such Qualified Capital Stock of the Company
(except to the extent such proceeds are used to purchase, redeem or otherwise
retire Capital Stock or Subordinated Indebtedness as set forth below in clause
(ii) or (iii) of paragraph (b) below);
(C) the aggregate Net Cash Proceeds received after April 13, 1998
by the Company (other than from any of its Subsidiaries) upon the exercise of
any options, warrants or rights to purchase Qualified Capital Stock of the
Company;
(D) the aggregate Net Cash Proceeds received after April 13, 1998
by the Company from the conversion or exchange, if any, of debt securities or
Redeemable Capital Stock of the Company or its Subsidiaries into or for
Qualified Capital Stock of the Company plus, to the extent such debt securities
or Redeemable Capital Stock were issued after April 13, 1998, the aggregate of
Net Cash Proceeds from their original issuance; and
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(E) in the case of the disposition or repayment of any Investment
constituting a Restricted Payment, an amount equal to the lesser of (x) the cash
return of capital with respect to such Investment (less the cost of disposition
and taxes, if any) and (y) the initial amount of such Investment.
(b) Notwithstanding the foregoing, and in the case of clauses (ii) through
(vi) below, so long as there is no Default or Event of Default continuing, the
foregoing provisions shall not prohibit the following actions (each of clauses
(i) through (xT) being referred to as a "Permitted Payment"):
(i) the payment of any dividend within 60 days after the date of
declaration thereof, if at such date of declaration such payment was permitted
by the provisions of paragraph (a) of this Section and such payment shall have
been deemed to have been paid on such date of declaration;
(ii) the repurchase, redemption, or other acquisition or retirement
for value of any shares of any class of Capital Stock of the Company in exchange
for (including any such exchange pursuant to the exercise of a conversion right
or privilege in connection with which cash is paid in lieu of the issuance of
fractional shares or scrip), or out of the Net Cash Proceeds of a substantially
concurrent issuance and sale for cash (other than to a Subsidiary) of, other
shares of Qualified Capital Stock of the Company; provided that the Net Cash
Proceeds from the issuance of such shares of Qualified Capital Stock are
excluded from clause (3)(B) of paragraph (a) of this Section 10.09;
(iii) the repurchase, redemption, defeasance, retirement or
acquisition for value or payment of principal of any Subordinated Indebtedness
or Redeemable Capital Stock in exchange for, or in an amount not in excess of
the Net Cash Proceeds of, a substantially concurrent issuance and sale for cash
(other than to any Subsidiary of the Company) of any Qualified Capital Stock of
the Company, provided that the Net Cash Proceeds from the issuance of such
shares of Qualified Capital Stock are excluded from clause (3)(B) of paragraph
(a) of this Section 10.09;
(iv) the repurchase, redemption, defeasance, retirement, refinancing,
acquisition for value or payment of principal of any Subordinated Indebtedness
(other than Redeemable Capital Stock) through the substantially concurrent
issuance of new Subordinated Indebtedness of the Company, provided that any such
new Subordinated Indebtedness (1) shall be in a principal amount that does not
exceed the principal amount and accrued interest thereon so refinanced or the
accreted value thereof as of the date of refinancing (or, if such Subordinated
Indebtedness provides for an amount less than the principal amount thereof to be
due and payable upon a declaration of acceleration thereof,
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then such lesser amount as of the date of determination), plus the lesser of (I)
the stated amount of any premium or other payment required to be paid in
connection with such a refinancing pursuant to the terms of the Indebtedness
being refinanced or (II) the amount of premium or other payment actually paid at
such time to refinance the Indebtedness, plus, in either case, the amount of
expenses of the Company incurred in connection with such refinancing; (2) has an
Average Life to Stated Maturity greater than the remaining Average Life to
Stated Maturity of the Notes; (3) has a Stated Maturity for its final scheduled
principal payment later than the Stated Maturity for the final scheduled
principal payment of the Notes; and (4) is expressly subordinated in right of
payment to the Notes at least to the same extent as the Subordinated
Indebtedness to be refinanced;
(v) the repurchase, redemption, defeasance, retirement, refinancing,
acquisition for value or payment of any Redeemable Capital Stock through the
substantially concurrent issuance of new Redeemable Capital Stock of the
Company, PROVIDED that any such new Redeemable Capital Stock (1) shall have an
aggregate liquidation preference that does not exceed the aggregate liquidation
preference of the amount so refinanced; (2) has an Average Life to Stated
Maturity greater than the remaining Average Life to Stated Maturity of the
Notes; and (3) has a Stated Maturity later than the Stated Maturity for the
final scheduled principal payment of the Notes;
(vi) the repurchase of shares of, or options to purchase shares of,
common stock of the Company or any of its Subsidiaries from employees, officers,
consultants or directors or any former employees, officers, consultants or
directors of the Company or any of its Subsidiaries (or permitted transferees of
such employees, officers, consultants or directors or former employees,
officers, consultants or directors), pursuant to the terms of the agreements
(including employment agreements) or plans (or amendments thereto) or other
arrangements or transactions approved by the Board of Directors under which such
individuals purchase or sell or are granted the option to purchase or sell,
shares of such common stock; PROVIDED, HOWEVER, that the aggregate amount of
such repurchases in any calendar year shall not exceed $1 million and $3 million
in the aggregate pursuant to this clause (vi);
(vii) the (a) payment of dividends on the Company's Series B Preferred
Stock (in the form of cash or additional shares of Series B Preferred Stock) in
an aggregate amount not to exceed $3 million in any calendar year (provided that
such amounts may, to the extent not previously paid, be aggregated through the
period prior to the conversion or redemption of such Series B Preferred Stock)
and (b) redemption of any shares of Series B Preferred Stock outstanding on
April 13,1998 (including any shares of Series B Preferred Stock issued on or
after April 13, 1998 as dividends thereon or in respect of such additional
shares so issued) pursuant to the terms of such shares of Series B Preferred
Stock
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as in effect on the date of the Indenture (or as such terms may be amended, from
time to time, to the extent that any such amendment has been determined by the
Board of Directors, in good faith, not to adversely affect the holders of the
Notes);
(viii) Investments in any Person engaged principally in the
Telecommunications Business on the date of such Investments; PROVIDED that the
aggregate amount of any such Investments made pursuant to this clause (viii)
does not exceed the sum of (A) the amount of the Net Cash Proceeds received by
the Company after April 13, 1998 as a capital contribution or from the sale of
its Capital Stock (other than Disqualified Stock) to a Person who is not a
Subsidiary of the Company, except to the extent that such Net Cash Proceeds are
used to Incur Indebtedness pursuant to Section 10.08(b)(iii) or to make
Restricted Payments pursuant to Section 10.09(a)(3), or Section 10.09(b) (ii),
(iii) or (iv) plus (B) the net reduction in Investments made pursuant to this
clause (viii) resulting from distributions on or repayments of such Investments
or from the Net Cash Proceeds from the sale of any such Investments (except in
each case to the extent any such payments or proceeds are included in the
calculation of Consolidated Net Income) or from such Person becoming a
Wholly-Owned Subsidiary (valued in each case as provided in the definition of
"Permitted Investments");
(ix) the payment or declaration of any dividend or the making of any
distribution on or the redemption of rights or any securities issued pursuant to
the Company Rights Agreement;
(x) the payment of cash in lieu of the issuance of fractional shares
pursuant to any agreement, warrant or option and any repurchase or other
acquisition of fractional shares from time to time; and
(xi) the acquisition of Capital Stock of the Company by the Company in
connection with the cashless exercise of any options, warrants or similar rights
issued by the Company on or prior to January 1, 1998.
In determining the amount of Restricted Payments permissible under this
covenant, amounts expended pursuant to clauses (i), (vi), (vii), (viii), (ix)
and (x) shall be included, without duplication, as Restricted Payments and shall
not be deemed a Permitted Payment for purposes of the calculation required by
paragraph (a) of this Section 10.09.
Section 10.10. LIMITATION ON TRANSACTIONS WITH AFFILIATES.
The Company will not, and will not permit any of its Subsidiaries to,
directly or indirectly, enter into any transaction or series of related
transactions (including, without
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limitation, the sale, purchase, exchange or lease of assets, property or
services) with or for the benefit of any Affiliate of the Company (other than
the Company or a Wholly-Owned Subsidiary) unless such transaction or series of
related transactions is entered into in good faith and in writing and (a) such
transaction or series of related transactions is on terms that are no less
favorable to the Company or such Subsidiary, as the case may be, than those that
would be reasonably expected to be available in a comparable transaction in
arm's-length dealings with an unrelated third party, (b) with respect to any
transaction or series of related transactions involving aggregate value in
excess of $5 million, the Company delivers an Officers' Certificate to the
Trustee certifying that such transaction or series of related transactions
complies with clause (a) above, and (c) with respect to any transaction or
series of related transactions involving aggregate value in excess of $10
million, either (A) such transaction or series of related transactions has been
approved by a majority of the Disinterested Directors of the Company, or in the
event there is only one Disinterested Director, by such Disinterested Director,
or (B) the Company delivers to the Trustee a written opinion of an investment
banking firm of national standing or other recognized independent expert with
experience appraising the terms and conditions of the type of transaction or
series of related transactions for which an opinion is required stating that the
transactions or series of related transactions is fair to the Company or such
Subsidiary from a financial point of view; provided, however, that this covenant
shall not apply to: (a) compensation, severance and employee benefit
arrangements with any officer, director or employee of the Company, including
under any stock option or stock incentive plans, in the ordinary course of
business; (b) any transaction solely between or among the Company and/or any
Subsidiaries, if such transaction otherwise does not violate the terms of the
Indenture; (c) any transaction otherwise permitted by the terms of the section
of the Indenture described in Section 10.09; (d) the execution and delivery of
or payments made under any tax sharing agreement between or among any of the
Company and any Subsidiary; (e) licensing or sublicensing of use of any
intellectual property by the Company or any Subsidiary to the Company any other
Subsidiary of the Company or to any Permitted Joint Venture; provided that the
licensor shall continue to have access to such intellectual property to the
extent necessary for the conduct of its business and, in the case of any
Permitted Joint Venture, that the terms of any such arrangement are fair and
reasonable to the Company or any such Subsidiary as determined in good faith by
the Board of Directors; (f) arrangements between the Company and any Subsidiary
of the Company for the purpose of providing services or employees to such
Subsidiary; and (g) transactions undertaken pursuant to the IXC Agreement and
other agreements entered into in connection therewith and in effect on or after
April 13, 1998 (or as such other agreements may be amended, from time to time,
to the extent that any such amendment has been determined by the Board of
Directors, in good faith, not to adversely affect the holders of the Notes).
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Section 10.11. LIMITATION ON LIENS.
The Company shall not, and shall not permit any Subsidiary to, directly or
indirectly, create, incur or affirm any Lien of any kind upon any property or
assets (including any intercompany notes) of the Company or any Subsidiary owned
on the date hereof, or acquired after the date hereof, or any income or profits
therefrom, unless the Notes are directly secured equally and ratably with (or,
in the case of Subordinated Indebtedness, prior or senior thereto, with the same
relative priority as the Notes shall have with respect to such Subordinated
Indebtedness) the obligation or liability secured by such Lien except for any
Permitted Liens.
Section 10.12. LIMITATION ON SALE OF ASSETS.
(a) The Company will not, and will not permit any of its Subsidiaries to,
directly or indirectly, consummate an Asset Sale unless (i) at least 75% of the
consideration from such Asset Sale is received in cash or other comparable
consideration (as described below), and (ii) the Company or such Subsidiary
receives consideration at the time of such Asset Sale at least equal to the Fair
Market Value of the shares or assets subject to such Asset Sale (as determined
by the Board of Directors of the Company and evidenced in a board resolution).
The following types of consideration shall be deemed "comparable consideration"
for the purposes of this covenant: (A) Cash Equivalents, (B) liabilities
(contingent or otherwise) of the Company or a Subsidiary assumed by the
transferee (or its designee) such that the Company or such Subsidiary has no
further liability therefor, and (C) any securities, notes or other obligations
received by the Company or any such Subsidiary from such transferee that within
60 days after receipt, are converted by the Company or such Subsidiary into
cash.
(b) The Company or a Subsidiary may, within 365 days of the Asset Sale,
invest the Net Cash Proceeds thereof in Telecommunications Assets or to repay
any Pari Passu Indebtedness of the Company or any Subsidiary (including the
repurchase of Notes). The amount of such Net Cash Proceeds not used or invested
within 365 days of the Asset Sale as set forth in this paragraph constitutes
"Excess Proceeds."
(c) When the aggregate amount of Excess Proceeds exceeds $10 million, the
Company will apply the Excess Proceeds to the repayment of the Notes and any
other Pari Passu Indebtedness outstanding with similar provisions requiring the
Company to make an offer to purchase such Indebtedness with the proceeds from
any Asset Sale as follows: (A) the Company will make an offer to purchase (an
"Offer") from all holders of the Notes in accordance with the procedures set
forth in the Indenture in the maximum principal amount (expressed as a multiple
of $1,000) of Notes that may be purchased out of an amount (the
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"Note Amount") equal to the product of such Excess Proceeds multiplied by a
fraction, the numerator of which is the outstanding principal amount of the
Notes, and the denominator of which is the sum of the outstanding principal
amount of the Notes and such Pari Passu Indebtedness (subject to proration in
the event such amount is less than the aggregate Offered Price (as defined
herein) of all Notes tendered) and (B) to the extent required by such Pari Passu
Indebtedness to permanently reduce the principal amount of such Pari Passu
Indebtedness, the Company will make an offer to purchase or otherwise repurchase
or redeem Pari Passu Indebtedness (a "Pari Passu Offer") in an amount (the "Pari
Passu Debt Amount") equal to the excess of the Excess Proceeds over the Note
Amount; provided that in no event will the Company be required to make a Pari
Passu Offer in a Pari Passu Debt Amount exceeding the principal amount of such
Pari Passu Indebtedness plus the amount of any premium required to be paid to
repurchase such Pari Passu Indebtedness. The offer price for the Notes will be
payable in cash in an amount equal to 100% of the principal amount of the Notes
plus accrued and unpaid interest, if any, to the date (the "Offer Date") such
Offer is consummated (the "Offered Price"), in accordance with the procedures
set forth herein. To the extent that the aggregate Offered Price of the Notes
tendered pursuant to the Offer is less than the Note Amount relating thereto or
the aggregate amount of Pari Passu Indebtedness that is purchased in a Pari
Passu Offer is less than the Pari Passu Debt Amount, the Company will use any
remaining Excess Proceeds for general corporate purposes. If the aggregate
principal amount of Notes and Pari Passu Indebtedness surrendered by holders
thereof exceeds the amount of Excess Proceeds, the Trustee shall select the
Notes to be purchased on a pro rata basis. Upon the completion of the purchase
of all the Notes tendered pursuant to an Offer and the completion of a Pari
Passu Offer, the amount of Excess Proceeds, if any, shall be reset at zero.
(d) If the Company becomes obligated to make an Offer pursuant to clause
(c) above, the Notes and the Pari Passu Indebtedness shall be purchased by the
Company, at the option of the holders thereof, in whole or in part in integral
multiples of $1,000, on a date that is not earlier than 30 days and not later
than 60 days from the date the notice of the Offer is given to holders, or such
later date as may be necessary for the Company to comply with the requirements
under the Exchange Act.
(e) The Company will comply with the applicable tender offer rules,
including Rule 14e-1 under the Exchange Act, and any other applicable securities
laws or regulations in connection with an Offer.
Section 10.13. LIMITATION ON ISSUANCES OF GUARANTEES OF INDEBTEDNESS.
(a) The Company will not permit any Subsidiary, directly or indirectly, to
guarantee, assume or in any other manner become liable with respect to any Pari
Passu
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Indebtedness or Subordinated Indebtedness of the Company unless such Subsidiary
simultaneously executes and delivers a supplemental indenture to this Indenture
providing for a Guarantee of the Notes on the same terms as the guarantee of
such Indebtedness except that (A) such guarantee need not be secured unless
required pursuant to Section 10.11 and (B) if such Indebtedness is by its terms
expressly subordinated to the Notes, any such assumption, guarantee or other
liability of such Subsidiary with respect to such Indebtedness shall be
subordinated to such Subsidiary's Guarantee of the Notes at least to the same
extent as such Indebtedness is subordinated to the Notes; provided that this
paragraph shall not apply to any guarantee or assumption of liability of
Indebtedness permitted under clauses (i), (ii), (iv), (v), (vii) and (viii) of
subsection (b) of Section 10.08.
(b) Notwithstanding the foregoing, any Guarantee by a Subsidiary of the
Notes shall provide by its terms that it (and all Liens securing the same) shall
be automatically and unconditionally released and discharged upon any sale,
exchange or transfer, to any Person not an Affiliate of the Company, of all of
the Company's Capital Stock in, or all or substantially all the assets of, such
Subsidiary, which transaction is in compliance with the terms of this Indenture
and pursuant to which transaction such Subsidiary is released from all
guarantees, if any, by it of other Indebtedness of the Company or any
Subsidiaries.
Section 10.14. PURCHASE OF NOTES UPON A CHANGE OF CONTROL.
(a) If a Change of Control shall occur at any time, then each Holder shall
have the right to require that the Company purchase all such Holder's Notes in
whole or in part in integral multiples of $1,000, at a purchase price (the
"Change of Control Purchase Price") in cash, in an amount equal to 101% of the
principal amount of such Notes or portion thereof, plus accrued and unpaid
interest, if any, to the date of purchase (the "Change of Control Purchase
Date"), pursuant to the offer described below in this Section 10.14 (the "Change
of Control Offer") and in accordance with the other procedures set forth in
subsections (b), (c), (d) and (e) of this Section 10.14.
(b) Within 30 days of any Change of Control, the Company shall notify the
Trustee thereof and give written notice (a "Change of Control Purchase Notice")
of such Change of Control to each Holder by first-class mail, postage prepaid,
at his or her address appearing in the Note Register, stating among other
things:
(1) that a Change of Control has occurred, the date of such
event, and that such Holder has the right to require the Company to repurchase
such Holder's Notes at the Change of Control Purchase Price;
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(2) the circumstances and relevant facts regarding such Change of
Control;
(3) that the Change of Control Offer is being made pursuant to
this Section 10.14 and that all Notes properly tendered pursuant to the Change
of Control Offer will be accepted for payment at the Change of Control Purchase
Price;
(4) the Change of Control Purchase Date, which shall be a
Business Day no earlier than 30 days and not later than 60 days from the date
such notice is mailed, or such later date as is necessary to comply with
requirements under the Exchange Act;
(5) the Change of Control Purchase Price;
(6) the names and addresses of the Paying Agent and the offices
or agencies referred to in Section 10.02;
(7) that Notes must be surrendered on or prior to the Change of
Control Purchase Date to the Paying Agent at the office of the Paying Agent or
to an office or agency referred to in Section 10.02 to collect payment;
(8) that the Change of Control Purchase Price for any Note which
has been properly tendered and not withdrawn will be paid promptly following the
Change of Control Offer Purchase Date;
(9) the procedures that a Holder must follow to accept a Change
of Control Offer or to withdraw such acceptance;
(10) that any Note not tendered will continue to accrue interest;
and
(11) that, unless the Company defaults in the payment of the
Change of Control Purchase Price, any Notes accepted for payment pursuant to the
Change of Control Offer shall cease to accrue interest after the Change of
Control Purchase Date.
(c) Upon receipt by the Company of the proper tender of Notes,
the Holder of the Note in respect of which such proper tender was made shall
(unless the tender of such Note is properly withdrawn) thereafter be entitled to
receive solely the Change of Control Purchase Price with respect to such Note.
Upon surrender of any such Note for
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purchase in accordance with the foregoing provisions, such Note shall be paid by
the Company at the Change of Control Purchase Price; provided, however, that
installments of interest whose Stated Maturity is on or prior to the Change of
Control Purchase Date shall be payable to the Holders of such Notes, or one or
more Predecessor Notes, registered as such on the relevant Regular Record Dates
according to the terms and the provisions of Section 3.09. If any Note tendered
for purchase in accordance with the provisions of this Section 10.14 shall not
be so paid upon surrender thereof, the principal thereof (and premium, if any,
thereon) shall, until paid, bear interest from the Change of Control Purchase
Date at the rate borne by such Note. Holders electing to have Notes purchased
will be required to surrender such Notes to the Paying Agent at the address
specified in the Change of Control Purchase Notice prior to 5:00 p.m. (New York
time) at least one Business Day prior to the Change of Control Purchase Date.
Any Note that is to be purchased only in part shall be surrendered to a Paying
Agent at the office of such Paying Agent (with, if the Company, the Note
Registrar or the Trustee so requires, due endorsement by, or a written
instrument of transfer in form satisfactory to the Company and the Note
Registrar or the Trustee, as the case may be, duly executed by the Holder
thereof or such Holder's attorney duly authorized in writing), and the Company
shall execute and the Trustee shall authenticate and deliver to the Holder of
such Note, without service charge to the Holder, one or more new Notes of any
authorized denomination as requested by such Holder in an aggregate principal
amount equal to, and in exchange for, the portion of the principal amount of the
Note so surrendered that is not purchased.
(d) The Company shall (i) not later than the Change of Control Purchase
Date, accept for payment Notes or portions thereof tendered pursuant to the
Change of Control Offer, (ii) not later than 12:00 a.m. (New York time) on the
Change of Control Purchase Date, deposit with the Trustee or with a Paying Agent
an amount of money in same day funds (or New York Clearing House funds if such
deposit is made prior to the Change of Control Purchase Date) sufficient to pay
the aggregate Change of Control Purchase Price of all the Notes or portions
thereof which are to be purchased as of the Change of Control Purchase Date and
(iii) not later than 12:00 a.m. (New York time) on the Change of Control
Purchase Date, deliver to the Paying Agent an Officers' Certificate stating the
aggregate principal amount of Notes or portions thereof being purchased by the
Company. The Paying Agent shall promptly mail or deliver to Holders of Notes so
accepted payment in an amount equal to the Change of Control Purchase Price of
the Notes purchased from each such Holder, and the Company shall execute and the
Trustee shall promptly authenticate and mail or deliver to such Holders a new
Note equal in principal amount to any unpurchased portion of the Note
surrendered. Any Notes not so accepted shall be promptly mailed or delivered by
the Paying Agent at the Company's expense to the Holder thereof. The Company
will publicly announce the results of the Change of Control Offer on the Change
of Control
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Purchase Date. For purposes of this Section 10.14, the Company shall choose a
Paying Agent which shall not be the Company.
(e) A tender made in response to a Change of Control Purchase Notice may be
withdrawn if the Company or its agent receives, not later than 5:00 p.m. (New
York time) one Business Day prior to the Change of Control Purchase Date, a
signed letter, delivered to the address specified in the change of Control
Purchase Notice specifying, as applicable:
(1) the name of the Holder;
(2) the certificate number of the Note in respect of which such
notice of withdrawal is being submitted;
(3) the principal amount of the Note (which shall be $1,000 or an
integral multiple thereof) delivered for purchase by the Holder as to which such
notice of withdrawal is being submitted;
(4) a statement that such Holder is withdrawing his election to
have such principal amount of such Note purchased; and
(5) the principal amount, if any, of such Note (which shall be
$1,000 or an integral multiple thereof) that remains subject to the original
Change of Control Purchase Notice and that has been or will be delivered for
purchase by the Company.
(f) Subject to applicable escheat laws, the Trustee and the Paying Agent
shall return to the Company any cash that remains unclaimed, together with
interest or dividends, if any, thereon, held by them for the payment of the
Change of Control Purchase Price; provided, however, that, (x) to the extent
that the aggregate amount of cash deposited by the Company pursuant to clause
(ii) of paragraph (d) above exceeds the aggregate Change of Control Purchase
Price of the Notes or portions thereof to be purchased, then the Trustee shall
hold such excess for the Company and (y) unless otherwise directed by the
Company in writing, promptly after the Business Day following the Change of
Control Purchase Date the Trustee shall return any such excess to the Company
together with interest, if any, thereon.
(g) The Company shall comply, to the extent applicable, with the applicable
tender offer rules, including Rule 14e-1 under the Exchange Act, and any other
applicable securities laws or regulations in connection with a Change of Control
Offer.
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Notwithstanding the foregoing, the Company will not be required to make a
Change of Control Offer if a third party makes the Change of Control Offer, in
the manner, at the times and otherwise in compliance with the requirements set
forth in this Indenture applicable to a Change of Control Offer made by the
Company and purchases all the Notes validly tendered and not withdrawn under
such Change of Control Offer.
Section 10.15. LIMITATION ON SALE-LEASEBACK TRANSACTIONS.
(a) The Company will not, and will not permit any Subsidiary of the Company
to, directly or indirectly, enter into any Sale-Leaseback Transaction with
respect to any property or assets (whether now owned or hereafter acquired),
unless (i) the sale or transfer of such property or assets to be leased is
treated as an Asset Sale and complies with the provisions of Section 10.12 and
(ii) the Company or such Subsidiary would be entitled under Section 10.08 to
incur any Indebtedness (with the lease obligations being treated as Indebtedness
for purposes of ascertaining compliance with this covenant unless such lease is
properly classified as an operating lease under GAAP) in respect of such
Sale-Leaseback Transaction.
(b) The foregoing restriction does not apply to any Sale-Leaseback
Transaction if (i) the lease is for a period, including renewal rights, not in
excess of three years; (ii) the transaction is solely between the Company and
any Wholly Owned Subsidiary or any Wholly-Owned Subsidiary and any other
Wholly-Owned Subsidiary; and (iii) the transaction is consummated within 180
days of the acquisition by the Company or its Subsidiary of the property or
assets subject to such sale-leaseback or entered into within 180 days after the
purchase or substantial completion of the construction of such property or
assets (or 270 days in the event that the only condition delaying such
consummation is the receipt of applicable regulatory approvals).
Section 10.16. LIMITATION ON ISSUANCE AND SALE OF SUBSIDIARY CAPITAL STOCK.
The Company will not permit (a) any Subsidiary of the Company to issue any
Capital Stock, except for (i) Capital Stock issued or sold to, held by or
transferred to the Company or a Wholly-Owned Subsidiary, and (ii) Capital Stock
issued by a Person prior to the time (A) such Person becomes a Subsidiary, (B)
such Person merges with or into a Subsidiary or (C) a Subsidiary merges with or
into such Person; provided that such Capital Stock was not issued or incurred by
such Person in anticipation of the type of transaction contemplated by subclause
(A), (B) or (C) (excluding for purposes of this proviso, shares of Capital Stock
issued in connection with customary accelerated vesting provisions contained in
option or similar plans or agreements which are accelerated as a result of a
change of control of such Person and which option or similar plans were not
adopted or implemented
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solely in anticipation of or in connection with such transaction) or (b) any
Person (other than the Company or a Wholly-Owned Subsidiary) to acquire Capital
Stock of any Subsidiary from the Company or any Subsidiary, except, in the case
of clause (a) or (b), (1) upon the acquisition of all the outstanding Capital
Stock of such Subsidiary in accordance with the terms hereof, (2) if,
immediately after giving effect to such issuance or sale, such Subsidiary would
no longer constitute a Subsidiary, and any Investment in such Person remaining
after giving effect to such issuance or sale would have been permitted to be
made under the provisions of Section 10.09 if made on the date of such issuance
or sale, (3) issuances of director's qualifying shares, or sales to foreign
nationals of shares of Capital Stock of foreign Subsidiaries, to the extent
required by applicable law or to maintain the limited liability status of such
foreign Subsidiaries or, (4) issuances or sales of common stock of a Subsidiary,
provided that the Company or such Subsidiary applies the Net Cash Proceeds, if
any, in a manner which does not violate the provisions of this Indenture to the
extent applicable (excluding for purposes of this proviso, shares of Capital
Stock issued in connection with customary accelerated vesting provisions
contained in option or similar plans or agreements which are accelerated as a
result of a change of control of such Person and which option or similar plans
were not adopted or implemented solely in anticipation of or in connection with
such transaction).
Section 10.17. LIMITATION ON DIVIDENDS AND OTHER PAYMENT RESTRICTIONS
AFFECTING SUBSIDIARIES.
The Company will not, and will not permit any of its Subsidiaries to,
directly or indirectly, create or otherwise cause or suffer to exist or become
effective any encumbrance or restriction on the ability of any Subsidiary to (i)
pay dividends or make any other distribution on its Capital Stock, (ii) pay any
Indebtedness owed to the Company or any other Subsidiary, (iii) make any
Investment in the Company or any other Subsidiary or (iv) transfer any of its
properties or assets to the Company or any other Subsidiary, except for:
(a) any encumbrance or restriction, with respect to a Subsidiary that is
not a Subsidiary of the Company on the date of the Indenture, in existence at
the time such Person becomes a Subsidiary of the Company and not incurred in
connection with, or in contemplation of, such Person becoming a Subsidiary;
(b) encumbrances or restrictions
(i) by reason of applicable law,
(ii) under this Indenture, or
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(iii) in any agreement, instrument or indenture governing or relating
to Indebtedness in respect of any Permitted Credit Facility;
(c) customary non-assignment provisions of any contract or lease of any
Subsidiary entered into in the ordinary course of business;
(d) encumbrances or restrictions imposed pursuant to Indebtedness or
contracts entered into in connection with Permitted Liens, but solely to the
extent such encumbrances or restrictions affect property or assets subject to
such Permitted Lien;
(e) any encumbrance or restriction imposed pursuant to contracts for the
sale of assets with respect to the assets to be sold pursuant to such contract;
and
(f) any encumbrance or restriction existing under any agreement that
extends, renews, refunds refinances or replaces the agreements containing the
encumbrances or restrictions in the foregoing clauses (a) through (e), or in
this clause (f), provided that the terms and conditions of any such encumbrances
or restrictions are no more restrictive in any material respect than those under
or pursuant to the agreement evidencing the Indebtedness so extended, renewed,
refinanced or replaced.
Section 10.18. LIMITATIONS ON UNRESTRICTED SUBSIDIARIES.
The Company will not make, and will not permit its Subsidiaries to make,
any Investment in Unrestricted Subsidiaries if, at the time thereof, the
aggregate amount of such Investments would exceed the amount of Restricted
Payments then permitted to be made pursuant to Section 10.09. Any Investments in
Unrestricted Subsidiaries permitted to be made pursuant to this covenant will be
treated as a Restricted Payment in calculating the amount of Restricted Payments
made by the Company.
Section 10.19. PROVISION OF FINANCIAL STATEMENTS.
After the earlier to occur of the consummation of the Exchange Offer and
the 150th calendar day following the date of original issue of the Notes,
whether or not the Company is subject to Section 13(a) or 15(d) of the Exchange
Act, the Company will, to the extent permitted under the Exchange Act, file with
the Commission the annual reports, quarterly reports and other documents which
the Company would have been required to file with the Commission pursuant to
Sections 13(a) or 15(d) if the Company were so subject, such documents to be
filed with the Commission on or prior to the date (the "Required Filing Date")
by which the Company would have been required so to file such documents if the
Company were so subject. The Company will also in any event (x) within 15 days
of each
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Required Filing Date (i) transmit by mail to all Holders, as their names and
addresses appear in the Note Register, without cost to such Holders and (ii)
file with the Trustee copies of the annual reports, quarterly reports and other
documents which the Company would have been required to file with the Commission
pursuant to Sections 13(a) or 15(d) of the Exchange Act if the Company were
subject to either of such Sections and (y) if filing such documents by the
Company with the Commission is not permitted under the Exchange Act, promptly
upon written request and payment of the reasonable cost of duplication and
delivery, supply copies of such documents to any prospective Holder at the
Company's cost. If any Guarantor's financial statements would be required to be
included in the financial statements filed or delivered pursuant to this
Indenture if the Company were subject to Section 13(a) or 15(d) of the Exchange
Act, the Company shall include such Guarantor's financial statements in any
filing or delivery pursuant to the Indenture. In addition, so long as any of the
Notes remain outstanding, the Company will make available to any prospective
purchaser of Notes or beneficial owner of Notes in connection with any sale
thereof the information required by Rule 144A(d)(4) under the Securities Act,
until the earlier of such time as the Company has completed its Exchange Offer
or such time as the Holders thereof have disposed of such Notes pursuant to an
effective registration statement under the Securities Act.
Section 10.20. STATEMENT BY OFFICERS AS TO DEFAULT.
(a) The Company will deliver to the Trustee, on or before a date not more
than 120 days after the end of each fiscal year of the Company ending after the
date hereof, and 60 days after the end of each fiscal quarter ending after the
date hereof, a written statement signed by the principal executive officer,
principal financial officer or principal accounting officer of the Company in
his or her capacity as an officer of the Company, as to compliance herewith,
including whether or not, after a review of the activities of the Company during
such year and of the Company's performance and the performance of each
Guarantor, if any, under this Indenture, to the best knowledge (based on such
review) of the signers thereof, the Company and each Guarantor, if any, have
fulfilled all of their respective obligations and are in compliance with all
conditions and covenants under this Indenture throughout such year and, if there
has been a Default specifying each Default and the nature and status thereof and
any actions being taken by the Company with respect thereto.
(b) When any Default or Event of Default has occurred and is continuing, or
if the Trustee or any Holder or the trustee for or the holder of any other
evidence of Indebtedness of the Company or any Subsidiary gives any notice or
takes any other action with respect to a claimed default, the Company shall
deliver to the Trustee by registered or certified mail or facsimile transmission
followed by an originally executed copy of an Officers' Certificate specifying
such Default, Event of Default, notice or other action, the
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status thereof and what actions the Company is taking or proposes to take with
respect thereto, within five Business Days after the occurrence of such Default
or Event of Default.
Section 10.21. WAIVER OF CERTAIN COVENANTS.
The Company may omit in any particular instance to comply with any covenant
or condition set forth in Sections 10.06 through 10.11, 10.12(a), 10.13, 10.15
through 10.20 and 10.22, if, before or after the time for such compliance, the
Holders of not less than a majority in aggregate principal amount of the Notes
at the time Outstanding shall, by Act of such Holders, waive such compliance in
such instance with such covenant or provision, but no such waiver shall extend
to or affect such covenant or condition except to the extent so expressly
waived, and, until such waiver shall become effective, the obligations of the
Company and the duties of the Trustee in respect of any such covenant or
condition shall remain in full force and effect.
Section 10.22. LIMITATION ON BUSINESS.
The Company will not, and will not permit any of the Subsidiaries to,
engage in a business which is not substantially a Telecommunications Business.
ARTICLE XI
Redemption of Notes
Section 11.01. RIGHTS OF REDEMPTION.
(a) The Notes are subject to redemption at any time on or after November 1,
2003, at the option of the Company, in whole or in part, subject to the
conditions, and at the Redemption Prices, specified in the form of Note,
together with accrued and unpaid interest, if any, to the Redemption Date
(subject to the right of Holders of record on relevant Regular Record Dates and
Special Record Dates to receive interest due on relevant Interest Payment Dates
and Special Payment Dates)
(b) In addition, at any time on or prior to November 1, 2001, the Company
may, at its option, use the Net Cash Proceeds of one or more Public Equity
Offerings or the sale of Capital Stock (other than Disqualified Stock) of the
Company to a Strategic Investor in a single transaction or in a series of
related transactions, to redeem up to an aggregate of 35% of the aggregate
principal amount of Notes originally issued under this Indenture at a redemption
price equal to 111.5% of the of the principal amount thereof, plus accrued and
unpaid interest thereon, if any, to the Redemption Date; provided that at
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least 65% aggregate principal amount of Notes remains outstanding immediately
after the occurrence of such redemption. In order to effect the foregoing
redemption, the Company must mail a notice of redemption no later than 45 after
the closing of the related Public Equity Offering or sale to a Strategic
Investor and must consummate such redemption within 60 days of the closing of
the Public Equity Offering or sale to a Strategic Investor.
Section 11.02. APPLICABILITY OF ARTICLE.
Redemption of Notes at the election of the Company or otherwise, as
permitted or required by any provision of this Indenture, shall be made in
accordance with such provision and this Article XI.
Section 11.03. ELECTION TO REDEEM; NOTICE TO TRUSTEE.
If the Company elects to redeem Notes pursuant to Section 11.01, it shall
furnish to the Trustee, at least 15 but not more than 30 days before notice of
any redemption is to be mailed to Holders (or such shorter time as may be
satisfactory to the Trustee), (x) a Company Order and an Officer's Certificate
stating (i) that the Company has elected to redeem Notes pursuant to Section
11.01, (ii) the date notice of redemption is to be mailed to Holders, (iii) the
redemption date, (iv) the aggregate principal amount of Notes to be redeemed,
(v) the redemption prices for such Notes and (vi) the amount, if any, of accrued
and unpaid interest (including Liquidated Damages, if any) on such Notes as of
the redemption date and (y) an Opinion of Counsel that the Company is entitled
to redeem the Notes pursuant to Section 11.01.
Section 11.04. SELECTION BY TRUSTEE OF NOTES TO BE REDEEMED.
If less than all the Notes are to be redeemed, the particular Notes or
portions thereof to be redeemed shall be selected not more than 30 days prior to
the Redemption Date. The Trustee shall select the Notes or portions thereof to
be redeemed pro rata, by lot or by any other method the Trustee shall deem fair
and reasonable. The amounts to be redeemed shall be equal to $1,000 or any
integral multiple thereof. The Trustee shall promptly notify the Company and the
Note Registrar in writing of the Notes selected for redemption and, in the case
of any Notes selected for partial redemption, the principal amount thereof to be
redeemed. For all purposes of this Indenture, unless the context otherwise
requires, all provisions relating to redemption of Notes shall relate, in the
case of any Note redeemed or to be redeemed only in part, to the portion of the
principal amount of such Note which has been or is to be redeemed.
Section 11.05. NOTICE OF REDEMPTION.
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Notice of redemption shall be given by first-class mail, postage prepaid,
mailed not less than 30 days nor more than 60 days prior to the Redemption Date,
to each Holder of Notes to be redeemed, at its address appearing in the Note
Register. All notices of redemption shall state:
(a) the Redemption Date;
(b) the Redemption Price;
(c) if less than all Outstanding Notes are to be redeemed, the
identification of the particular Notes to be redeemed;
(d) in the case of a Note to be redeemed in part, the principal amount of
such Note to be redeemed and that after the Redemption Date upon surrender of
such Note, new Note or Notes in the aggregate principal amount equal to the
unredeemed portion thereof will be issued;
(e) that Notes called for redemption must be surrendered to the Paying
Agent to collect the Redemption Price;
(f) that on the Redemption Date the Redemption Price will become due and
payable upon each such Note or portion thereof to be redeemed, and that (unless
the Company shall default in payment of the Redemption Price) interest thereon
shall cease to accrue on and after said date;
(g) the names and addresses of the Paying Agent and the offices or agencies
referred to in Section 10.02 where such Notes are to be surrendered for payment
of the Redemption Price;
(h) the CUSIP number, if any, relating to such Notes; and
(i) the procedures that a Holder must follow to surrender the Notes to be
redeemed. Notice of redemption of Notes to be redeemed at the election of the
Company shall be given by the Company or, at the Company's written request, by
the Trustee in the name and at the expense of the Company. If the Company elects
to give notice of redemption, it shall provide the Trustee with a certificate
stating that such notice has been given in compliance with the requirements of
this Section 11.05.
The notice if mailed in the manner herein provided shall be conclusively
presumed to have been given, whether or not the Holder receives such notice. In
any case,
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failure to give such notice by mail or any defect in the notice to the Holder of
any Note designated for redemption as a whole or in part shall not affect the
validity of the proceedings for the redemption of any other Note.
Section 11.06. DEPOSIT OF REDEMPTION PRICE.
On or prior to any Redemption Date, the Company shall deposit with the
Trustee or with a Paying Agent (or, if the Company or any of its Affiliates is
acting as Paying Agent, segregate and hold in trust as provided in Section
10.03) an amount of money in same day funds sufficient to pay the Redemption
Price of, and (except if the Redemption Date shall be an Interest Payment Date
or Special Payment Date) accrued interest on, all the Notes or portions thereof
which are to be redeemed on that date. The Paying Agent shall promptly mail or
deliver to Holders of Notes so redeemed payment in an amount equal to the
Redemption Price of the Notes purchased from each such Holder. All money, if
any, earned on funds held in trust by the Trustee or any Paying Agent prior to
the Redemption Date shall be remitted to the Company. For purposes of this
Section 11.06, the Company shall choose a Paying Agent which shall not be the
Company.
Section 11.07. NOTES PAYABLE ON REDEMPTION DATE.
Notice of redemption having been given as aforesaid, the Notes so to be
redeemed shall, on the Redemption Date, become due and payable at the Redemption
Price therein specified and from and after such date (unless the Company shall
default in the payment of the Redemption Price and accrued interest) such Notes
shall cease to bear interest. Holders will be required to surrender the Notes to
be redeemed to the Paying Agent at the address specified in the notice of
redemption at least one Business Day prior to the Redemption Date. Upon
surrender of any such Note for redemption in accordance with said notice, such
Note shall be paid by the Company at the Redemption Price together with accrued
interest to the Redemption Date; provided, however, that installments of
interest whose Stated Maturity is on or prior to the Redemption Date shall be
payable to the Holders of such Notes, or one or more Predecessor Notes,
registered as such on the relevant Regular Record Dates and Special Record Dates
according to the terms and the provisions of Section 3.09.
If any Note called for redemption shall not be so paid upon surrender
thereof for redemption, the principal and premium, if any, shall, until paid,
bear interest from the Redemption Date at the rate borne by such Note.
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<PAGE>
Section 11.08. NOTES REDEEMED IN PART.
Any Note which is to be redeemed only in part shall be surrendered to the
Paying Agent at the office or agency maintained for such purpose pursuant to
Section 10.02 (with, if the Company, the Note Registrar or the Trustee so
requires, due endorsement by, or a written instrument of transfer in form
satisfactory to the Company, the Note Registrar or the Trustee, as the case may
be, duly executed by, the Holder thereof or such Holder's attorney duly
authorized in writing), and the Company shall execute, and the Trustee shall
authenticate and deliver to the Holder of such Note without service charge, a
new Note or Notes, of any authorized denomination as requested by such Holder in
aggregate principal amount equal to, and in exchange for, the unredeemed portion
of the principal of the Note so surrendered that is not redeemed.
ARTICLE XII
Satisfaction and Discharge
Section 12.01. SATISFACTION AND DISCHARGE OF INDENTURE.
This Indenture shall be discharged and shall cease to be of further effect
(except as to surviving rights of registration of transfer or exchange of Notes
as expressly provided for herein) as to all Outstanding Notes hereunder, and the
Trustee, upon Company Request and at the expense of the Company, shall execute
proper instruments acknowledging satisfaction and discharge of this Indenture,
when
(a) either (1) all the Notes theretofore authenticated and delivered
(other than (i) lost, stolen or destroyed Notes which have been replaced or paid
as provided in Section 3.08 or (ii) all Notes whose payment has theretofore been
deposited in trust or segregated and held in trust by the Company and thereafter
repaid to the Company or discharged from such trust as provided in Section
10.03) have been delivered to the Trustee for cancellation; or
(2) all such Notes not theretofore delivered to the
Trustee for cancellation (i) have become due and payable, (ii) will become due
and payable at their Stated Maturity within one year or (iii) are to be called
for redemption within one year under arrangements reasonably satisfactory to the
Trustee for the giving of notice of redemption by the Trustee in the name, and
at the expense, of the Company; and the Company or any Guarantor has irrevocably
deposited or caused to be deposited with the Trustee as trust funds in trust an
amount in United States dollars sufficient to pay and discharge the entire
Indebtedness on the Notes not theretofore delivered to the
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<PAGE>
Trustee for cancellation, including the principal of, premium, if any, and
accrued interest on, such Notes at such Maturity, Stated Maturity or Redemption
Date;
(b) the Company or any Guarantor has paid or caused to be paid all other
sums payable hereunder by the Company and any Guarantor; and
(c) the Company has delivered to the Trustee an Officers' Certificate and
an Opinion of Independent Counsel, in form and substance reasonably satisfactory
to the Trustee, each stating that (i) all conditions precedent herein relating
to the satisfaction and discharge hereof have been complied with and (ii) such
satisfaction and discharge will not result in a breach or violation of, or
constitute a default under, this Indenture or any other material agreement or
instrument to which the Company, any Guarantor or any Subsidiary is a party or
by which the Company, any Guarantor or any Subsidiary is bound.
Notwithstanding the satisfaction and discharge hereof, the obligations of
the Company to the Trustee under Section 6.06 and, if United States dollars
shall have been deposited with the Trustee pursuant to subclause (2) of
subsection (a) of this Section 12.01, the obligations of the Trustee under
Section 12.02 and the last paragraph of Section 10.03 shall survive.
Section 12.02. APPLICATION OF TRUST MONEY.
Subject to the provisions of the last paragraph of Section 10.03, all
United States dollars deposited with the Trustee pursuant to Section 12.01 shall
be held in trust and applied by it, in accordance with the provisions of the
Notes and this Indenture, to the payment, either directly or through any Paying
Agent (including the Company acting as its own Paying Agent) as the Trustee may
determine, to the Persons entitled thereto, of the principal of, premium, if
any, and interest on, the Notes for whose payment such United States dollars
have been deposited with the Trustee.
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<PAGE>
IN WITNESS WHEREOF, the parties hereto have caused this Indenture to be
duly executed, all as of the day and year first above written.
PSINET INC.
By: /s/ Edward D. Postal
-----------------------
Name: Edward D. Postal
Title: Senior Vice President and
Chief Financial Officer
WILMINGTON TRUST COMPANY
By: /s/ James J. McGinley
-------------------------
Name: James J. McGinley
Title: Authorized Signer
<PAGE>
EXHIBIT A
REGULATION S CERTIFICATE
(For transfers pursuant to Section 307(a)(i) of the Indenture)
Wilmington Trust Company
Rodney Square North
1100 North Market Street
Wilmington, DE 19890-0001
Re: 11 1/2% Senior Notes due 2008 of PSINet Inc. (the "Notes")
Reference is made to the Indenture, dated as of November 3, 1998 (the
"Indenture"), between PSINet Inc. (the "Company") and Wilmington Trust Company,
as Trustee. Terms used herein and defined in the Indenture or in Regulation S or
Rule 144 under the U.S. Securities Act of 1933 (the "Securities Act") are used
herein as so defined. This certificate relates to US$____________ principal
amount of Notes, which are evidenced by the following certificate(s) (the
"Specified Notes"):
CUSIP No(s). ___________________________
CERTIFICATE No(s)._____________________
The person in whose name this certificate is executed below (the
"Undersigned") hereby certifies that either (i) it is the sole beneficial owner
of the Specified Notes or (ii) it is acting on behalf of all the beneficial
owners of the Specified Notes and is duly authorized by them to do so. Such
beneficial owner or owners are referred to herein collectively as the "Owner."
The Specified Notes are represented by a Global Note and are held through the
Depositary or an Agent Member in the name of the Undersigned, as or on behalf of
the Owner. The Owner has requested that the Specified Notes be transferred to a
person (the "Transferee") who will take delivery in the form of a Regulation S
Global Note. In connection with such transfer, the Owner hereby certifies that,
unless such transfer is being effected pursuant to an effective registration
statement under the Securities Act, it is being effected in accordance with Rule
904 or Rule 144 under the Securities Act and with all applicable securities laws
of the states of the United States and other jurisdictions. Accordingly, the
Owner hereby further certifies as follows:
A-1
<PAGE>
(1) RULE 904 TRANSFERS. If the transfer is being effected in accordance
with Rule 904:
(A) the Owner is not a distributor of the Specified Notes, an
affiliate of the Company or any such distributor or a person acting on behalf of
any of the foregoing;
(B) the offer of the Specified Notes was not made to a person in the
United States;
(C) either
(i) at the time the buy order was originated, the Transferee was
outside the United States or the Owner and any person acting on its behalf
reasonably believed that the Transferee was outside the United States, or
(ii) the transaction is being executed in, on or through the
facilities of the Eurobond market, as regulated by the Association of
International Bond Dealers, or another designated offshore securities market
described in Rule 902(a) of Regulation S and neither the Owner nor any person
acting on its behalf knows that the transaction has been prearranged with a
buyer in the United States;
(D) no "directed selling efforts" within the meaning of Rule 902(b) of
Regulation S have been made in the United States by or on behalf of the Owner or
any affiliate thereof;
(E) if the Owner is a dealer in securities, as defined in Section
2(12) of the Securities Act, or has received a selling concession, fee or other
remuneration in respect of the Specified Notes, and the transfer is to occur
during the restricted period, then:
(i) neither the Owner nor any person acting on behalf of the
Owner knows that the Transferee of the Specified Notes is a U.S. person; and
(ii) if the Owner or any person acting on the Owner's behalf
knows that the Transferee is a dealer, as defined in Section 2(12) of the
Securities Act, or is a person receiving a selling concession, fee or other
remuneration in respect of the Specified Notes, the Owner or a person acting on
the Owner's behalf has sent to the Transferee a confirmation or other notice
stating that the Specified Notes may be offered and sold during the Restricted
Period only: (x) in accordance with Regulation S; (y) pursuant to
A-2
<PAGE>
registration of the Specified Notes under the Securities Act; or (z) pursuant to
an available exemption from the registration requirements of the Securities Act;
and
(iii) the transaction is not part of a plan or scheme to evade
the registration requirements of the Securities Act.
(2) RULE 144 TRANSFERS.
If the transfer is being effected pursuant to Rule 144:
(A) the transfer is occurring after a holding period of at least one
year (computed in accordance with paragraph (d) of Rule 144) has elapsed since
the Specified Notes were acquired by the Owner, and is being effected in
accordance with the applicable amount, manner of sale and notice requirements of
Rule 144; or
(B) the transfer is occurring after a holding period of at least two
years has elapsed since the Specified Notes were acquired by the Owner and the
Owner is not, and during the preceding three months has not been, an affiliate
of the Company.
This certificate and the statements contained herein are made for your
benefit and the benefit of the Company and the Initial Purchasers.
Dated: __________________
(Print the name of the Undersigned, as such term is defined in the third
paragraph of this certificate.)
BY:_______________________________________________________
Name:
Title:
(If the Undersigned is a corporation, partnership or fiduciary, the title
of the person signing on behalf of the Undersigned must be stated.)
A-3
<PAGE>
EXHIBIT B
RESTRICTED NOTES CERTIFICATE
(For transfers pursuant to Section 3.07(a)(ii) of the Indenture)
Wilmington Trust Company
Rodney Square North
1100 North Market Street
Wilmington, DE 19890-0001
Re: 11 1/2% Senior Notes due 2008 of PSINet Inc. (the "Notes")
Reference is made to the Indenture, dated as of November 3, 1998 (the
"Indenture"), between PSINet Inc. (the "Company") and Wilmington Trust Company,
as Trustee. Terms used herein and defined in the Indenture or in Rule 144A or
Rule 144 under the U.S. Securities Act of 1933 (the "Securities Act") are used
herein as so defined. This certificate relates to US$_____________ principal
amount of Notes, which are evidenced by the following certificate(s) (the
"Specified Notes"):
CUSIP No(s). ___________________________
ISIN No(s). (If any.)______________________
CERTIFICATE No(s). ____________________
The person in whose name this certificate is executed below (the
"Undersigned") hereby certifies that either (i) it is the sole beneficial owner
of the Specified Notes or (ii) it is acting on behalf of all the beneficial
owners of the Specified Notes and is duly authorized by them to do so. Such
beneficial owner or owners are referred to herein collectively as the "Owner".
The Specified Notes are represented by a Global Note and are held through the
Depositary or an Agent Member in the name of the Undersigned, as or on behalf of
the Owner. The Owner has requested that the Specified Notes be transferred to a
person (the "Transferee") who will take delivery in the form of a Restricted
Note. In connection with such transfer, the Owner hereby certifies that, unless
such transfer is being effected pursuant to an effective registration statement
under the Securities Act, it is being effected in accordance with Rule 144A or
Rule 144 under the Securities Act and all applicable securities laws of the
states of the United States and other jurisdictions. Accordingly, the Owner
hereby further certifies as follows:
B-1
<PAGE>
(1) RULE 144A TRANSFERS. If the transfer is being effected in accordance
with Rule 144A:
(A) the Specified Notes are being transferred to a person that the
Owner and any person acting on its behalf reasonably believe is a "qualified
institutional buyer" within the meaning of Rule 144A, acquiring for its own
account or for the account of a qualified institutional buyer; and
(B) the Owner and any person acting on its behalf have taken
reasonable steps to ensure that the Transferee is aware that the Owner may be
relying on Rule 144A in connection with the transfer; and
(2) RULE 144 TRANSFERS. If the transfer is being effected pursuant to Rule
144:
(A) the transfer is occurring after a holding period of at least one
year (computed in accordance with paragraph (d) of Rule 144) has elapsed since
the Specified Notes were acquired by the Owner and is being effected in
accordance with the applicable amount, manner of sale and notice requirements of
Rule 144; or
(B) the transfer is occurring after a holding period of at least two
years has elapsed since the Specified Notes were acquired by the Owner, and the
Owner is not, and during the preceding three months has not been, an affiliate
of the Company.
This certificate and the statements contained herein are made for your
benefit and the benefit of the Company and the Initial Purchasers.
Dated:______________________
(Print the name of the Undersigned, as such term is defined in the third
paragraph of this certificate.)
By:_____________________________________________________
Name:
Title:
B-2
<PAGE>
(If the Undersigned is a corporation, partnership or fiduciary, the title
of the person signing on behalf of the Undersigned must be stated.)
B-3
<PAGE>
EXHIBIT C
UNRESTRICTED NOTES CERTIFICATE
(For removal of Securities Act Legends pursuant to Section 3.07(b)
of the Indenture)
Wilmington Trust Company
Rodney Square North
1100 North Market Street
Wilmington, DE 19890-0001
Re: 11 1/2% Senior Notes due 2008 of PSINet Inc. (the "Notes")
Reference is made to the Indenture, dated as of November 3, 1998 (the
"Indenture"), between PSINet Inc. (the "Company") and Wilmington Trust Company,
as Trustee. Terms used herein and defined in the Indenture or in Rule 144 under
the U.S. Securities Act of 1933 (the "Securities Act") are used herein as so
defined.
This certificate relates to US$_____________ principal amount of Notes,
which are evidenced by the following certificate(s) (the "Specified Notes"):
CUSIP No(s). __________________________
CERTIFICATE No(s). ____________________
The person in whose name this certificate is executed below (the
"Undersigned") hereby certifies that either (i) it is the sole beneficial owner
of the Specified Notes or (ii) it is acting on behalf of all the beneficial
owners of the Specified Notes and is duly authorized by them to do so. Such
beneficial owner or owners are referred to herein collectively as the "Owner".
If the Specified Notes are represented by a Global Note, they are held through
the Depositary or an Agent Member in the name of the Undersigned, as or on
behalf of the Owner. If the Specified Notes are not represented by a Global
Note, they are registered in the name of the Undersigned, as or on behalf of the
Owner. The Owner has requested that the Specified Notes be exchanged for Notes
bearing no Private Placement Legend pursuant to Section 3.07(b) of the
Indenture. In connection with such exchange, the Owner hereby certifies that the
exchange is occurring after a holding period of at least two years (computed in
accordance with paragraph (d) of Rule 144) has elapsed since the Specified Notes
were acquired by the Owner, and the Owner is not, and during the preceding three
months has not been, an affiliate of the Company. The Owner also
C-1
<PAGE>
acknowledges that any future transfers of the Specified Notes must comply with
all applicable securities laws of the states of the United States and other
jurisdictions.
This certificate and the statements contained herein are made for your
benefit and the benefit of the Company and the Initial Purchasers.
Dated: _________________
(Print the name of the Undersigned, as such term is defined in the third
paragraph of this certificate.)
By:____________________________________
Name:
Title:
(If the Undersigned is a corporation, partnership or fiduciary, the title
of the person signing on behalf of the Undersigned must be stated.)
C-2
<PAGE>
APPENDIX I
[FORM OF TRANSFER NOTICE]
FOR VALUE RECEIVED, the undersigned registered holder hereby sell(s),
assign(s) and transfer(s) unto Insert Taxpayer Identification No__________
________________________________________________________________________________
(Please print or typewrite name and address including zip code of assignee)
________________________________________________________________________________
the within Note and all rights thereunder, hereby irrevocably constituting and
appointing _____________________________________________________________________
attorney to transfer such Note on the books of the Company with full power of
substitution in the premises. [THE FOLLOWING PROVISION TO BE INCLUDED ON ALL
CERTIFICATES FOR SERIES A NOTES EXCEPT PERMANENT OFFSHORE PHYSICAL
CERTIFICATES]. In connection with any transfer of this Note occurring prior to
the date which is the earlier of the date of an effective Registration Statement
or November 3, 1999, the undersigned confirms that without utilizing any general
solicitation or general advertising that:
[Check One]
[_] (a) this Note is being transferred in compliance
with the exemption from registration under the Securities Act of 1933, as
amended, provided by Rule 144A thereunder or
[_] (b) this Note is being transferred other than in
accordance with (a) above and documents are being furnished which comply with
the conditions of transfer set forth in this Note and the Indenture. If none of
the foregoing boxes is checked, the Trustee or other Note Registrar shall not be
obligated to register this Note in the name of any Person other than the Holder
hereof unless and until the conditions to any such transfer of registration set
forth herein and in Section 3.07 of the Indenture shall have been satisfied.
Date: ___________________________________
NOTICE: The signature to this assignment must correspond with the name as
written upon the face of the within-mentioned instrument in every particular,
without alteration or any change whatsoever.
C-3
<PAGE>
Signature Guarantee:
_______________________________
[Signature must be guaranteed by an eligible Guarantor Institution (banks, stock
brokers, savings and loan associations and credit unions) with membership in an
approved guarantee medallion program pursuant to Securities and Exchange
Commission Rule 17Ad-15.]
TO BE COMPLETED BY PURCHASER IF (a) ABOVE IS CHECKED. The undersigned
represents and warrants that it is purchasing this Note for its own account or
an account with respect to which it exercises sole investment discretion and
that it and any such account is a "qualified institutional buyer" within the
meaning of Rule 144A under the Securities Act of 1933, as amended, and is aware
that the sale to it is being made in reliance on Rule 144A and acknowledges that
it has received such information regarding the Company as the undersigned has
requested pursuant to Rule 144A or has determined not to request such
information and that it is aware that the transferor is relying upon the
undersigned's foregoing representations in order to claim the exemption from
registration provided by Rule 144A.
Dated:___________________________________
NOTICE: To be executed by an authorized signatory
C-4
<PAGE>
APPENDIX II
FORM OF TRANSFEREE CERTIFICATE
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 __________________________________________________
[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
must be guaranteed by an eligible Guarantor Institution (banks, stock brokers,
savings and loan associations and credit unions) with membership in an approved
guarantee medallion program pursuant to Securities and Exchange Commission Rule
17 Ad-15]
Exhibit 4.2
SERIES A GLOBAL NOTE
THIS NOTE (OR ITS PREDECESSOR) HAS NOT BEEN REGISTERED UNDER THE U.S.
SECURITIES ACT OF 1933, AS AMENDED (THE "SECURITIES ACT"), AND, ACCORDINGLY, MAY
NOT BE OFFERED, SOLD, PLEDGED OR OTHERWISE TRANSFERRED WITHIN THE UNITED STATES
OR TO, OR FOR THE ACCOUNT OR BENEFIT OF, U.S. PERSONS, EXCEPT AS SET FORTH IN
THE NEXT SENTENCE. BY ITS ACQUISITION HEREOF OR OF A BENEFICIAL INTEREST HEREIN,
THE HOLDER:
(1) REPRESENTS THAT (A) IT IS A "QUALIFIED INSTITUTIONAL BUYER" (AS DEFINED
IN RULE 144A UNDER THE SECURITIES ACT) (A "QIB") OR (B) IT HAS ACQUIRED
THIS NOTE IN AN OFFSHORE TRANSACTION IN COMPLIANCE WITH REGULATION S UNDER
THE SECURITIES ACT,
(2) AGREES THAT IT WILL NOT RESELL OR OTHERWISE TRANSFER THIS NOTE EXCEPT
(A) TO THE COMPANY OR ANY OF ITS SUBSIDIARIES, (B) TO A PERSON WHOM THE
SELLER REASONABLY BELIEVES IS A QIB PURCHASING FOR ITS OWN ACCOUNT OR FOR
THE ACCOUNT OF A QIB IN A TRANSACTION MEETING THE REQUIREMENTS OF RULE
144A, (C) IN AN OFFSHORE TRANSACTION MEETING THE REQUIREMENTS OF RULE 903
OR 904 OF THE SECURITIES ACT, (D) IN A TRANSACTION MEETING THE REQUIREMENTS
OF RULE 144 UNDER THE SECURITIES ACT, (E) IN ACCORDANCE WITH ANOTHER
EXEMPTION FROM THE REGISTRATION REQUIREMENTS OF THE SECURITIES ACT (AND
BASED UPON AN OPINION OF COUNSEL ACCEPTABLE TO THE COMPANY) OR (F) PURSUANT
TO AN EFFECTIVE REGISTRATION STATEMENT AND, IN EACH CASE, IN ACCORDANCE
WITH THE APPLICABLE SECURITIES LAWS OF ANY STATE OF THE UNITED STATES OR
ANY OTHER APPLICABLE JURISDICTION AND
(3) AGREES THAT IT WILL DELIVER TO EACH PERSON TO WHOM THIS NOTE OR AN
INTEREST HEREIN IS TRANSFERRED A NOTICE SUBSTANTIALLY TO THE EFFECT OF THIS
LEGEND.
AS USED HEREIN, THE TERMS "OFFSHORE TRANSACTION" AND "UNITED STATES" HAVE
THE MEANINGS GIVEN TO THEM BY RULE 902 OF REGULATION S UNDER THE SECURITIES ACT.
THE INDENTURE CONTAINS A
<PAGE>
PROVISION REQUIRING THE TRUSTEE TO REFUSE TO REGISTER ANY TRANSFER OF THIS NOTE
IN VIOLATION OF THE FOREGOING.
THIS NOTE IS A GLOBAL NOTE WITHIN THE MEANING OF THE INDENTURE HEREINAFTER
REFERRED TO AND IS REGISTERED IN THE NAME OF A DEPOSITARY OR A NOMINEE OF A
DEPOSITARY OR A SUCCESSOR DEPOSITARY. TRANSFERS OF THIS GLOBAL NOTE SHALL BE
LIMITED TO TRANSFERS IN WHOLE, BUT NOT IN PART, TO NOMINEES OF CEDE & CO. OR TO
A SUCCESSOR THEREOF OR SUCH SUCCESSOR'S NOMINEE AND TRANSFERS OF PORTIONS OF
THIS GLOBAL NOTE SHALL BE LIMITED TO TRANSFERS MADE IN ACCORDANCE WITH THE
RESTRICTIONS SET FORTH IN SECTIONS 3.06 AND 3.07 OF THE INDENTURE.
UNLESS THIS CERTIFICATE IS PRESENTED BY AN AUTHORIZED REPRESENTATIVE OF THE
DEPOSITORY TRUST COMPANY, A NEW YORK CORPORATION ("DTC"), TO THE COMPANY OR ITS
AGENT FOR REGISTRATION OF TRANSFER, EXCHANGE, OR PAYMENT AND ANY SUCH
CERTIFICATE ISSUED IS REGISTERED IN THE NAME OF CEDE & CO. OR IN SUCH OTHER NAME
AS IS REQUESTED BY AN AUTHORIZED REPRESENTATIVE OF DTC (AND ANY PAYMENT IS MADE
TO CEDE & CO. OR TO SUCH OTHER ENTITY AS IS REQUESTED BY AN AUTHORIZED
REPRESENTATIVE OF DTC), ANY TRANSFER, PLEDGE, OR OTHER USE HEREOF FOR VALUE OR
OTHERWISE BY OR TO ANY PERSON IS WRONGFUL INASMUCH AS THE REGISTERED OWNER
HEREOF, CEDE & CO., HAS AN INTEREST HEREIN.
<PAGE>
PSINET INC.
-------------------
11 1/2% SENIOR NOTE DUE 2008, SERIES A
CUSIP NO. ______________
No. __ $________________
PSINet Inc., a New York corporation (herein called the "Company", which
term includes any successor Person under the Indenture hereinafter referred to),
for value received, hereby promises to pay to __________ or registered assigns,
the principal sum of _______________________________________________________
United States dollars on November 1, 2008, at the office or agency of
the Company referred to below, and to pay interest thereon from November 3,
1998, or from the most recent Interest Payment Date to which interest has been
paid or duly provided for, semiannually on May 1 and November 1, in each year,
commencing May 1, 1999 at the rate of 11 1/2% per annum, subject to adjustments
as described in the second following paragraph, in United States dollars, until
the principal hereof is paid or duly provided for. Interest shall be computed on
the basis of a 360-day year comprised of twelve 30-day months.
The Holder of this Series A Note is entitled to the benefits of the
Registration Rights Agreement between the Company and the Initial Purchasers,
dated as of November 3, 1998, pursuant to which, subject to the terms and
conditions thereof, the Company is obligated to consummate the Exchange Offer
pursuant to which the Holder of this Note shall have the right to exchange this
Note for 11 1/2% Senior Notes due 2008, Series B (herein called the "Series B
Notes") in like principal amount as provided therein. The Series A Notes and the
Series B Notes are together referred to as the "Notes". The Series A Notes rank
pari passu in right of payment with the Series B Notes.
In the event that (a) the Exchange Offer Registration Statement is not
filed with the Commission on or prior to the date specified in the Registration
Rights Agreement, (b) the Exchange Offer Registration Statement is not declared
effective on or prior to the date specified in the Registration Rights
Agreement, (c) the Exchange Offer is not consummated
<PAGE>
on or prior to the date specified in the Registration Rights Agreement, (d) if
obligated to file the Shelf Registration Statement, the Company fails to file
the Shelf Registration Statement with the Commission on or prior to the date
specified in the Registration Rights Agreement, (e) if obligated to file the
Shelf Registration Statement, the Shelf Registration Statement is not declared
effective on or prior to the date specified in the Registration Rights
Agreement, or (f) the Shelf Registration Statement or the Exchange Offer
Registration Statement is declared effective but thereafter ceases to be
effective or usable in connection with resales of the Series A Notes during the
periods specified in the Registration Rights Agreement (each such event referred
to in clauses (a) through (f) above, a "Registration Default"), the Company
agrees to pay to each Holder of Series A Notes liquidated damages ("Liquidated
Damages") in an amount equal to $0.05 per week per $1,000 in principal amount of
Series A Notes held by such Holder for each week or portion thereof that the
Registration Default continues for the first 90 day period immediately following
the occurrence of such Registration Default. The amount of Liquidated Damages
shall increase by an additional $0.05 per week per $1,000 in principal amount of
Series A Notes with respect to each subsequent 90 day period until all
Registration Defaults have been cured, up to a maximum amount of Liquidated
Damages of $0.50 per week per $1,000 in principal amount of Series A Notes. The
Company shall not be required to pay Liquidated Damages for more than one
Registration Default at any given time. Following the cure of all Registration
Defaults, the accrual of Liquidated Damages shall cease. All accrued Liquidated
Damages shall be paid by the Company to holders entitled thereto by wire
transfer to the accounts specified by them or by mailing checks to their
registered address if no such accounts have been specified.
The interest so payable, and punctually paid or duly provided for, on any
Interest Payment Date will, as provided in the Indenture hereinafter referred
to, be paid to the Person in whose name this Note (or any Predecessor Notes) is
registered at the close of business on the Regular Record Date for such
interest, which shall be the April 15 or October 15 (whether or not a Business
Day), as the case may be, next preceding such Interest Payment Date. Any such
interest not so punctually paid, or duly provided for, and interest on such
defaulted interest at the interest rate borne by the Series A Notes, to the
extent lawful, shall forthwith cease to be payable to the Holder on such Regular
Record Date, and may either be paid to the Person in whose name this Note (or
any Predecessor Notes) is registered at the close of business on a Special
Record Date for the payment of such defaulted interest to be fixed by the
Trustee, notice whereof shall be given to Holders of Notes not less than 10 days
prior to such Special Record Date, or be paid at any time in any other lawful
manner not inconsistent with the requirements of any securities exchange on
which the Notes may be listed, and upon such notice as may be required by this
Indenture not inconsistent with the requirements of such exchange, all as more
fully provided in this Indenture.
<PAGE>
Payment of the principal of, premium, if any, and interest on, this Note,
and exchange or transfer of the Note, will be made at the office or agency of
the Company in the City of New York maintained for that purpose (which initially
will be the Trustee c/o Harris Trust Company of New York, 77 Water Street, New
York, NY 10005), or at such other office or agency as may be maintained for such
purpose, or, at the option of the Company, payment of interest may be made by
check mailed to the address of the Person entitled thereto as such address shall
appear on the Note Register, and provided, that payment by wire transfer of
immediately available funds will be required with respect to principal of and
interest on all Global Notes and all other Notes the Holders of which shall have
provided wire transfer instructions to the Company or the Paying Agent. Such
payment shall be in such coin or currency of the United States of America as at
the time of payment is legal tender for payment of public and private debts.
Reference is hereby made to the further provisions of this Note set forth
on the reverse hereof, which further provisions shall for all purposes have the
same effect as if set forth at this place.
Unless the certificate of authentication hereon has been duly executed by
the Trustee referred to on the reverse hereof or by the authenticating agent
appointed as provided in the Indenture by manual signature of an authorized
signer, this Note shall not be entitled to any benefit under the Indenture, or
be valid or obligatory for any purpose.
<PAGE>
IN WITNESS WHEREOF, the Company has caused this instrument to be duly
executed by the manual or facsimile signature of its authorized officers and its
corporate seal to be affixed or reproduced hereon.
PSINET INC.
[Seal] By:___________________________
Title:________________________
Attest:
____________________________
Authorized Officer
TRUSTEE'S CERTIFICATE OF AUTHENTICATION
This is one of the 11 1/2% Senior Notes due 2008, Series A referred to in
the within-mentioned Indenture.
WILMINGTON TRUST COMPANY,
as Trustee
By: _______________________________
Authorized Signer
Dated:
<PAGE>
OPTION OF HOLDER TO ELECT PURCHASE
If you wish to have this Note purchased by the Company pursuant to Section
10.12 or Section 10.14, as applicable, of the Indenture, check the Box: [_].
If you wish to have a portion of this Note purchased by the Company
pursuant to Section 10.12 or Section 10.14 as applicable, of the Indenture,
state the amount (in original principal amount):
$ ________________
Date: ___________________
Your Signature: _____________________
(Sign exactly as your name appears on the other side of this Note)
Signature Guarantee: __________________________________
[Signature must be guaranteed by an eligible Guarantor Institution (banks, stock
brokers, savings and loan associations and credit unions) with membership in an
approved guarantee medallion program pursuant to Securities and Exchange
Commission Rule 17Ad-15]
<PAGE>
(Back of Note)
PSINET INC.
11 1/2% Senior Note due 2008, Series A
This Note is one of a duly authorized issue of Notes of the Company
designated as its 11 1/2% Senior Notes due 2008, Series A (herein called the
"Notes"), limited (except as otherwise provided in the Indenture referred to
below) in aggregate principal amount to $200,000,000, issued under, entitled to
the benefits of and subject to the terms of an indenture (herein called the
"Indenture") dated as of November 3, 1998, between the Company and Wilmington
Trust Company, as trustee (herein called the "Trustee," which term includes any
successor trustee under the Indenture), to which Indenture and all indentures
supplemental thereto reference is hereby made for a statement of the respective
rights, limitations of rights, duties, obligations and immunities thereunder of
the Company, any Guarantors, the Trustee and the Holders of the Notes, and of
the terms upon which the Notes are, and are to be, authenticated and delivered.
The Indenture contains provisions for defeasance at any time of (a) the
entire Indebtedness on the Notes and (b) certain restrictive covenants and
related Defaults and Events of Default, in each case upon compliance with
certain conditions set forth therein.
The Notes are subject to redemption at any time on or after November 1,
2003, at the option of the Company, in whole or in part, on not less than 30 nor
more than 60 days' prior notice, in amounts of $1,000 or an integral multiple
thereof, at the following redemption prices (expressed as percentages of the
principal amount), if redeemed during the 12-month period beginning November 1
of the years indicated below:
REDEMPTION
YEAR PRICE
---- ----------
2003 105.750%
2004 103.833%
2005 101.917%
2006 100.000%
<PAGE>
and thereafter at 100% of the principal amount, in each case, together with
accrued and unpaid interest, if any, to the Redemption Date (subject to the
rights of Holders of record on relevant record dates to receive interest due on
an Interest Payment Date).
In addition, at any time on or prior to November 1, 2001, the Company may,
at its option, use the net proceeds of one or more Public Equity Offerings or
the sale of Capital Stock (other than Disqualified Stock) of the Company to a
Strategic Investor in a single transaction or in a series of related
transactions, to redeem up to an aggregate of 35% of the aggregate principal
amount of Notes originally issued under the Indenture at a redemption price
equal to 111.5% of the aggregate principal amount thereof, plus accrued and
unpaid interest thereon, if any, to the Redemption Date; provided that at least
65% aggregate principal amount of Notes remains outstanding immediately after
the occurrence of such redemption. In order to effect the foregoing redemption,
the Company must mail a notice of redemption no later than 45 days after the
closing of the related Public Equity Offering or to a Strategic Investor and
must consummate such redemption within 60 days of the closing of the Public
Equity Offering or sale to a Strategic Investor.
If less than all of the Notes are to be redeemed, the Trustee shall select
the Notes or portions thereof to be redeemed pro rata, by lot or by any other
method the Trustee shall deem fair and reasonable.
Upon the occurrence of a Change of Control, subject to the terms of the
Indenture, each Holder may require the Company to purchase such Holder's Notes
in whole or in part in integral multiples of $1,000, at a purchase price in cash
in an amount equal to 101% of the principal amount thereof, plus accrued and
unpaid interest, if any, to the date of purchase, pursuant to a Change of
Control Offer in accordance with the procedures set forth in the Indenture.
Under certain circumstances, subject to the terms of the Indenture, in the
event the Net Cash Proceeds received by the Company from any Asset Sale, which
proceeds are not used to repay any Pari Passu Indebtedness of the Company or any
Subsidiary (including the repurchase of Notes) or which will be invested in
Telecommunications Assets, exceeds a specified amount the Company will be
required to apply such proceeds by making an offer to purchase Notes and certain
Indebtedness ranking pari passu in right of payment to the Notes.
In the case of any redemption of Notes in accordance with the Indenture,
interest installments whose Stated Maturity is on or prior to the Redemption
Date will be payable to the Holders of such Notes of record as of the close of
business on the relevant
<PAGE>
Regular Record Date or Special Record Date referred to on the face hereof. Notes
(or portions thereof) for whose redemption and payment provision is made in
accordance with the Indenture shall cease to bear interest from and after the
Redemption Date.
In the event of redemption of this Note in accordance with the Indenture in
part only, a new Note or Notes for the unredeemed portion hereof shall be issued
in the name of the Holder hereof upon the cancellation hereof.
If an Event of Default shall occur and be continuing, the principal amount
of all the Notes may be declared due and payable in the manner and with the
effect provided in the Indenture.
The Indenture permits, with certain exceptions (including certain
amendments permitted without the consent of any Holders and certain amendments
which require the consent of all the Holders) as therein provided, the amendment
thereof and the modification of the rights and obligations of the Company and
any Guarantors and the rights of the Holders under the Indenture and the Notes
and any Guarantees at any time by the Company and the Trustee with the consent
of the Holders of at least a majority in aggregate principal amount of the Notes
at the time Outstanding. The Indenture also contains provisions permitting the
Holders of at least a majority in aggregate principal amount of the Notes (100%
of the Holders in certain circumstances) at the time Outstanding, on behalf of
the Holders of all the Notes, to waive compliance by the Company and any
Guarantors with certain provisions of the Indenture and the Notes and any
Guarantees and certain past Defaults under the Indenture and the Notes and any
Guarantees and their consequences. Any such consent or waiver by or on behalf of
the Holder of this Note shall be conclusive and binding upon such Holder and
upon all future Holders of this Note and of any Note issued upon the
registration of transfer hereof or in exchange herefor or in lieu hereof whether
or not notation of such consent or waiver is made upon this Note.
No reference herein to the Indenture and no provision of this Note or of
the Indenture shall alter or impair the obligation of the Company, any Guarantor
or any other obligor on the Notes (in the event such Guarantor or such other
obligor is obligated to make payments in respect of the Notes), which is
absolute and unconditional, to pay the principal of, premium, if any, and
interest on, this Note at the times, place, and rate, and in the coin or
currency, herein prescribed.
As provided in the Indenture and subject to certain limitations therein set
forth, the transfer of this Note is registrable in the Note Register, upon
surrender of this Note for registration of transfer at the office or agency of
the Company in the Borough of
<PAGE>
Manhattan, The City of New York, duly endorsed by, or accompanied by a written
instrument of transfer in form satisfactory to the Company and the Note
Registrar duly executed by, the Holder hereof or its attorney duly authorized in
writing, and thereupon one or more new Notes, of authorized denominations and
for the same aggregate principal amount, will be issued to the designated
transferee or transferees.
Certificated securities shall be transferred to all beneficial
holders in exchange for their beneficial interests in the Rule 144A Global Notes
or the Regulation S Global Notes if (x) the Depositary notifies the Company that
it is unwilling or unable to continue as depository for such Global Note and a
successor depository is not appointed by the Company within 90 days or (y) there
shall have occurred and be continuing an Event of Default and the Note Registrar
has received a request from the Depositary. Upon any such issuance, the Trustee
is required to register such certificated Series A Notes in the name of, and
cause the same to be delivered to, such Person or Persons (or the nominee of any
thereof). All such certificated Series A Notes would be required to include the
Private Placement Legend.
Series A Notes in certificated form are issuable only in registered form
without coupons in denominations of $1,000 and any integral multiple thereof. As
provided in the Indenture and subject to certain limitations therein set forth,
the Series A Notes are exchangeable for a like aggregate principal amount of
Notes of a differing authorized denomination, as requested by the Holder
surrendering the same.
At any time when the Company is not subject to Sections 13 or 15(d) of the
Exchange Act, upon the written request of a Holder of a Series A Note, the
Company will promptly furnish or cause to be furnished such information as is
specified pursuant to Rule 144A(d)(4) under the Securities Act (or any successor
provision thereto) to such Holder or to a prospective purchaser of such Series A
Note who such Holder informs the Company is reasonably believed to be a
"Qualified Institutional Buyer" within the meaning of Rule 144A under the
Securities Act, as the case may be, in order to permit compliance by such Holder
with Rule 144A under the Securities Act.
No service charge shall be made for any registration of transfer or
exchange of Notes, but the Company may require payment of a sum sufficient to
cover any tax or other governmental charge payable in connection therewith.
Prior to due presentment of this Note for registration of transfer, the
Company, any Guarantor, the Trustee and any agent of the Company, any Guarantor
or the Trustee may treat the Person in whose name this Note is registered as the
owner hereof for
<PAGE>
all purposes, whether or not this Note is overdue, and neither the Company, any
Guarantor, the Trustee nor any such agent shall be affected by notice to the
contrary.
THIS NOTE SHALL BE GOVERNED BY AND CONSTRUED IN ACCORDANCE WITH THE LAWS OF
THE STATE OF NEW YORK, WITHOUT REGARD TO CONFLICTS OF LAW PRINCIPLES THEREOF.
All terms used in this Note which are defined in the Indenture and not
otherwise defined herein shall have the meanings assigned to them in the
Indenture.
<PAGE>
FORM OF TRANSFER NOTICE
FOR VALUE RECEIVED, the undersigned registered holder hereby sell(s),
assign(s) and transfer(s) unto Insert Taxpayer Identification No._______________
________________________________________________________________________________
(Please print or typewrite name and address including zip code of assignee)
________________________________________________________________________________
the within Note and all rights thereunder, hereby irrevocably constituting and
appointing______________________________________________________________________
attorney to transfer such Note on the books of the Company with full power of
substitution in the premises. In connection with any transfer of this Note
occurring prior to the date which is the earlier of the date of an effective
Registration Statement or November 3, 1999, the undersigned confirms that
without utilizing any general solicitation or general advertising that:
[Check One]
[_] (a) this Note is being transferred in compliance with the exemption
from registration under the Securities Act of 1933, as amended, provided by Rule
144A thereunder or
[_] (b) this Note is being transferred other than in accordance with (a)
above and documents are being furnished which comply with the conditions of
transfer set forth in this Note and the Indenture. If none of the foregoing
boxes is checked, the Trustee or other Note Registrar shall not be obligated to
register this Note in the name of any Person other than the Holder hereof unless
and until the conditions to any such transfer of registration set forth herein
and in Section 3.07 of the Indenture shall have been satisfied.
Date: ________________________________________________________
NOTICE: The signature to this assignment must correspond with the name as
written upon the face of the within-mentioned instrument in every particular,
without alteration or any change whatsoever.
<PAGE>
Signature Guarantee:
___________________________
[Signature must be guaranteed by an eligible Guarantor Institution (banks, stock
brokers, savings and loan associations and credit unions) with membership in an
approved guarantee medallion program pursuant to Securities and Exchange
Commission Rule 17Ad-15.]
TO BE COMPLETED BY PURCHASER IF (a) ABOVE IS CHECKED. The undersigned
represents and warrants that it is purchasing this Note for its own account or
an account with respect to which it exercises sole investment discretion and
that it and any such account is a "qualified institutional buyer" within the
meaning of Rule 144A under the Securities Act of 1933, as amended, and is aware
that the sale to it is being made in reliance on Rule 144A and acknowledges that
it has received such information regarding the Company as the undersigned has
requested pursuant to Rule 144A or has determined not to request such
information and that it is aware that the transferor is relying upon the
undersigned's foregoing representations in order to claim the exemption from
registration provided by Rule 144A.
Dated:_________________________
NOTICE: To be executed by an authorized signatory
Exhibit 10.1
REGISTRATION RIGHTS AGREEMENT
Dated as of November 3, 1998
by and among
PSINet Inc.
and
Donaldson, Lufkin & Jenrette Securities Corporation,
Chase Securities Inc. and
Morgan Stanley & Co. Incorporated
<PAGE>
This Registration Rights Agreement (this "Agreement") is made and
---------
entered into as of November 3, 1998, by and among PSINet Inc., a New York
corporation (the "Company"), and Donaldson, Lufkin & Jenrette Securities
-------
Corporation, Chase Securities Inc. and Morgan Stanley & Co. Incorporated
(each an "Initial Purchaser" and, collectively, the "Initial Purchasers"),
------------------
each of whom has agreed to purchase the Company's 11 1/2% Senior Notes due 2008
(the "Notes") pursuant to the Purchase Agreement (as defined below).
-----
This Agreement is made pursuant to the Purchase Agreement, dated
October 27, 1998 (the "Purchase Agreement"), by and among the Company and the
------------------
Initial Purchasers. In order to induce the Initial Purchasers to purchase
the Notes, the Company has agreed to provide the registration rights set
forth in this Agreement. The execution and delivery of this Agreement is a
condition to the obligations of the Initial Purchasers set forth in Section 3
of the Purchase Agreement. Capitalized terms used herein and not otherwise
defined shall have the meaning assigned to them the Indenture, dated as of
November 3, 1998, between the Company and Wilmington Trust Company, as
Trustee, relating to the Notes and the Exchange Notes (as defined below) (the
"Indenture").
---------
The parties hereby agree as follows:
SECTION 1. DEFINITIONS
As used in this Agreement, the following capitalized terms shall
have the following meanings:
Act: The Securities Act of 1933, as amended.
---
Affiliate: As defined in Rule 144 of the Commission under the Act.
---------
Affiliated Market Maker: A Broker-Dealer who is deemed to be an
-----------------------
Affiliate of the Company.
Broker-Dealer: Any broker or dealer registered under the Exchange
-------------
Act.
Business Day: A day other than Saturday, Sunday or a day on
------------
which banking institutions located in New York City or in the place in which
the Company maintains its principal office are authorized or obligated by
law, regulation or executive order to be closed.
Certificated Securities: Physical Notes, as defined in the
-----------------------
Indenture.
Closing Date: The date hereof.
------------
Commission: The Securities and Exchange Commission.
----------
Consummate: An Exchange Offer shall be deemed "Consummated" for
----------
purposes of this Agreement upon the occurrence of (a) the filing and
effectiveness under the Act of the
<PAGE>
Exchange Offer Registration Statement relating to the Exchange Notes to be
issued in the Exchange Offer, (b) the maintenance of such Exchange Offer
Registration Statement continuously effective and the keeping of the Exchange
Offer open for a period not less than the period required pursuant to Section
3(b) hereof and (c) the delivery by the Company to the Registrar under the
Indenture of Exchange Notes in the same aggregate principal amount as the
aggregate principal amount of Notes validly tendered by Holders thereof pursuant
to the Exchange Offer. The term Consummation shall have a correlative meaning.
Consummation Deadline: As defined in Section 3(b) hereof.
---------------------
Effectiveness Deadline: As defined in Sections 3(a) and 4(a)
----------------------
hereof.
Exchange Act: The Securities Exchange Act of 1934, as amended.
------------
Exchange Notes: The Company's 11 1/2% Senior Notes due 2008 to be
--------------
issued pursuant to the Indenture: (i) in the Exchange Offer or (ii) as
contemplated by Section 4 hereof.
Exchange Offer: The exchange and issuance by the Company of an
--------------
aggregate principal amount of Exchange Notes (which shall be registered
pursuant to the Exchange Offer Registration Statement) equal to the
outstanding aggregate principal amount of Notes that are tendered by such
Holders in connection with such exchange and issuance.
Exchange Offer Registration Statement: The Registration
-------------------------------------
Statement relating to the Exchange Offer, including the related Prospectus.
Exempt Resales: The transactions in which the Initial Purchasers
--------------
propose to resell the Notes to certain "qualified institutional buyers," as
such term is defined in Rule 144A under the Act and pursuant to Regulation S
under the Act.
Filing Deadline: As defined in Sections 3(a) and 4(a) hereof.
---------------
Holders: As defined in Section 2 hereof.
-------
Person: Any individual, corporation, limited liability company,
------
partnership, joint venture, association, joint-stock company, trust,
unincorporated organization or government or any agency or political
subdivision thereof.
Prospectus: The prospectus included in a Registration Statement
----------
at the time such Registration Statement is declared effective, as amended or
supplemented by any prospectus supplement and by all other amendments
thereto, including post-effective amendments, and all material incorporated
by reference into such Offering Memorandum.
Recommencement Date: As defined in Section 6(d) hereof.
-------------------
Registration Default: As defined in Section 5 hereof.
--------------------
- 2 -
<PAGE>
Registration Statement: Any registration statement of the
----------------------
Company relating to (a) an offering of Exchange Notes pursuant to the
Exchange Offer or (b) the registration for resale of Transfer Restricted
Securities pursuant to the Shelf Registration Statement, in each case, (i)
that is filed pursuant to the provisions of this Agreement and (ii) including
the Prospectus included therein, all amendments and supplements thereto
(including post-effective amendments) and all exhibits and material
incorporated by reference therein.
Regulation S: Regulation S promulgated under the Act.
------------
Shelf Registration Statement: As defined in Section 4 hereof.
----------------------------
Suspension Notice: As defined in Section 6(d) hereof.
-----------------
TIA: The Trust Indenture Act of 1939 (15 U.S.C. Section
---
77aaa-77bbbb) as in effect on the date of the Indenture.
Transfer Restricted Securities: Each Note, until the earliest
------------------------------
to occur of (a) the date on which such Note is exchanged in the Exchange
Offer for a Exchange Note which is entitled to be resold to the public by the
Holder thereof without complying with the prospectus delivery requirements of
the Act, (b) the date on which such Note has been disposed of in accordance
with a Shelf Registration Statement (and the purchasers thereof have been
issued Exchange Notes), or (c) the date on which such Note is entitled to be
distributed to the public pursuant to Rule 144 under the Act (and purchasers
thereof have been issued Exchange Notes), and each Exchange Note until the
date on which such Exchange Note is disposed of by a Broker-Dealer pursuant
to the "Plan of Distribution" contemplated by the Exchange Offer Registration
Statement (including the delivery of the Prospectus contained therein).
SECTION 2. HOLDERS
A Person is deemed to be a holder of Transfer Restricted
Securities (each, a "Holder") whenever such Person owns Transfer Restricted
------
Securities.
SECTION 3. REGISTERED EXCHANGE OFFER
(a) Unless the Exchange Offer shall not be permitted by applicable
federal law (after the procedures set forth in Section 6(a)(i) below have been
complied with), the Company shall (i) cause the Exchange Offer Registration
Statement to be filed with the Commission as soon as practicable after the
Closing Date, but in no event later than 75 days after the Closing Date (such
75th day being the "Filing Deadline"), (ii) use its best efforts to cause
---------------
such Exchange Offer Registration Statement to become effective at the
earliest possible time (consistent with existing contractual obligations of
the Company), but in no event later than 150 days after the Closing Date
(such 150th day being the "Effectiveness Deadline"), (iii) in connection with
----------------------
the foregoing, (A) file all pre-effective amendments to such Exchange Offer
Registration Statement as may be necessary in order to cause it to become
effective, (B) file, if applicable, a post-effective amendment to such
Exchange Offer Registration Statement pursuant to Rule 430A under the Act and
(C) cause all necessary filings, if any, in connection with the
- 3 -
<PAGE>
registration and qualification of the Exchange Notes to be made under the Blue
Sky laws of such jurisdictions as are necessary to permit Consummation of the
Exchange Offer, and (iv) upon the effectiveness of such Exchange Offer
Registration Statement, commence and Consummate the Exchange Offer. The
Exchange Offer shall be on the appropriate form permitting (i) registration of
the Exchange Notes to be offered in exchange for the Notes that are Transfer
Restricted Securities and (ii) resales of Exchange Notes by Broker-Dealers that
tendered into the Exchange Offer the Notes that such Broker-Dealer acquired for
its own account as a result of market making activities or other trading
activities (other than Notes acquired directly from the Company or any of
its Affiliates) as contemplated by Section 3(c) below.
(b) The Company shall use its best efforts to cause the Exchange
Offer Registration Statement to be effective continuously and shall keep the
Exchange Offer open for a period of not less than the minimum period required
under applicable federal and state securities laws to Consummate the Exchange
Offer; provided, however, that in no event shall such period be less than 20
Business Days. The Company shall cause the Exchange Offer to comply with all
applicable federal and state securities laws. No securities other than the
Exchange Notes shall be included in the Exchange Offer Registration
Statement. The Company shall use its best efforts to cause the Exchange
Offer to be Consummated on the earliest practicable date after the Exchange
Offer Registration Statement has become effective, but in no event later than
30 Business Days thereafter (such 30th day being the "Consummation Deadline").
---------------------
(c) The Company shall include a "Plan of Distribution" section
in the Prospectus contained in the Exchange Offer Registration Statement and
indicate therein that any Broker-Dealer who holds Transfer Restricted
Securities that were acquired for the account of such Broker-Dealer as a
result of market-making activities or other trading activities (other than
Notes acquired directly from the Company or any Affiliate of the Company),
may exchange such Transfer Restricted Securities pursuant to the Exchange
Offer; however, such Broker-Dealer may be deemed to be an "underwriter"
within the meaning of the Act and must, therefore, deliver a prospectus
meeting the requirements of the Act in connection with any resales of the
Exchange Notes received by such Broker-Dealer in the Exchange Offer, which
prospectus delivery requirement may be satisfied by the delivery by such
Broker-Dealer of the Prospectus contained in the Exchange Offer Registration
Statement. Such "Plan of Distribution" section shall also contain all other
information with respect to such sales by such Broker-Dealers that the
Commission may require in order to permit such sales pursuant thereto, but
such "Plan of Distribution" shall not name any such Broker-Dealer or disclose
the amount of Transfer Restricted Securities held by any such Broker-Dealer,
except to the extent required by the Commission as a result of a change in
policy, rules or regulations after the date of this Agreement. The letter of
transmittal or similar documentation to be executed by a Holder in order to
participate in the Exchange Offer will include, among other things, a
provision to the effect that, if the Holder is a Broker-Dealer holding Notes
acquired for its own account as a result of market-making activities or other
trading activities, such Holder acknowledges that it will deliver a
prospectus meeting the requirements of the Act in connection with any resale
of Exchange Notes received in respect of Notes pursuant to the Exchange Offer.
- 4 -
<PAGE>
Because such Broker-Dealer may be deemed to be an "underwriter"
within the meaning of the Act and must, therefore, deliver a prospectus
meeting the requirements of the Act in connection with its initial sale of
any Exchange Notes received by such Broker-Dealer in the Exchange Offer, the
Company shall permit the use of the Prospectus contained in the Exchange
Offer Registration Statement by such Broker-Dealer to satisfy such prospectus
delivery requirement. To the extent necessary to ensure that the prospectus
contained in the Exchange Offer Registration Statement is available for sales
of Exchange Notes by Broker-Dealers, the Company agree to use its best
efforts to keep the Exchange Offer Registration Statement continuously
effective, supplemented, amended and current as required by and subject to
the provisions of Section 6(a) and (c) hereof and in conformity with the
requirements of this Agreement, the Act and the policies, rules and
regulations of the Commission as announced from time to time, for a period of
one year from the Consummation Deadline or such shorter period as will
terminate when all Transfer Restricted Securities covered by such
Registration Statement have been sold pursuant thereto. The Company shall
provide sufficient copies of the latest version of such Prospectus to such
Broker-Dealers, promptly upon request, and in no event later than two
Business Days after such request, at any time during such period.
SECTION 4. SHELF REGISTRATION
(a) Shelf Registration. If (i) the Exchange Offer is not permitted
------------------
by applicable law (after the Company has complied with the procedures set forth
in Section 6(a)(i) below) or (ii) if any Holder of Transfer Restricted
Securities shall notify the Company within 20 Business Days following the
Consummation Deadline that (A) such Holder was prohibited by law or
Commission policy from participating in the Exchange Offer or (B) such Holder
may not resell the Exchange Notes acquired by it in the Exchange Offer to the
public without delivering a prospectus and the Prospectus contained in the
Exchange Offer Registration Statement is not appropriate or available for
such resales by such Holder or (C) such Holder is a Broker-Dealer and holds
Notes acquired directly from the Company or any of its Affiliates, then the
Company shall:
(x) cause to be filed, on or prior to 30 days after the earlier
of (i) the date on which the Company determines that the Exchange Offer
Registration Statement cannot be filed as a result of clause (a)(i) above or
(ii) the date on which the Company receives the notice specified in clause
(a)(ii) above (such earlier date, the "Filing Deadline"), a shelf
---------------
registration statement pursuant to Rule 415 under the Act (which may be an
amendment to the Exchange Offer Registration statement (the "Shelf
-----
Registration Statement")), relating to all Transfer Restricted Securities,
- ----------------------
the Holders of which shall have provided the information required pursuant to
Section 4(b) hereof, and
(y) shall use its best efforts to cause such Shelf Registration
Statement to become effective on or prior to 60 days after the filing of the
Shelf Registration Statement (or such longer period, not to exceed 150 days
after the filing of the Shelf Registration Statement as may be necessary to
avoid conflicts with existing contractual obligations of the Company) (such
60th day or longer period the "Effectiveness Deadline").
----------------------
- 5 -
<PAGE>
If, after the Company has filed an Exchange Offer Registration
Statement that satisfies the requirements of Section 3(a) above, the Company
is required to file and make effective a Shelf Registration Statement solely
because the Exchange Offer is not permitted under applicable federal law
(i.e., clause (a)(i) above), then the filing of the Exchange Offer
Registration Statement shall be deemed to satisfy the requirements of clause
(x) above; provided that, in such event, the Company shall remain obligated
to meet the Effectiveness Deadline set forth in clause (y) above.
To the extent necessary to ensure that the Shelf Registration
Statement is available for sales of Transfer Restricted Securities by the
Holders thereof entitled to the benefit of this Section 4(a) and the other
securities required to be registered therein pursuant to Section 6(b)(ii)
hereof, the Company shall use its best efforts to keep any Shelf Registration
Statement required by this Section 4(a) continuously effective, supplemented,
amended and current as required by and subject to the provisions of Sections
6(b) and (c) hereof and in conformity with the requirements of this
Agreement, the Act and the policies, rules and regulations of the Commission
as announced from time to time, for a period of at least two years (as
extended pursuant to Section 6(c)(i)) following the Closing Date, or such
shorter period as will terminate when all Transfer Restricted Securities
covered by such Shelf Registration Statement have been sold pursuant thereto.
(b) Provision by Holders of Certain Information in Connection with
--------------------------------------------------------------
the Shelf Registration Statement. No Holder of Transfer Restricted Securities
- --------------------------------
may include any of its Transfer Restricted Securities in any Shelf
Registration Statement pursuant to this Agreement unless and until such
Holder furnishes to the Company in writing, within 10 Business days after
receipt of a request therefor, such information as the Company may reasonably
request for use in connection with any Shelf Registration Statement or
Prospectus or preliminary prospectus included therein, including, without
limitation, the information specified in Item 507 or 508 of Regulation S-K,
as applicable, under the Act for use in connection with any Shelf
Registration Statement or Prospectus or preliminary Prospectus included
therein. No Holder of Transfer Restricted Securities shall be entitled to
liquidated damages pursuant to Section 5 hereof unless and until such Holder
shall have provided all such information. Each selling Holder as to which
any Shelf Registration Statement is being effected agrees to notify the
Company as promptly as practicable of any inaccuracy or change in information
previously furnished by such Holder to the Company or the happening of any
event, in either case as a result of which the Shelf Registration Statement
contains any untrue statement of a material fact regarding such Holder or the
distribution of Transfer Restricted Securities or omits to state any material
fact regarding such Holder or the distribution of such Transfer Restricted
Securities required to be stated therein or necessary to make the statement
therein, in light of the circumstances under which they are made, not
misleading or any prospectus relating to such Shelf Registration Statement
contains any untrue statement of a material fact regarding such Holder or the
distribution of such Transfer Restricted Securities or omits to state any
material fact regarding such Holder or the distribution of such Transfer
Restricted Securities necessary to make the statements therein, in light of
the circumstances under which they were made, not misleading, and to furnish
promptly to the Company any additional information (i) required to correct
and update any previously furnished
- 6 -
<PAGE>
information or (ii) required so that the Shelf Registration Statement or any
Prospectus shall not contain any such untrue statement of a material fact or any
such omission to state a material fact.
SECTION 5. LIQUIDATED DAMAGES
If (i) any Registration Statement required by this Agreement is
not filed with the Commission on or prior to the applicable Filing Deadline,
(ii) any such Registration Statement has not been declared effective by the
Commission on or prior to the applicable Effectiveness Deadline, (iii) the
Exchange Offer has not been Consummated on or prior to the Consummation
Deadline, or (iv) any Registration Statement required by this Agreement is
filed and declared effective but shall thereafter cease to be effective or
fail to be usable for its intended purpose without being succeeded
immediately (subject to the terms of this Agreement) by a post-effective
amendment to such Registration Statement that cures such failure and that is
itself declared effective immediately (each such event referred to in clauses
(i) through (iv), a "Registration Default"), then the Company hereby agrees
to pay to each Holder of Transfer Restricted Securities affected thereby
liquidated damages in an amount equal to $.05 per week per $1,000 in
principal amount of Transfer Restricted Securities held by such Holder for
each week or portion thereof that the Registration Default continues for the
first 90-day period immediately following the occurrence of such Registration
Default. The amount of the liquidated damages shall increase by an
additional $.05 per week per $1,000 in principal amount of Transfer
Restricted Securities with respect to each subsequent 90-day period until all
Registration Defaults have been cured, up to a maximum amount of liquidated
damages of $.50 per week per $1,000 in principal amount of Transfer
Restricted Securities, provided that the Company shall in no event be
required to pay liquidated damages for more than one Registration Default at
any given time. Notwithstanding anything to the contrary set forth herein,
(1) upon filing of the Exchange Offer Registration Statement (and/or, if
applicable, the Shelf Registration Statement), in the case of (i) above, (2)
upon the effectiveness of the Exchange Offer Registration Statement (and/or,
if applicable, the Shelf Registration Statement), in the case of (ii) above,
(3) upon Consummation of the Exchange Offer, in the case of (iii) above, or
(4) upon the filing of a post-effective amendment to the Registration
Statement or an additional Registration Statement that causes the Exchange
Offer Registration Statement (and/or, if applicable, the Shelf Registration
Statement) to again be declared effective or made usable in the case of (iv)
above, the liquidated damages payable with respect to the Transfer Restricted
Securities as a result of such clause (i), (ii), (iii) or (iv), as
applicable, shall cease.
All accrued liquidated damages shall be paid to the Holders
entitled thereto, in the manner provided for the payment of interest in the
Indenture, on each Interest Payment Date, as more fully set forth in the
Indenture and the Notes. Notwithstanding the fact that any securities for
which liquidated damages are due cease to be Transfer Restricted Securities,
all obligations of the Company to pay liquidated damages with respect to such
securities outstanding prior to the time such securities ceased to be
Transfer Restricted Securities shall survive until such time as such
obligations with respect to such securities shall have been satisfied in full.
- 7 -
<PAGE>
SECTION 6. REGISTRATION PROCEDURES
(a) Exchange Offer Registration Statement. In connection with the
-------------------------------------
Exchange Offer, the Company shall (x) comply with all applicable provisions of
Section 6(c) below, (y) use its best efforts to effect such exchange and to
permit the resale of Exchange Notes by Broker-Dealers that tendered in the
Exchange Offer Notes that such Broker-Dealer acquired for its own account as a
result of its market making activities or other trading activities (other than
Notes acquired directly from the Company or any of its Affiliates) being sold in
accordance with the intended method or methods of distribution thereof, and
(z) comply with all of the following provisions:
(i) If, following the date hereof there has been announced a change
in Commission policy with respect to exchange offers such as the
Exchange Offer, that in the reasonable opinion of counsel to the
Company raises a substantial question as to whether the Exchange Offer
is permitted by applicable federal law, the Company hereby agrees to
seek a no-action letter or other favorable decision from the Commission
allowing the Company to Consummate an Exchange Offer for such Transfer
Restricted Securities. The Company hereby agrees to pursue the
issuance of such a decision to the Commission staff level. In
connection with and subject to the foregoing, the Company hereby agrees
to take all such other actions as may be reasonably requested by the
Commission or otherwise required in connection with the issuance of
such decision, including, without limitation, (A) participating in
telephonic conferences with the Commission, (B) delivering to the
Commission staff an analysis prepared by counsel to the Company setting
forth the legal bases, if any, upon which such counsel has concluded
that such an Exchange Offer should be permitted and (C) diligently
pursuing a resolution (which need not be favorable) by the Commission
staff.
(ii) As a condition to its participation in the Exchange Offer, each
Holder of Transfer Restricted Securities (including, without limitation,
any Holder who is a Broker Dealer) shall furnish, upon the request of the
Company, prior to the Consummation of the Exchange Offer, a written
representation to the Company (which may be contained in the letter of
transmittal contemplated by the Exchange Offer Registration Statement) to
the effect that (A) it is not an Affiliate of the Company, (B) it is
not engaged in, and does not intend to engage in, and has no arrangement
or understanding with any person to participate in, a distribution of the
Exchange Notes to be issued in the Exchange Offer and (C) it is acquiring
the Exchange Notes in its ordinary course of business. In addition, all
such Holders of Transfer Restricted Securities shall otherwise reasonably
cooperate to the extent necessary in the Company's preparations for the
Exchange Offer. Each Holder using the Exchange Offer to participate in a
distribution of the Exchange Notes hereby acknowledges and agrees that, if
the resales are of Exchange Notes obtained by such Holder in exchange
Notes acquired directly from the Company or an Affiliate thereof, it (1)
could not, under Commission policy as in effect on the date of this
Agreement, rely on the position of the Commission enunciated in Morgan
------
Stanley and Co., Inc. (available June 5, 1991) and Exxon Capital Holdings
--------------------- ----------------------
Corporation (available May 13, 1988), as interpreted in the Commission's
-----------
letter to Shearman & Sterling dated July 2, 1993, and
-------------------
- 8 -
<PAGE>
similar no-action letters (including, if applicable, any no-action letter
obtained pursuant to clause (i) above), and (2) must comply with the
registration and prospectus delivery requirements of the Act in connection
with a secondary resale transaction and that such a secondary resale
transaction must be covered by an effective registration statement
containing the selling security holder information required by Item 507 or
508, as applicable, of Regulation S-K.
(iii) Prior to effectiveness of the Exchange Offer Registration
Statement, the Company shall provide a supplemental letter to the
Commission (A) stating that the Company is registering the Exchange Offer
in reliance on the position of the Commission enunciated in Exxon Capital
-------------
Holdings Corporation (available May 13, 1988), Morgan Stanley and Co.,
-------------------- -----------------------
Inc. (available June 5, 1991) as interpreted in the Commission's letter to
----
Shearman & Sterling dated July 2, 1993, and, if applicable, any no-action
-------------------
letter obtained pursuant to clause (i) above, (B) including a
representation that the Company has not entered into any arrangement or
understanding with any Person to distribute the Exchange Notes to be
received in the Exchange Offer, and to the extent that the Company is
capable of so representing, to the best of the Company's information and
belief, each Holder participating in the Exchange Offer is acquiring the
Exchange Notes in its ordinary course of business and has no arrangement
or understanding with any Person to participate in the distribution of the
Exchange Notes received in the Exchange Offer and (C) any other
undertaking or representation required by the Commission as set forth in
any no-action letter obtained pursuant to clause (i) above, if applicable.
(b) Shelf Registration Statement. In connection with the Shelf
----------------------------
Registration Statement, the Company shall (i) (x) comply with all the provisions
of Section 6(c) below and (y) use its best efforts to effect such registration
to permit the sale of the Transfer Restricted Securities being sold in
accordance with the intended method or methods of distribution thereof (as
indicated in the information furnished to the Company pursuant to Section 4(b)
hereof), and pursuant thereto the Company will prepare and file with the
Commission a Registration Statement relating to the registration on any
appropriate form under the Act, which form shall be available for the sale of
the Transfer Restricted Securities in accordance with the intended method or
methods of distribution thereof within the time periods and otherwise in
accordance with the provisions hereof; and (ii) issue, upon the request of any
Holder or purchaser of Notes covered by any Shelf Registration Statement
contemplated by this Agreement, Exchange Notes having an aggregate principal
amount equal to the aggregate principal amount of Notes sold pursuant to the
Shelf Registration Statement and surrendered to the Company for cancellation;
the Company shall register Exchange Notes on the Shelf Registration Statement
for this purpose and issue the Exchange Notes to the purchaser(s) of securities
subject to the Shelf Registration Statement in the names as such purchaser(s)
shall designate.
(c) General Provisions. In connection with any Registration Statement
------------------
and any related Prospectus required by this Agreement, the Company shall:
(i) use its best efforts to keep such Registration Statement
continuously effective and provide all requisite financial statements
for the period specified in Section
- 9 -
<PAGE>
3 or 4 of this Agreement, as applicable. Upon the occurrence of any event
that would cause any such Registration Statement or the Prospectus
contained therein (A) to contain an untrue statement of material fact or
omit to state any material fact necessary to make the statements therein
not misleading or (B) not to be effective and usable for resale of
Transfer Restricted Securities during the period required by this
Agreement, the Company shall file promptly an appropriate amendment to
such Registration Statement curing such defect, and, if Commission review
is required, use its best efforts to cause such amendment to be declared
effective as soon as practicable.
(ii) prepare and file with the Commission such amendments and
post-effective amendments to the applicable Registration Statement as may
be necessary to keep such Registration Statement effective for the
applicable period set forth in Section 3 or 4 hereof, as the case may be;
cause the Prospectus to be supplemented by any required Prospectus
supplement, and as so supplemented to be filed pursuant to Rule 424 under
the Act, and to comply fully with the applicable provisions of Rules 424,
430A and 462, as applicable, under the Act in a timely manner; and comply
with the provisions of the Act with respect to the disposition of all
securities covered by such Registration Statement during the applicable
period in accordance with the intended method or methods of distribution
by the sellers thereof set forth in such Registration Statement or
supplement to the Prospectus;
(iii) advise each Holder and each Initial Purchaser who is required
to deliver a prospectus in connection with sales or market making
activities (an "Affiliated Market Maker") promptly and, if requested by
-----------------------
such Holder or Person, confirm such advice in writing, (A) when the
Prospectus or any Prospectus supplement or post-effective amendment has
been filed, and, with respect to any applicable Registration Statement or
any post-effective amendment thereto, when the same has become effective,
(B) of any request by the Commission for amendments to the Registration
Statement or amendments or supplements to the Prospectus or for additional
information relating thereto, (C) of the issuance by the Commission of any
stop order suspending the effectiveness of the Registration Statement
under the Act or of the suspension by any state securities commission of
the qualification of the Transfer Restricted Securities for offering or
sale in any jurisdiction, or the initiation of any proceeding for any of
the preceding purposes, (D) of the existence of any fact or the happening
of any event that makes any statement of a material fact made in the
Registration Statement, the Prospectus, any amendment or supplement
thereto or any document incorporated by reference therein untrue, or that
requires the making of any additions to or changes in the Registration
Statement in order to make the statements therein not misleading, or that
requires the making of any additions to or changes in the Prospectus in
order to make the statements therein, in the light of the circumstances
under which they were made, not misleading. If at any time the Commission
shall issue any stop order suspending the effectiveness of the
Registration Statement, or any state securities commission or other
regulatory authority shall issue an order suspending the qualification or
exemption from qualification of the Transfer Restricted Securities under
state securities or Blue Sky laws, the Company shall
- 10 -
<PAGE>
use its best efforts to obtain the withdrawal or lifting of such order at
the earliest practical time;
(iv) subject to Section 6(c)(i), if any fact or event contemplated by
Section 6(c)(iii)(D) above shall exist or have occurred, prepare a
supplement or post-effective amendment to the Registration Statement or
related Prospectus or any document incorporated therein by reference or
file any other required document so that, as thereafter delivered to the
purchasers of Transfer Restricted Securities, the Prospectus will not
contain an untrue statement of a material fact or omit to state any
material fact necessary to make the statements therein, in the light of
the circumstances under which they were made, not misleading;
(v) furnish to each Holder and each Affiliated Market Maker in
connection with such exchange or sale, if any, before filing with the
Commission, copies of any Registration Statement or any Prospectus
included therein or any amendments or supplements to any such
Registration Statement or Prospectus (including all documents incorporated
by reference after the initial filing of such Registration Statement),
which documents will be subject to the review and comment of such Holders
in connection with such sale, if any, for a period of at least five
Business Days, and the Company will not file any such Registration
Statement or Prospectus or any amendment or supplement to any such
Registration Statement or Prospectus (including all such documents
incorporated by reference) to which such Holders shall reasonably object
within five Business Days after the receipt thereof. A Holder shall be
deemed to have reasonably objected to such filing if such Registration
Statement, amendment, Prospectus or supplement, as applicable, as proposed
to be filed, contains an untrue statement of a material fact or omits to
state any material fact necessary to make the statements therein not
misleading or fails to comply with the applicable requirements of the Act
which has been specifically identified by such Holder or Affiliated
Market Maker;
(vi) promptly prior to the filing of any document that is to be
incorporated by reference into a Registration Statement or Prospectus,
provide copies of such document to each Holder and each Affiliated Market
Maker in connection with such exchange or sale, if any, make the Company's
representatives available at reasonable times for discussion of such
document and other customary due diligence matters, and include such
information in such document prior to the filing thereof as such Holders
may reasonably request;
(vii) make available, at reasonable times, for inspection by each
Holder and each Affiliated Market Maker and any attorney or accountant
retained by such Holders all financial and other records, pertinent
corporate documents of the Company and cause the Company's officers,
directors and employees to supply all information reasonably requested
by any such Holder or attorney or accountant in connection with such
Registration Statement or any post-effective amendment thereto subsequent
to the filing thereof and prior to its effectiveness; provided, however,
that such Persons shall first agree in writing with the Company that any
information that is reasonably and in good
- 11 -
<PAGE>
faith designated by the Company in writing as confidential at the time of
delivery of such information shall be kept confidential by such Persons,
unless (i) disclosure of such information is required by court or
administrative order or is necessary to respond to inquiries of regulatory
authorities, (ii) disclosure of such information is required by law
(including any disclosure requirements pursuant to federal securities laws
in connection with the filing of such Registration Statement or the use of
any Prospectus), (iii) such information becomes generally available to the
public other than as a result of a disclosure or failure to safeguard such
information by such Person or (iv) such information becomes available to
such Person from a source other than the Company and its subsidiaries and
such source is not known, after due inquiry, by such Person to be bound by
a confidentiality agreement; provided further, that the foregoing
investigation shall be coordinated on behalf of such Persons by one
representative designated by and on behalf of such Persons and any such
confidential information shall be available from such representative to
such Persons so long as any Person agrees to be bound by such
confidentiality agreement;
(viii) if requested by any Holders in connection with such exchange
or sale or any Affiliated Market Maker, promptly include in any
Registration Statement or Prospectus, pursuant to a supplement or
post-effective amendment if necessary, such information as such Holders
may reasonably request to have included therein, including, without
limitation, information relating to the "Plan of Distribution" of the
Transfer Restricted Securities and the use of the Registration Statement
or Prospectus for market making activities, except to the extent that the
Company, upon receipt of an opinion of counsel, reasonably believes that
the inclusion of such information could result in a violation of federal
or state securities laws; and make all required filings of such Prospectus
supplement or post-effective amendment as soon as practicable after the
Company is notified of the matters to be included in such Prospectus
supplement or post-effective amendment;
(ix) furnish to each Holder in connection with such exchange or sale
and each Affiliated Market Maker, without charge, at least one copy of the
Registration Statement, as first filed with the Commission, and of each
amendment thereto, including all documents incorporated by reference
therein and all exhibits (including exhibits incorporated therein by
reference);
(x) deliver to each Holder and each Affiliated Market Maker,
without charge, as many copies of the Prospectus (including each
preliminary prospectus) and any amendment or supplement thereto as such
Persons reasonably may request; the Company hereby consents to the use
(in accordance with law) of the Prospectus and any amendment or
supplement thereto by each selling Holder in connection with the offering
and the sale of the Transfer Restricted Securities covered by the
Prospectus or any amendment or supplement thereto and all market making
activities of such Affiliated Market Maker, as the case may be;
- 12 -
<PAGE>
(xi) upon the request of any Holder, enter into such agreements
(including underwriting agreements) and make such representations and
warranties as are customarily made by issuers to underwriters in primary
underwritten offerings and take all such other actions in connection
therewith in order to expedite or facilitate the disposition of the
Transfer Restricted Securities pursuant to any applicable Registration
Statement contemplated by this Agreement as may be reasonably requested by
any Holder in connection with any sale or resale pursuant to any
applicable Registration Statement. In such connection, and also in
connection with market making activities by any Affiliated Market Maker,
the Company shall:
(A) upon request of any Holder furnish (or in the case of
paragraphs (2) and (3) below, use its best efforts to cause to be
furnished) to each Holder upon Consummation of the Exchange Offer
or upon the effectiveness of the Shelf Registration Statement, in
such substance and scope and as are customarily made by issuers
to underwriters in primary underwritten offerings, as the case
may be:
(1) a certificate, dated such date, signed on behalf of
the Company by (x) the President or any Vice President and (y)
a principal financial or accounting officer of the Company,
confirming, as of the date thereof, the matters set forth in
Sections 6(y), 9(a) and 9(b) of the Purchase Agreement and
such other similar matters as such Holders may reasonably
request;
(2) an opinion, dated the date of Consummation of the
Exchange Offer or the date of effectiveness of the Shelf
Registration Statement, as the case may be, of counsel for the
Company covering matters similar to those set forth in paragraph
(e) of Section 9 of the Purchase Agreement and such other matters
as such Holder may reasonably request, and in any event including
a statement to the effect that such counsel has participated in
conferences with officers and other representatives of the
Company, representatives of the independent public accountants
for the Company, the underwriters' representatives and the
underwriters' counsel in connection with the preparation of such
Registration Statement and the related Prospectus, and have
considered the matters required to be stated therein and the
statements contained therein, although such counsel has not
independently verified the accuracy, completeness or fairness of
such statements; and that such counsel advises that, on the basis
of the foregoing (relying as to materiality to the extent such
counsel deems appropriate upon the statements of officers and
other representatives of the Company and without independent
check or verification), no facts came to such counsel's attention
that caused such counsel to believe that the applicable
Registration Statement, at the time such Registration Statement
or any post-effective amendment thereto became effective and, in
the case of the Exchange Offer Registration Statement, as of the
date of Consummation of the Exchange Offer, contained an untrue
statement of a material fact or omitted to state a material fact
required to be
- 13 -
<PAGE>
stated therein or necessary to make the statements therein not
misleading, or that the Prospectus contained in such
Registration Statement as of its date and, in the case of the
opinion dated the date of Consummation of the Exchange Offer, as
of the date of Consummation, contained an untrue statement of a
material fact or omitted to state a material fact necessary in
order to make the statements therein, in the light of the
circumstances under which they were made, not misleading. Without
limiting the foregoing, such counsel may state further that such
counsel assumes no direct or indirect responsibility, explicitly
or implicitly, for, and has not independently verified, the
accuracy, completeness or fairness of the financial statements
(including, without limitation, pro forma financial statements),
notes and schedules and other financial, numerical, statistical
and accounting information and data included in any Registration
Statement contemplated by this Agreement or the related
Prospectus; and
(3) a customary comfort letter, dated the date of
Consummation of the Exchange Offer, or as of the date of
effectiveness of the Shelf Registration Statement, as the case
may be, from the Company's independent accountants, in the
customary form and covering matters of the type customarily
covered in comfort letters to underwriters in connection with
underwritten offerings, and affirming the matters set forth in
the comfort letters delivered pursuant to Section 9(g) of the
Purchase Agreement; and
(B) deliver such other documents and certificates as may be
reasonably requested by the selling Holders or such Persons to
evidence compliance with the matters covered in clause (A) above
and with any customary conditions contained in the underwriting
or other agreement entered into by the Company pursuant to this
clause (xi);
(xii) prior to any public offering of Transfer Restricted Securities,
cooperate with the selling Holders and their counsel in connection with
the registration and qualification of the Transfer Restricted
Securities under the securities or Blue Sky laws of such jurisdictions
as the selling Holders may request and do any and all other acts or
things necessary or advisable to enable the disposition in such
jurisdictions of the Transfer Restricted Securities covered by the
applicable Registration Statement; provided, however, that the Company
shall not be required to register or qualify as a foreign corporation
where it is not now so qualified or to take any action that would
subject it to the service of process in suits or to taxation, other
than as to matters and transactions relating to the Registration
Statement, in any jurisdiction where it is not now so subject;
(xiii) in connection with any sale of Transfer Restricted Securities
that will result in such securities no longer being Transfer Restricted
Securities, cooperate with the Holders to facilitate the timely
preparation and delivery of certificates representing Transfer Restricted
Securities to be sold and not bearing any restrictive legends; and to
- 14 -
<PAGE>
register such Transfer Restricted Securities in such denominations and
such names as the selling Holders may request at least two Business Days
prior to such sale of Transfer Restricted Securities;
(xiv) use its best efforts to cause the disposition of the Transfer
Restricted Securities covered by the Registration Statement to be
registered with or approved by such other governmental agencies or
authorities as may be necessary to enable the seller or sellers thereof to
consummate the disposition of such Transfer Restricted Securities, subject
to the proviso contained in clause (xii) above;
(xv) provide a CUSIP number for all Transfer Restricted Securities
not later than the effective date of a Registration Statement covering
such Transfer Restricted Securities and provide the Trustee under the
Indenture with printed certificates for the Transfer Restricted Securities
which are in a form eligible for deposit with the Depository Trust
Company;
(xvi) otherwise use its best efforts to comply with all applicable
rules and regulations of the Commission, and make generally available to
its security holders with regard to any applicable Registration Statement,
as soon as practicable, a consolidated earnings statement meeting the
requirements of Rule 158 (which need not be audited) covering a
twelve-month period beginning after the effective date of the Registration
Statement (as such term is defined in paragraph (c) of Rule 158 under
the Act);
(xvii) use its best efforts to cause the Indenture to be qualified under
the TIA not later than the effective date of the first Registration
Statement required by this Agreement and, in connection therewith,
cooperate with the Trustee and the Holders to effect such changes to the
Indenture as may be required for such Indenture to be so qualified in
accordance with the terms of the TIA; and execute and use its best efforts
to cause the Trustee to execute, all documents that may be required to
effect such changes and all other forms and documents required to be filed
with the Commission to enable such Indenture to be so qualified in a
timely manner; and
(xviii) provide promptly to each Holder and Affiliated Market Maker,
upon request, each document filed with the Commission pursuant to the
requirements of Section 13 or Section 15(d) of the Exchange Act.
(d) Restrictions on Holders. Each Holder agrees by acquisition of a
-----------------------
Transfer Restricted Security and each Affiliated Market Maker agrees that, upon
receipt of the notice referred to in Section 6(c)(iii)(C) or any notice from the
Company of the existence of any fact of the kind described in Section 6(c)(iii)
(D) hereof (in each case, a "Suspension Notice"), such Holder or Person will
-----------------
forthwith discontinue disposition of Transfer Restricted Securities pursuant to
the applicable Registration Statement until (i) such Holder or Person has
received copies of the supplemented or amended Prospectus contemplated by
Section 6(c)(iv) hereof, or (ii) such Holder or Person is advised in writing by
the Company that the use of the Prospectus may be resumed, and has received
copies of any additional or supplemental filings that are incorporated
- 15 -
<PAGE>
by reference in the Prospectus (in each case, the "Recommencement Date").
-------------------
Each Holder or Person receiving a Suspension Notice hereby agrees that it will
either (i) destroy any Prospectuses, other than permanent file copies, then in
such Holder's or Person's possession which have been replaced by the Company
with more recently dated Prospectuses or (ii) deliver to the Company (at the
Company's expense) all copies, other than permanent file copies, then in such
Holder's Person's possession of the Prospectus covering such Transfer Restricted
Securities that was current at the time of receipt of the Suspension Notice. The
time period regarding the effectiveness of such Registration Statement set forth
in Section 3 or 4 hereof, as applicable, shall be extended by a number of days
equal to the number of days in the period from and including the date of
delivery of the Suspension Notice to the date of delivery of the Recommencement
Date.
SECTION 7. REGISTRATION EXPENSES
(a) All expenses incident to the Company's performance of or
compliance with this Agreement will be borne by the Company, regardless of
whether a Registration Statement becomes effective, including without
limitation: (i) all registration and filing fees and expenses; (ii) all fees and
expenses of compliance with federal securities and state Blue Sky or securities
laws; (iii) all expenses of printing (including printing certificates for the
Exchange Notes to be issued in the Exchange Offer and printing of
Prospectuses whether for exchanges, sales, market making or otherwise),
messenger and delivery services and telephone; (iv) all fees and
disbursements of counsel for the Company and one counsel for the Holders of
Transfer Restricted Securities as provided in Section 7(b) below; (v) all
application and filing fees in connection with listing the Exchange Notes on
a national securities exchange or automated quotation system pursuant to the
requirements hereof; and (vi) all fees and disbursements of independent
certified public accountants of the Company (including the expenses of any
special audit and comfort letters required by or incident to such
performance).
The Company will, in any event, bear its internal expenses
(including, without limitation, all salaries and expenses of its officers and
employees performing legal or accounting duties), the expenses of any annual
audit and the fees and expenses of any Person, including special experts,
retained by the Company.
(b) In connection with any Registration Statement required by this
Agreement (including, without limitation, the Exchange Offer Registration
Statement and the Shelf Registration Statement), the Company will reimburse
the Initial Purchasers and the Holders of Transfer Restricted Securities who
are tendering Notes in the Exchange Offer and/or selling or reselling Notes
or Exchange Notes pursuant to the "Plan of Distribution" contained in the
Exchange Offer Registration Statement or the Shelf Registration Statement, as
applicable, for the reasonable fees and disbursements of not more than one
counsel, who shall be Paul, Hastings, Janofsky & Walker LLP, unless another
firm shall be chosen by the Holders of a majority in principal amount of the
Transfer Restricted Securities for whose benefit such Registration Statement
is being prepared.
SECTION 8. INDEMNIFICATION
- 16 -
<PAGE>
(a) The Company agrees to indemnify and hold harmless each Holder,
its directors, officers and each Person, if any, who controls such Holder
(within the meaning of Section 15 of the Act or Section 20 of the Exchange Act),
from and against any and all losses, claims, damages, liabilities or judgments
(including without limitation, any legal or other expenses incurred in
connection with investigating or defending any matter, including any action
that could give rise to any such losses, claims, damages, liabilities or
judgments) caused by any untrue statement or alleged untrue statement of a
material fact contained in any Registration Statement, preliminary prospectus
or Prospectus (or any amendment or supplement thereto) provided by the
Company to any Holder or any prospective purchaser of Exchange Notes or
registered Notes, 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, liabilities or judgments are caused by (i) an untrue statement or
omission or alleged untrue statement or omission that is based upon
information relating to any of the Holders furnished in writing to the
Company by any of the Holders or (ii) an untrue statement or alleged untrue
statement or omission or alleged omission in any preliminary prospectus that
was corrected by the Prospectus and such Holder failed to comply with such
Prospectus delivery requirements as are applicable to it and such loss,
claim, damage, liability or judgment would not have arisen if such Prospectus
had been so delivered.
(b) Each Holder of Transfer Restricted agrees, severally and not
jointly, to indemnify and hold harmless the Company and its directors and
officers, and each Person, if any, who controls (within the meaning of Section
15 of the Act or Section 20 of the Exchange Act) the Company, to the same extent
as the foregoing indemnity from the Company set forth in section (a) above, but
only (i) with reference to information relating to such Holder furnished in
writing to the Company by such Holder expressly for use in any Registration
Statement or (ii) if an untrue statement or alleged untrue statement or
omission or alleged omission in any preliminary prospectus was corrected by
the Prospectus and such Holder failed to comply with such Prospectus delivery
requirements as are applicable to it and such loss, claim, damage, liability
or judgment would not have arisen if such Prospectus had been so delivered.
In no event shall any Holder, its directors, officers or any Person who
controls such Holder be liable or responsible for any amount in excess of the
amount by which the total amount received by such Holder with respect to its
sale of Transfer Restricted Securities pursuant to a Registration Statement
exceeds (i) the amount paid by such Holder for such Transfer Restricted
Securities and (ii) the amount of any damages that such Holder, its
directors, officers or any Person who controls such Holder has otherwise been
required to pay by reason of such untrue or alleged untrue statement or
omission or alleged omission or failure to comply with such Prospectus
delivery requirements as are applicable to it.
(c) In case any action shall be commenced involving any Person in
respect of which indemnity may be sought pursuant to Section 8(a) or 8(b) (the
"indemnified party"), the indemnified party shall promptly notify the person
-----------------
against whom such indemnity may be sought (the "indemnifying person") in
-------------------
writing and the indemnifying party shall assume the defense of such action,
including the employment of counsel reasonably satisfactory to the
indemnified party and the payment of all fees and expenses of such counsel,
as incurred (except that in the
- 17 -
<PAGE>
case of any action in respect of which indemnity may be sought pursuant to both
Sections 8(a) and 8(b), a Holder shall not be required to assume the defense of
such action pursuant to this Section 8(c), but may employ separate counsel and
participate in the defense thereof, but the fees and expenses of such counsel,
except as provided below, shall be at the expense of the Holder). Any
indemnified party shall have the right to employ separate counsel in any such
action and participate in the defense thereof, but the fees and expenses of such
counsel shall be at the expense of the indemnified party unless (i) the
employment of such counsel shall have been specifically authorized in writing by
the indemnifying party, (ii) the indemnifying party shall have failed to assume
the defense of such action or employ counsel reasonably satisfactory to the
indemnified party or (iii) the named parties to any such action (including any
impleaded parties) include both the indemnified party and the indemnifying
party, and the indemnified party shall have been advised by such counsel that
there may be one or more legal defenses available to it which are different from
or additional to those available to the indemnifying party (in which case the
indemnifying party shall not have the right to assume the defense of such
action on behalf of the indemnified party). In any such case, the
indemnifying party shall not, in connection with any one action or separate
but substantially similar or related actions in the same jurisdiction arising
out of the same general allegations or circumstances, be liable for the fees
and expenses of more than one separate firm of attorneys (in addition to any
local counsel) for all indemnified parties and all such fees and expenses
shall be reimbursed as they are incurred. Such firm shall be designated in
writing by a majority of the Holders, in the case of the parties indemnified
pursuant to Section 8(a), and by the Company in the case of parties
indemnified pursuant to Section 8(b). The indemnifying party shall indemnify
and hold harmless the indemnified party from and against any and all losses,
claims, damages, liabilities and judgments by reason of any settlement of any
action (i) effected with its written consent or (ii) effected without its
written consent if the settlement is entered into more than 20 Business Days
after the indemnifying party shall have received a request from the
indemnified party for reimbursement for the fees and expenses of counsel (in
any case where such fees and expenses are at the expense of the indemnifying
party) and, prior to the date of such settlement, the indemnifying party
shall have failed to comply with such reimbursement request. No
indemnifying party shall, without the prior written consent of the
indemnified party, effect any settlement or compromise of, or consent to the
entry of judgment with respect to, any pending or threatened action in
respect of which the indemnified party is or could have been a party and
indemnity or contribution may be or could have been sought hereunder by the
indemnified party, unless such settlement, compromise or judgment (i)
includes an unconditional release of the indemnified party from all liability
on claims that are or could have been the subject matter of such action and
(ii) does not include a statement as to or an admission of fault, culpability
or a failure to act, by or on behalf of the indemnified party.
(d) To the extent that the indemnification provided for in this
Section 8 is unavailable to an indemnified party in respect of any losses,
claims, damages, liabilities or judgments referred to therein, then each
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, liabilities or judgments (i) in such proportion
as is appropriate to reflect the relative benefits received by the Company, on
the one hand, and the
- 18 -
<PAGE>
Holders, on the other hand, from their sale of Transfer Restricted Securities or
(ii) if the allocation provided by clause 8(d)(i) is not permitted by applicable
law, in such proportion as is appropriate to reflect not only the relative
benefits referred to in clause 8(d)(i) above but also the relative fault of the
Company, on the one hand, and of the Holder, on the other hand, in connection
with the statements or omissions which resulted in such losses, claims, damages,
liabilities or judgments, as well as any other relevant equitable
considerations. The relative fault of the Company, on the one hand, and of the
Holder, on the other hand, 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 (A) information
supplied by the Company on the one hand, or by the Holder, on the other hand, or
(B) an untrue statement or alleged untrue statement or omission or alleged
omission therein that was corrected by the Prospectus and any Holder failed to
comply with such Prospectus delivery requirements as are applicable to it and
such loss, claim, damage, liability or judgment would not have arisen if such
Prospectus had been so delivered, and the parties' relative intent, knowledge,
access to information and opportunity to correct or prevent such statement or
omission. The amount paid or payable by a party as a result of the losses,
claims, damages, liabilities and judgments referred to above shall be deemed
to include, subject to the limitations set forth in the second paragraph of
Section 8(a), any legal or other fees or expenses reasonably incurred by such
party in connection with investigating or defending any action or claim.
The Company and each Holder agree that it would not be just and
equitable if contribution pursuant to this Section 8(d) were determined by
pro rata allocation (even if the Holders were treated as one entity for such
purpose) 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 judgments 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
matter. Notwithstanding the provisions of this Section 8, no Holder, its
directors, its officers or any Person, if any, who controls such Holder shall
be required to contribute, in the aggregate, any amount in excess of the
amount by which the total amount received by such Holder with respect to the
sale of Transfer Restricted Securities pursuant to a Registration Statement
exceeds (i) the amount paid by such Holder for such Transfer Restricted
Securities and (ii) the amount of any damages which such Holder has otherwise
been required to pay by reason of such untrue or alleged untrue statement or
omission or alleged omission or failure to comply with such Prospectus
delivery requirements as are applicable to it. No person guilty of
fraudulent misrepresentation (within the meaning of Section 11(f) of the Act)
shall be entitled to contribution from any person who was not guilty of such
fraudulent misrepresentation. The Holders' obligations to contribute
pursuant to this Section 8(c) are several in proportion to the respective
principal amount of Transfer Restricted Securities held by each Holder
hereunder and not joint.
- 19 -
<PAGE>
(e) The Company agrees that the indemnity and contribution provisions
of this Section 8 shall apply to Affiliated Market Makers to the same extent, on
the same conditions, as it applies to Holders.
SECTION 9. RULE 144A AND RULE 144
The Company agrees with each Holder, for so long as any Transfer
Restricted Securities remain outstanding and during any period in which the
Company (i) is not subject to Section 13 or 15(d) of the Exchange Act, to
make available, upon request of any Holder, to such Holder or beneficial
owner of Transfer Restricted Securities in connection with any sale thereof
and any prospective purchaser of such Transfer Restricted Securities
designated by such Holder or beneficial owner, the information required by
Rule 144A(d)(4) under the Act in order to permit resales of such Transfer
Restricted Securities pursuant to Rule 144A, and (ii) is subject to Section
13 or 15 (d) of the Exchange Act, to make all filings required thereby in a
timely manner in order to permit resales of such Transfer Restricted
Securities pursuant to Rule 144.
SECTION 10. MISCELLANEOUS
(a) Remedies. The Company acknowledges and agrees that any failure
--------
by it to comply with its obligations under Sections 3 and 4 hereof may result
in material irreparable injury to the Initial Purchasers or the Holders or
Affiliated Market Makers for which there is no adequate remedy at law, that
it will not be possible to measure damages for such injuries precisely and
that, in the event of any such failure, the Initial Purchasers or any Holder
or Affiliated Market Makers may obtain such relief as may be required to
specifically enforce the Company's obligations under Sections 3 and 4
hereof. The Company further agrees to waive the defense in any action for
specific performance that a remedy at law would be adequate.
(b) No Inconsistent Agreements. The Company will not, on or after
--------------------------
the date of this Agreement, enter into any agreement with respect to its
securities that is inconsistent with the rights granted to the Holders in this
Agreement or otherwise conflicts with the provisions hereof. Except as set
forth on Schedule A attached hereto, there are no agreements between the Company
and any Person granting such Person any registration rights with respect to its
securities. Except as set forth on Schedule A attached hereto, the rights
granted to the Holders hereunder do not conflict with the rights granted to
the holders of the Company's securities under any agreement in effect on the
date hereof.
(c) Amendments and Waivers. The provisions of this Agreement may not
----------------------
be amended, modified or supplemented, and waivers or consents to or departures
from the provisions hereof may not be given unless (i) in the case of Section
5 hereof and this Section 10(c)(i), the Company has obtained the written
consent of Holders of all outstanding Transfer Restricted Securities and (ii)
in the case of all other provisions hereof, the Company has obtained the
written consent of Holders of a majority of the outstanding principal amount
of Transfer Restricted Securities (excluding Transfer Restricted Securities
held by the Company or its Affiliates). Notwithstanding the foregoing, a
waiver or consent to departure from the provisions hereof that relates
exclusively to the rights of Holders whose Transfer Restricted Securities are
- 20 -
<PAGE>
being tendered pursuant to the Exchange Offer, and that does not affect
directly or indirectly the rights of other Holders whose Transfer Restricted
Securities are not being tendered pursuant to such Exchange Offer, may be
given by the Holders of a majority of the outstanding principal amount of
Transfer Restricted Securities subject to such Exchange Offer.
(d) Third Party Beneficiary. The Holders and Affiliated Market
-----------------------
Makers shall be third party beneficiaries to the agreements made hereunder
between the Company, on the one hand, and the Initial Purchasers, on the other
hand, and shall have the right to enforce such agreements directly to the extent
they may deem such enforcement necessary or advisable to protect its rights
or the rights of Holders and Affiliated Market Makers hereunder.
(e) Notices. All notices and other communications provided for or
-------
permitted hereunder shall be made in writing by hand-delivery, first-class
mail (registered or certified, return receipt requested), telex, telecopier,
or air courier guaranteeing overnight delivery:
(i) if to a Holder, at the address set forth on the records of the
Registrar under the Indenture, with a copy to the Registrar under the Indenture;
and
(ii) if to the Company:
PSINet Inc.
510 Huntmar Park Drive
Herndon, VA 20170-5100
Telecopier No.: (703) 904-9527
Attention: David N. Kunkel
Executive Vice President and General Counsel
With a copy to:
Nixon, Hargrave, Devans & Doyle LLP
437 Madison Avenue
New York, NY 10022
Telecopier No.: (212) 940-3111
Attention: Richard F. Langan, Jr.
All such notices and communications shall be deemed to have been
duly given: at the time delivered by hand, if personally delivered; five
Business Days after being deposited in the mail, postage prepaid, if mailed;
when receipt acknowledged, if telecopied; and on the next business day, if
timely delivered to an air courier guaranteeing overnight delivery.
Copies of all such notices, demands or other communications shall
be concurrently delivered by the Person giving the same to the Trustee at the
address specified in the Indenture.
Upon the date of filing of the Exchange Offer or a Shelf
Registration Statement, as the case may be, notice shall be delivered to
Donaldson, Lufkin & Jenrette Securities
- 21 -
<PAGE>
Corporation, on behalf of the Initial Purchasers (in the form attached hereto
as Exhibit A) and shall be addressed to: Attention: Louise Guarneri
(Compliance Department), 277 Park Avenue, New York, New York 10172.
(f) Successors and Assigns. This Agreement shall inure to the
----------------------
benefit of and be binding upon the successors and assigns of each of the
parties, including, without limitation and without the need for an express
assignment, subsequent Holders; provided, that nothing herein shall be deemed
to permit any assignment, transfer or other disposition of Transfer Restricted
Securities in violation of the terms hereof or of the Purchase Agreement or
the Indenture. If any transferee of any Holder shall acquire Transfer
Restricted Securities in any manner permitted by this Agreement, the Purchase
Agreement and the Indenture, whether by operation of law or otherwise, such
Transfer Restricted Securities shall be held subject to all of the terms of
this Agreement, the Purchase Agreement and the Indenture, and by taking and
holding such Transfer Restricted Securities, such Person shall be
conclusively deemed to have agreed to be bound by and to perform all of the
terms and provisions of this Agreement, the Purchase Agreement and the
Indenture, including the restrictions on resale set forth in this Agreement,
the Purchase Agreement and the Indenture, and such Person shall be entitled
to receive the benefits hereof.
(g) Counterparts. This Agreement may be executed in any number of
------------
counterparts and by the parties hereto in separate counterparts, each of
which when so executed shall be deemed to be an original and all of which
taken together shall constitute one and the same agreement.
(h) Headings. The headings in this Agreement are for convenience of
--------
reference only and shall not limit or otherwise affect the meaning hereof.
(i) Governing Law. THIS AGREEMENT SHALL BE GOVERNED BY AND CONSTRUED
-------------
IN ACCORDANCE WITH THE INTERNAL LAWS OF THE STATE OF NEW YORK, WITHOUT REGARD TO
THE CONFLICTS OF LAW RULES THEREOF.
(j) Severability. In the event that any one or more of the
------------
provisions contained herein, or the application thereof in any circumstance, is
held invalid, illegal or unenforceable, the validity, legality and
enforceability of any such provision in every other respect and of the remaining
provisions contained herein shall not be affected or impaired thereby.
(k) Entire Agreement. This Agreement is intended by the parties as
----------------
a final expression of their agreement and intended to be a complete and
exclusive statement of the agreement and understanding of the parties hereto in
respect of the subject matter contained herein. There are no restrictions,
promises, warranties or undertakings, other than those set forth or referred to
herein with respect to the registration rights granted with respect to the
Transfer Restricted Securities. This Agreement supersedes all prior agreements
and understandings between the parties with respect to such subject matter.
<PAGE>
IN WITNESS WHEREOF, the parties have executed this Agreement as
of the date first written above.
PSINET INC.
By: /s/ Edward D. Postal
-------------------------------
Name: Edward D. Postal
Title: Senior Vice President and
Chief Financial Officer
DONALDSON, LUFKIN & JENRETTE
SECURITIES CORPORATION
By: /s/ Jim Hann
-------------------------------
Name: Jim Hann
Title: Managing Director
CHASE SECURITIES INC.
By: /s/ Stephanie Cuskley
-------------------------------
Name: Stephanie Cuskley
Title: Managing Director
MORGAN STANLEY & CO. INCORPORATED
By: /s/ Gregory J. Attori
-------------------------------
Name: Gregory J. Attori
Title: Principal
- 23 -
<PAGE>
EXHIBIT A
NOTICE OF FILING OF
EXCHANGE OFFER REGISTRATION STATEMENT
To: Donaldson, Lufkin & Jenrette Securities Corporation
277 Park Avenue
New York, New York 10172
Attention: Louise Guarneri (Compliance Department)
Fax: (212) 892-7272
From: PSINet Inc.
11 1/2% Senior Notes due 2008
Date: ___, 199_
For your information only (NO ACTION REQUIRED):
Today, ______, 199_, we filed [an Exchange Registration
Statement/a Shelf Registration Statement] with the Securities and Exchange
Commission. We currently expect this registration statement to be declared
effective within __ business days of the date hereof.
Exhibit 10.2
FIRST AMENDMENT dated as of October 27, 1998
(this "Amendment"), to the Credit Agreement, dated
---------
as of September 29, 1998 (as amended, supplemented
or otherwise modified from time to time, the "Credit
------
Agreement"), among PSINET, INC., a corporation
---------
organized under the laws of the State of New York (the
"Borrower"), the several banks and other financial
--------
institutions and entities from time to time parties
thereto (the "Lenders"), THE CHASE MANHATTAN BANK, as
-------
administrative agent (the "Administrative Agent") for
--------------------
the Lenders, Fleet National Bank, as syndication agent
for the Lenders, and The Bank of New York as documentation
agent for the Lenders.
WHEREAS, pursuant to the Credit Agreement, the Lenders have
agreed to make certain loans to the Borrower; and
WHEREAS the Borrower has requested that certain provisions of the
Credit Agreement be modified in the manner provided for in this Amendment, and
the Lenders are willing to agree to such modifications as provided for in this
Amendment.
NOW, THEREFORE, the parties hereto hereby agree as follows:
1. Defined Terms. Capitalized terms used and not defined herein
--------------
shall have the meanings given to them in the Credit Agreement, as amended
hereby.
2. Amendments to the Credit Agreement.
-----------------------------------
(a) Section 1.01 of the Credit Agreement is hereby amended by:
(i) inserting after the definition of "Net Proceeds"
and before the definition of "Non Hostile Acquisition" the
following definition:
<PAGE>
2
"'1998 High Yield Notes' means the high yield notes
---------------------
issued by the Borrower in November 1998 on
substantially the terms described in the Preliminary
Offering Memorandum dated October 27, 1998, which do
not mature in whole or part, and in respect of which
no regularly scheduled amortization of principal is
required, earlier than the date which is six months
subsequent to the Maturity Date and which are in a
minimum aggregate principal amount of $200,000,000,
including the Indebtedness represented thereby and
refinancings of such Indebtedness; provided that
(i) any such refinancing Indebtedness shall not have
a greater outstanding principal amount, an earlier
maturity date, or a decreased weighted average life
than the 1998 High Yield Notes refinanced and
(ii) the proceeds of such refinancing Indebtedness
shall be used solely to repay the 1998 High Yield
Notes refinanced thereby and fees and expenses in
connection therewith";
(b) Section 5.13 of the Credit Agreement is amended by
inserting, immediately after the reference to "(a)" the following: "if
such Significant Subsidiary is not a Foreign Subsidiary,"
(c) Section 6.01 of the Credit Agreement is hereby amended
by:
(i) inserting, immediately after the reference to
"$750,000,000" in clause (B) of subsection (ix) thereof, the
following: "less the aggregate principal amount of the 1998 High
Yield Notes";
(ii) deleting the period at the end of subsection (xi)
thereof and substituting therefor "; and";
(iii) inserting the following after subsection 6.01(xi)
thereof:
"(xii) the 1998 High Yield Notes issued on terms
reasonably satisfactory to the Lenders with an aggregate
initial public offering price or purchase price not to
exceed $300,000,000; provided that the proceeds of such
1998 High Yield Notes shall be used by the Borrower to
finance the
<PAGE>
3
design, development, acquisition, construction or
improvement of real or personal property, tangible or
intangible (including, without limitation, IRUs), used or
to be used in connection with a Telecommunications
Business; provided that any proceeds not in excess of the
sum of (x) the difference between $150,000,000 and the
outstanding Revolving Exposure and (y) $50,000,000 and any
Indebtedness incurred pursuant to Section 6.01(vi)(y), can
be used for any lawful purpose."
(d) Section 6.08 of the Credit Agreement is hereby amended
by:
(i) deleting the period at the end of subsection (xv)
thereof and substituting therefor "; and";
(ii) inserting the following after subsection (x)(v):
"(xvi) the purchase of any of the Senior Notes or
1998 High Yield Notes pursuant to any offer to purchase
required to be made by the Borrower upon the occurrence of
a "Change of Control" (as defined in the Senior Note
Indenture or the indenture relating to the 1998 High Yield
Notes); provided that no such purchase shall be made
unless, immediately prior thereto, (x) all outstanding
Loans, accrued interest thereon and other amounts payable
under this Agreement have been paid in full and (y) all
outstanding Letters of Credit have been cash collateralized
in accordance with the provisions of Section 2.04(j)
(regardless of whether any demand for cash collateral has
been made thereunder)."
3. No Other Amendments; Confirmation. Except as expressly
----------------------------------
amended, waived, modified and supplemented hereby, the provisions of
the Credit Agreement are and shall remain in full force and effect.
4. Representations and Warranties. The Borrower hereby
-------------------------------
represents and warrants to the Administrative Agent and the Lenders as
of the date hereof as follows:
(a) No Default or Event of Default has occurred and is
continuing.
<PAGE>
4
(b) The execution, delivery and performance by the
Borrower of this Amendment have been duly authorized by all necessary
corporate and other action and do not and will not require any
registration with, consent or approval of, notice to or action by, any
person (including any governmental agency) in order to be effective and
enforceable. The Credit Agreement as amended by this Amendment
constitutes the legal, valid and binding obligation of the Borrower,
enforceable against it in accordance with its terms, subject only to
the operation of the Bankruptcy Code and other similar statutes for the
benefit of debtors generally and to the application of general
equitable principles.
(c) All representations and warranties of the Borrower
contained in the Credit Agreement (other than representations or
warranties expressly made only on and as of the Effective Date) are
true and correct as of the date hereof.
5. Effectiveness. This Amendment shall become effective
--------------
only upon the satisfaction in full of the following conditions
precedent:
(a) The Administrative Agent shall have received
counterparts hereof, duly executed and delivered by the Borrower and
the Required Lenders; and
(b) Prior to or contemporaneously with the closing of the
issuance and sale by the Borrower of the 1998 High Yield Notes, all
outstanding Revolving Loans shall have been prepaid in full.
6. Expenses. The Borrower agrees to reimburse the
---------
Administrative Agent for its out-of-pocket expenses in connection with
this Amendment, including the reasonable fees, charges and
disbursements of Cravath, Swaine & Moore, counsel for the
Administrative Agent.
7. Governing Law; Counterparts. (a) This Amendment and
----------------------------
the rights and obligations of the parties hereto shall be governed by,
and construed and interpreted in accordance with, the laws of the State
of New York.
(b) This Amendment may be executed by one or more of the
parties to this Amendment on any number of separate counterparts, and
all of said counterparts taken together shall be deemed to constitute
one and the same instrument.
<PAGE>
5
This Amendment may be delivered by facsimile transmission of the relevant
signature pages hereof.
IN WITNESS WHEREOF, the parties hereto have caused this
Amendment to be duly executed and delivered by their respective proper
and duly authorized officers as of the day and year first above written.
PSINET INC.
by
/s/ Edward D. Postal
-------------------------------
Name: Edward D. Postal
Title: Senior Vice President
and Chief Financial Officer
THE CHASE MANHATTAN BANK,
individually and as Administrative
Agent,
by
/s/ Mitchell J. Gervis
-------------------------------
Name: Mitchell J. Gervis
Title: Vice President
FLEET NATIONAL BANK,
individually and as Syndication
Agent,
by
/s/ Daniel G. Head, Jr.
-------------------------------
Name: Daniel G. Head, Jr.
Title: Senior Vice President
THE BANK OF NEW YORK,
individually and as Documentation
Agent,
by
/s/ Gerry Granovsky
----------------------------------
Name: Gerry Granovsky
Title: Vice President
