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) April 13, 1998
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
(Former name or former address, if changed since last report)
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Item 5. Other Events
On April 13, 1998, PSINet Inc. (the "Company") completed its previously
announced offering of $600 million aggregate principal amount of 10% Senior
Notes due 2005 (the "Notes"). The Notes were issued and sold to Donaldson,
Lufkin & Jenrette Securities Corporation, Merrill Lynch, Pierce, Fenner & Smith
Incorporated and Chase Securities Inc., as initial purchasers (the "Initial
Purchasers"), in reliance on Section 4(2) of the Securities Act of 1933, as
amended (the "Securities Act"), as a transaction by an issuer not involving any
public offering. The Initial Purchasers advised the Company that they resold the
Notes to persons whom the Initial Purchasers reasonably believed to be
"qualified institutional buyers" (as defined in Rule 144A under the Securities
Act) and to persons permitted to purchase the Notes in offshore transactions in
reliance on Regulation S under the Securities Act. In connection with the
offering, the Initial Purchasers had adequate access to information regarding
the Company, each of the Initial Purchasers made certain representations and
warranties to the Company, including, among others, that it was an "accredited
investor" (as defined in Rule 501 of Regulation D under the Securities Act) and
was not acquiring the Notes with a view to any distribution thereof in a
transaction that would violate the Securities Act, and appropriate legends
regarding the restricted nature of the Notes were affixed to the global
certificates representing the Notes.
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 February 15, 2005. Interest on the Notes will
be payable semi-annually on August 15 and February 15 of each year, commencing
August 15, 1998. The Notes will be redeemable at the option of the Company, in
whole or in part, at any time on or after February 15 of 2002, 2003 and 2004 at
105%, 102% 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 February 15, 2001, the Company may redeem up to 35% of the original
aggregate principal amount of the Notes at a redemption price of 110% 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 discounts and
commissions and expenses payable by the Company, were approximately $580.75
million. Concurrently with the closing of the offering, the Company deposited
$138.7 million of such net proceeds into an escrow account, which, together with
the proceeds of the investment thereof, will be sufficient to pay when due the
first five semi-annual interest payments on the Notes. Of the remaining net
proceeds of the offering, $20 million were used to repay certain indebtedness
and the balance are expected to be used to finance capital expenditures
(including, without limitation, facilities and
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equipment in connection with the development and expansion of the Company's
domestic and international network) and working capital requirements (including,
without limitation, debt service obligations) of the Company. 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.
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. The Notes have been rated B3 by Moody's Investors
Service and B- by Standard & Poor's.
Item 7. Financial Statements, Pro Forma Financial Information and Exhibits
(c) Exhibits
Exhibit 4.1 Indenture, dated as of April 13, 1998,
between PSINet Inc. and Wilmington Trust
Company, as trustee
Exhibit 4.2 Form of 10% Senior Note Due 2005, Series A
Exhibit 10.1 Registration Rights Agreement, dated as of
April 13, 1998, among PSINet Inc. and
Donaldson Lufkin & Jenrette Securities
Corporation, Merrill Lynch, Pierce, Fenner
& Smith Incorporated and Chase Securities
Inc.
Exhibit 10.2 Interest Escrow Agreement, dated as of
April 13, 1998, among PSINet Inc. and
Wilmington Trust Company, as escrow
agent, and Wilmington Trust Company, as
trustee
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SIGNATURES
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: April 22, 1998 PSINET INC.
By: /s/ Kathleen B. Horne
Kathleen B. Horne
Vice President
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EXHIBIT INDEX
Exhibit
Number Exhibit Name Location
------ ------------ --------
4.1 Indenture, dated as of April 13, 1998, 6
between PSINet Inc. and Wilmington
Trust Company, as trustee
4.2 Form of 10% Senior Note Due 2005, Series A 117
10.1 Registration Rights Agreement, dated as of 126
April 13, 1998, among PSINet Inc. and
Donaldson Lufkin & Jenrette Securities
Corporation, Merrill Lynch, Pierce,
Fenner & Smith Incorporated and Chase
Securities Inc.
10.2 Interest Escrow Agreement, dated as of 148
April 13, 1998, among PSINet Inc. and
Wilmington Trust Company, as escrow agent,
and Wilmington Trust Company, as trustee
Page 5 of 162
Exhibit 4.1
PSINET INC.
$600,000,000
10% SENIOR NOTES DUE 2005
-------
INDENTURE
Dated As Of April 13, 1998
-------
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 April 13, 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............12
SECTION 1.01. CONSTRUCTION...................................................12
SECTION 1.02. DEFINITIONS....................................................13
SECTION 1.03. COMPLIANCE CERTIFICATES AND OPINIONS...........................31
SECTION 1.04. FORM OF DOCUMENTS DELIVERED TO TRUSTEE.........................32
SECTION 1.05. ACTS OF HOLDERS................................................32
SECTION 1.06. NOTICES, ETC., TO THE TRUSTEE, THE COMPANY AND ANY
GUARANTOR......................................................33
SECTION 1.07. TO HOLDERS; WAIVER.............................................34
SECTION 1.08. CONFLICT WITH TRUST INDENTURE ACT..............................34
SECTION 1.09. EFFECT OF HEADINGS AND TABLE OF CONTENTS.......................34
SECTION 1.10. SUCCESSORS AND ASSIGNS.........................................34
SECTION 1.11. SEPARABILITY CLAUSE............................................35
SECTION 1.12. BENEFITS OF INDENTURE..........................................35
SECTION 1.13. GOVERNING LAW..................................................35
SECTION 1.14. LEGAL HOLIDAYS.................................................35
SECTION 1.15. INDEPENDENCE OF COVENANTS......................................35
SECTION 1.16. SCHEDULES AND EXHIBITS.........................................35
SECTION 1.17. COUNTERPARTS...................................................35
SECTION 1.18. NO ADVERSE INTERPRETATION OF OTHER AGREEMENTS..................35
SECTION 1.19. NO RECOURSE AGAINST OTHERS.....................................36
ARTICLE II NOTES FORMS.......................................................36
SECTION 2.01. FORMS GENERALLY................................................36
SECTION 2.02. FORM OF FACE OF NOTE...........................................37
ARTICLE III THE NOTES........................................................51
SECTION 3.01. TITLE AND TERMS................................................51
SECTION 3.02. DENOMINATIONS..................................................52
SECTION 3.03. EXECUTION, AUTHENTICATION, DELIVERY AND DATING.................52
SECTION 3.04. TEMPORARY NOTES................................................53
SECTION 3.05. REGISTRATION, REGISTRATION OF TRANSFER AND EXCHANGE............53
SECTION 3.06. BOOK ENTRY PROVISIONS FOR GLOBAL NOTES.........................55
SECTION 3.07. SPECIAL TRANSFER AND EXCHANGE PROVISIONS.......................56
SECTION 3.08. MUTILATED, DESTROYED, LOST AND STOLEN NOTES....................58
SECTION 3.09. PAYMENT OF INTEREST; INTEREST RIGHTS PRESERVED.................58
SECTION 3.10. CUSIP NUMBERS..................................................59
SECTION 3.11. PERSONS DEEMED OWNERS..........................................59
SECTION 3.12. CANCELLATION...................................................60
SECTION 3.13. COMPUTATION OF INTEREST........................................60
ARTICLE IV DEFEASANCE AND COVENANT DEFEASANCE................................60
SECTION 4.01. COMPANY'S OPTION TO EFFECT DEFEASANCE OR
COVENANT DEFEASANCE............................................60
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SECTION 4.02. DEFEASANCE AND DISCHARGE.......................................60
SECTION 4.03. COVENANT DEFEASANCE............................................61
SECTION 4.04. CONDITIONS TO DEFEASANCE OR COVENANT DEFEASANCE................61
SECTION 4.05. DEPOSITED MONEY AND U.S. GOVERNMENT OBLIGATIONS TO
BE HELD IN TRUST; OTHER MISCELLANEOUS PROVISIONS...............63
SECTION 4.06. REINSTATEMENT..................................................63
ARTICLE V REMEDIES...........................................................64
SECTION 5.01. EVENTS OF DEFAULT..............................................64
SECTION 5.02. ACCELERATION OF MATURITY; RESCISSION AND ANNULMENT.............65
SECTION 5.03. COLLECTION OF INDEBTEDNESS AND SUITS FOR ENFORCEMENT
BY TRUSTEE.................................... 66
SECTION 5.04. TRUSTEE MAY FILE PROOFS OF CLAIM...............................67
SECTION 5.05. TRUSTEE MAY ENFORCE CLAIMS WITHOUT POSSESSION OF NOTES.........68
SECTION 5.06. APPLICATION OF MONEY COLLECTED.................................68
SECTION 5.07. LIMITATION ON SUITS............................................68
SECTION 5.08. UNCONDITIONAL RIGHT OF HOLDERS TO RECEIVE PRINCIPAL,
PREMIUM AND INTEREST.......................... 69
SECTION 5.09. RESTORATION OF RIGHTS AND REMEDIES.............................69
SECTION 5.10. RIGHTS AND REMEDIES CUMULATIVE.................................69
SECTION 5.11. DELAY OR OMISSION NOT WAIVER...................................69
SECTION 5.12. CONTROL BY HOLDERS.............................................69
SECTION 5.13. WAIVER OF PAST DEFAULTS........................................70
SECTION 5.14. UNDERTAKING FOR COSTS..........................................70
SECTION 5.15. WAIVER OF STAY, EXTENSION OR USURY LAWS........................70
SECTION 5.16. REMEDIES SUBJECT TO APPLICABLE LAW.............................71
ARTICLE VI THE TRUSTEE.......................................................71
SECTION 6.01. DUTIES OF TRUSTEE..............................................71
SECTION 6.02. NOTICE OF DEFAULTS.............................................72
SECTION 6.03. CERTAIN RIGHTS OF TRUSTEE......................................72
SECTION 6.04. TRUSTEE NOT RESPONSIBLE FOR RECITALS, DISPOSITIONS
OF NOTES OR APPLICATION OF PROCEEDS THEREOF..... 73
SECTION 6.05. TRUSTEE AND AGENTS MAY HOLD NOTES; COLLECTIONS; ETC............73
SECTION 6.06. MONEY HELD IN TRUST............................................74
SECTION 6.07. COMPENSATION AND INDEMNIFICATION OF TRUSTEE AND ITS
PRIOR CLAIM.................................... 74
SECTION 6.08. CONFLICTING INTERESTS..........................................75
SECTION 6.09. TRUSTEE ELIGIBILITY............................................75
SECTION 6.10. RESIGNATION AND REMOVAL; APPOINTMENT OF SUCCESSOR
TRUSTEE.......................................... 75
SECTION 6.11. ACCEPTANCE OF APPOINTMENT BY SUCCESSOR.........................76
SECTION 6.12. MERGER, CONVERSION, CONSOLIDATION OR SUCCESSION TO
BUSINESS....................................... 77
SECTION 6.13. PREFERENTIAL COLLECTION OF CLAIMS AGAINST COMPANY..............77
ARTICLE VII HOLDERS' LISTS AND REPORTS BY TRUSTEE AND COMPANY................77
SECTION 7.01. COMPANY TO FURNISH TRUSTEE NAMES AND ADDRESSES OF
HOLDERS. THE COMPANY WILL FURNISH OR CAUSE TO BE
FURNISHED TO THE TRUSTEE.......................................77
SECTION 7.02. DISCLOSURE OF NAMES AND ADDRESSES OF HOLDERS...................78
SECTION 7.03. REPORTS BY TRUSTEE.............................................78
SECTION 7.04. REPORTS BY COMPANY.............................................78
ARTICLE VIII CONSOLIDATION, MERGER, SALE OF ASSETS...........................79
SECTION 8.01. COMPANY AND GUARANTORS MAY CONSOLIDATE, ETC.,
ONLY ON CERTAIN TERMS................................ 79
SECTION 8.02. SUCCESSOR SUBSTITUTED..........................................80
ARTICLE IX SUPPLEMENTAL INDENTURES...........................................80
SECTION 9.01. SUPPLEMENTAL INDENTURES AND AGREEMENTS WITHOUT
CONSENT OF HOLDERS.................................. 80
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SECTION 9.02. SUPPLEMENTAL INDENTURES AND AGREEMENTS WITH
CONSENT OF HOLDERS..................................... 81
SECTION 9.03. EXECUTION OF SUPPLEMENTAL INDENTURES AND AGREEMENTS............82
SECTION 9.04. EFFECT OF SUPPLEMENTAL INDENTURES..............................82
SECTION 9.05. CONFORMITY WITH TRUST INDENTURE ACT............................83
SECTION 9.06. REFERENCE IN NOTES TO SUPPLEMENTAL INDENTURES..................83
SECTION 9.07. NOTICE OF SUPPLEMENTAL INDENTURES..............................83
ARTICLE X COVENANTS..........................................................83
SECTION 10.01. PAYMENT OF PRINCIPAL, PREMIUM AND INTEREST....................83
SECTION 10.02. MAINTENANCE OF OFFICE OR AGENCY...............................83
SECTION 10.03. MONEY FOR NOTE PAYMENTS TO BE HELD IN TRUST...................84
SECTION 10.04. CORPORATE EXISTENCE...........................................85
SECTION 10.05. PAYMENT OF TAXES AND OTHER CLAIMS.............................85
SECTION 10.06. MAINTENANCE OF PROPERTIES.....................................85
SECTION 10.07. MAINTENANCE OF INSURANCE......................................86
SECTION 10.08. LIMITATION ON INDEBTEDNESS....................................86
SECTION 10.09. LIMITATION ON RESTRICTED PAYMENTS.............................88
SECTION 10.10. LIMITATION ON TRANSACTIONS WITH AFFILIATES....................91
SECTION 10.11. LIMITATION ON LIENS...........................................92
SECTION 10.12. LIMITATION ON SALE OF ASSETS..................................92
SECTION 10.13. LIMITATION ON ISSUANCES OF GUARANTEES OF INDEBTEDNESS.........93
SECTION 10.14. PURCHASE OF NOTES UPON A CHANGE OF CONTROL....................94
SECTION 10.15. LIMITATION ON SALE-LEASEBACK TRANSACTIONS.....................96
SECTION 10.16. LIMITATION ON ISSUANCE AND SALE OF SUBSIDIARY CAPITAL
STOCK....................................... 97
SECTION 10.17. LIMITATION ON DIVIDENDS AND OTHER PAYMENT
RESTRICTIONS AFFECTING SUBSIDIARIES.................... 97
SECTION 10.18. LIMITATIONS ON UNRESTRICTED SUBSIDIARIES......................98
SECTION 10.19. PROVISION OF FINANCIAL STATEMENTS.............................98
SECTION 10.20. STATEMENT BY OFFICERS AS TO DEFAULT...........................99
SECTION 10.21. WAIVER OF CERTAIN COVENANTS...................................99
SECTION 10.22. LIMITATION ON BUSINESS........................................99
SECTION 10.23. DEPOSIT OF FUNDS WITH ESCROW AGENT............................99
ARTICLE XI REDEMPTION OF NOTES..............................................100
SECTION 11.01. RIGHTS OF REDEMPTION.........................................100
SECTION 11.02. APPLICABILITY OF ARTICLE.....................................100
SECTION 11.03. ELECTION TO REDEEM; NOTICE TO TRUSTEE........................100
SECTION 11.04. SELECTION BY TRUSTEE OF NOTES TO BE REDEEMED.................100
SECTION 11.05. NOTICE OF REDEMPTION.........................................101
SECTION 11.06. DEPOSIT OF REDEMPTION PRICE..................................101
SECTION 11.07. NOTES PAYABLE ON REDEMPTION DATE.............................102
SECTION 11.08. NOTES REDEEMED IN PART.......................................102
ARTICLE XII SATISFACTION AND DISCHARGE......................................102
SECTION 12.01. SATISFACTION AND DISCHARGE OF INDENTURE......................102
SECTION 12.02. APPLICATION OF TRUST MONEY...................................103
ARTICLE XIII COLLATERAL AND SECURITY........................................103
SECTION 13.01. ESCROW AGREEMENT.............................................103
SECTION 13.02. RECORDING AND OPINIONS.......................................104
SECTION 13.03. RELEASE OF COLLATERAL........................................104
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SECTION 13.04. AUTHORIZATION OF ACTIONS TO BE TAKEN BY THE TRUSTEE
UNDER THE ESCROW AGREEMENT................................105
SECTION 13.05. AUTHORIZATION OF RECEIPT OF FUNDS BY THE TRUSTEE UNDER
THE ESCROW AGREEMENT.........................................105
SECTION 13.06. TERMINATION OF SECURITY INTEREST.............................105
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INDENTURE, dated as of April 13, 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 $600,000,000
aggregate principal amount of its 10% Senior Notes due 2005 ("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;
(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
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(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 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
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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, 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 or "A-1" (or higher)
according to Standard & Poor's Corporation ("S&P") or any successor rating
agency,
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(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 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.
"Collateral" has the meaning provided in the Escrow Agreement.
"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.
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"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.
"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, 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
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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 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 the original issue date of the Notes 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 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
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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 Depositary 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 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.
"Escrow Account" means the "Interest Escrow Account" as
defined in the Escrow Agreement.
"Escrow Agent" means Wilmington Trust Company, as escrow agent
under the Escrow Agreement and includes any subcustodian appointed by Wilmington
Trust Company under the Escrow Agreement, until a successor replaces it in
accordance with the provisions of the Escrow Agreement and thereafter means such
successor.
"Escrow Agreement" means the Interest Escrow Agreement dated
as of April 13, 1998 among the Company, the Escrow Agent and the Trustee.
"Escrow Funds" has the meaning specified in the Escrow
Agreement.
"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.
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"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 (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.
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"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 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, Merrill Lynch, Pierce, Fenner & Smith Incorporated and
Chase Securities Inc.
"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 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
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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.
"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
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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 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
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 the date of the Indenture 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
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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:
(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
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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;
and
(e) any Lien arising from judgments, decrees or
attachments in circumstances not constituting an Event of Default;
(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 or the
Escrow Agreement;
(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.
(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 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.
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"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.
"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.
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"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 April 13, 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 February 1 or August 1 (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.
"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.
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"Shelf Registration Statement" has the meaning set forth in
Section 4 of the Registration Rights Agreement.
"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 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, 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.
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"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.
"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
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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 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.
"U.S. Government Securities" means securities that are direct
obligations of the United States of America, the payment of which its full faith
and credit is pledged.
"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
"Defeased Notes"............................................. 4.01
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Term Defined in Section
- ---- ------------------
"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 Securities"................................. 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.
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
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(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 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
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(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.
(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:
(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
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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. 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.
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.
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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.
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.
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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 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 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.
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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:
(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
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<PAGE>
(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 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 DEPOSITARY 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.
-------------------
10% SENIOR NOTE DUE 2005, 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 February 15, 2005, at the office or agency of the
Company referred to below, and to pay interest thereon from April 13, 1998, or
from the most recent Interest Payment Date to which interest has
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been paid or duly provided for, semiannually on August 15 and February 15, in
each year, commencing August 15, 1998 at the rate of 10% 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 April 13, 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 10% Senior Notes due 2005, 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.
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 August 1 or February 1 (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
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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.
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
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<PAGE>
TRUSTEE'S CERTIFICATE OF AUTHENTICATION
This is one of the 10% Senior Notes due 2005, 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: [_].
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]
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<PAGE>
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 DEPOSITARY 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 42 of 162
<PAGE>
PSINET INC.
------------------
10% SENIOR NOTE DUE 2005, 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 February 15, 2005, at the office or agency of the Company
referred to below, and to pay interest thereon from April 13, 1998, or from the
most recent Interest Payment Date to which interest has been paid or duly
provided for, semiannually on August 15 and February 15 in each year, commencing
August 15, 1998 at the rate of 10% 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 10% Senior Notes due 2005, 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 August 1 or February 1 (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,
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<PAGE>
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.
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 10% Senior Notes due 2005, Series B
referred to in the within-mentioned Indenture.
WILMINGTON TRUST COMPANY
as Trustee
By: _______________________________
Authorized Signer
Dated:
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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]
Form of Reverse of Notes.
The form of the reverse of the Series A Notes shall be
substantially as follows:
PSINET INC.
10% Senior Note due 2005, Series A
This Note is one of a duly authorized issue of Notes of the
Company designated as its 10% Senior Notes due 2005, Series A (herein called the
"Notes"), limited (except as otherwise provided in the Indenture referred to
below) in aggregate principal amount to $600,000,000, issued under, entitled to
the benefits of and subject to the terms of an indenture (herein called the
"Indenture") dated as of April 13, 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
February 15, 2002, 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
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percentages of the principal amount), if redeemed during the 12-month period
beginning February 15 of the years indicated below:
Redemption
Year Price
---- ---------
2002 105.0%
2003 102.5%
2004 100.0%
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 February 15, 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 110.0% 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 Regular Record Date or Special Record Date
referred to on the face hereof. Notes (or portions thereof) for whose redemption
and payment
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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 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
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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 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.
10% Senior Note due 2005, Series B
This Note is one of a duly authorized issue of Notes of the
Company designated as its 10% Senior Notes due 2005, Series B (herein called the
"Notes"), limited (except as otherwise provided in the Indenture referred to
below) in aggregate principal amount to $600,000,000, issued under, entitled to
the benefits of and subject to the terms of an indenture (herein called the
"Indenture") dated as of April 13, 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.
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The Notes are subject to redemption at any time on or after
February 15, 2002, 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 February 15 of the years indicated below:
Redemption
Year Price
---- ----------
2002 105.0%
2003 102.5%
2004 100.0%
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 February 15, 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 110.0% 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 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.
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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 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).
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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 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 $600,000,000 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 "10% Senior
Notes due 2005" of the Company. The Stated Maturity of the Notes shall be
February 15, 2005, and the Notes shall each bear interest at the rate of 10% per
annum, as such interest rate may be adjusted as set forth in the Notes, from
April 13, 1998, or from the most recent Interest Payment Date to which interest
has been paid, payable semiannually on August 15 and February 15 in each year,
commencing August 15, 1998, 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.
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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.
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
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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 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.
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
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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 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.
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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 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 Trustee shall be entitled to
rely upon any order, direction or request of the Depositary or its authorized
representative which is given or
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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).
(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).
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(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;
(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
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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.
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 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:
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(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.
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.
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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.
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.
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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 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, 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 February 15, 2002 (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 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
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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;
(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
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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.
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 Securities 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 Escrow Agreement, 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 $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
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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) 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 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); or
(j) the Company challenges the Lien on the Collateral
under the Escrow Agreement prior to such time as the Collateral is to be
released to the Company, or the Escrow Agreement becomes, or the Company asserts
that the Escrow Agreement is, invalid or unenforceable, otherwise than in
accordance with its terms.
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
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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:
(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 cover the costs and expenses of collection, including the
reasonable compensation, expenses, disbursements and advances of the Trustee,
its agents and counsel.
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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, the Escrow Agreement 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 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
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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
the Escrow Agreement or otherwise on behalf of the Holders or the Trustee
pursuant to this Article or the Escrow Agreement or through any proceeding or
any arrangement or restructuring in anticipation or in lieu of any proceeding
contemplated by this Article or the Escrow Agreement 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 and to the Escrow Agent pursuant to the Escrow Agreement;
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, the Trustee and the Escrow Agent 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
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(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.
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.
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
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(a) such direction shall not be in conflict with any rule
of law or with this Indenture (including, without limitation, Section 5.07), the
Escrow Agreement or any Guarantee, expose the Trustee to personal 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 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.
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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.
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 or the Escrow Agreement. However, the Trustee
shall examine the certificates and opinions to determine whether or not they
conform to the requirements of this Indenture or the Escrow Agreement;
(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 fo 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;
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(d) no provision of this Indenture or the Escrow
Agreement 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 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 or a Default in complying with any of
the provisions of the Escrow Agreement, 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;
(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 or the Escrow
Agreement at the request or direction of any of the Holders
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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 shal 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
(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, the Escrow Agreement 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 and
the Escrow Agreement, 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
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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. The Escrow Agent shall have the same rights as the Trustee
under this Section 6.05.
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
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,
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.
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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 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,
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(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 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
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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 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.
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
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(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 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
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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 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, the Escrow Agreement and the Registration Rights Agreement, as
the case may be, and the Notes, this Indenture, the Escrow Agreement 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;
(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, the Escrow Agreement 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, 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, the Escrow 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;
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(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.
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
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(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;
(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;
(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; or
(g) modify the provisions of the Escrow Agreement or
this Indenture relating to the Collateral in any manner adverse to the Holders
or release any of the Collateral from the Lien under the Escrow Agreement (other
than in accordance with its terms) or permit any other obligation to be secured
by the Collateral.
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 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
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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:
(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
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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.
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 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
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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, 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 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 the date of the Indenture (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
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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;
(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 the Indenture 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.
(c) For purposes of determining any particular amount of Indebtedness
under this covenant, Guarantees, Liens or obligations with respect to letters
ofcredit supporting Indebtedness
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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;
(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 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 the date of the date hereof,
does not exceed the sum of the following:
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(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 the date of the original issue of the Notes 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 the date of this Indenture 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 the date of this Indenture 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 the date of this Indenture, the aggregate of Net
Cash Proceeds from their original issuance; and
(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 (vi) 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;
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(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, 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 the date of the Indenture (including any shares
of Series B Preferred Stock issued on or after the date of the Indenture as
dividends thereon or in respect of such additional shares so issued) pursuant to
the terms of such shares of Series B Preferred Stock 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 the date of the Indenture 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
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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 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
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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 the date
hereof (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).
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
"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
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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 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 paragraph (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.
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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;
(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.
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(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 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 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;
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(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.
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 wil 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).
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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 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
(iii) in any agreement, instrument or indenture
governing or relating to Indebtedness in respect of any Permitted Credit
Facility;
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(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 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.
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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 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.
Section 10.23 Deposit of Funds with Escrow Agent.
(a) On the Issue Date, the Company shall deposit with the
Escrow Agent funds in the amount of $138,700,000. All Collateral shall be held
in the Escrow Account until permitted to be disbursed pursuant to the Escrow
Agreement and then shall be disbursed strictly in accordance with the terms
thereof.
(b) Pending release of the Escrow Funds as provided in
the Escrow Agreement, the Escrow Funds will be invested in U.S. Government
Securities or temporarily in Cash Equivalents, of the type referred to in
clauses (ii) and (iv) of the definition thereof, as specifically directed in
writing by the Company. Any interest or other profit resulting from such
investment will be deposited in the Escrow Account.
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ARTICLE XI
Redemption of Notes
Section 11.01. Rights of Redemption.
(a) The Notes are subject to redemption at any time
on or after February 15, 2002, 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 prior to February 15, 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 110.0% of the of the 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 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
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<PAGE>
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.
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, 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
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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.
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
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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
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.
ARTICLE XII
Collateral and Security
Section 13.01. Escrow Agreement.
The due and punctual payment of the first five scheduled
interest payments on the Notes, when and as the same shall be due and payable on
an Interest Payment Date or by acceleration shall be secured as provided in the
Escrow Agreement which the Company, the Escrow Agent and the Trustee have
entered into simultaneously with the execution of this Indenture. Upon the
acceleration of the Maturity of the Notes prior to the payment in full of the
first five scheduled interest payments, the Escrow Agent shall, upon the receipt
of written notice from the Trustee, as agent for the Trustee, foreclose upon the
Collateral. Each Holder of Notes, by its acceptance thereof, consents and agrees
to the terms of the Escrow Agreement (including, without limitation, the
provisions providing for foreclosure and
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disbursement of Collateral) as the same may be in effect or may be amended from
time to time in accordance with its terms and the terms hereof and authorizes
and directs the Escrow Agent and the Trustee to enter into the Escrow Agreement
and to perform its obligations and exercise its rights thereunder in accordance
therewith. The Company shall deliver to the Trustee copies of the Escrow
Agreement, and shall do or cause to be done all such acts and things as may be
necessary or proper, or as may be required by the provisions of the Escrow
Agreement, to assure and confirm to the Trustee the security interest in the
Collateral contemplated by the Escrow Agreement or any part thereof, as from
time to time constituted, so as to render the same available for the security
and benefit of this Indenture with respect to, and of, the Notes, according to
the intent and purposes expressed in the Escrow Agreement. The Company shall
take any and all actions reasonably required to cause the Escrow Agreement to
create and maintain (to the extent possible under applicable law), as security
for the obligations of the Company hereunder, a security interest in and on all
the Collateral, in favor of the Trustee, for the benefit of the Holders of
Notes. Neither the Escrow Agent nor the Trustee shall have any responsibility
for perfecting or maintaining the perfection of the Trustee's security interest
in the Collateral or for filing any instrument, document or notice in any public
office at any time or times.
Section 13.02. Recording and Opinions.
(a) The Company shall furnish to the Trustee
simultaneously with the execution and delivery of this Indenture an Opinion of
Counsel either (i) stating that in the opinion of such counsel all action has
been taken or such action which is required to be taken with respect to the
recording, registering and filing of this Indenture, financing statements or
other instruments necessary to make effective a security interest in favor of
the Trustee for the benefit of the Holders of the Notes, or (ii) stating that in
the opinion of such counsel no such action is necessary to make such security
interest effective.
(b) To the extent, if any, Section 314(b) of the Trust
Indenture Act is applicable, the Company shall furnish to the Trustee on each
anniversary of the Issue Date (upon receipt of written notice from Escrow Agent)
until the date upon which the balance of Escrow Funds shall have been reduced to
zero, an Opinion of Counsel, dated as of such date, complying in all respects
with Section 314(b) of the Trust Indenture Act.
Section 13.03. Release of Collateral.
(a) Subject to subsections (b), (c) and (d) of this
Section 13.03, the Collateral may be released from the security interest created
by the Escrow Agreement only in accordance with the provisions of the Escrow
Agreement.
(b) Except to the extent that any security interest
on proceeds of Collateral is automatically released by operation of Section
9-306 of the Uniform Commercial Code or other similar law, no Collateral shall
be released from the security interest created by the Escrow Agreement pursuant
to the provisions of the Escrow Agreement, other than as provided in the Escrow
Agreement.
(c) At any time when an Event of Default shall have
occurred and be continuing and the Maturity of the Notes shall have been
accelerated (whether by declaration or otherwise), no Collateral shall be
released pursuant to the provisions of the Escrow Agreement, and no release of
Collateral in contravention of this Section 13.03(c) shall be effective as
against the Holders of Notes, except for the disbursement of all Escrow Funds
(as defined in the Escrow Agreement) and other Collateral to the Trustee
pursuant to Section 6(b)(iv) of the Escrow Agreement.
Page 104 of 162
<PAGE>
(d) To the extent, if any, applicable, the Company shall
cause Section 314(d) of the Trust Indenture Act, relating to the release of
property or securities from the security interest of the Escrow Agreement, to be
complied with.
Section 13.04. Authorization of Actions to Be Taken by the
Trustee Under the Escrow Agreement.
Subject to the provisions of Section 6.01 and Section 6.03,
the Trustee may, without the consent of the Holders of Notes, on behalf of the
Holders of Notes, take all actions it deems necessary or appropriate in order to
(a) enforce any of the terms of the Escrow Agreement and (b) collect and receive
any and all amounts payable in respect of the obligations of the Company
hereunder. The Trustee shall have power to institute and maintain such suits and
proceedings as it may deem expedient to prevent any impairment of the Collateral
by any acts that may be unlawful or in violation of the Escrow Agreement or this
Indenture, and such suits and proceedings as the Trustee may deem expedient to
preserve or protect its interests and the interests of the Holders of Notes and
the Escrow Agent in the Collateral (including power to institute and maintain
suits or proceedings to restrain the enforcement of or compliance with any
legislative or other governmental enactment, rule or order that may be
unconstitutional or otherwise invalid if the enforcement of, or compliance with,
such enactment, rule or order would impair the security interest hereunder or be
prejudicial to the interests of the Holders of Notes or of the Trustee).
Section 13.05. Authorization of Receipt of Funds by the
Trustee Under the Escrow Agreement.
The Trustee is authorized to receive any funds for the benefit
of the Holders of Notes disbursed under the Escrow Agreement, and to make
further distributions of such funds to the Holders of Notes according to the
provisions of this Indenture.
Section 13.06. Termination of Security Interest.
Upon the earliest to occur of (i) the date upon which the
balance of Escrow Funds and other Collateral shall have been reduced to zero,
(ii) the payment of the first five scheduled interest payments on the Notes,
(iii) legal defeasance of all Outstanding Notes pursuant to Section 4.02 and
(iv) covenant defeasance of all Outstanding Notes pursuant to Section 4.03, the
Trustee shall, at the written request of the Company, release the security
interest in the Collateral pursuant to this Indenture and the Escrow Agreement
upon the Company's compliance with the provisions of the Trust Indenture Act
pertaining to release of collateral.
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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.
Attest: /s/ David N. Kunkel By: /s/ Edward D. Postal
Secretary Name: Edward D. Postal
Title: Senior Vice President and
Chief Financial Officer
WILMINGTON TRUST COMPANY
Attest: /s/ Roseline K. Maney By: /s/ Bruce L. Bisson
Asst. Secretary Name: Bruce L. Bisson
Title: Vice President
Page 106 of 162
<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: 10% Senior Notes due 2005 of PSINet Inc. (the "Notes")
Reference is made to the Indenture, dated as of April 13, 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:
(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
A-1
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<PAGE>
(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
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.
A-2
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<PAGE>
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 109 of 162
<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: 10% Senior Notes due 2005 of PSINet Inc. (the "Notes")
Reference is made to the Indenture, dated as of April 13, 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:
(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
B-1
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<PAGE>
(2) Rule 144 Transfers. If the transfer is being effected
pursuant to Rule 144:
(A) the transfer is occurring after a holding
period of at least one year (computed in accordance with paragraph (d) of Rule
144) has elapsed since the Specified Notes were 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.)
B-2
Page 111 of 162
<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: 10% Senior Notes due 2005 of PSINet Inc. (the "Notes")
Reference is made to the Indenture, dated as of April 13, 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 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:
C-1
Page 112 of 162
<PAGE>
(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 113 of 162
<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 April 13, 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.
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
Page 114 of 162
<PAGE>
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
Page 115 of 162
<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]
Page 116 of 162
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 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
Page 117 of 162
<PAGE>
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 DEPOSITARY 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 118 of 162
<PAGE>
PSINET INC.
-------------------
10% SENIOR NOTE DUE 2005, 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 February 15, 2005, at the office or agency of the
Company referred to below, and to pay interest thereon from April 13, 1998, or
from the most recent Interest Payment Date to which interest has been paid or
duly provided for, semiannually on August 15 and February 15, in each year,
commencing August 15, 1998 at the rate of 10% 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 April 13, 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 10% Senior Notes due 2005, 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"), to the extent
permitted by applicable law, 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. To the extent permitted by law, 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
Page 119 of 162
<PAGE>
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 August 1 or February 1 (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.
Page 120 of 162
<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 10% Senior Notes due 2005, Series A
referred to in the within-mentioned Indenture.
WILMINGTON TRUST COMPANY,
as Trustee
By: _________________________________
Authorized Signer
Dated:
Page 121 of 162
<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: __________________________________
Page 122 of 162
<PAGE>
(Back of Note)
PSINET INC.
10% Senior Note due 2005, Series A
This Note is one of a duly authorized issue of Notes of the
Company designated as its 10% Senior Notes due 2005, Series A (herein called the
"Notes"), limited (except as otherwise provided in the Indenture referred to
below) in aggregate principal amount to $600,000,000, issued under, entitled to
the benefits of and subject to the terms of an indenture (herein called the
"Indenture") dated as of April 13, 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
February 15, 2002, 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 February 15 of the years indicated below:
Redemption
Year Pric
---- ----------
2002 105.0%
2003 102.5%
2004 100.0%
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 February 15, 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 110.0% 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.
Page 123 of 162
<PAGE>
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, 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 purchase the 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 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.
Page 124 of 162
<PAGE>
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.
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 LAWS
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.]
Page 125 of 162
Exhibit 10.1
REGISTRATION RIGHTS AGREEMENT
Dated as of April 13, 1998
by and among
PSINet Inc.
and
Donaldson, Lufkin & Jenrette Securities
Corporation, Merrill Lynch & Co.,
Chase Securities Inc.
Page 126 of 162
<PAGE>
This Registration Rights Agreement (this "Agreement") is made
and entered into as of April 13, 1998, by and among PSINet Inc., a New York
corporation (the "Company"), and Donaldson, Lufkin & Jenrette Securities
Corporation, Merrill Lynch, Pierce, Fenner & Smith Incorporated and Chase
Securities Inc. (each an "Initial Purchaser" and, collectively, the "Initial
Purchasers"), each of whom has agreed to purchase the Company's 10% Senior Notes
due 2005 (the "Notes") pursuant to the Purchase Agreement (as defined below).
This Agreement is made pursuant to the Purchase Agreement,
dated April 13, 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 April 13,
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:
ARTICLE XIV
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 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.
Page 127 of 162
<PAGE>
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 10% Senior Notes due 2005
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.
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.
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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).
ARTICLE XV
HOLDERS
A Person is deemed to be a holder of Transfer Restricted
Securities (each, a "Holder") whenever such Person owns Transfer Restricted
Securities.
ARTICLE XVI
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 45 days after the Closing Date (such
45th 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 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
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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.
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.
ARTICLE XVII
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
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(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").
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
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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
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.
ARTICLE XVIII
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.
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ARTICLE XIX
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 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.
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(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 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
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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 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
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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 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;
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(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;
(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:
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:
Section 19.02. 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;
Section 19.03. 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 stated therein or necessary to make the
statements therein not misleading, or that the
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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 Section
19.04. 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
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 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
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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 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.
ARTICLE XX
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
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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.
ARTICLE XXI
INDEMNIFICATION
(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
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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 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.
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(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 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.
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(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.
ARTICLE XXII
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.
ARTICLE XXIII
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 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.
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(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
Senior 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 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
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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.
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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/ Ronald F. Zampolin
Name: Ronald F. Zampolin
Title: Vice President
MERRILL LYNCH, PIERCE,
FENNER & SMITH INCORPORATED
By: /s/ Joseph B. Sheehan
Name: Joseph B. Sheehan
Title: Director
CHASE SECURITIES INC.
By: /s/ Kristen B. Selvala
Name: Kristen B. Selvala
Title: Vice President
Page 146 of 162
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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.
10% Senior Notes due 2005
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.
Page 147 of 162
Exhibit 10.2
INTEREST ESCROW AGREEMENT
Among
WILMINGTON TRUST COMPANY
(as "Escrow Agent" and "Trustee")
and
PSINET Inc.
("Company")
April 13, 1998
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INTEREST ESCROW AGREEMENT
INTEREST ESCROW AGREEMENT ("Agreement"), dated as of April 13,
1998 by and among WILMINGTON TRUST COMPANY, a Delaware banking corporation,
escrow agent (together with any Subcustodian (as defined below), "Escrow Agent")
and as trustee for the benefit of the holders of the Notes (as defined below)
under the Indenture (as defined below) (the "Trustee"), and PSINET INC., a New
York corporation (the "Company").
RECITALS
A. Pursuant to that certain Indenture dated as of
April 13, 1998, by and among the Company and the Trustee (the
"Indenture"), the Company has issued $600,000,000 aggregate
principal amount of its 10% Senior Notes due 2005 (together
with the notes issued in connection with the Exchange Offer,
the "Notes").
B. The parties are entering into this Agreement to
set forth the conditions upon which, and the manner in which,
funds will be disbursed from the Interest Escrow Account to be
established pursuant to this Agreement and released from the
security interest and lien described in Section 6(a) of this
Agreement.
AGREEMENT
NOW, THEREFORE, for good and valuable consideration, the
receipt and sufficiency of which are hereby acknowledged, the parties hereto
agree as follows:
1. Defined Terms. Capitalized terms used herein but not defined herein
shall have the meaning given in the Indenture. In addition to any other defined
terms used herein, the following terms shall constitute defined terms for
purposes of this Agreement and shall have the meanings set forth below:
"Acceptable Replacement Escrow Agent" means a corporation
organized and doing business under the laws of the United States of America or
of any state thereof authorized under such laws to exercise corporate trustee
power, subject to supervision or examination by federal or state authority and
having a combined capital and surplus of at least $100 million as set forth in
its most recent published annual report of condition.
"Affiliates" means, as applied to any Person, any other Person
directly or indirectly controlling, controlled by, or under direct or indirect
common control with, such Person. For purposes of this definition, "control"
(including, with correlative meanings, the terms "controlling," "controlled by"
and "under common control with"), as applied to any Person, means the
possession, directly or indirectly, of the power to direct or cause the
direction of the management and policies of such Person, whether through the
ownership of voting securities, by contract or otherwise.
"Available Funds" means (A) the sum of (i) the Initial Escrow
Amount and (ii) interest and other amounts earned, if any, or dividends paid on
the funds in the Interest Escrow Account (including holdings of U.S. Government
Securities), less (B) the aggregate disbursements previously made pursuant to
this Agreement.
"Collateral" hall have the meaning given in Section 6(a)
hereof.
"Escrow Agent" has the meaning set forth in Section 2(a)
hereof.
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"Escrow Account Statement" shall have the meaning given in
Section 2(g).
"Initial Escrow Amount" means $138.7 million.
"Interest Escrow Account" means the escrow account established
pursuant to Section 2.
"Issue Date" means April 13, 1998.
"Payment Notice and Disbursement Request" means a notice sent
by the Trustee to the Escrow Agent requesting a disbursement of funds from the
Interest Escrow Account, in substantially the form of Exhibit A hereto. Each
Payment Notice and Disbursement Request shall be signed by an officer of the
Trustee.
"U.S. Government Securities" mean securities that are direct
obligations of the United States of America, the payment of which its full faith
and credit is pledged.
2. Interest Escrow Account, Escrow Agent.
(a) Appointment of Escrow Agent. The Trustee and the Company hereby
appoint Wilmington Trust Company, and Wilmington Trust Company hereby accepts
appointment, as escrow agent (the "Escrow Agent") under the terms and conditions
of this Agreement. The term "Escrow Agent" shall be deemed to include any
successor to, or Subcustodian located in the State of New York ("Subcustodian")
appointed by, the Escrow Agent.
(b) Establishment of Interest Escrow Account.
(i) Concurrently with the execution and delivery hereof,
Escrow Agent shall establish the Interest Escrow Account, a non-interest bearing
account, at the office of the Escrow Agent or Subcustodian in New York. Subject
to the security interest granted therein for the benefit of the Trustee, and
subject to the other terms and conditions of this Agreement, all funds accepted
by Escrow Agent pursuant to this Agreement shall be held for the exclusive
benefit of the Trustee, for the ratable benefit of the holders of the Notes. All
such funds shall be held in the Interest Escrow Account until disbursed in
accordance with the terms hereof. The Interest Escrow Account, and the funds and
any U.S. Government Securities and permitted Cash Equivalents and proceeds held
therein by the Escrow Agent, shall be deemed to be under the sole dominion and
control of Escrow Agent for the benefit of the Trustee for the ratable benefit
of the holders of the Notes and all such funds shall be held by the Escrow Agent
separate and apart from all other funds of or held by the Escrow Agent, subject
to Section 5. Concurrently with the execution and delivery hereof, the Company
shall deliver the Initial Escrow Amount to the Escrow Agent for deposit into the
Interest Escrow Account against the Escrow Agent's written acknowledgment and
receipt of the Initial Escrow Amount. The Escrow Agent hereby acknowledges the
security interest in the Collateral in favor of the Trustee as a secured party
for the ratable benefit of the holders of the Notes. The Escrow Agent does not
have any interest in the Collateral except as escrow holder for the benefit of
the Trustee for the ratable benefit of the holders of the Notes. The parties
acknowledge that this Agreement is intended to establish control of the
Collateral in favor of the Escrow Agent for the benefit of Trustee for the
ratable benefit of the holders of the Notes in accordance and for purposes of
Section 8-106 of the Uniform Commercial Code.
The Company shall pay or reimburse the Escrow Agent upon request for
any transfer taxes or other taxes, fees, charges or expenses relating to the
Collateral incurred in connection herewith and shall indemnify and hold harmless
the Escrow Agent from any amounts that it is obligated to pay in the way of such
taxes, fees, charges or expenses. Any payments of income from the Interest
Escrow Account shall
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be subject to withholding regulations then in force with respect to United
States taxes. The parties hereto will provide the Escrow Agent with appropriate
W-9 forms for tax I.D. number certifications, or W-8 forms for non-resident
alien certifications. It is understood that the Escrow Agent shall be
responsible for income reporting only with respect to income earned on
investment of funds which are part of the Collateral and is not responsible for
any other reporting. This paragraph shall survive notwithstanding any
termination of this Escrow Agreement or the resignation of the Escrow Agent.
(c) Escrow Agent Compensation.
(i) Escrow Agent and any Acceptable Replacement Escrow Agent
shall be compensated pursuant to a separate agreement between the Company and
Escrow Agent or such Acceptable Replacement Escrow Agent.
(ii) To the extent not paid by the Company when due, Escrow
Agent shall be entitled to disburse from the Interest Escrow Account all amounts
due to Escrow Agent as compensation for services to be performed by Escrow Agent
under this Agreement (as determined by agreement with the Company or pursuant to
this Section 2(c)(ii)).
(d) Investment of Funds in Interest Escrow Account. Funds deposited
in the Interest Escrow Account shall be invested and reinvested upon the
following terms and conditions:
(iii) Acceptable Investments. Funds deposited in the Interest
Escrow Account (including proceeds of any U.S. Government Securities at maturity
and interest and other earnings paid on any such investments) shall be invested
by the Escrow Agent in U.S. Government Securities or temporarily in Cash
Equivalents of the type referred to in clauses (ii) and (iv) of the definition
of Cash Equivalents in the Indenture, in accordance with the Company's written
instructions to the Escrow Agent accompanied by a certification of the Company
that such investments are in accordance with the terms of this paragraph. The
Company shall so instruct the Escrow Agent in a manner such that the Company in
its sole discretion determines at such time is in accordance with the Indenture
and will generate sufficient funds available without any further deposit by the
Company of funds or securities into the Interest Escrow Account (other than the
reinvestment of funds in U.S. Government Securities, Cash Equivalents permitted
herein and funds held in the form of cash as U.S. Government Securities mature)
to cover all interest due on the outstanding Notes, as such interest becomes
due, for each Interest Payment Date occurring from the Issue Date and ending on
(and including) the fifth such Interest Payment Date. Any U.S. Government
Securities constituting Collateral maintained with the Federal Reserve Bank
shall be transferred to a book-entry account in the name of the Escrow Agent,
for the benefit of the Trustee for the ratable benefit of the holders of the
Notes, (subject to Section 3 and Section 5). The Escrow Agent shall have no
responsibility for determining whether funds held in the Interest Escrow Account
shall have been invested in such a manner so as to comply with the requirements
of the second sentence of this clause (i) or the Indenture, and shall have no
responsibility for, and the Company indemnifies and holds harmless the Escrow
Agent from any liability in connection with, any gain or loss on any investment
made pursuant to this clause (i) or the lack of sufficient funds available in
the Interest Escrow Account to cover all interest or other amounts due on any
Interest Payment Date or otherwise.
(iv) Security Interest in Investments. No investment of funds
in the Interest Escrow Account shall be made unless the Company has certified to
Escrow Agent upon advice of legal counsel that, upon such investment, the
Trustee will have a perfected security interest in the applicable investment
(such advice of legal counsel relating solely to the manner of perfecting a
security interest in a particular type of investment, but not to whether such
perfection has been achieved in the instance). A certificate as to a class of
investments need not be issued with respect to individual investments in
securities in that class if the certificate applicable to the class remains
accurate with respect to such individual investments,
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which continued accuracy the Escrow Agent may conclusively assume. When and if
the Indenture is qualified under the Trust Indenture Act of 1939, as amended
(the "TIA"), to the extent, if any, that Section 314(b) of the TIA is
applicable, on such date and on each annual anniversary of such date until the
date upon which the balance of the Available Funds shall have been reduced to
zero, each of the Trustee and the Escrow Agent shall receive an opinion of
counsel to the Company, dated each such date as applicable, which opinion shall
meet the requirements of Section 314(b) of the TIA.
(v) Interest and Dividends. Subject to the security interest
granted therein for the benefit of the Trustee for the ratable benefit of the
holders of the Notes, and subject to the other terms and conditions of this
Agreement, all interest and other amounts earned and dividends paid on funds
invested in such U.S. Government Securities in accordance with the written
instructions of the Company shall be deposited in the Interest Escrow Account,
and commingled with the funds therein, for the exclusive benefit of the Trustee
for the ratable benefit of the holders of the Notes (subject to Sections 3 and 5
hereof) and shall be reinvested in accordance with the terms hereof at the
Company's written instruction and subject to disbursement as provided herein.
(e) Limitation on Escrow Agent's Responsibilities.
(vi) Escrow Agent's duties and responsibilities shall be
limited to those expressly set forth in this Agreement. Without limiting the
foregoing, the Escrow Agent shall maintain continuous exclusive possession,
dominion and control of cash included in the Collateral and will cause the U.S.
Government Securities to be registered in the book-entry system of and
transferred to an account of the Escrow Agent or a sub-agent of the Escrow Agent
at the Federal Reserve Bank. Escrow Agent shall not be subject to, or obligated
to recognize, any agreement other than this Agreement to which the Company, the
Trustee, or either of them may be a party. References in this Agreement to any
such agreement are for identification and definitional purposes only.
(vii) Escrow Agent shall have no obligation with respect to
the Interest Escrow Account other than to follow faithfully instructions
contained in this Agreement or delivered to Escrow Agent in accordance with this
Agreement. Escrow Agent may rely and act upon any written notice, instruction,
direction, request, waiver, consent, receipt, or other paper or document
("Instructions") which it believes in good faith to be genuine and what it
purports to be. Escrow Agent shall be subject to no liability with respect to
the form, execution, or validity of any such Instruction. The Escrow Agent shall
not be liable for verifying the accuracy of any certifications made by the
Company or the Trustee, including without limitation, in any Payment Notice and
Disbursement Request, pursuant to Section 2(d)(ii) hereof, or otherwise.
(viii) Escrow Agent shall not be liable for any error of
judgment, or for any act done or step taken or omitted by it in good faith, or
for any mistake of fact or law, or for doing anything which, in good faith, it
may do or refrain from doing in connection with the Interest Escrow Account,
except in each case in the event of Escrow Agent's gross negligence or wilful
misconduct.
(f) Substitution of Escrow Agent.
(ix) The Company shall have the right to cause Escrow Agent to
be relieved of its duties hereunder and to select a substitute escrow agent to
serve hereunder (provided such substitute escrow agent is an Acceptable
Replacement Escrow Agent), upon the expiration of thirty (30) days following
delivery of written notice of substitution to Escrow Agent and the Trustee. Upon
selection of such substitute escrow agent, such substitute escrow agent and the
parties hereto other than the substituted escrow agent shall enter into an
agreement substantially identical to this Agreement and, thereafter, Escrow
Agent shall be relieved of its duties and obligations to perform hereunder,
except that Escrow
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Agent shall transfer to the substitute escrow agent upon request therefor all
funds and U.S. Government Securities maintained by Escrow Agent hereunder and
copies of all books, records, plans and other documents in Escrow Agent's
possession relating to such funds or U.S. Government Securities or this
Agreement.
(x) Escrow Agent, or any substitute escrow agent, may at any
time resign and be discharged of its duties and obligations under this Agreement
by giving at least sixty (60) days' notice to the Company and the Trustee. The
Company shall appoint an Acceptable Replacement Escrow Agent or substitute
escrow agent within such sixty day period.
(xi) If the Company fails to appoint a substitute escrow agent
as required under paragraph (ii) above, Escrow Agent shall deliver all assets
held in the Escrow Account to an Acceptable Replacement Escrow Agent of either
its choosing or as appointed by a court upon application therefor, or to a court
as directed.
(xii) Escrow Agent shall be discharged from any further duties
under this Agreement upon its transfer of the assets held in the Escrow Account
to an Acceptable Replacement Escrow Agent.
(g) Interest Escrow Account Statement. The Escrow Agent shall deliver
to the Company and the Trustee a monthly statement setting forth with reasonable
particularity the Collateral then held by the Escrow Agent, and the manner in
which such funds are invested (the "Escrow Account Statement"). The books and
records of the Escrow Agent with respect to the Interest Escrow Account shall be
open to inspection and audit at reasonable times during reasonable business
hours by the Trustee and the Company or their respective representatives. The
parties hereto irrevocably instruct Escrow Agent that on the first date upon
which the balance in the Interest Escrow Account (including the holdings of all
U.S. Government Securities) is reduced to zero, Escrow Agent shall deliver to
the Company and to the Trustee a notice that the balance in the Interest Escrow
Account has been reduced to zero.
(h) Other Powers of Escrow Agent.
(xiii) Escrow Agent may register any investments held by the
Interest Escrow Account in its nominee name without increase or decrease of
liability.
(xiv) Escrow Agent may consult with and obtain advice from
legal counsel in the event of any dispute or question as to the construction of
any of the provisions of this Agreement or any of Escrow Agent's duties under
this Agreement, and Escrow Agent shall incur no liability in acting in good
faith in accordance with the advice of such counsel. The fees for consultation
with such counsel shall be a proper expense chargeable to the Interest Escrow
Account without a Payment Notice and Disbursement Request, provided that Escrow
Agent provides the Company with prior written notice of any such charge.
(i) Incumbency Certificate. The Company and the Trustee each shall
provide a certificate to Escrow Agent as to the incumbency and signatures of
those individuals authorized to provide from time to time instructions relating
to the Interest Escrow Account or to execute documents to be provided to Escrow
Agent. The Company and the Trustee also shall promptly notify Escrow Agent of
any changes to such a certificate. Escrow Agent may rely on the accuracy and
completeness of any such certificate unless and until it has received an
acceptable replacement certificate. All certificates provided under this Section
2(i) shall be executed by the applicable party's corporate secretary or
assistant secretary or, if the party does not have a corporate secretary or
assistant secretary, by an authorized officer.
3. Disbursements.
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(a) Disbursements. At least five (5) Business Days prior to each
Interest Payment Date described in Section 2(d)(i), the Trustee shall submit to
the Escrow Agent a completed Payment Notice and Disbursement Request
substantially in the form of Exhibit A hereto and the Escrow Agent shall, upon
acceptance of such Payment Notice and Disbursement Request, and provided that
there are sufficient funds in the Interest Escrow Account, disburse the funds
requested to the Trustee for payment to the Holders of the Notes at or before
11:00 a.m. New York City time on the Interest Payment Date for which the
completed Payment Notice and Disbursement Request was submitted. The Escrow
Agent shall notify the Trustee and the Company as soon as reasonably possible
(but not later than two (2) Business Days from the date of receipt of the
Payment Notice and Disbursement Request) if any Payment Notice and Disbursement
Request is rejected or not conforming with the requirements of this Agreement
and the reason(s) therefor. Escrow Agent shall have no obligation to make any
payment or disbursement in connection with any Payment Notice and Disbursement
Request to the extent, if any, which there are insufficient funds in the
Interest Escrow Account. The Escrow Agent and the Trustee will communicate
expeditiously and use their best effort to cure any defect therein.
(b) Retired Notes. In the event a portion of the Notes has been
retired by the Company and submitted to the Trustee for cancellation and there
is no Event of Default under the Indenture, funds representing the excess over
the amount sufficient to pay interest through and including the fifth Interest
Payment Date on the Notes not so retired and any amounts due to the Escrow Agent
shall, upon written request of the Trustee to the Escrow Agent, be paid to the
Company. The Trustee shall provide such notice to the Escrow Agent (i) upon
receipt of notice of similar effect from, and certification of such retirement
by, the Company, which notice and certification shall be provided to the Escrow
Agent and (ii) upon the Company's compliance with the release of collateral
provisions of the TIA to the extent applicable.
(c) Excess Amounts. Notwithstanding anything in this Agreement to the
contrary, so long as no Event of Default shall have occurred and being
continuing, at such time as all interest due on the Notes through and including
the fifth Interest Payment Date on the Notes has been paid to the Holders
thereof pursuant to the Indenture and in accordance herewith, and all other
amounts due and owing under this Agreement and the Indenture, including but not
limited to the compensation, expenses, disbursements and advances of the Escrow
Agent and the Trustee or their agents or counsel, upon the written request of
the Trustee, the Escrow Agent shall disburse all remaining funds and U.S.
Government Securities and permitted Cash Equivalents in the Interest Escrow
Account to the Company and pending such disbursement shall hold such funds or
securities for the Company, except that no such disbursement shall be made
unless the Company has certified to the Escrow Agent that all interest due and
payable on the Notes from time to time outstanding through and including the
fifth Interest Payment Date has been paid to the Holders thereof pursuant to the
Indenture and in accordance with this Agreement and the Company has indemnified
the Escrow Agent, its officers, directors, employees and agents, for any
liability, loss or expense in connection therewith.
(d) Acceleration. Upon the acceleration of the maturity of the Notes
prior to the payment in full of the first five scheduled interest payments, the
Escrow Agent shall, upon the receipt of written notice from the Trustee, as
agent for the Trustee, foreclose upon the Collateral and shall apply the
proceeds of such foreclosure in accordance with Section 5.06 of the Indenture.
The Escrow Agent shall be entitled to reimbursement of all expenses,
disbursements and advances incurred or made by it in connection with such
foreclosure and application of proceeds.
4. Escrow Agent. The Escrow Agent's responsibility and liability
under this Agreement shall be limited as follows: (i) the Escrow Agent does not
represent, warrant or guaranty to the holders of the Notes from time to time the
performance of the Company or the Trustee; (ii) the Escrow Agent shall have no
responsibility to the Company or the holders of the Notes or the Trustee from
time to time as a
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consequence of performance or nonperformance by the Escrow Agent hereunder,
except for any gross negligence or willful misconduct of the Escrow Agent; (iii)
the Company shall remain solely responsible for all aspects of the Company's
business and conduct; and (iv) the Escrow Agent is not obligated to supervise,
inspect or inform the Company or any third party of any matter referred to
above.
No implied covenants or obligations shall be inferred from
this Agreement against the Escrow Agent, nor shall the Escrow Agent be bound by
the provisions of any agreement beyond the specific terms hereof. Specifically
and without limiting the foregoing, the Escrow Agent shall in no event have any
liability in connection with its investment, reinvestment or liquidation, in
good faith and in accordance with the terms hereof, of any funds or U.S.
Government Securities held by it hereunder, including, without limitation any
liability for any delay not resulting from gross negligence or wilful misconduct
in such investment, reinvestment or liquidation, or for any loss of principal or
income incident to any such delay.
The Escrow Agent shall be entitled to rely upon any judicial
order or judgment, upon any written opinion of counsel or upon any
certification, instruction, notice, or other writing delivered to it by the
Company or the Trustee in compliance with the provisions of this Agreement
without being required to determine the authenticity or the correctness of any
fact stated therein or the propriety or validity of service thereof. The Escrow
Agent may act in reliance upon any instrument comporting with the provisions of
this Agreement or signature believed by it to be genuine and may assume that any
person purporting to give notice or receipt or advice or make any statement or
execute any document in connection with the provisions hereof has been duly
authorized to do so.
The Escrow Agent may act pursuant to the written advice of
counsel chosen by it with respect to any matter relating to this Agreement and
(subject to Section 4(a)(ii)) shall not be liable for any action taken or
omitted in accordance with such advice.
The Escrow Agent shall not be called upon to advise any party
as to selling or retaining, or taking or refraining from taking any action with
respect to, any securities or other property deposited hereunder. The Escrow
Agent shall not be responsible for or incur any liability in connection with the
performance of any investment made at the discretion of the Company, for any
other loss or gain in the Interest Escrow Account, or for the sufficiency of
funds in the Interest Escrow Account to cover interest payments on the Notes.
In the event the Escrow Agent in good faith is in doubt as to
what action to take under this Agreement with respect to any funds or property
deposited hereunder, the Escrow Agent shall be entitled to refuse to comply with
any and all claims, demands or instructions with respect to such funds or
property, and the Escrow Agent shall not be or become liable for its failure or
refusal to comply with conflicting claims, demands or instructions. The Escrow
Agent shall be entitled to refuse to act until either any conflicting or adverse
claims or demands shall have been finally determined by a court of competent
jurisdiction or settled by agreement between the conflicting claimants
(including the Company) directing the payment or delivery of funds or property.
The Escrow Agent may in addition elect in its sole option to commence an
interpleader action or seek other judicial relief or orders as the Escrow Agent
may deem necessary.
No provision of this Agreement shall require the Escrow Agent
to expend or risk its own funds or otherwise incur any liability .
5. Indemnity. The Company shall indemnify, hold harmless and defend
Escrow Agent and the Trustee, and their respective directors, officers, agents
and employees, from and against any and all claims, actions, obligations,
liabilities and expenses, including defense costs, investigative fees and costs,
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legal fees, and claims for damages, arising from Escrow Agent's and the
Trustee's respective performance under this Agreement, except to the extent that
such liability, expense or claim is directly attributable to the gross
negligence or wilful misconduct of such indemnified person. In connection with
any claim, action, obligation, liability or expense for which indemnification is
sought by the Escrow Agent hereunder, the Escrow Agent shall be entitled to
recover its costs and expenses as incurred from funds available in the Interest
Escrow Account.
Grant of Security Interest; Instructions to Escrow Agent.
(e) The Company hereby irrevocably grants a first priority security
interest in, pledges, assigns and sets over to the Trustee all of the Company's
right, title and interest in the Initial Escrow Amount, the Interest Escrow
Account, all funds held therein and all U.S. Government Securities and permitted
Cash Equivalents and replacements thereof and proceeds of each of the foregoing
held by or on behalf of the Escrow Agent including, without limitation, any of
the foregoing which is a certificated or uncertificated security, a security
entitlement, a securities account, investment property, a financial asset, a
Treasury security (including any Treasury STRIPS (Separate Trading of Registered
Interest and Principal of Securities) (collectively, the "Collateral"), to
secure all obligations and indebtedness of the Company under the Notes and any
other obligation now or hereafter arising, of every kind and nature, owed by the
Company under the Indenture to the Holders of the Notes or the Trustee.
(f) The Company and the Trustee hereby irrevocably instruct the
Escrow Agent to and the Escrow Agent will: (i)(A) maintain sole and exclusive
possession, dominion and control over funds in the Interest Escrow Account for
the benefit of the Trustee for the ratable benefit of the holders of the Notes
as required herein and (B) take all applicable steps set forth in Section
2(d)(i) and 2(d)(ii); (ii) maintain all of the Collateral free and clear of all
liens, security interests, safekeeping or other charges, demands and claims
against Escrow Agent of any nature whatsoever now or hereafter existing, in
favor of anyone other than the Escrow Agent and the Trustee; (iii) promptly
notify the Trustee if Escrow Agent becomes aware that any person other than the
Trustee has a lien or security interest upon any portion of the Collateral
(other than any claim which Escrow Agent may have against the Interest Escrow
Account for unpaid fees and expenses); and (iv) immediately disburse all funds
held in the Interest Escrow Account to the Trustee and transfer title to all
U.S. Government Securities held by Escrow Agent hereunder to the Trustee upon
written notice by the Trustee to Escrow Agent (without any consent from the
Company) that as a result of an Event of Default under the Indenture, the
indebtedness represented by the Notes has been accelerated and has become due
and payable.
(g) Any money and U.S. Government Securities collected by the Trustee
pursuant to Section 6(b)(iii) of the Indenture shall be applied as provided in
Section 5.06 of the Indenture.
(h) Upon demand, the Company will execute and deliver to the Trustee
such instruments and documents as the Trustee may reasonably deem necessary or
advisable to confirm or perfect the rights of the Trustee under this Agreement
and the Trustee's interest in the Collateral.
(i) The Company hereby appoints the Trustee as its attorney-in-fact
effective upon and during the continuance of a Default or an Event of Default
under the Indenture with full power of substitution to do any act which the
Company is obligated hereunder to do, and the Trustee may exercise such rights
as the Company might exercise with respect to the Collateral and take any action
in the Company's name to protect the Trustee's security interest hereunder.
6. Termination. This Agreement shall terminate automatically ten(10)
days following disbursement of all funds remaining in the Interest Escrow
Account (including the proceeds of any U.S. Government Securities), unless
sooner terminated by agreement of the parties hereto (in accordance with
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the terms hereof, not in violation of the Indenture), provided, however, that
the obligations of the Company under Section 5 of this Agreement shall survive
termination of this Agreement or the resignation or removal of the Escrow Agent;
provided, further, however, that until such tenth day, this Agreement (or any
permitted successor agreement) will remain in effect and the Company will use
its reasonable best efforts to cause there to be an escrow agent (including any
permitted successor thereto) acting hereunder (or under any such permitted
successor agreement).
7. Miscellaneous.
(j) Waiver. Any party hereto may specifically waive any breach of
this Agreement by any other party, but no such waiver shall be deemed to have
been given unless such waiver is in writing, signed by the waiving party and
specifically designating the breach waived, nor shall any such waiver constitute
a continuing waiver of similar or other breaches.
(k) Invalidity. If, for any reason whatsoever, any one or more of
the provisions of this Agreement shall be held or deemed to be inoperative,
unenforceable or invalid in a particular case or in all cases, such
circumstances shall not have the effect of rendering any of the other provisions
of this Agreement inoperative, unenforceable or invalid, and the inoperative,
unenforceable or invalid provision shall be construed as if it were written so
as to effectuate, to the maximum extent possible, the parties' intent.
(l) Assignment. This Agreement is personal to the parties hereto,
and the rights and duties of any party hereunder shall not be assignable except
with the prior written consent of the other parties, provided however, that the
Escrow Agent may , in accordance with the terms of Agreement, appoint a
Subcustodian hereunder. In any event, this Agreement shall inure to and be
binding upon the parties and their successors and permitted assigns.
(m) Benefit. The parties hereto, the holders of the Notes and their
permitted assigns, but no others, shall be bound hereby and entitled to the
benefits hereof.
(n) Time. Time is of the essence in each provision of this Agreement
of which time is an element.
(o) Choice of Law. The existence, validity, construction, operation
and effect of any and all terms and provisions of this Agreement (including the
security interest created hereby and perfection thereof) shall be determined in
accordance with and governed by the laws of the State of New York, without
giving effect to conflict of law principles thereof.
(p) Entire Agreement; Amendments. This Agreement contains the entire
agreement among the parties with respect to the subject matter hereof and
supersedes any and all prior agreements, understandings and commitments, whether
oral or written. This Agreement may be amended only by a writing signed by duly
authorized representatives of all parties.
(q) Notices. All notices and other communications required or
permitted to be given or made under this Agreement shall be in writing and shall
be deemed to have been duly given and received, regardless of when and whether
received, either: (a) on the day of hand delivery; (b) three business days
following the day sent, when sent by United States certified mail, postage and
certification fee prepaid, return receipt requested, or (c) the next business
day following the day timely delivered to a recognized next-day air courier,
addressed as follows:
To Escrow Agent:
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Wilmington Trust Company
1100 North Market Street
Wilmington, DE 19890-0001
Attention: Corporate Trust Administration
To the Trustee:
Wilmington Trust Company
1100 North Market Street
Wilmington, DE 19890-0001
Attention: Corporate Trust Administration
To the Company:
PSINet Inc.
510 Huntmar Park Drive
Herndon, Virginia 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 such other address as the specified entity most recently may have
designated in writing in accordance with this section to the others; or (d) by
facsimile transmission to the Escrow Agent at (302) 651-8882, to the Trustee at
(302) 651-8882, and to the Company at (703) 397-5396 and (703) 397-5349.
(r) Counterparts. This Agreement may be executed in one or more
counterparts, each of which shall be deemed an original but all of which
together shall constitute one and the same instrument.
(s) Captions. Captions in this Agreement are for convenience only and
shall not be considered or referred to in resolving questions of interpretation
of this Agreement.
(t) Authority of the Company; Valid and Binding Agreement. The
Company hereby represents and warrants that this Agreement has been duly
authorized, executed and delivered on its behalf and constitutes the legal,
valid and binding obligation of the Company. The execution, delivery and
performance of this Agreement by the Company does not violate any applicable law
or regulation to which the Company is subject and does not require the consent
of any governmental or other regulatory body to which the Company is subject,
except for such consents and approvals as have been obtained and are in full
force and effect.
(u) Authority of the Escrow Agent and the Trustee; Valid and Binding
Agreement. Each of the Escrow Agent and the Trustee hereby represents and
warrants and this Agreement has been duly authorized, executed and delivered on
its behalf and constitutes its legal, valid and binding obligation.
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[SIGNATURE PAGE FOLLOWS]
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IN WITNESS WHEREOF, the parties have executed and delivered
this Interest Escrow Agreement as of the date first above written.
ESCROW AGENT: WILMINGTON TRUST COMPANY
By: /s/ Thomas P. Laskarsis
Name: Thomas P. Laskarsis
Title: Vice President
TRUSTEE: WILMINGTON TRUST COMPANY
By: /s/ Thomas P. Laskarsis
Name: Thomas P. Laskarsis
Title: Vice President
COMPANY: PSINET INC.
By: /s/ Edward D. Postal
Name: Edward D. Postal
Title: Senior Vice President
and Chief Financial Officer
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Exhibit A
Form of Payment Notice and Disbursement Request
[Letterhead of the Trustee]
[Date]
Wilmington Trust Company
1100 North Market Street
Wilmington, DE 19890-0001
Attention: Corporate Trust Administration
Re: Disbursement Request No. ___
[indicate whether revised]
Ladies and Gentlemen:
We refer to the Interest Escrow Agreement ("Escrow Agreement")
dated as of April 13, 1998 by and among Wilmington Trust Company, as Trustee and
Escrow Agent, and PSINET Inc., a New York corporation (the "Company"). Unless
otherwise specified, capitalized terms used herein shall have the meaning given
in the Escrow Agreement.
This letter constitutes a Payment Notice and Disbursement
Request under the Escrow Agreement.
[Choose one of the following, as applicable]
[The undersigned hereby notifies you that a scheduled interest
payment in the amount of $_________ will become due on ___________, ____ and
requests a disbursement of funds contained in the Interest Escrow Account in
such amount to the Holders of the Notes pursuant to Section 3(a) of the Escrow
Agreement.]
[The undersigned hereby notifies you that Notes equaling
$_________ in aggregate principal amount have been retired and authorizes you to
release $________ of funds in the Interest Escrow Account to the Company (to an
account designated by the Company in writing), which amount represents the
amount permitted to be released in accordance with Section 3(b) of the Escrow
Agreement.]
[The undersigned hereby notifies you that all amounts due on
the Notes up to and through _____________ have been paid from the Interest
Escrow Account in accordance with the Indenture (as defined in the Escrow
Agreement) and authorizes you to release to the Company all remaining funds
contained in the Interest Escrow Account.]
[In accordance with Section 6(b)(iv) of the Escrow Agreement,
the undersigned hereby notifies you that there has been an acceleration of the
maturity of the Notes. Accordingly, you are hereby requested to disburse all
remaining funds contained in the Interest Escrow Account to the Trustee such
that the balance in the Interest Escrow Account is reduced to zero.]
In connection with the requested disbursement, the undersigned
hereby notifies you that:
1. [The Notes have not, as a result of an Event of
Default (as defined in the Indenture), been accelerated and
become due and payable.]
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2. All prior disbursements to the Trustee from the
Interest Escrow Account have been applied.
3. [Add wire instructions for payment to Trustee.]
The Escrow Agent is entitled to rely on the foregoing in
disbursing funds relating to this Payment Notice and Disbursement Request.
WILMINGTON TRUST COMPANY
as Trustee
By:_________________________________________
Name:
Title:
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