-----BEGIN PRIVACY-ENHANCED MESSAGE----- Proc-Type: 2001,MIC-CLEAR Originator-Name: webmaster@www.sec.gov Originator-Key-Asymmetric: MFgwCgYEVQgBAQICAf8DSgAwRwJAW2sNKK9AVtBzYZmr6aGjlWyK3XmZv3dTINen TWSM7vrzLADbmYQaionwg5sDW3P6oaM5D3tdezXMm7z1T+B+twIDAQAB MIC-Info: RSA-MD5,RSA, S2OipqqyH4WGq7FPvk+kuuuawedyAVsPv59IUZ8sjcp6oE8knjBChhy7lri6kdON 0xEoIGl0apMI5bliSM3YtQ== 0000940180-97-000616.txt : 19970718 0000940180-97-000616.hdr.sgml : 19970718 ACCESSION NUMBER: 0000940180-97-000616 CONFORMED SUBMISSION TYPE: 8-K PUBLIC DOCUMENT COUNT: 5 CONFORMED PERIOD OF REPORT: 19970709 ITEM INFORMATION: Acquisition or disposition of assets ITEM INFORMATION: Other events ITEM INFORMATION: Financial statements and exhibits FILED AS OF DATE: 19970717 SROS: NONE FILER: COMPANY DATA: COMPANY CONFORMED NAME: INTERMEDIA COMMUNICATIONS OF FLORIDA INC CENTRAL INDEX KEY: 0000885067 STANDARD INDUSTRIAL CLASSIFICATION: TELEPHONE COMMUNICATIONS (NO RADIO TELEPHONE) [4813] IRS NUMBER: 592913586 STATE OF INCORPORATION: DE FISCAL YEAR END: 1231 FILING VALUES: FORM TYPE: 8-K SEC ACT: 1934 Act SEC FILE NUMBER: 000-20135 FILM NUMBER: 97641887 BUSINESS ADDRESS: STREET 1: 3625 QUEEN PALM DR STREET 2: STE 720 CITY: TAMPA STATE: FL ZIP: 33619 BUSINESS PHONE: 8136210011 8-K 1 FORM 8-K 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): July 9, 1997 ------------ INTERMEDIA COMMUNICATIONS INC. ------------------------------------------------------ (Exact name of registrant as specified in its charter) Delaware 59-2913586 - -------------------------- ------------------- (State or other jurisdic- (I.R.S. Employer tion of incorporation or Identification No.) organization) 0-20135 ------------------------ (Commission File Number) 3625 Queen Palm Drive, Tampa, Florida 33619-1309 - -------------------------------------------------------------------------------- (Address of principal executive offices) (Zip Code) Registrant's telephone number, including area code (813) 829-0011 -------------- Item 2. Acquisition or Disposition of Assets - --------------------------------------------- Daylight Acquisition Corp. ("Daylight"), a wholly owned subsidiary of Intermedia Communications Inc. (the "Company") successfully completed a cash tender offer, at $13 per share, for all of the outstanding shares of DIGEX, Incorporated ("DIGEX"). The tender offer expired at 12:00 midnight, New York City time on Wednesday, July 9, 1997. 11,804,197 shares of common stock of DIGEX, representing approximately 98.8% of the aggregate shares outstanding, were validly tendered and not withdrawn. On July 11, 1997, Daylight completed a merger with DIGEX, the final step in its acquisition of DIGEX. The aggregate consideration for the acquisition of DIGEX was approximately $155 million. The acquisition price was funded with the Company's existing cash reserves. DIGEX is a leading national Internet carrier focusing exclusively on business customers. DIGEX offers a comprehensive range of Internet solutions, including high speed dedicated business Internet connectivity, corporate Web site management services and private network capacity. The Company intends to continue operating the DIGEX assets to provide Internet services. Financial statements with respect to the acquisition of DIGEX will be filed within 75 days of the consummation of such acquisition. Item 5. Other Events - --------------------- On July 10, 1997, the Company announced that it had completed concurrent private placements (the "Offerings") of 6,000,000 Depositary Shares each representing a one-hundredth interest in a share of Series D Convertible Preferred Stock and $606,000,000 principal amount at maturity of 11 1/4% Senior Discount Notes due 2007 for an aggregate gross proceeds of approximately $500,000,000. A copy of the press release is filed herewith as Exhibit 99.1. Subsequent thereto, the over-allotment option with respect to each of the concurrent private placements was exercised and the Company sold an additional 900,000 Depositary Shares and $43,000,000 principal amount at maturity of Senior Discount Notes for additional aggregate gross proceeds of approximately $47,000,000. 2 Item 7. Financial Statements and Exhibits - ------------------------------------------ Exhibit 2.1 Agreement and Plan of Merger among the Company, Daylight and DIGEX, dated June 4, 1997. Exhibit 99(c)(1) to the Company's Schedule 14D-1 filed with the Securities and Exchange Commission on June 11, 1997 is incorporated herein by reference. Exhibit 4.1 Indenture, by and between the Company and SunTrust Bank, Central Florida, National Association, as Trustee, dated as of July 9, 1997. Exhibit 4.2 Certificate of Designation of Voting Power, Designation Preferences and Relative, Participating, Optional and Other Special Rights and Qualifications, Limitations and Restrictions of 7% Series D Junior Convertible Preferred Stock of the Company, filed with the Secretary of State of the State of Delaware on July 8, 1997. Exhibit 4.3 Deposit Agreement by and between the Company and Continental Stock Transfer & Trust Company, dated as of July 9, 1997. Exhibit 99.1 Press Release, dated July 10, 1997.
3 SIGNATURE 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 thereunto duly authorized. Date: July 17, 1997 INTERMEDIA COMMUNICATIONS INC. ------------------------------ (Registrant) By: /s/ Robert M. Manning ------------------------------- Name: Robert M. Manning Title: Senior Vice President and Chief Financial Officer 4 Exhibit Index -------------
Exhibit No. Description - --- ----------- 2.1 Agreement and Plan of Merger among the Company, Daylight and DIGEX, dated June 4, 1997. Exhibit 99(c)(1) to the Company's Schedule 14D-1 filed with the Securities and Exchange Commission on June 11, 1997 is incorporated herein by reference. 4.1 Indenture, by and between the Company and SunTrust Bank, Central Florida, National Association, as Trustee, dated as of July 9, 1997. 4.2 Certificate of Designation of Voting Power, Designation Preferences and Relative, Participating, Optional and Other Special Rights and Qualifications, Limitations and Restrictions of 7% Series D Junior Convertible Preferred Stock of the Company, filed with the Secretary of State of the State of Delaware on July 8, 1997. 4.3 Deposit Agreement by and between the Company and Continental Stock Transfer & Trust Company, dated as of July 9, 1997. 99.1 Press Release, dated July 10, 1997.
5 EX-4.1 2 INDENTURE DATED 7/9/97 EXHIBIT 4.1 EXECUTION COPY ================================================================================ INTERMEDIA COMMUNICATIONS INC. Up to $649,000,000 11 1/4% SENIOR DISCOUNT NOTES DUE 2007 -------------------------------------- _________________ INDENTURE Dated as of July 9, 1997 _________________ _________________ SUNTRUST BANK, CENTRAL FLORIDA, NATIONAL ASSOCIATION _________________ Trustee ================================================================================ CROSS-REFERENCE TABLE*
Trust Indenture Act Section Indenture Section 310 (a)(1).................................................... 7.10 (a)(2).................................................... 7.10 (a)(3).................................................... N.A. (a)(4).................................................... N.A. (a)(5).................................................... 7.10 (b)....................................................... 7.10 (c)....................................................... N.A. 311 (a)....................................................... 7.11 (b)....................................................... 7.11 (c)....................................................... N.A. 312 (a)....................................................... 2.05 (b)....................................................... 10.03 (c)....................................................... 10.03 313 (a)....................................................... 7.06 (b)(1).................................................... N.A. (b)(2).................................................... 7.06 (c)....................................................... 7.06; 10.02 (d)....................................................... 7.06 314 (a)....................................................... 4.03; 10.05 (b)....................................................... 4.17 (c)(1).................................................... 10.04 (c)(2).................................................... 10.04 (c)(3).................................................... N.A. (d)....................................................... 4.17 (e)....................................................... N.A. (f)....................................................... N.A. 315 (a)....................................................... N.A. (b)....................................................... 7.05 (c)....................................................... N.A. (d)....................................................... N.A. (e)....................................................... N.A. 316 (a)(last sentence)........................................ N.A. (a)(1)(A)................................................. N.A. (a)(2).................................................... N.A. (b)....................................................... N.A. (c)....................................................... 2.13 317 (a)(1).................................................... N.A. (a)(2).................................................... N.A. (b)....................................................... N.A. 318 (a)....................................................... N.A. (b)....................................................... N.A. (c)....................................................... 10.01
N.A. means not applicable. *This Cross-Reference Table is not part of the Indenture. TABLE OF CONTENTS
Page ARTICLE 1 DEFINITIONS AND INCORPORATION BY REFERENCE Section 1.01. Definitions............................................. 1 Section 1.02. Other Definitions....................................... 16 Section 1.03. Incorporation by Reference of Trust Indenture Act....... 17 Section 1.04. Rules of Construction................................... 17 ARTICLE 2 THE SENIOR DISCOUNT NOTES Section 2.01. Form and Dating......................................... 17 Section 2.02. Execution and Authentication............................ 18 Section 2.03. Registrar and Paying Agent.............................. 19 Section 2.04. Paying Agent to Hold Money in Trust..................... 19 Section 2.05. Holder Lists............................................ 20 Section 2.06. Transfer and Exchange................................... 20 Section 2.07. Replacement Notes....................................... 32 Section 2.08. Outstanding Notes....................................... 32 Section 2.09. Treasury Notes.......................................... 33 Section 2.10. Temporary Notes......................................... 33 Section 2.11. Cancellation............................................ 33 Section 2.12. Defaulted Interest...................................... 34 Section 2.13. Record Date............................................. 34 Section 2.14. CUSIP Number............................................ 34 ARTICLE 3 REDEMPTION AND CERTAIN REPURCHASES Section 3.01. Notices to Trustee...................................... 34 Section 3.02. Selection of Notes to Be Redeemed....................... 34 Section 3.03. Notice of Redemption.................................... 35 Section 3.04. Effect of Notice of Redemption.......................... 36 Section 3.05. Deposit of Redemption Price............................. 36 Section 3.06. Senior Discount Notes Redeemed in Part.................. 37 Section 3.07. Optional Redemption..................................... 37 Section 3.08. Mandatory Redemption.................................... 38 Section 3.09. Offer to Purchase With Excess Asset Sale Proceeds....... 38 ARTICLE 4 COVENANTS Section 4.01. Payment of Notes........................................ 40 Section 4.02. Maintenance of Office or Agency......................... 41 Section 4.03. Reports................................................. 41 Section 4.04. Compliance Certificate.................................. 42
i Section 4.05. Taxes................................................... 43 Section 4.06. Stay, Extension and Usury Laws.......................... 43 Section 4.07. Restricted Payments..................................... 43 Section 4.08. Dividend and Other Payment Restrictions Affecting Subsidiaries......................................... 46 Section 4.09. Incurrence of Indebtedness and Issuance of Disqualified Stock................................... 47 Section 4.10. Asset Sales............................................. 49 Section 4.11. Transactions with Affiliates............................ 51 Section 4.12. Liens................................................... 51 Section 4.13. Limitations on Sale and Leaseback Transactions.......... 51 Section 4.14. Corporate Existence..................................... 52 Section 4.15. Offer to Purchase Upon Change of Control................ 52 Section 4.16. Business Activities..................................... 53 Section 4.17. Payments for Consent.................................... 53 Section 4.18. Use of Proceeds......................................... 53 ARTICLE 5 SUCCESSORS Section 5.01. Merger, Consolidation or Sale of Assets................. 54 Section 5.02. Successor Corporation Substituted....................... 55 ARTICLE 6 DEFAULTS AND REMEDIES Section 6.01. Events of Default....................................... 55 Section 6.02. Acceleration............................................ 57 Section 6.03. Other Remedies.......................................... 58 Section 6.04. Waiver of Past Defaults................................. 58 Section 6.05. Control by Majority..................................... 58 Section 6.06. Limitation on Suits..................................... 58 Section 6.07. Rights of Holders of Notes to Receive Payment........... 59 Section 6.08. Collection Suit by Trustee.............................. 59 Section 6.09. Trustee May File Proofs of Claim........................ 60 Section 6.10. Priorities.............................................. 60 Section 6.11. Undertaking for Costs................................... 61 ARTICLE 7 TRUSTEE Section 7.01. Duties of Trustee....................................... 61 Section 7.02. Rights of Trustee....................................... 62 Section 7.03. Individual Rights of Trustee............................ 63 Section 7.04. Trustee's Disclaimer.................................... 63 Section 7.05. Notice of Defaults...................................... 63 Section 7.06. Reports by Trustee to Holders of the Senior Discount Notes....................................... 63 Section 7.07. Compensation and Indemnity.............................. 64 Section 7.08. Replacement of Trustee.................................. 64 Section 7.09. Successor Trustee by Merger, etc........................ 65 Section 7.10. Eligibility; Disqualification........................... 65 Section 7.11. Preferential Collection of Claims Against Company....... 66
ii ARTICLE 8 LEGAL DEFEASANCE AND COVENANT DEFEASANCE Section 8.01. Option to Effect Legal Defeasance or Covenant Defeasance........................................... 66 Section 8.02. Legal Defeasance and Discharge.......................... 66 Section 8.03. Covenant Defeasance..................................... 66 Section 8.04. Conditions to Legal or Covenant Defeasance.............. 67 Section 8.05. Deposited Money and Government Securities to be Held in Trust; Other Miscellaneous Provisions............. 68 Section 8.06. Repayment to Company.................................... 69 Section 8.07. Reinstatement........................................... 69 ARTICLE 9 AMENDMENT, SUPPLEMENT AND WAIVER Section 9.01. Without Consent of Holders of Senior Discount Notes..... 70 Section 9.02. With Consent of Holders of Senior Discount Notes........ 70 Section 9.03. Compliance with Trust Indenture Act..................... 72 Section 9.04. Revocation and Effect of Consents....................... 72 Section 9.05. Notation on or Exchange of Senior Discount Notes........ 72 Section 9.06. Trustee to Sign Amendments, etc......................... 72 Section 9.07. Payment for Consents.................................... 73 ARTICLE 10 MISCELLANEOUS Section 10.01. Trust Indenture Act Controls............................ 74 Section 10.02. Notices................................................. 74 Section 10.03. Communication by Holders of Senior Discount Notes with Other Holders of Senior Discount Notes............... 75 Section 10.04. Certificate and Opinion as to Conditions Precedent...... 75 Section 10.05. Statements Required in Certificate or Opinion........... 75 Section 10.06. Rules by Trustee and Agents............................. 76 Section 10.07. No Personal Liability of Partners, Directors, Officers, Employees and Stockholders.................... 76 Section 10.08. Governing Law........................................... 76 Section 10.09. No Adverse Interpretation of Other Agreements........... 76 Section 10.10. Successors.............................................. 76 Section 10.11. Severability............................................ 76 Section 10.12. Counterpart Originals................................... 76 Section 10.13. Table of Contents, Headings, etc........................ 77 EXHIBITS Exhibit A FORM OF NOTE Exhibit B FORM OF CERTIFICATE OF TRANSFER Exhibit C FORM OF CERTIFICATE OF EXCHANGE Exhibit D FORM OF CERTIFICATE OF ACQUIRING INSTITUTIONAL ACCREDITED INVESTOR
iii INDENTURE dated as of July 9, 1997 between Intermedia Communications Inc. (the "Company"), and SunTrust Bank, Central Florida, National Association, as trustee (the "Trustee"). The Company and the Trustee agree as follows for the benefit of each other and for the equal and ratable benefit of the holders of the 11 1/4% Senior Discount Notes due 2007 (the "Senior Discount Notes"): ARTICLE 1 DEFINITIONS AND INCORPORATION BY REFERENCE Section 1.01. Definitions. "13 1/2% Notes" means the Company's 13 1/2% Senior Notes due 2005. "144A Global Security" means the global security in the form of Exhibit A hereto bearing the Global Security Legend and the Private Placement Legend and deposited with and registered in the name of the Depositary or its nominee that will be issued in a denomination equal to the outstanding principal amount at maturity of the Senior Discount Notes sold in reliance on Rule 144A. "Accreted Value" means, as of any date of determination prior to July 15, 2002 the sum of (a) the initial offering price of each Senior Discount Note and (b) that portion of the excess of the principal amount of each Senior Discount Note over such initial offering price as shall have been accreted thereon through such date, such amount to be so accreted on a daily basis at the rate of 11 1/4% per annum of the initial offering price of the Senior Discount Notes, compounded semi-annually on each July 15 and January 15 from the date of issuance of the Senior Discount Notes through the date of determination computed on the basis of a 360-day year of twelve 30-day months. The Accreted Value of any Senior Discount Note on or after July 15, 2002 shall be 100% of the principal amount thereof. "Acquired Debt" means, with respect to any specified Person, (i) Indebtedness of any other Person existing at the time such other Person is merged with or into or became a Subsidiary of such specified Person, including, without limitation, Indebtedness incurred in connection with, or in contemplation of, such other Person merging with or into or becoming a Subsidiary of such specified Person, and (ii) Indebtedness secured by a Lien encumbering any asset acquired by such specified Person. "Affiliate" of any specified Person means any other Person directly or indirectly controlling or controlled by or under direct or indirect common control with such specified Person. For purposes of this definition, "control" (including, with correlative meanings, the terms "controlling," "controlled by" and "under common control with"), as used with respect to any Person, shall mean the possession, directly or indirectly, of the power to direct or cause the direction of the management or policies of such Person, whether through the ownership of voting securities, by agreement or otherwise, provided, however, that beneficial ownership of 25% or more of the voting securities of a Person shall be deemed to be control. "Agent" means any Registrar, Paying Agent or co-registrar. "Applicable Procedures" means, with respect to any transfer or exchange of or for beneficial interests in any Global Note, the rules and procedures of the Depositary that apply to such transfer or exchange. "Attributable Debt" means, with respect to any Sale and Leaseback Transaction, the present value at the time of determination (discounted at a rate consistent with accounting guidelines, as determined in good faith by the Company) of the payments during the remaining term of the lease (including any period for which such lease has been extended or may, at the option of the lessor, be extended) or until the earliest date on which the lessee may terminate such lease without penalty or upon payment of a penalty (in which case the rental payments shall include such penalty), after excluding all amounts required to be paid on account of maintenance and repairs, insurance, taxes, assessments, water, utilities and similar charges. "Beneficial Owner" means a beneficial owner as defined in Rules 13d-3 and 13d-5 under the Exchange Act (or any successor rules), including the provision of such Rules that a Person shall be deemed to have beneficial ownership of all securities that such Person has a right to acquire within 60 days; provided that a Person will not be deemed a beneficial owner of, or to own beneficially, any securities if such beneficial ownership (1) arises solely as a result of a revocable proxy delivered in response to a proxy or consent solicitation made pursuant to, and in accordance with, the Exchange Act and (2) is not also then reportable on Schedule 13D or Schedule 13G (or any successor schedule) under the Exchange Act. "Board of Directors" means, unless otherwise specified, the Board of Directors of the Company or any authorized committee thereof. "Board Resolution" means a resolution authorized by the Board of Directors. "Business Day" means any day other than a Legal Holiday. "Capital Lease Obligation" means, at the time any determination thereof is to be made, the amount of the liability in respect of a capital lease that would at such time be so required to be capitalized on the balance sheet in accordance with GAAP. "Capital Stock" means (i) in the case of a corporation, corporate stock, (ii) in the case of an association or business entity, any and all shares, interests, participations, rights or other equivalents (however designated) of corporate stock and (iii) in the case of a partnership, partnership interests (whether general or limited) and any other interest or participation that confers on a Person the right to receive a share of the profits and losses of, or distributions of assets of, such partnership. "Certificated Security" means a certificated Senior Discount Note registered in the name of the holder thereof and issued in accordance with Section 2.07 hereof, substantially in the form of Exhibit A 2 hereto, except that such Senior Discount Note shall not bear the Global Security Legend and shall not have the "Schedule of Exchanges of Interests in the Global Security" attached thereto. "Change of Control" means the occurrence of any of the following: (i) the sale, lease, transfer, conveyance or other disposition, in one or a series of related transactions, of all or substantially all of the assets of the Company and its Subsidiaries, taken as a whole, to any Person or group (as such term is used in Section 13(d)(3) and 14(d)(2) of the Exchange Act), (ii) the adoption of a plan relating to the liquidation or dissolution of the Company, (iii) any Person or group (as defined above) is or becomes the Beneficial Owner, directly or indirectly, of more than 50% of the total Voting Stock or Total Common Equity of the Company, including by way of merger, consolidation or otherwise or (iv) the first day on which a majority of the members of the Board of Directors of the Company are not Continuing Directors. "Closing Price" on any Trading Day with respect to the per share price of any shares of Capital Stock means the last reported sale price regular way or, in case no such reported sale takes place on such day, the average of the reported closing bid and asked prices regular way, in either case on the New York Stock Exchange or, if such shares of Capital Stock are not listed or admitted to trading on such exchange, on the principal national securities exchange on which such shares are listed or admitted to trading or, if not listed or admitted to trading on any national securities exchange, on the Nasdaq National Market or, if such shares are not listed or admitted to trading on any national securities exchange or quoted on Nasdaq National Market but the issuer is a Foreign Issuer (as defined in Rule 3b-4(b) under the Exchange Act) and the principal securities exchange on which such shares are listed or admitted to trading is a Designated Offshore Securities Market (as defined in Rule 902(a) under the Securities Act), the average of the reported closing bid and asked prices regular way on such principal exchange, or, if such shares are not listed or admitted to trading on any national securities exchange or quoted on Nasdaq National Market and the issuer and principal securities exchange do not meet such requirements, the average of the closing bid and asked prices in the over- the-counter market as furnished by any New York Stock Exchange member firm that is selected from time to time by the Company for that purpose and is reasonably acceptable to the Trustee. "Common Stock" of any Person means Capital Stock of such Person that does not rank prior, as to the payment of dividends or as to the distribution of assets upon any voluntary or involuntary liquidation, dissolution or winding up of such Person, to shares of Capital Stock of any other class of such Person. "Consolidated Cash Flow Leverage Ratio" with respect to any Person means the ratio of the Consolidated Indebtedness of such Person to the Consolidated EBITDA of such Person for the relevant period; provided, however, that (1) if the Company or any Subsidiary of the Company has incurred any Indebtedness (including Acquired Debt) or if the Company has issued any Disqualified Stock or if any Subsidiary of the Company has issued any Preferred Stock since the beginning of such period that remains outstanding on the date of such determination or if the transaction giving rise to the need to calculate the Consolidated Cash Flow Leverage Ratio is an incurrence of Indebtedness (including Acquired Debt) or the issuance of Disqualified Stock by the Company, Consolidated EBITDA and Consolidated Indebtedness for such period will be calculated after giving effect on a pro forma basis to (A) such Indebtedness, Disqualified Stock or Preferred Stock, as applicable, as if such Indebtedness had been incurred or such stock had been issued on the first day of such period, (B) the discharge of any other Indebtedness repaid, repurchased, defeased or otherwise discharged with the proceeds of such new Indebtedness or sale of stock as if such discharge had occurred on the first day of such period, and (C) the interest income realized by the Company or its Subsidiaries on the proceeds of such Indebtedness or of such stock sale, to the extent 3 not yet applied at the date of determination, assuming such proceeds earned interest at the rate in effect on the date of determination from the first day of such period through such date of determination, (2) if since the beginning of such period the Company or any Subsidiary of the Company has made any sale of assets (including, without limitation, any Asset Sales or pursuant to any Sale and Leaseback Transaction), Consolidated EBITDA for such period will be (A) reduced by an amount equal to Consolidated EBITDA (if positive) directly attributable to the assets which are the subject of such sale of assets for such period or (B) increased by an amount equal to Consolidated EBITDA (if negative) directly attributable thereto for such period and (3) if since the beginning of such period the Company or any Subsidiary of the Company (by merger or otherwise) has made an Investment in any Subsidiary of the Company (or any Person which becomes a Subsidiary of the Company) or has made an acquisition of assets, including, without limitation, any acquisition of assets occurring in connection with a transaction causing a calculation of Consolidated EBITDA to be made hereunder, which constitutes all or substantially all of an operating unit of a business, Consolidated EBITDA for such period will be calculated after giving pro forma effect thereto (including the incurrence of any Indebtedness (including Acquired Debt)) as if such Investment or acquisition occurred on the first day of such period. For purposes of this definition, whenever pro forma effect is to be given to an acquisition of assets, the pro forma calculations will be determined in good faith by a responsible financial or accounting Officer of the Company, provided, however, that such Officer shall assume (i) the historical sales and gross profit margins associated with such assets for any consecutive 12-month period ended prior to the date of purchase (provided that the first month of such 12-month period will be no more than 18 months prior to such date of purchase) and (ii) other expenses as if such assets had been owned by the Company since the first day of such period. If any Indebtedness (including, without limitation, Acquired Debt) bears a floating rate of interest and is being given pro forma effect, the interest on such Indebtedness will be calculated as if the rate in effect on the date of determination had been the applicable rate for the entire period. "Consolidated EBITDA" as of any date of determination means the Consolidated Net Income for such period (but without giving effect to adjustments, accruals, deductions or entries resulting from purchase accounting, extraordinary losses or gains and any gains or losses from any Asset Sales), plus the following to the extent deducted in calculating such Consolidated Net Income: (i) provision for taxes based on income or profits of such Person and its Subsidiaries for such period, (ii) Consolidated Interest Expense, (iii) depreciation, amortization (including amortization of goodwill and other intangibles) and other non-cash charges (excluding any such non-cash charge to the extent that it represents an accrual of or reserve for cash charges in any future period or amortization of a prepaid cash expense that was paid in a prior period and excluding non-cash interest and dividend income) of such Person and its Subsidiaries for such period, in each case, on a consolidated basis and determined in accordance with GAAP. Notwithstanding the foregoing, the provision for taxes on the income or profits of, and the depreciation, amortization, interest expense and other non-cash charges of, a Subsidiary of the referent Person shall be added to Consolidated Net Income to compute Consolidated EBITDA only to the extent (and in same proportion) that the Net Income of such Subsidiary was included in calculating the Consolidated Net Income of such Person and only if a corresponding amount would be permitted at the date of determination to be dividended to the Company by such Subsidiary, or loaned to the Company by any such Subsidiary, without prior approval (that has not been obtained), pursuant to the terms of its charter and all agreements, instruments, judgments, decrees, orders, statutes, rules and governmental regulations applicable to that Subsidiary or its stockholders. "Consolidated Indebtedness" means, with respect to any Person, as of any date of determination, the aggregate amount of Indebtedness of such Person and its Subsidiaries as of such date calculated on a consolidated basis in accordance with GAAP consistently applied. 4 "Consolidated Interest Expense" means, for any Person, for any period, the aggregate of the following for such Person for such period determined on a consolidated basis in accordance with GAAP: (a) the amount of interest in respect of Indebtedness (including amortization of original issue discount, amortization of debt issuance costs, and non-cash interest payments on any Indebtedness, the interest portion of any deferred payment obligation and after taking into account the effect of elections made under any Interest Rate Agreement, however denominated, with respect to such Indebtedness), (b) the amount of Redeemable Dividends (to the extent not already included in Indebtedness in determining Consolidated Interest Expense for the relevant period) and (c) the interest component of rentals in respect of any Capital Lease Obligation paid, in each case whether accrued or scheduled to be paid or accrued by such Person during such period to the extent such amounts were deducted in computing Consolidated Net Income, determined on a consolidated basis in accordance with GAAP. For purposes of this definition, interest on a Capital Lease Obligation shall be deemed to accrue at an interest rate reasonably determined by such Person to be the rate of interest implicit in such Capital Lease Obligation in accordance with GAAP consistently applied. "Consolidated Net Income" means, with respect to any Person for any period, the aggregate of the Net Income of such Person and its Subsidiaries for such period, on a consolidated basis, determined in accordance with GAAP; provided that: (i) the Net Income of any Person that is not a Subsidiary or that is accounted for by the equity method of accounting shall be included only to the extent of the amount of dividends or distributions paid in cash to the referent Person or a Subsidiary thereof, (ii) the Net Income of any Subsidiary shall be excluded to the extent that the declaration or payment of dividends or other distributions by that Subsidiary of that Net Income is not at the date of determination permitted without any prior governmental approval (which has not been obtained) or, directly or indirectly, by operation of the terms of its charter or any agreement, instrument, judgment, decree, order, statute, rule or governmental regulation applicable to that Subsidiary or its stockholders, (iii) the Net Income of any Person acquired in a pooling of interests transaction for any period prior to the date of such acquisition shall be excluded, (iv) the cumulative effect of a change in accounting principles shall be excluded, and (v) the Net Income of any Unrestricted Subsidiary shall be excluded, whether or not distributed to the Company or one of its Subsidiaries. "Contingent Investment" means, with respect to any Person, any guarantee by such Person of the performance of another Person or any commitment by such Person to invest in another Person. Any Investment that consists of a Contingent Investment shall be deemed made at the time that the guarantee of performance or the commitment to invest is given, and the amount of such Investment shall be the maximum monetary obligation under such guarantee of performance or commitment to invest. To the extent that a Contingent Investment is released or lapses without payment under the guarantee of performance or the commitment to invest, such Investment shall be deemed not made to the extent of such release or lapse. With respect to any Contingent Investment, the payment of the guarantee of performance or the payment under the commitment to invest shall not be deemed to be an additional Investment. 5 "Continuing Directors" means, as of any date of determination, any member of the Board of Directors of the Company who (i) was a member of such Board of Directors on the Issue Date or (ii) was nominated for election or elected to such Board of Directors with the affirmative vote of a majority of the Continuing Directors who were members of such Board at the time of such nomination or election. "Corporate Trust Office of the Trustee" shall be at the address of the Trustee specified in Section 10.02 hereof or such other address as to which the Trustee may give notice to the Company. "Credit Facility" means any credit facility entered into by and among the Company and one or more commercial banks or financial institutions, providing for senior term or revolving credit borrowings of a type similar to credit facilities typically entered into by commercial banks and financial institutions, including any related notes, Guarantees, collateral documents, instruments and agreements executed in connection therewith, as such credit facility and related agreements may be amended, extended, refinanced, renewed, restated, replaced or refunded from time to time. "Damages Payment Date" means each July 15 and January 15. "Defeasance" means the defeasance by the Company of its 13 1/2% Notes pursuant to Article 8 of the indenture governing such notes. "Default" means any event that is or with the passage of time or the giving of notice or both would be an Event of Default. "Depositary" means, with respect to the Senior Discount Notes issuable or issued in whole or in part in global form, the Person specified in Section 2.03 hereof as the Depositary with respect to the Senior Discount Notes, until a successor shall have been appointed and become such pursuant to the applicable provision of this Indenture, and, thereafter, "Depositary" shall mean or include such successor. "Disqualified Stock" means any Capital Stock to the extent that, and only to the extent that, 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 is mandatorily redeemable, pursuant to a sinking fund obligation or otherwise, or is redeemable at the option of the holder thereof, in whole or in part, on or prior to the date on which the Senior Discount Notes mature, provided, however, that any Capital Stock which would not constitute Disqualified Stock but for provisions thereof giving holders thereof the right to require the Company to repurchase or redeem such Capital Stock upon the occurrence of a Change of Control occurring prior to the final maturity of the Senior Discount Notes shall not constitute Disqualified Stock if the change in control provisions applicable to such Capital Stock are no more favorable to the holders of such Capital Stock than the provisions applicable to the Senior Discount Notes contained in Section 4.15 hereof and such Capital Stock specifically provides that the Company will not repurchase or redeem any such stock pursuant to such provisions prior to the Company's repurchase of such Senior Discount Notes as are required to be repurchased pursuant to Section 4.15 hereof. "Eligible Institution" means a commercial banking institution that has combined capital and surplus of not less than $500 million or its equivalent in foreign currency, whose debt is rated "A" (or higher) according to S&P or Moody's at the time as of which any investment or rollover therein is made. "Eligible Receivable" means any Receivable not more than 90 days past due under its scheduled payment terms. 6 "Equity Interests" means Capital Stock and all warrants, options or other rights to acquire Capital Stock or that are measured by the value of Capital Stock (but excluding any debt security that is convertible into or exchangeable for Capital Stock). "Exchange Act" means the Securities Exchange Act of 1934, as amended (or any successor act), and the rules and regulations thereunder. "Existing Indebtedness" means the Existing Senior Notes and all other Indebtedness of the Company and its Subsidiaries in existence on the Issue Date. "Existing Senior Notes" means the Company's 12 1/2% Senior Discount Notes due 2006. "Fair Market Value" means with respect to any asset or property, the sale value that would be obtained in an arm's length transaction between an informed and willing seller under no compulsion to sell and an informed and willing buyer under no compulsion to buy. "GAAP" means generally accepted accounting principles set forth in the opinions and pronouncements of the Accounting Principles Board of the American Institute of Certified Public Accountants and statements and pronouncements of the Financial Accounting Standards Board or in such other statements by such other entity as may be approved by a significant segment of the accounting profession of the United States, which are in effect on the Issue Date. "Global Security" means, individually and collectively, each of the Restricted Global Securities and the Unrestricted Global Security, substantially in the form of Exhibit A. "Global Security Legend" means the legend set forth in Section 2.07(g)(ii) to be placed on all Global Securities issued under this Indenture. "Government Securities" means direct obligations of, or obligations guaranteed by, the United States of America for the payment of which guarantee or obligations the full faith and credit of the United States is pledged. "Guarantee" means a guarantee (other than by endorsement of negotiable instruments for collection in the ordinary course of business), direct or indirect, in any manner (including, without limitation, letters of credit and reimbursement agreements in respect thereof), of all or any part of any Indebtedness. "Hedging Obligations" means, with respect to any Person, the obligations of such Person under Interest Rate Agreements. "Holder" and "holder" shall mean a Person in whose name a Senior Discount Note is registered. "IAI Global Security" means the Global Security in the form of Exhibit A hereto bearing the Global Security Legend and the Private Placement Legend and deposited with and registered in the name of the Depositary or its nominee that will be issued in a denomination equal to the outstanding principal amount at maturity of the Senior Discount Notes sold to Institutional Accredited Investors. 7 "Indebtedness" means, with respect to any Person, any indebtedness of such Person, whether or not contingent, in respect of borrowed money or evidenced by bonds, notes, debentures or similar instruments or letters of credit (or reimbursement agreements in respect thereof) or representing the balance deferred and unpaid of the purchase price of any property (including pursuant to capital leases) or representing any Hedging Obligations, except any such balance that constitutes an accrued expense or trade payable, if and to the extent any of the foregoing (other than Hedging Obligations or letters of credit) would appear as a liability upon a balance sheet of such Person prepared in accordance with GAAP, all indebtedness of others secured by a Lien on any asset of such Person (whether or not such indebtedness is assumed by such Persons), all obligations to purchase, redeem, retire, defease or otherwise acquire for value any Disqualified Stock or any warrants, rights or options to acquire such Disqualified Stock valued, in the case of Disqualified Stock, at the greatest amount payable in respect thereof on a liquidation (whether voluntary or involuntary) plus accrued and unpaid dividends, the liquidation value of any Preferred Stock issued by Subsidiaries of such Person plus accrued and unpaid dividends, and also includes, to the extent not otherwise included, the Guarantee of items that would be included within this definition and any amendment, supplement, modification, deferral, renewal, extension or refunding of any of the above; notwithstanding the foregoing, in no event will performance bonds or similar security for performance be deemed Indebtedness so long as such performance bonds or similar security for performance would not appear as a liability on a balance sheet of such Person prepared in accordance with GAAP; and provided, further that the amount of any Indebtedness in respect of any Guarantee shall be the maximum principal amount of the Indebtedness so guaranteed. "Indenture" means this Indenture, as amended or supplemented from time to time. "Indirect Participant" means a Person who holds a beneficial interest in a Global Security through a Participant. "Initial Purchasers" means Bear, Stearns & Co. Inc. and Salomon Brothers Inc, as initial purchasers in the Offering. "Interest Rate Agreements" means (i) interest rate swap agreements, interest rate cap agreements and interest rate collar agreements and (ii) other agreements or arrangements designed to protect such Person against fluctuations in interest rates. "Institutional Accredited Investor" means an institution that is an "accredited investor" as defined in Rule 501(a)(1), (2), (3) or (7) under the Securities Act. "Investments" means, with respect to any Person, all investments by such Person in other Persons (including Affiliates) in the forms of loans, Guarantees, Contingent Investments, advances or capital contributions (excluding commission, travel and similar advances to officers and employees made in the ordinary course of business), purchases or other acquisitions for consideration of Indebtedness, Equity Interests or other securities of any other Person and all other items that are or would be classified as investments on a balance sheet prepared in accordance with GAAP; provided, however, that any investment to the extent made with Capital Stock of the Company (other than Disqualified Stock) shall not be deemed an "Investment" for purposes of this Indenture. "Issue Date" means July 9, 1997. 8 "Joint Venture" means a Person in the Telecommunications Business in which the Company holds less than a majority of the shares of Voting Stock or an Unrestricted Subsidiary in the Telecommunications Business. "Legal Holiday" means a Saturday, a Sunday or a day on which banking institutions in the City of New York or at a place of payment are authorized by law, regulation or executive order to remain closed. If a payment date is a Legal Holiday at a place of payment, payment may be made at that place on the next succeeding day that is not a Legal Holiday, and no interest shall accrue for the intervening period. "Letter of Transmittal" means the letter of transmittal to be prepared by the Company and sent to all holders of the Senior Discount Notes for use by such holders in connection with the Exchange Offer. "Liquidated Damages" means all liquidated damages then owing pursuant to Section 5 of the Senior Discount Note Registration Rights Agreement. "Lien" means, with respect to any asset, any mortgage, lien, pledge, charge, security interest or encumbrance of any kind in respect of such asset, whether or not filed, recorded or otherwise perfected under applicable law (including any conditional sale or other title retention agreement, any lease in the nature thereof, any option or other agreement to sell or give a security interest in and any filing of or agreement to give any financing statement under the Uniform Commercial Code (or equivalent statutes) of any jurisdiction). "Marketable Securities" means: (i) Government Securities; (ii) any certificate of deposit maturing not more than 270 days after the date of acquisition issued by, or time deposit of, an Eligible Institution; (iii) commercial paper maturing not more than 270 days after the date of acquisition issued by a corporation (other than an Affiliate of the Company) with a rating, at the time as of which any investment therein is made, of "A-1" (or higher) according to S&P or "P-1" (or higher) according to Moody's; (iv) any banker's acceptances or money market deposit accounts issued or offered by an Eligible Institution; and (v) any fund investing exclusively in investments of the types described in clauses (i) through (iv) above. "Moody's" means Moody's Investors Service, Inc. and its successors. "Net Income" means, with respect to any Person, the net income (loss) of such Person, determined in accordance with GAAP and before any reduction in respect of preferred stock dividends, excluding, however, (i) any gain (but not loss), together with any related provision for taxes on such gain (but not loss), realized in connection with (a) any Asset Sale (including, without limitation, dispositions pursuant to Sale and Leaseback Transactions) or (b) the disposition of any securities by such Person or 9 any of its Subsidiaries or the extinguishment of any Indebtedness of such Person or any of its Subsidiaries and (ii) any extraordinary gain (but not loss), together with any related provision for taxes on such extraordinary gain (but not loss). "Net Proceeds" means the aggregate cash proceeds received by the Company or any of its Subsidiaries in respect of any Asset Sale, net of the direct costs relating to such Asset Sale (including, without limitation, legal, accounting and investment banking fees, and sales commissions) and any relocation expenses incurred as a result thereof, taxes paid or payable as a result thereof (after taking into account any available tax credits or deductions and any tax sharing arrangements), amounts required to be applied to the repayment of Indebtedness secured by a Lien on the asset or assets that are the subject of such Asset Sale and any reserve for adjustment in respect of the sale price of such asset or assets. Net Proceeds shall exclude any non-cash proceeds received from any Asset Sale, but shall include such proceeds when and as converted by the Company or any Subsidiary of the Company to cash. "Note Custodian" means the Trustee, as custodian with respect to the Senior Discount Notes in global form, or any successor entity thereto. "Offering" means the offering of the Senior Discount Notes pursuant to the Offering Memorandum. "Offering Memorandum" means the offering memorandum of the Company, dated July 3, 1997, relating to the Offering. "Officer" means, with respect to any Person, the Chairman of the Board, the Chief Executive Officer, the President, the Chief Operating Officer, the Chief Financial Officer, the Treasurer, any Assistant Treasurer, Controller, Secretary or any Vice-President of such Person. "Officers' Certificate" means a certificate signed by two Officers of the Company, one of whom must be the principal executive officer, principal financial officer, treasurer or principal accounting officer of the Company. "Opinion of Counsel" means an opinion from legal counsel, who may be an employee of or counsel to the Company, any Subsidiary of the Company or the Trustee. "Pari Passu Notes" means any notes issued by the Company which, by their terms and the terms of any indenture governing such notes, have an obligation to be repurchased by the Company upon the occurrence of an Asset Sale. "Participant" means, with respect to DTC, a Person who has an account with DTC. "Permitted Investment" means (a) any Investments in the Company or any Subsidiary of the Company; (b) any Investments in Marketable Securities; (c) Investments by the Company or any Subsidiary of the Company in a Person, if as a result of such Investment (i) such Person becomes a Subsidiary of the Company or (ii) such Person is merged, consolidated or amalgamated with or into, or transfers or conveys substantially all of its assets to, or is liquidated into, the Company or a Subsidiary of the Company; (d) any Investments in property or assets to be used in (A) any line of business in which the Company or any of its Subsidiaries was engaged on the Issue Date or (B) any Telecommunications Business; (e) Investments in any Person in connection with the acquisition of such Person or substantially 10 all of the property or assets of such Person by the Company or any Subsidiary of the Company; provided that within 180 days from the first date of any such Investment, either (A) such Person becomes a Subsidiary of the Company or any of its Subsidiaries or (B) the amount of any such Investment is repaid in full to the Company or any of its Subsidiaries; (f) Investments pursuant to any agreement or obligation of the Company or a Subsidiary, in effect on the Issue Date or on the date a subsidiary becomes a Subsidiary (provided that any such agreement was not entered into in contemplation of such subsidiary becoming a Subsidiary), to make such Investments; (g) Investments in prepaid expenses, negotiable instruments held for collection and lease, utility and workers' compensation, performance and other similar deposits; (h) Hedging Obligations permitted to be incurred pursuant to Section 4.09(b) hereof; and (i) bonds, notes, debentures or other securities received as a result of Asset Sales permitted under Section 4.10 hereof. "Permitted Liens" means (i) Liens securing Indebtedness (including Capital Lease Obligations) permitted to be incurred pursuant to Sections 4.09(b)(i) and 4.09(b)(ii) hereof; (ii) Liens in favor of the Company; (iii) Liens on property of a Person existing at the time such Person is merged into or consolidated with the Company or any Subsidiary of the Company; provided that such Liens were in existence prior to the contemplation of such merger or consolidation and do not extend to any assets other than those of the Person merged into or consolidated with the Company; (iv) Liens on property existing at the time of acquisition thereof by the Company or any Subsidiary of the Company, provided that such Liens were in existence prior to the contemplation of such acquisition; (v) Liens to secure the performance of statutory obligations, surety or appeal bonds, performance bonds or other obligations of a like nature incurred in the ordinary course of business; (vi) Liens existing on the Issue Date; (vii) Liens for taxes, assessments or governmental charges or claims that are not yet delinquent or that are being contested in good faith by appropriate proceedings timely instituted and diligently concluded, provided that any reserve or other appropriate provision as shall be required in conformity with GAAP shall have been made therefor; (viii) Liens incurred in the ordinary course of business of the Company or any Subsidiary of the Company with respect to obligations that do not exceed $5.0 million at any one time outstanding and that (a) are not incurred in connection with the borrowing of money or the obtaining of advances or credit (other than trade credit in the ordinary course of business) and (b) do not in the aggregate materially detract from the value of the property or materially impair the use thereof in the operation of business by the Company or such Subsidiary; (ix) existing Liens to secure the Company's 13 1/2% Notes pursuant to the indenture governing such notes or Liens arising from the Defeasance thereof; (x) Liens on Telecommunications Related Assets existing during the time of the construction thereof; (xi) Liens on Receivables to secure Indebtedness permitted to be incurred pursuant to Section 4.09(b) hereof, but only to the extent that the outstanding amount of the Indebtedness secured by such Liens would not represent more than 80% of Eligible Receivables; and (xii) Liens to secure any Permitted Refinancing of any Indebtedness secured by Liens referred to in the foregoing clauses (i), (iii), (v) or (xi); but only to the extent that such Liens do not extend to any other property or assets and the principal amount of the Indebtedness secured by such Liens is not increased. "Person" means any individual, corporation, partnership, joint venture, association, joint stock company, trust, unincorporated organization, government or any agency or political subdivision thereof or any other entity. "Preferred Stock" as applied to the Capital Stock of any Person, means Capital Stock of such Person of any class or classes (however designated) that ranks prior, as to payment of dividends or as to the distribution of assets upon any voluntary or involuntary liquidation, dissolution or winding up of such Person, to shares of Capital Stock of any other class of such Person. 11 "Public Offering" means an underwritten offering of Common Stock of the Company registered under the Securities Act. "Receivables" means, with respect to any Person, all of the following property and interests in property of such person or entity, whether now existing or existing in the future or hereafter acquired or arising: (i) accounts; (ii) accounts receivable, including, without limitation, all rights to payment created by or arising from sales of goods, leases of goods or the rendition of services no matter how evidenced, whether or not earned by performance; (iii) all unpaid seller's or lessor's rights including, without limitation, rescission, replevin, reclamation and stoppage in transit, relating to any of the foregoing after creation of the foregoing or arising therefrom; (iv) all rights to any goods or merchandise represented by any of the foregoing, including, without limitation, returned or repossessed goods; (v) all reserves and credit balances with respect to any such accounts receivable or account debtors; (vi) all letters of credit, security, or Guarantees for any of the foregoing; (vii) all insurance policies or reports relating to any of the foregoing; (viii) all collection of deposit accounts relating to any of the foregoing; (ix) all proceeds of any of the foregoing; and (x) all books and records relating to any of the foregoing. "Redeemable Dividend" means, for any dividend with regard to Disqualified Stock and Preferred Stock, the quotient of the dividend divided by the difference between one and the maximum statutory federal income tax rate (expressed as a decimal number between 1 and 0) then applicable to the issuer of such Disqualified Stock or Preferred Stock. "Representative" means the indenture trustee or other trustee, agent or representative for any Senior Indebtedness. "Responsible Officer" when used with respect to the Trustee, means any officer within the Corporate Trust Department of the Trustee (or any successor group of the Trustee) or any other officer of the Trustee customarily performing functions similar to those performed by any of the above designated officers and also means, with respect to a particular corporate trust matter, any other officer to whom such matter is referred because of his knowledge of and familiarity with the particular subject. "Restricted Investment" means an Investment other than a Permitted Investment. "Restricted Certificated Security" means a Certificated Security bearing the Private Placement Legend. "Restricted Global Security" means the 144A Global Security and the IAI Global Security, each of which shall bear the Private Placement Legend. "Retirement" means, the purchase, redemption, defeasance, retirement or other acquisition for value by the Company of the 13 1/2% Notes. "Rule 144" means Rule 144 under the Securities Act. "Rule 144A" means Rule 144A under the Securities Act. "Rule 903" means Rule 903 under the Securities Act. "Rule 904" means Rule 904 under the Securities Act. 12 "S&P" means Standard and Poor's Corporation and its successors. "Sale and Leaseback Transaction" means, with respect to any Person, any direct or indirect arrangement pursuant to which any property (other than Capital Stock) is sold by such Person or a Subsidiary of such Person and is thereafter leased back from the purchaser or transferee thereof by such Person or one of its Subsidiaries. "Securities Act" means the Securities Act of 1933, as amended (or any successor act), and the rules and regulations thereunder. "Senior Discount Note Registration Rights Agreement" means the Registration Rights Agreement dated as of the date hereof between the Company and the Initial Purchasers. "Senior Indebtedness" means any Indebtedness permitted to be incurred by the Company under the terms of this Indenture, unless the instrument under which such Indebtedness is incurred expressly provides that it is subordinated in right of payment to the Senior Discount Notes. Notwithstanding anything to the contrary in the foregoing, Senior Indebtedness will not include (i) any liability for federal, state, local or other taxes owed or owing by the Company, (ii) any Indebtedness of the Company to any of its Subsidiaries or other Affiliates, (iii) any trade payables or (iv) any Indebtedness that is incurred in violation of this Indenture. "Shelf Registration Statement" means the Shelf Registration Statement as defined in the Senior Discount Note Registration Rights Agreement. "Significant Subsidiary" means any Subsidiary that would be a "Significant Subsidiary" as defined in Article 1, Rule 1-02 of Regulation S-X, promulgated pursuant to the Securities Act, as such Regulation is in effect on the date hereof. "Strategic Investor" means, with respect to any sale of the Company's Capital Stock, any Person which, both as of the Trading Day immediately before the day of such sale and the Trading Day immediately after the day of such sale, has, or whose parent has, a Total Market Capitalization of at least $1.0 billion on a consolidated basis. In calculating Total Market Capitalization for the purpose of this definition, the consolidated Indebtedness of such Person, solely when calculated as of the Trading Day immediately after the day of such sale, will be calculated after giving effect to such sale (including any Indebtedness incurred in connection with such sale). For purposes of this definition, the term "parent" means any Person of which the referent Strategic Investor is a Subsidiary. "Subsidiary" of any Person means (i) any corporation, association or business entity of which more than 50% of the total voting power of shares of Capital Stock entitled (without regard to the occurrence of any contingency) to vote in the election of directors, managers or trustees thereof is at the time owned or controlled, directly or indirectly, by such Person or one or more of the other Subsidiaries of such Person or a combination thereof and (ii) any partnership (a) the sole general partner or the managing general partner of which is such Person or a Subsidiary of such Person or (b) the only general partners of which are such Person or one or more Subsidiaries of such Person or any combination thereof; provided that any Unrestricted Subsidiary shall be excluded from this definition of "Subsidiary." "Telecommunications Business" means, when used in reference to any Person, that such Person is engaged primarily in the business of (i) transmitting, or providing services relating to the transmission 13 of, voice, video or data through owned or leased transmission facilities, (ii) creating, developing or marketing communications related network equipment, software and other devices for use in a Telecommunications Business or (iii) evaluating, participating or pursuing any other activity or opportunity that is related to those identified in (i) or (ii) above; provided that the determination of what constitutes a Telecommunications Business shall be made in good faith by the Board of Directors of the Company. "Telecommunications Related Assets" means all assets, rights (contractual or otherwise) and properties, whether tangible or intangible, used in connection with a Telecommunications Business. "TIA" means the Trust Indenture Act of 1939 (15 U.S.C. (S)(S) 77aaa- 77bbbb) as in effect on the date on which this Indenture is qualified under the TIA, except as provided in Section 9.03 hereof. "Total Common Equity" of any Person means, as of any date of determination (and as modified for purposes of the definition of "Change of Control"), the product of (i) the aggregate number of outstanding primary shares of Common Stock of such Person on such day (which shall not include any options or warrants on, or securities convertible or exchangeable into, shares of Common Stock of such Person) and (ii) the average Closing Price of such Common Stock over the 20 consecutive Trading Days immediately preceding such day. If no such Closing Price exists with respect to shares of any such class, the value of such shares for purposes of clause (ii) of the preceding sentence shall be determined by the Board of Directors of the Company in good faith and evidenced by a resolution of the Board of Directors filed with the Trustee. "Total Market Capitalization" of any Person means, as of any day of determination (and as modified for purposes of the definition of "Strategic Investor"), the sum of (1) the consolidated Indebtedness of such Person and its Subsidiaries (except in the case of the Company, in which case of the Company and its Subsidiaries) on such day, plus (2) the product of (i) the aggregate number of outstanding primary shares of Common Stock of such Person on such day (which shall not include any options or warrants on, or securities convertible or exchangeable into, shares of Common Stock of such Person) and (ii) the average Closing Price of such Common Stock over the 20 consecutive Trading Days immediately preceding such day, plus (3) the liquidation value of any outstanding shares of Preferred Stock of such Person on such day. If no such Closing Price exists with respect to shares of any such class, the value of such shares for purposes of clause (2) of the preceding sentence shall be determined by the Company's Board of Directors in good faith and evidenced by a resolution of the Board of Directors filed with the Trustee. "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 party named as such above until a successor replaces it in accordance with the applicable provisions of this Indenture and thereafter means the successor serving hereunder. "Unrestricted Certificated Security" means one or more Certificated Securities that do not and are not required to bear the Private Placement Legend. "Unrestricted Global Security" means a permanent global security in the form of Exhibit A attached hereto that bears the Global Security Legend and the "Schedule of Exchanges of Interests in the Global Security" attached thereto, and that is deposited with and registered in the name of the Depositary, representing a series of Senior Discount Notes that do not bear the Private Placement Legend. 14 "Unrestricted Subsidiary" means any Subsidiary that is designated by the Board of Directors as an Unrestricted Subsidiary pursuant to a Board Resolution. "Vendor Indebtedness" means any Indebtedness of the Company or any Subsidiary incurred in connection with the acquisition or construction of Telecommunications Related Assets. "Voting Stock" of any Person means Capital Stock of such Person which ordinarily has voting power for the election of directors (or Persons performing similar functions) of such Person, whether at all times or only so long as no senior class of securities has such voting power by reason of any contingency. "Weighted Average Life to Maturity" means, when applied to any Indebtedness at any date, the number of years obtained by dividing (a) the then outstanding principal amount of such Indebtedness into (b) the total of the product obtained by multiplying (x) the amount of each then remaining installment, sinking fund, serial maturity or other required payments of principal, including payment at final maturity, in respect thereof, by (y) the number of years (calculated to the nearest one-twelfth) that will elapse between such date and the making of such payment; provided, that with respect to Capital Lease Obligations, that maturity shall be calculated after giving effect to all renewal options by the Lessee.
Section 1.02. Other Definitions. Defined in Term Section "Affiliate Transaction"........... 4.11 "Asset Sale"...................... 4.10 "Bankruptcy Law".................. 4.01 "Change of Control Offer"......... 4.15 "Change of Control Payment"....... 4.15 "Change of Control Payment Date".. 4.15 "Commission"...................... 4.03 "Covenant Defeasance"............. 8.03 "Custodian"....................... 6.01 "Event of Default"................ 6.01 "Excess Proceeds"................. 4.10 "Excess Proceeds Offer"........... 3.09 "incur"........................... 4.09 "Legal Defeasance"................ 8.02 "Offer Amount".................... 3.09 "Offer Period".................... 3.09 "Paying Agent".................... 2.03 "Payment Default"................. 6.01 "Permitted Refinancing"........... 4.09 "Purchase Date"................... 3.09 "Refinance"....................... 4.09 "Registrar"....................... 2.03 "Restricted Payments"............. 4.07 "Retire".......................... 4.07 "SEC Reports"..................... 4.03
15 Section 1.03. Incorporation by Reference of Trust Indenture Act. Whenever this Indenture refers to a provision of the TIA, the provision is incorporated by reference in and made a part of this Indenture. The following TIA terms used in this Indenture have the following meanings: "indenture securities" means the Senior Discount Notes; "indenture security holder" means a holder of a Note; "indenture to be qualified" means this Indenture; "indenture trustee" or "institutional trustee" means the Trustee; "obligor" on the Senior Discount Notes means the Company and any successor obligor upon the Senior Discount Notes. All other terms used in this Indenture that are defined by the TIA, defined by TIA reference to another statute or defined by SEC rule under the TIA have the meanings so assigned to them. Section 1.04. Rules of Construction. Unless the context otherwise requires: (1) a capitalized term has the meaning assigned to it under this Article 1; (2) an accounting term not otherwise defined has the meaning assigned to it in accordance with GAAP; (3) "or" is not exclusive; (4) "including" means including without limitation; and (5) words in the singular include the plural, and in the plural include the singular. ARTICLE 2 THE SENIOR DISCOUNT NOTES Section 2.01. Form and Dating. 16 The Senior Discount Notes and the Trustee's certificate of authentication shall be substantially in the form of Exhibit A hereto, the terms of which are incorporated in and made a part of this Indenture. The Senior Discount Notes may have notations, legends or endorsements required by law, stock exchange rule or usage. Each Senior Discount Note shall be dated the date of its authentication. The Senior Discount Notes shall be in denominations of $1,000 and integral multiples thereof. The terms and provisions contained in the Senior Discount Notes shall constitute, and are hereby expressly made, a part of this Indenture and the Company and the Trustee, by their execution and delivery of this Indenture, expressly agree to such terms and provisions and to be bound thereby. However, to the extent any provision of any Senior Discount Note conflicts with the express provisions of this Indenture, the provisions of this Indenture shall govern and be controlling. Senior Discount Notes issued in global form shall be substantially in the form of Exhibit A attached hereto (including the Global Security Legend and the "Schedule of Exchanges in the Global Security" attached thereto). Senior Discount Notes issued in definitive form shall be substantially in the form of Exhibit A attached hereto (but without the Global Security Legend and without the "Schedule of Exchanges of Interests in the Global Security" attached thereto). Each Global Security shall represent such of the outstanding Senior Discount Notes as shall be specified therein and each shall provide that it shall represent the aggregate principal amount at maturity of outstanding Senior Discount Notes from time to time endorsed thereon and that the aggregate principal amount at maturity of outstanding Senior Discount Notes represented thereby may from time to time be reduced or increased, as appropriate, to reflect exchanges and redemptions. Any endorsement of a Global Security to reflect the amount of any increase or decrease in the aggregate principal amount at maturity of outstanding Senior Discount Notes represented thereby shall be made by the Trustee or the Note Custodian, at the direction of the Trustee, in accordance with instructions given by the holder thereof as required by Section 2.06 hereof. Section 2.02. Execution and Authentication. One Officer of the Company shall sign the Senior Discount Notes for the Company by manual or facsimile signature. If an Officer whose signature is on a Senior Discount Note no longer holds that office at the time a Senior Discount Note is authenticated, the Senior Discount Note shall nevertheless be valid. In addition, if a Person is not an Officer at the time a Senior Discount Note is authenticated, but becomes an Officer on or prior to the delivery of the Senior Discount Note, the Senior Discount Note shall nevertheless be valid. A Senior Discount Note shall not be valid until authenticated by the manual signature of an authorized signatory of the Trustee. The signature of the Trustee shall be conclusive evidence that the Senior Discount Note has been authenticated under this Indenture. The Trustee shall, upon a written order of the Company signed by an Officer of the Company, authenticate Senior Discount Notes for original issue up to the aggregate principal amount stated in paragraph 4 of the Senior Discount Notes. The aggregate principal amount of Senior Discount Notes outstanding at any time may not exceed such amount except as provided in Section 2.07 hereof. 17 The Trustee may appoint an authenticating agent acceptable to the Company to authenticate Senior Discount Notes. Unless limited by the terms of such appointment, an authenticating agent may authenticate Senior Discount 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 an Agent to deal with the Company or an Affiliate of the Company. Section 2.03. Registrar and Paying Agent. The Company shall maintain an office or agency where Senior Discount Notes may be presented for registration of transfer or for exchange ("Registrar") and an office or agency where Senior Discount Notes may be presented for payment ("Paying Agent"). The Registrar shall keep a register of the Senior Discount Notes and of their transfer and exchange. The Company may appoint one or more co-registrars and one or more additional paying agents. The term "Registrar" includes any co-registrar and the term "Paying Agent" includes any additional paying agent. The Company may change any Paying Agent or Registrar without notice to any holder. The Company shall notify the Trustee and the Trustee shall notify the holders of the Senior Discount Notes in writing of the name and address of any Agent not a party to this Indenture. If the Company fails to appoint or maintain another entity as Registrar or Paying Agent, the Trustee shall act as such. The Company or any of its Subsidiaries may act as Paying Agent or Registrar. The Company shall enter into an appropriate agency agreement with any Agent not a party to this Indenture, which shall incorporate the provisions of the TIA. The agreement shall implement the provisions of this Indenture that relate to such Agent. The Company shall notify the Trustee of the name and address of any such Agent. If the Company fails to maintain a Registrar or Paying Agent, or fails to give the foregoing notice, the Trustee shall act as such, and shall be entitled to appropriate compensation in accordance with Section 7.07 hereof. The Company initially appoints the Depository Trust Company ("DTC") to act as Depositary with respect to the Global Securities. The Company initially appoints the Trustee to act as the Registrar and Paying Agent and to act as Note Custodian with respect to the Global Securities. Except as otherwise specifically provided herein, (i) all references in this Indenture to the Trustee shall be deemed to refer to the Trustee in its capacity as Trustee and in its capacities as Registrar and Paying Agent and (ii) every provision of this Indenture relating to the conduct of or affecting the liability of or offering protection, immunity or indemnity to the Trustee shall be deemed to apply with the same force and effect to the Trustee acting in its capacities as Paying Agent and Registrar. Section 2.04. Paying Agent to Hold Money in Trust. The Company shall require each Paying Agent other than the Trustee to agree in writing that the Paying Agent shall hold in trust for the benefit of holders or the Trustee all money held by the Paying Agent for the payment of principal, premium or Liquidated Damages, if any, or interest on the Senior Discount Notes, and will notify the Trustee of any default by the Company in making any such payment. While any such default continues, the Trustee may require a Paying Agent to pay all money held by it to the Trustee. The Company at any time may require a Paying Agent to pay all money held by it to the Trustee. Upon payment over to the Trustee, the Paying Agent (if other than the Company or a Subsidiary) shall have no further liability for the money. If the Company or a Subsidiary acts as Paying Agent, it 18 shall segregate and hold in a separate trust fund for the benefit of the holders all money held by it as Paying Agent. Upon any bankruptcy or reorganization proceedings relating to the Company, the Trustee shall serve as Paying Agent and Registrar for the Senior Discount Notes. Section 2.05. Holder Lists. If it is the Registrar, the Trustee shall preserve in as current a form as is reasonably practicable the most recent list available to it of the names and addresses of all holders and shall otherwise comply with TIA (S) 312(a). If the Trustee is not the Registrar, the Company shall furnish to the Trustee at least five Business Days before each interest payment date and at such other times as the Trustee may request in writing, a list in such form and as of such date as the Trustee may reasonably require of the names and addresses of the holders of the Senior Discount Notes and the Company shall otherwise comply with TIA (S) 312(a). Section 2.06. Transfer and Exchange. (a) Transfer and Exchange of Global Securities. A Global Security may not be transferred as a whole except by the Depositary to a nominee of the Depositary, by a nominee of the Depositary to the Depositary or to another nominee of the Depositary, or by the Depositary or any such nominee to a successor Depositary or a nominee of such successor Depositary. All Global Securities will be exchanged by the Company for Certificated Securities if (i) the Company delivers to the Trustee notice from the Depositary that it is unwilling or unable to continue to act as Depositary or that it is no longer a clearing agency registered under the Exchange Act and, in either case, a successor Depositary is not appointed by the Company within 120 days after the date of such notice from the Depositary or (ii) the Company in its sole discretion determines that the Global Securities (in whole but not in part) should be exchanged for Certificated Securities and delivers a written notice to such effect to the Trustee. Upon the occurrence of either of the preceding events in (i) or (ii) above, Certificated Securities shall be issued in such names as the Depositary shall instruct the Trustee. Global Securities also may be exchanged or replaced, in whole or in part, as provided in Sections 2.07 and 2.11 hereof. Every Senior Discount Note authenticated and delivered in exchange for, or in lieu of, a Global Security or any portion thereof, pursuant to Section 2.07 or 2.11 hereof, shall be authenticated and delivered in the form of, and shall be, a Global Security. A Global Security may not be exchanged for another Senior Discount Note other than as provided in this Section 2.06(a), however beneficial interests in a Global Security may be transferred and exchanged as provided in Section 2.06(b), (c) or (f) hereof. (b) Transfer and Exchange of Beneficial Interests in the Global Securities. The transfer and exchange of beneficial interests in the Global Securities shall be effected through the Depositary, in accordance with the provisions of this Indenture and the procedures of the Depositary therefor. Beneficial interests in the Restricted Global Securities shall be subject to restrictions on transfer comparable to those set forth herein to the extent required by the Securities Act. The Trustee shall have no obligation to ascertain the Depositary's compliance with any such restrictions on transfer. Transfers of beneficial interests in the Global Securities also shall require compliance with either subparagraph (i) or (ii) below, as applicable, as well as one or more of the other following subparagraphs as applicable: (i) Transfer of Beneficial Interests in the Same Global Security. Beneficial interests in any Restricted Global Security may be transferred to Persons who take delivery thereof in the form of 19 a beneficial interest in the same Restricted Global Security in accordance with the transfer restrictions set forth in the Private Placement Legend. Beneficial interests in any Unrestricted Global Security may be transferred only to Persons who take delivery thereof in the form of a beneficial interest in an Unrestricted Global Security. No written orders or instructions shall be required to be delivered to the Registrar to effect the transfers described in this Section 2.06(b)(i). (ii) All Other Transfers and Exchanges of Beneficial Interests in Global Securities. In connection with all transfers and exchanges of beneficial interests (other than transfers of beneficial interests in a Global Security to Persons who take delivery thereof in the form of a beneficial interest in the same Global Security), the transferor of such beneficial interest must deliver to the Registrar either (A) (1) a written order from a Participant or an Indirect Participant given to the Depositary in accordance with the Applicable Procedures directing the Depositary to credit or cause to be credited a beneficial interest in the specified Global Security in an amount equal to the beneficial interest to be transferred or exchanged and (2) instructions given in accordance with the Applicable Procedures containing information regarding the Participant account to be credited with such increase or (B) (1) a written order from a Participant or an Indirect Participant given to the Depositary in accordance with the Applicable Procedures directing the Depositary to cause to be issued a Certificated Security in an amount equal to the beneficial interest to be transferred or exchanged and (2) instructions given by the Depositary to the Registrar containing information regarding the Person in whose name such Certificated Security shall be registered to effect the transfer or exchange referred to in (1) above. Upon an Exchange Offer by the Company in accordance with Section 2.06(f) hereof, the requirements of this Section 2.06(b)(ii) shall be deemed to have been satisfied upon receipt by the Registrar of the instructions contained in the Letter of Transmittal delivered by the holder of such beneficial interests in the Restricted Global Securities. Upon satisfaction of all of the requirements for transfer or exchange of beneficial interests in Global Securities contained in this Indenture, the Notes and otherwise applicable under the Securities Act, the Trustee shall adjust the principal amount at maturity of the relevant Global Security pursuant to Section 2.06(h) hereof. (iii) Transfer of Beneficial Interests to Another Restricted Global Security. Beneficial interests in any Restricted Global Security may be transferred to Persons who take delivery thereof in the form of a beneficial interest in another Restricted Global Security if the Registrar receives the following: (A) if the transferee will take delivery in the form of a beneficial interest in the 144A Global Security, then the transferor must deliver a certificate in the form of Exhibit B hereto, including the certifications in item (1) thereof; (B) if the transferee will take delivery in the form of a beneficial interest in the IAI Global Security, then the transferor must deliver (x) a certificate in the form of Exhibit B hereto, including the certifications in item (3) thereof, (y) to the extent required by item 3(d) of Exhibit B hereto, an Opinion of Counsel in form reasonably acceptable to the Company to the effect that such transfer is in compliance with the Securities Act and such beneficial interest is being transferred in compliance with any applicable blue sky securities laws of any State of the United States and (z) if the transfer is being made to an Institutional Accredited Investor and effected pursuant to an exemption from the registration requirements of the Securities Act other than Rule 144A under the Securities Act, Rule 144 under the Securities Act or Rule 904 under the Securities Act, a certificate from the transferee in the form of Exhibit D hereto. 20 (iv) Transfer and Exchange of Beneficial Interests in a Restricted Global Security for Beneficial Interests in the Unrestricted Global Security. Beneficial interests in any Restricted Global Security may be exchanged by any holder thereof for a beneficial interest in the Unrestricted Global Security or transferred to Persons who take delivery thereof in the form of a beneficial interest in the Unrestricted Global Security if: (A) such exchange or transfer is effected pursuant to the Exchange Offer in accordance with the Registration Rights Agreement and the holder, in the case of an exchange, or the transferee, in the case of a transfer, is not (1) a broker-dealer, (2) a Person participating in the distribution of the Exchange Notes or (3) a Person who is an affiliate (as defined in Rule 144) of the Company; (B) any such transfer is effected pursuant to the Shelf Registration Statement in accordance with the Registration Rights Agreement; (C) any such transfer is effected by a Participating Broker-Dealer pursuant to the Exchange Offer Registration Statement in accordance with the Registration Rights Agreement; or (D) the Registrar receives the following: (1) if the holder of such beneficial interest in a Restricted Global Security proposes to exchange such beneficial interest for a beneficial interest in the Unrestricted Global Security, a certificate from such holder in the form of Exhibit C hereto, including the certifications in item (1)(a) thereof; (2) if the holder of such beneficial interest in a Restricted Global Security proposes to transfer such beneficial interest to a Person who shall take delivery thereof in the form of a beneficial interest in the Unrestricted Global Security, a certificate from such holder in the form of Exhibit B hereto, including the certifications in item (4) thereof; (3) in each such case set forth in this subparagraph (D), an Opinion of Counsel in form reasonably acceptable to the Registrar to the effect that such exchange or transfer is in compliance with the Securities Act, that the restrictions on transfer contained herein and in the Private Placement Legend are not required in order to maintain compliance with the Securities Act, and such beneficial interest is being exchanged or transferred in compliance with any applicable blue sky securities laws of any State of the United States. If any such transfer is effected pursuant to subparagraph (B) or (D) above at a time when an Unrestricted Global Security has not yet been issued, the Company shall issue and, upon receipt of an authentication order in accordance with Section 2.02 hereof, the Trustee shall authenticate one or more Unrestricted Global Securities in an aggregate principal amount at maturity equal to the principal amount at maturity of beneficial interests transferred pursuant to subparagraph (B) or (D) above. Beneficial interests in an Unrestricted Global Security cannot be exchanged for, or transferred to Persons who take delivery thereof in the form of, a beneficial interest in any Restricted Global Security. 21 (c) Transfer or Exchange of Beneficial Interests for Certificated Securities. (i) If any holder of a beneficial interest in a Restricted Global Security proposes to exchange such beneficial interest for a Certificated Security or to transfer such beneficial interest to a Person who takes delivery thereof in the form of a Certificated Security, then, upon receipt by the Registrar of the following documentation (all of which may be submitted by facsimile): (A) if the holder of such beneficial interest in a Restricted Global Security proposes to exchange such beneficial interest for a Certificated Security, a certificate from such holder in the form of Exhibit C hereto, including the certifications in item (2)(a) thereof; (B) if such beneficial interest is being transferred to a QIB in accordance with Rule 144A under the Securities Act, a certificate to the effect set forth in Exhibit B hereto, including the certifications in item (1) thereof; (C) if such beneficial interest is being transferred to a Non-U.S. Person in an offshore transaction in accordance with Rule 904 under the Securities Act, a certificate to the effect set forth in Exhibit B hereto, including the certifications in item (2) thereof; (D) if such beneficial interest is being transferred pursuant to an exemption from the registration requirements of the Securities Act in accordance with Rule 144 under the Securities Act, a certificate to the effect set forth in Exhibit B hereto, including the certifications in item (3)(a) thereof; (E) if such beneficial interest is being transferred to an Institutional Accredited Investor in reliance on an exemption from the registration requirements of the Securities Act other than those listed in subparagraphs (B) through (D) above, a certificate to the effect set forth in Exhibit B hereto, including the certifications in item (3)(d) thereof, a certificate from the transferee to the effect set forth in Exhibit D hereof and, to the extent required by item 3(d) of Exhibit B, an Opinion of Counsel from the transferee or the transferor reasonably acceptable to the Company to the effect that such transfer is in compliance with the Securities Act and such beneficial interest is being transferred in compliance with any applicable blue sky securities laws of any State of the United States; (F) if such beneficial interest is being transferred to the Company or any of its Subsidiaries, a certificate to the effect set forth in Exhibit B hereto, including the certifications in item (3)(b) thereof; or (G) if such beneficial interest is being transferred pursuant to an effective registration statement under the Securities Act, a certificate to the effect set forth in Exhibit B hereto, including the certifications in item (3)(c) thereof, the Trustee shall cause the aggregate principal amount at maturity of the applicable Global Security to be reduced accordingly pursuant to Section 2.06(h) hereof, and the Company shall execute and the Trustee shall authenticate and deliver to the Person designated in the instructions a Certificated Security in the appropriate principal amount at maturity. Certificated Securities issued in exchange for beneficial interests in a Restricted Global Security pursuant to this Section 2.06(c) shall be registered in such names and in such authorized denominations as the holder shall instruct the 22 Registrar through instructions from the Depositary and the Participant or Indirect Participant. The Trustee shall deliver such Certificated Securities to the Persons in whose names such Notes are so registered. Certificated Securities issued in exchange for a beneficial interest in a Restricted Global Security pursuant to this Section 2.06(c)(i) shall bear the Private Placement Legend and shall be subject to all restrictions on transfer contained therein. (ii) Notwithstanding 2.06(c)(i), a holder of a beneficial interest in a Restricted Global Security may exchange such beneficial interest for an Unrestricted Certificated Security or may transfer such beneficial interest to a Person who takes delivery thereof in the form of an Unrestricted Certificated Security only if: (A) such exchange or transfer is effected pursuant to the Exchange Offer in accordance with the Registration Rights Agreement and the holder, in the case of an exchange, or the transferee, in the case of a transfer, is not (1) a broker-dealer, (2) a Person participating in the distribution of the Exchange Notes or (3) a Person who is an affiliate (as defined in Rule 144) of the Company; (B) any such transfer is effected pursuant to the Shelf Registration Statement in accordance with the Registration Rights Agreement; (C) any such transfer is effected by a Participating Broker-Dealer pursuant to the Exchange Offer Registration Statement in accordance with the Registration Rights Agreement; or (D) the Registrar receives the following: (1) if the holder of such beneficial interest in a Restricted Global Security proposes to exchange such beneficial interest for a Certificated Security that does not bear the Private Placement Legend, a certificate from such holder in the form of Exhibit C hereto, including the certifications in item (1)(b) thereof; (2) if the holder of such beneficial interest in a Restricted Global Security proposes to transfer such beneficial interest to a Person who shall take delivery thereof in the form of a Certificated Security that does not bear the Private Placement Legend, a certificate from such holder in the form of Exhibit B hereto, including the certifications in item (4) thereof; and (3) in each such case set forth in this subparagraph (D), an Opinion of Counsel in form reasonably acceptable to the Company, to the effect that such exchange or transfer is in compliance with the Securities Act, that the restrictions on transfer contained herein and in the Private Placement Legend are not required in order to maintain compliance with the Securities Act, and such beneficial interest in a Restricted Global Security is being exchanged or transferred in compliance with any applicable blue sky securities laws of any State of the United States. (iii) If any holder of a beneficial interest in an Unrestricted Global Security proposes to exchange such beneficial interest for a Certificated Security or to transfer such beneficial interest to a Person who takes delivery thereof in the form of a Certificated Security, then, upon satisfaction of the conditions set forth in Section 2.06(b)(ii), the Trustee shall cause the aggregate principal amount at maturity of the applicable Global Security to be reduced accordingly pursuant to Section 2.06(h) 23 hereof, and the Company shall execute and the Trustee shall authenticate and deliver to the Person designated in the instructions a Certificated Security in the appropriate principal amount at maturity. Certificated Securities issued in exchange for a beneficial interest pursuant to this Section 2.06(c)(iii) shall be registered in such names and in such authorized denominations as the holder shall instruct the Registrar through instructions from the Depositary and the Participant or Indirect Participant. The Trustee shall deliver such Certificated Securities to the Persons in whose names such Notes are so registered. Certificated Securities issued in exchange for a beneficial interest pursuant to this section 2.06(c)(iii) shall not bear the Private Placement Legend. Beneficial interests in an Unrestricted Global Security cannot be exchanged for a Certificated Security bearing the Private Placement Legend or transferred to a Person who takes delivery thereof in the form of a Certificated Security bearing the Private Placement Legend. (d) Transfer or Exchange of Certificated Securities for Beneficial Interests. (i) If any holder of Restricted Certificated Securities proposes to exchange such Notes for a beneficial interest in a Restricted Global Security or to transfer such Certificated Securities to a Person who takes delivery thereof in the form of a beneficial interest in a Restricted Global Security, then, upon receipt by the Registrar of the following documentation (all of which may be submitted by facsimile): (A) if the holder of such Restricted Certificated Securities proposes to exchange such Notes for a beneficial interest in a Restricted Global Security, a certificate from such holder in the form of Exhibit C hereto, including the certifications in item (2)(b) thereof; (B) if such Certificated Securities are being transferred to a QIB in accordance with Rule 144A under the Securities Act, a certificate to the effect set forth in Exhibit B hereto, including the certifications in item (1) thereof; (C) if such Certificated Securities are being transferred to a Non-U.S. Person in an offshore transaction in accordance with Rule 904 under the Securities Act, a certificate to the effect set forth in Exhibit B hereto, including the certifications in item (2) thereof; (D) if such Certificated Securities are being transferred pursuant to an exemption from the registration requirements of the Securities Act in accordance with Rule 144 under the Securities Act, a certificate to the effect set forth in Exhibit B hereto, including the certifications in item (3)(a) thereof; (E) if such Certificated Securities are being transferred to an Institutional Accredited Investor in reliance on an exemption from the registration requirements of the Securities Act other than those listed in subparagraphs (B) through (D) above, a certificate to the effect set forth in Exhibit B hereto, including the certifications in item (3)(d) thereof, a certificate from the transferee to the effect set forth in Exhibit D hereof and, to the extent required by item 3(d) of Exhibit B, an Opinion of Counsel from the transferee or the transferor reasonably acceptable to the Company to the effect that such transfer is in compliance with the Securities Act and such Certificated Securities are being transferred in compliance with any applicable blue sky securities laws of any State of the United States; 24 (F) if such Certificated Securities are being transferred to the Company or any of its Subsidiaries, a certificate to the effect set forth in Exhibit B hereto, including the certifications in item (3)(b) thereof; or (G) if such Certificated Securities are being transferred pursuant to an effective registration statement under the Securities Act, a certificate to the effect set forth in Exhibit B hereto, including the certifications in item (3)(c) thereof, the Trustee shall cancel the Certificated Securities, increase or cause to be increased the aggregate principal amount at maturity of, in the case of clause (A) above, the appropriate Restricted Global Security, in the case of clause (B) above, the 144A Global Security, in the case of clause (C) above, the Regulation S Global Security, and in all other cases, the IAI Global Security. (ii) A holder of Restricted Certificated Securities may exchange such Notes for a beneficial interest in the Unrestricted Global Security or transfer such Restricted Certificated Securities to a Person who takes delivery thereof in the form of a beneficial interest in the Unrestricted Global Security only if: (A) such exchange or transfer is effected pursuant to the Exchange Offer in accordance with the Registration Rights Agreement and the holder, in the case of an exchange, or the transferee, in the case of a transfer, is not (1) a broker-dealer, (2) a Person participating in the distribution of the Exchange Notes or (3) a Person who is an affiliate (as defined in Rule 144) of the Company; (B) any such transfer is effected pursuant to the Shelf Registration Statement in accordance with the Registration Rights Agreement; (C) any such transfer is effected by a Participating Broker-Dealer pursuant to the Exchange Offer Registration Statement in accordance with the Registration Rights Agreement; or (D) the Registrar receives the following: (1) if the holder of such Certificated Securities proposes to exchange such Notes for a beneficial interest in the Unrestricted Global Security, a certificate from such holder in the form of Exhibit C hereto, including the certifications in item (1)(c) thereof; (2) if the holder of such Certificated Securities proposes to transfer such Notes to a Person who shall take delivery thereof in the form of a beneficial interest in the Unrestricted Global Security, a certificate from such holder in the form of Exhibit B hereto, including the certifications in item (4) thereof; and (3) in each such case set forth in this subparagraph (D), an Opinion of Counsel in form reasonably acceptable to the Company to the effect that such exchange or transfer is in compliance with the Securities Act, that the restrictions on transfer contained herein and in the Private Placement Legend are not required in order to maintain compliance with the Securities Act, and such Certificated Securities are being exchanged or transferred in compliance with any applicable blue sky securities laws of any State of the United States. 25 Upon satisfaction of the conditions of any of the subparagraphs in this Section 2.06(d)(ii), the Trustee shall cancel the Certificated Securities and increase or cause to be increased the aggregate principal amount at maturity of the Unrestricted Global Security. (iii) A holder of Unrestricted Certificated Securities may exchange such Notes for a beneficial interest in the Unrestricted Global Security or transfer such Certificated Securities to a Person who takes delivery thereof in the form of a beneficial interest in the Unrestricted Global Security. Upon receipt of a request for such an exchange or transfer, the Trustee shall cancel the Unrestricted Certificated Securities and increase or cause to be increased the aggregate principal amount at maturity of the Unrestricted Global Security. If any such exchange or transfer from a Certificated Security to a beneficial interest is effected pursuant to subparagraphs (ii)(B), (ii)(D) or (iii) above at a time when an Unrestricted Global Security has not yet been issued, the Company shall issue and, upon receipt of an authentication order in accordance with Section 2.02 hereof, the Trustee shall authenticate one or more Unrestricted Global Securities in an aggregate principal amount at maturity equal to the principal amount at maturity of beneficial interests transferred pursuant to subparagraphs (ii)(B), (ii)(D) or (iii) above. (e) Transfer and Exchange of Certificated Securities. Upon request by a holder of Certificated Securities and such holder's compliance with the provisions of this Section 2.06(e), the Registrar shall register the transfer or exchange of Certificated Securities. Prior to such registration of transfer or exchange, the requesting holder shall present or surrender to the Registrar the Certificated Securities duly endorsed or accompanied by a written instruction of transfer in form satisfactory to the Registrar duly executed by such holder or by his attorney, duly authorized in writing. In addition, the requesting holder shall provide any additional certifications, documents and information, as applicable, pursuant to the provisions of this Section 2.06(e). (i) Restricted Certificated Securities may be transferred to and registered in the name of Persons who take delivery thereof if the Registrar receives the following: (A) if the transfer will be made pursuant to Rule 144A under the Securities Act, then the transferor must deliver a certificate in the form of Exhibit B hereto, including the certifications in item (1) thereof; (B) if the transfer will be made pursuant to Rule 904, then the transferor must deliver a certificate in the form of Exhibit B hereto, including the certifications in item (2) thereof; and (C) if the transfer will be made pursuant to any other exemption from the registration requirements of the Securities Act, then the transferor must deliver (x) a certificate in the form of Exhibit B hereto, including the certifications in item (3) thereof, (y) to the extent required by item 3(d) of Exhibit B hereto, an Opinion of Counsel in form reasonably acceptable to the Company to the effect that such transfer is in compliance with the Securities Act and such beneficial interest is being transferred in compliance with any applicable blue sky securities laws of any State of the United States and (z) if the transfer is being made to an Institutional Accredited Investor and effected pursuant to an exemption from the registration requirements of the Securities Act other than Rule 144A under the Securities Act, Rule 144 under the Securities Act or Rule 904 under the Securities Act, a certificate from the transferee in the form of Exhibit D hereto. 26 (ii) Restricted Certificated Securities may be exchanged by any holder thereof for an Unrestricted Certificated Security or transferred to Persons who take delivery thereof in the form of an Unrestricted Certificated Security if: (A) such exchange or transfer is effected pursuant to the Exchange Offer in accordance with the Registration Rights Agreement and the holder, in the case of an exchange, or the transferee, in the case of a transfer, is not (1) a broker-dealer, (2) a Person participating in the distribution of the Exchange Notes or (3) a Person who is an affiliate (as defined in Rule 144) of the Company; (B) any such transfer is effected pursuant to the Shelf Registration Statement in accordance with the Registration Rights Agreement; (C) any such transfer is effected by a Participating Broker-Dealer pursuant to the Exchange Offer Registration Statement in accordance with the Registration Rights Agreement; or (D) the Registrar receives the following: (1) if the holder of such Restricted Certificated Securities proposes to exchange such Notes for an Unrestricted Certificated Security, a certificate from such holder in the form of Exhibit C hereto, including the certifications in item (1)(a) thereof; (2) if the holder of such Restricted Certificated Securities proposes to transfer such Notes to a Person who shall take delivery thereof in the form of an Unrestricted Certificated Security, a certificate from such holder in the form of Exhibit B hereto, including the certifications in item (4) thereof; and (3) in each such case set forth in this subparagraph (D), an Opinion of Counsel in form reasonably acceptable to the Company to the effect that such exchange or transfer is in compliance with the Securities Act, that the restrictions on transfer contained herein and in the Private Placement Legend are not required in order to maintain compliance with the Securities Act, and such Restricted Certificated Security is being exchanged or transferred in compliance with any applicable blue sky securities laws of any State of the United States. (iii) A holder of Unrestricted Certificated Securities may transfer such Notes to a Person who takes delivery thereof in the form of an Unrestricted Certificated Security. Upon receipt of a request for such a transfer, the Registrar shall register the Unrestricted Certificated Securities pursuant to the instructions from the holder thereof. Unrestricted Certificated Securities cannot be exchanged for or transferred to Persons who take delivery thereof in the form of a Restricted Certificated Security. (f) Exchange Offer. Upon the occurrence of the Exchange Offer in accordance with the Registration Rights Agreement, the Company shall issue and, upon receipt of an authentication order in accordance with Section 2.02, the Trustee shall authenticate (i) one or more Unrestricted Global Securities in an aggregate principal amount at maturity equal to the principal amount at maturity of the beneficial interests in the Restricted Global Securities tendered for acceptance by persons that are not (x) broker-dealers, (y) Persons participating in the distribution of the Exchange Notes or (z) Persons who are affiliates (as defined in Rule 144) of the Company and accepted for exchange in the exchange Offer and (ii) Certificated Securities in an aggregate principal amount at 27 maturity equal to the principal amount at maturity of the Restricted Certificated Securities accepted for exchange in the Exchange Offer. Concurrent with the issuance of such Notes, the Trustee shall cause the aggregate principal amount at maturity of the applicable Restricted Global Securities to be reduced accordingly, and the Company shall execute and the Trustee shall authenticate and deliver to the Persons designated by the holders of Certificated Securities so accepted Certificated Securities in the appropriate principal amount at maturity. (g) Legends. The following legends shall appear on the face of all Global Securities and Certificated Securities issued under this Indenture unless specifically stated otherwise in the applicable provisions of this Indenture. (i) Private Placement Legend. (A) Except as permitted by subparagraph (b) below, each Global Security and each Certificated Security (and all Notes issued in exchange therefor or substitution thereof) shall bear the legend in substantially the following form: "THE SECURITY (OR ITS PREDECESSOR) EVIDENCED HEREBY WAS ORIGINALLY ISSUED IN A TRANSACTION EXEMPT FORM REGISTRATION UNDER SECTION 5 OF THE UNITED STATES SECURITIES ACT OF 1933, AS AMENDED (THE "SECURITIES ACT"), AND THE SECURITY EVIDENCED HEREBY MAY NOT BE OFFERED, SOLD OR OTHERWISE TRANSFERRED IN THE ABSENCE OF SUCH REGISTRATION OR AN APPLICABLE EXEMPTION THEREFROM. EACH PURCHASER OF THE SECURITY EVIDENCED HEREBY IS HEREBY NOTIFIED THAT THE SELLER MAY BE RELYING ON THE EXEMPTION FROM THE PROVISIONS OF SECTION 5 OF THE SECURITIES ACT PROVIDED BY RULE 144A THEREUNDER. THE HOLDER OF THE SECURITY EVIDENCED HEREBY AGREES FOR THE BENEFIT OF THE COMPANY THAT (A) SUCH SECURITY MAY BE RESOLD, PLEDGED OR OTHERWISE TRANSFERRED, ONLY (1)(a) TO A PERSON WHO THE SELLER REASONABLY BELIEVES IS A QUALIFIED INSTITUTIONAL BUYER (AS DEFINED IN RULE 144A UNDER THE SECURITIES ACT) IN A TRANSACTION MEETING THE REQUIREMENTS OF RULE 144A, (b) IN A TRANSACTION MEETING THE REQUIREMENTS OF RULE 144 UNDER THE SECURITIES ACT OR (c) IN ACCORDANCE WITH ANOTHER EXEMPTION FROM THE REGISTRATION REQUIREMENTS OF THE SECURITIES ACT (AND BASED UPON AN OPINION OF COUNSEL IF THE COMPANY SO REQUESTS), (2) TO THE COMPANY OR (3) PURSUANT TO AN EFFECTIVE REGISTRATION STATEMENT AND, IN EACH CASE, IN ACCORDANCE WITH ANY APPLICABLE SECURITIES LAWS OF ANY STATE OF THE UNITED STATES OR ANY OTHER APPLICABLE JURISDICTION AND (B) THE HOLDER WILL, AND EACH SUBSEQUENT HOLDER IS REQUIRED TO, NOTIFY ANY PURCHASER FROM IT OF THE SECURITY EVIDENCED HEREBY OF THE RESALE RESTRICTIONS SET FORTH IN (A) ABOVE. (B) Notwithstanding the foregoing, any Global Security or Certificated Security issued pursuant to subparagraphs (b)(iv), (c)(ii), (c)(iii), (d)(ii), (d)(iii), (e)(ii), (e)(iii) or (f) to this Section 2.06 (and all Senior Discount Notes issued in exchange therefor or substitution thereof) shall not bear the Private Placement Legend. 28 (ii) Global Security Legend. Each Global Security shall bear a legend in substantially the following form: "THIS GLOBAL SECURITY IS HELD BY THE DEPOSITARY (AS DEFINED IN THE INDENTURE GOVERNING THIS NOTE) OR ITS NOMINEE IN CUSTODY FOR THE BENEFIT OF THE BENEFICIAL OWNERS HEREOF, AND IS NOT TRANSFERABLE TO ANY PERSON UNDER ANY CIRCUMSTANCES EXCEPT THAT (I) THE TRUSTEE MAY MAKE SUCH NOTATIONS HEREON AS MAY BE REQUIRED PURSUANT TO SECTION 2.07 OF THE INDENTURE, (II) THIS GLOBAL SECURITY MAY BE EXCHANGED IN WHOLE BUT NOT IN PART PURSUANT TO SECTION 2.06(a) OF THE INDENTURE, (III) THIS GLOBAL SECURITY MAY BE DELIVERED TO THE TRUSTEE FOR CANCELLATION PURSUANT TO SECTION 2.11 OF THE INDENTURE AND (IV) THIS GLOBAL SECURITY MAY BE TRANSFERRED TO A SUCCESSOR DEPOSITARY WITH THE PRIOR WRITTEN CONSENT OF THE COMPANY." (iii) Original Issue Discount Legend. Each Note shall bear a legend in substantially the following form: "FOR THE PURPOSES OF SECTIONS 1272, 1273 AND 1275 OF THE INTERNAL REVENUE CODE OF 1986, AS AMENDED, THIS SECURITY IS BEING ISSUED WITH ORIGINAL ISSUE DISCOUNT; YOU MAY CONTACT THE CHIEF FINANCIAL OFFICER OF INTERMEDIA COMMUNICATIONS INC. AT 3625 QUEEN PALM DRIVE, TAMPA, FLORIDA 33619, TELEPHONE NUMBER (813) 829-0011, WHO WILL PROVIDE YOU WITH ANY REQUIRED INFORMATION REGARDING THE ORIGINAL ISSUE DISCOUNT." (h) Cancellation and/or Adjustment of Global Securities. At such time as all beneficial interests in a particular Global Security have been exchanged for Certificated Securities or a particular Global Security has been redeemed, repurchased or cancelled in whole and not in part, each such Global Security shall be returned to or retained and cancelled by the Trustee in accordance with Section 2.11 hereof. At any time prior to such cancellation, if any beneficial interest in a Global Security is exchanged for or transferred to a Person who will take delivery thereof in the form of a beneficial interest in another Global Security or for Certificated Securities, the principal amount at maturity of Senior Discount Notes represented by such Global Security shall be reduced accordingly and an endorsement shall be made on such Global Security, by the Trustee or by the Depositary at the direction of the Trustee, to reflect such reduction; and if the beneficial interest is being exchanged for or transferred to a Person who will take delivery thereof in the form of a beneficial interest in another Global Security, such other Global Security shall be increased accordingly and an endorsement shall be made on such Global Security, by the Trustee or by the Depositary at the direction of the Trustee, to reflect such increase. (i) General Provisions Relating to Transfers and Exchanges. (i) To permit registrations of transfers and exchanges, the Company shall execute and the Trustee shall authenticate Global Securities and Certificated Securities upon the Company's order or at the Registrar's request. (ii) No service charge shall be made to a holder of a beneficial interest in a Global Security or to a holder of a Certificated Security for any registration of transfer or exchange, but the Company 29 may require payment of a sum sufficient to cover any transfer tax or similar governmental charge payable in connection therewith (other than any such transfer taxes or similar governmental charge payable upon exchange or transfer pursuant to Sections 2.10, 3.06, 4.10, 4.15 and 9.05 hereof). (iii) The Registrar shall not be required to register the transfer of or exchange any Senior Discount Note selected for redemption in whole or in part, except the unredeemed portion of any Senior Discount Note being redeemed in part. (iv) All Global Securities and Certificated Securities issued upon any registration of transfer or exchange of Global Securities or Certificated Securities shall be the valid obligations of the Company, evidencing the same debt, and entitled to the same benefits under this Indenture, as the Global Securities or Certificated Securities surrendered upon such registration of transfer or exchange. (v) The Company shall not be required (A) to issue, to register the transfer of or to exchange Senior Discount Notes during a period beginning at the opening of business 15 days before the day of any selection of Senior Discount Notes for redemption under Section 3.02 hereof and ending at the close of business on the day of selection, (B) to register the transfer of or to exchange any Senior Discount Note so selected for redemption in whole or in part, except the unredeemed portion of any Senior Discount Note being redeemed in part or (C) to register the transfer of or to exchange a Senior Discount Note between a record date and the next succeeding Interest Payment Date. (vi) Prior to due presentment for the registration of a transfer of any Senior Discount Note, the Trustee, any Agent and the Company may deem and treat the Person in whose name any Note is registered as the absolute owner of such Senior Discount Note for the purpose of receiving payment of principal of and interest on such Senior Discount Notes and for all other purposes, and none of the Trustee, any Agent or the Company shall be affected by notice to the contrary. (vii) The Trustee shall authenticate Global Securities and Certificated Securities in accordance with the provisions of Section 2.02 hereof. Section 2.07. Replacement Notes. If any mutilated Note is surrendered to the Trustee, or the Company and the Trustee receives evidence to their satisfaction of the destruction, loss or theft of any Note, the Company shall issue and the Trustee, upon the written order of the Company signed by two Officers of the Company, shall authenticate a replacement Senior Discount Note if the Trustee's requirements are met. If required by the Trustee or the Company, an indemnity bond must be supplied by the holder that is sufficient in the judgment of the Trustee and the Company to protect the Company, the Trustee, any Agent and any authenticating agent from any loss that any of them may suffer if a Note is replaced. The Company may charge for its expenses in replacing a Note. Every replacement Note is an additional obligation of the Company and shall be entitled to all of the benefits of this Indenture equally and proportionately with all other Notes duly issued hereunder. Section 2.08. Outstanding Notes. 30 The Senior Discount Notes outstanding at any time are all the Senior Discount Notes authenticated by the Trustee except for those cancelled by it, those delivered to it for cancellation and those described in this Section 2.08 as not outstanding. Except as set forth in Section 2.09 hereof, a Note does not cease to be outstanding because the Company or an Affiliate of the Company holds the Note. If a Senior Discount Note is replaced pursuant to Section 2.07 hereof, it ceases to be outstanding unless the Trustee receives proof satisfactory to it that the replaced Senior Discount Note is held by a bona fide purchaser. If the principal amount at maturity of any Senior Discount Note is considered paid under Section 4.01 hereof, it ceases to be outstanding and interest on it ceases to accrue. If the Paying Agent (other than the Company, a Subsidiary or an Affiliate of any thereof) segregates and holds in trust, in accordance with this Indenture, on a redemption date or maturity date, money sufficient to pay all principal and interest, if any, payable on that date with respect to the Senior Discount Notes (or the portion thereof to be redeemed or maturing, as the case may be), then on and after that date such Senior Discount Notes (or portions thereof) shall be deemed to be no longer outstanding and shall cease to accrue interest. Section 2.09. Treasury Notes. In determining whether the holders of the required principal amount at maturity of Senior Discount Notes have concurred in any direction, waiver or consent, Senior Discount Notes owned by the Company, or an Affiliate of the Company, shall be considered as though not outstanding, except that for the purposes of determining whether the Trustee shall be protected in relying on any such direction, waiver or consent, only Senior Discount Notes that a Trustee knows are so owned shall be so disregarded. Section 2.10. Temporary Notes. Until definitive Senior Discount Notes are ready for delivery, the Company may prepare and the Trustee shall authenticate temporary Senior Discount Notes upon a written order of the Company signed by two Officers of the Company. Temporary Senior Discount Notes shall be substantially in the form of definitive Senior Discount Notes but may have variations that the Company considers appropriate for temporary Senior Discount Notes and as shall be reasonably acceptable to the Trustee. Without unreasonable delay, the Company shall prepare and the Trustee shall authenticate definitive Senior Discount Notes and deliver them in exchange for temporary Senior Discount Notes. Holders of temporary Senior Discount Notes shall be entitled to all of the benefits of this Indenture. Section 2.11. Cancellation. The Company at any time may deliver Senior Discount Notes to the Trustee for cancellation. The Registrar and Paying Agent shall forward to the Trustee any Senior Discount Notes surrendered to them for registration of transfer, exchange or payment. The Trustee and no one else shall cancel all Senior Discount Notes surrendered for registration of transfer, exchange, payment, replacement or 31 cancellation and shall destroy cancelled Senior Discount Notes (subject to the record retention requirement of the Exchange Act), unless the Company directs cancelled Senior Discount Notes to be returned to it. Certification of the destruction of all cancelled Senior Discount Notes shall be delivered to the Company for all certificates so destroyed. The Company may not issue new Senior Discount Notes to replace Senior Discount Notes that it has redeemed, paid or delivered to the Trustee for cancellation. Section 2.12. Defaulted Interest. If the Company defaults in a payment of interest on the Senior Discount Notes, it shall pay the defaulted interest in any lawful manner plus, to the extent lawful, interest payable on the defaulted interest, to the Persons who are holders on a subsequent special record date, which date shall be at the earliest practicable date but in all events at least five Business Days prior to the payment date, in each case at the rate provided in the Senior Discount Notes and in Section 4.01 hereof. The Company shall fix or cause to be fixed each such special record date and payment date, provided that the Company shall fix or cause to be fixed each such special record date as early as practicable prior to the payment date, and the Company shall mail or cause to be mailed as early as practicable to each holder a notice that states the special record date, the related payment date and the amount of defaulted interest to be paid. Section 2.13. Record Date. The record date for purposes of determining the identity of holders of the Senior Discount Notes entitled to vote or consent to any action by vote or consent authorized or permitted under this Indenture shall be determined as provided for in TIA (S) 316(c). Section 2.14. CUSIP Number. The Company in issuing the Senior Discount Notes may use a "CUSIP" number and, if it does so, the Trustee shall use the CUSIP number in notices of redemption or exchange as a convenience to holders; provided that any such notice may state that no representation is made as to the correctness or accuracy of the CUSIP number printed in the notice or on the Senior Discount Notes and that reliance may be placed only on the other identification numbers printed on the Senior Discount Notes. The Company will promptly notify the Trustee of any change in the CUSIP number. ARTICLE 3 REDEMPTION AND CERTAIN REPURCHASES Section 3.01. Notices to Trustee. If the Company elects to redeem Senior Discount Notes pursuant to the optional redemption provisions of Section 3.07 hereof, it shall furnish to the Trustee, at least 45 days (unless a shorter period is acceptable to the Trustee) but not more than 60 days before a redemption date, an Officers' Certificate setting forth (i) the clause of this Indenture pursuant to which the redemption shall occur, (ii) the 32 redemption date, (iii) the principal amount of Senior Discount Notes to be redeemed and (iv) the redemption price. Section 3.02. Selection of Notes to Be Redeemed. If less than all of the Senior Discount Notes are to be redeemed at any time, except as provided in Section 3.09, the Trustee shall select the Senior Discount Notes to be redeemed or purchased in compliance with the requirements of the principal national securities exchange, if any, on which the Senior Discount Notes are listed, or, if the Senior Discount Notes are not so listed, on a pro rata basis, by lot or in accordance with any other method the Trustee considers fair and appropriate (and in such manner as complies with applicable legal and stock exchange requirements, if any), provided that no Senior Discount Notes with a principal amount of $1,000 or less shall be redeemed or purchased in part. A new Senior Discount Note in principal amount equal to the unredeemed or unpurchased portion shall be issued in the name of the holder thereof upon cancellation of the original Note. On and after the redemption or purchase date, interest shall cease to accrue on the Senior Discount Notes (and the Accreted Value shall cease to accrete if prior to July 15, 2002) or portions of them called for redemption or purchase. In the event of partial redemption by lot, the particular Senior Discount Notes to be redeemed shall be selected, unless otherwise provided herein, not less than 30 nor more than 60 days prior to the redemption date by the Trustee from the outstanding Senior Discount Notes not previously called for redemption. The Trustee shall promptly notify the Company in writing of the Senior Discount Notes selected for redemption and, in the case of any Note selected for partial redemption, the principal amount thereof to be redeemed. Senior Discount Notes and portions of them selected shall be in amounts of $1,000 or whole multiples of $1,000; except that if all of the Senior Discount Notes of a holder are to be redeemed, the entire outstanding amount of Senior Discount Notes held by such holder, even if not a multiple of $1,000, shall be redeemed. Except as provided in the preceding sentence, provisions of this Indenture that apply to Senior Discount Notes called for redemption also apply to portions of Senior Discount Notes called for redemption. Section 3.03. Notice of Redemption. Subject to the provisions of Section 3.09 hereof, at least 30 days but not more than 60 days before a redemption date, the Company shall mail or cause to be mailed, by first class mail, a notice of redemption to each holder whose Senior Discount Notes are to be redeemed at its registered address (provided that in the event of a redemption pursuant to Section 3.07(b) hereof arising out of a sale of the Company's Capital Stock (other than Disqualified Stock) to a Strategic Equity Investor, such notice shall not be mailed prior to the consummation of such sale). The notice shall identify the Senior Discount Notes to be redeemed and shall state: (a) the redemption date; (b) the redemption price; (c) if any Note is being redeemed in part, the portion of the Accreted Value or principal amount of such Note to be redeemed and that, after the redemption date upon surrender of such Note, 33 a new Note or Senior Discount Notes in principal amount equal to the unredeemed portion shall be issued; (d) the name and address of the Paying Agent; (e) that Senior Discount Notes called for redemption must be surrendered to the Paying Agent to collect the redemption price; (f) that, unless the Company defaults in making such redemption payment, interest on Senior Discount Notes (or portions thereof) called for redemption ceases to accrue on and after the redemption date; (g) the paragraph of the Senior Discount Notes and/or section of this Indenture pursuant to which the Senior Discount Notes called for redemption are being redeemed; and (h) that no representation is made as to the correctness or accuracy of the CUSIP number, if any, listed in such notice or printed on the Senior Discount Notes. At the Company's request, the Trustee shall give the notice of redemption in the Company's name and at its expense; provided, however, that the Company shall have delivered to the Trustee, at least 45 days prior to the redemption date, an Officers' Certificate requesting that the Trustee give such notice and setting forth the information to be stated in such notice as provided in the preceding paragraph. Section 3.04. Effect of Notice of Redemption. Once notice of redemption is mailed in accordance with Section 3.03 hereof, Senior Discount Notes called for redemption become due and payable on the redemption date at the redemption price stated in such notice. A notice of redemption may not be conditional. Section 3.05. Deposit of Redemption Price. At least one Business Day prior to the redemption date, the Company shall deposit with the Trustee or with the Paying Agent (or, if the Company or a Subsidiary is the Paying Agent, shall segregate and hold in trust) immediately available funds sufficient to pay the redemption price of and accrued interest, if any, on all Senior Discount Notes to be redeemed on that date. The Trustee or the Paying Agent shall promptly return to the Company any funds deposited with the Trustee or the Paying Agent by the Company in excess of the amounts necessary to pay the redemption price of, and accrued interest, if any, on, all Senior Discount Notes to be redeemed. If the Company complies with the provisions of the preceding paragraph, on and after the redemption date if after July 15, 2002, interest shall cease to accrue on the Senior Discount Notes or the portions of Senior Discount Notes called for redemption or, if on or prior to July 15, 2002, the date of determination for the purpose of calculating the Accreted Value of the Senior Discount Notes or the portions of the Senior Discount Notes called for redemption shall be the redemption date. If a Note is redeemed on or after an interest record date but on or prior to the related interest payment date, then any 34 accrued and unpaid interest shall be paid to the Person in whose name such Note was registered at the close of business on such record date. If any Note called for redemption shall not be so paid upon surrender for redemption because of the failure of the Company to comply with the preceding paragraph, interest shall be paid on the unpaid redemption price, from the redemption date until such redemption price is paid, and to the extent lawful on any interest not paid on such unpaid principal, in each case at the rate provided in the Senior Discount Notes and in Section 4.01 hereof. Section 3.06. Senior Discount Notes Redeemed in Part. Upon surrender of a Senior Discount Note that is redeemed in part, the Company shall issue and the Trustee shall authenticate for the holder of the Senior Discount Notes at the expense of the Company a new Senior Discount Note equal in principal amount at maturity to the unredeemed portion of the Senior Discount Note surrendered. Section 3.07. Optional Redemption. (a) Except as set forth in Section 3.07(b) below, the Senior Discount Notes will not be redeemable at the Company's option prior to July 15, 2002. Thereafter, the Senior Discount Notes will be subject to redemption at the option of the Company, in whole or in part, upon not less than 30 nor more than 60 days' notice to the holders, at the redemption prices (expressed as percentages of principal amount) set forth below plus accrued and unpaid interest and Liquidated Damages, if any, thereon to the applicable redemption date, if redeemed during the twelve-month period beginning on July 15 of the years indicated below: YEAR PERCENTAGE ---- ---------- 2002......................................... 105.625% 2003......................................... 103.750% 2004......................................... 101.875% 2005 and thereafter.......................... 100.000% (b) Notwithstanding the provisions of Section 3.07(a) above, in the event of the sale by the Company prior to July 15, 2000 of its Capital Stock (other than Disqualified Stock) (i) to a Strategic Investor in a single transaction or series of related transactions for an aggregate purchase price equal to or exceeding $50.0 million or (ii) in one or more Public Offerings, up to a maximum of 25% of the aggregate principal amount at maturity of the Senior Discount Notes originally issued shall, at the option of the Company, be redeemable from the net cash proceeds of such sale or sales to such Strategic Investor (but only to the extent such proceeds consist of cash or readily marketable cash equivalents received in respect of the Capital Stock, other than Disqualified Stock, so sold) at a redemption price equal to 111 1/4% of the Accreted Value thereof with respect to the Senior Discount Notes to be redeemed on the redemption date, provided that at least 75% of the aggregate principal amount at maturity of the Senior Discount Notes originally issued remains outstanding immediately after the occurrence of such redemption and that such redemption occurs within 90 days of the date of the closing of such sale. 35 (c) Any redemption pursuant to this Section 3.07 shall be made pursuant to the provisions of Sections 3.01 through 3.06 hereof. Section 3.08. Mandatory Redemption. Except as set forth under Sections 3.09 and 4.15 hereof, the Company shall not be required to make mandatory redemption or sinking fund payments with respect to the Senior Discount Notes. Section 3.09. Offer to Purchase With Excess Asset Sale Proceeds. If at any time the cumulative amount of Excess Proceeds that have not been applied in accordance with this Section 3.09 exceeds $5.0 million, the Company shall, within 30 days thereafter, make an offer to all holders of Senior Discount Notes and Pari Passu Notes (an "Excess Proceeds Offer"), to purchase the maximum principal amount of Senior Discount Notes and Pari Passu Notes that may be purchased out of such Excess Proceeds, at an offer price in cash in an amount equal to 100% of the Accreted Value of the Senior Discount Notes to the date fixed for the closing of such offer (if such offer is prior to July 15, 2002) or 100% of the outstanding principal amount at maturity of the Senior Discount Notes (if such offer is on or after July 15, 2002) and 100% of the accreted value or 100% of the outstanding principal amount, as applicable, of the Pari Passu Notes, plus accrued and unpaid interest and Liquidated Damages thereon, if any, to the date fixed for the closing of such offer, in accordance with the procedures specified below. The Excess Proceeds Offer shall remain open for a period of 20 Business Days following its commencement and no longer, except to the extent that a longer period is required by applicable law (the "Offer Period"). No later than five Business Days after the termination of the Offer Period (the "Purchase Date"), the Company shall purchase the maximum Accreted Value or principal amount, as the case may be, of Senior Discount Notes and Pari Passu Notes that may be purchased with such Excess Proceeds (or such pro rata portion based upon the Accreted Value and/or the principal amount, as the case may be, of Senior Discount Notes and Pari Passu Notes tendered if the Accreted Value and/or the principal amount, as the case may be, of Senior Discount Notes and Pari Passu Notes tendered is in excess of the Excess Proceeds) (which maximum principal amount of Senior Discount Notes shall be the "Offer Amount") or, if less than the Offer Amount has been tendered, all Senior Discount Notes and Pari Passu Notes tendered in response to the Excess Proceeds Offer, subject to the provisions of Section 4.10 hereof. If the Purchase Date is on or after an interest record date and on or before the related interest payment date, any accrued interest on the Senior Discount Notes shall be paid to the Person in whose name a Senior Discount Note is registered at the close of business on such record date, and no additional interest shall be payable to holders who tender Senior Discount Notes pursuant to the Excess Proceeds Offer on the portion of the tendered Senior Discount Notes purchased pursuant to the Excess Proceeds Offer. Upon the commencement of any Excess Proceeds Offer, the Company shall send, by first class mail, a notice to the Trustee and each of the holders of the Senior Discount Notes, with a copy to the Trustee. The notice shall contain all instructions and materials necessary to enable such holders to tender Senior Discount Notes pursuant to the Excess Proceeds Offer. The Excess Proceeds Offer shall be made to all holders. The notice, which shall govern the terms of the Excess Proceeds Offer, shall state: 36 (a) that the Excess Proceeds Offer is being made pursuant to Sections 3.09 and 4.10 hereof and the length of time the Excess Proceeds Offer shall remain open; (b) the Offer Amount, the purchase price and the Purchase Date; (c) that any Senior Discount Note or portion thereof not tendered or accepted for payment shall continue to accrue interest (if after July 15, 2002) or that the Accreted Value of such Senior Discount Note or portion thereof not tendered or accepted for payment shall continue to be computed in accordance with the terms hereof (if on or prior to July 15, 2002); (d) that any Senior Discount Note or portion thereof accepted for payment pursuant to the Excess Proceeds Offer shall cease to accrue interest after the Purchase Date (if after July 15, 2002) or that, with respect to any Senior Discount Note or portion thereof accepted for payment pursuant to the Excess Proceeds Offer, the date of determination for the purpose of calculating Accreted Value of the Senior Discount Notes shall be at all times thereafter the Purchase Date (if, on or after July 15, 2002); (e) that holders electing to have a Senior Discount Note or portion thereof purchased pursuant to any Excess Proceeds Offer shall be required to surrender the Senior Discount Note, with the form entitled "Option of Holder to Elect Purchase" on the reverse of the Senior Discount Note completed, to the Company, a depositary, if appointed by the Company, or a Paying Agent at the address specified in the notice at least three Business Days before the Purchase Date; (f) that holders shall be entitled to withdraw their election if the Company, depositary or Paying Agent, as the case may be, receives, not later than the expiration of the Offer Period, a telegram, telex, facsimile transmission or letter setting forth the name of the holder, the principal amount at maturity of the Senior Discount Note or portion thereof the holder delivered for purchase and a statement that such holder is withdrawing his election to have the Senior Discount Note or portion thereof purchased; (g) that, if the aggregate Accreted Value and/or the aggregate principal amount at maturity, as the case may be, of Senior Discount Notes and Pari Passu Notes tendered by holders of such notes exceeds the Offer Amount, the Trustee shall select the Senior Discount Notes to be purchased on a pro rata basis as described above (with such adjustments as may be deemed appropriate by the Trustee so that only Senior Discount Notes in denominations of $1,000, or integral multiples thereof, shall be purchased); and (h) that holders whose Senior Discount Notes were purchased only in part shall be issued new Senior Discount Notes equal in principal amount at maturity to the unpurchased portion of the Senior Discount Notes surrendered (or transferred by book-entry transfer). On or before the Purchase Date, the Company shall, to the extent lawful, accept for payment, on a pro rata basis (as described above) to the extent necessary, the Offer Amount of Senior Discount Notes or portions thereof tendered pursuant to the Excess Proceeds Offer, or if less than the Offer Amount has been tendered, all Senior Discount Notes or portion thereof tendered, and deliver to the Trustee an Officers' Certificate stating that such Senior Discount Notes or portions thereof were accepted for payment by the Company in accordance with the terms of this Section 3.09. The Company or Paying Agent, as the case may be, shall promptly (but in any case not later than five days after the Purchase Date) mail or 37 deliver to each tendering holder an amount equal to the purchase price of the Senior Discount Note or portion thereof tendered by such holder and accepted by the Company for purchase, and the Company shall promptly issue a new Senior Discount Note, and the Trustee shall authenticate and mail or deliver such new Senior Discount Note to such holder equal in principal amount at maturity to any unpurchased portion of the Senior Discount Note surrendered. Any Senior Discount Note not so accepted shall be promptly mailed or delivered by the Company to the holder thereof. The Company shall publicly announce the results of the Excess Proceeds Offer on the Purchase Date. In the event that the aggregate amount of Excess Proceeds exceeds the aggregate Accreted Value or principal amount, as the case may be, of Senior Discount Notes, Pari Passu Notes or portion thereof surrendered by holders of such notes pursuant to an Excess Proceeds Offer, the Company may use the remaining Excess Proceeds for general purposes. Upon completion of an Excess Proceeds Offer, the amount of Excess Proceeds shall be deemed to be reset at zero. Other than as specifically provided in this Section 3.09, any purchase pursuant to this Section 3.09 shall be made pursuant to the provisions of Sections 3.01 through 3.06 hereof. No repurchase of Senior Discount Notes under this Section 3.9 shall be deemed to be a redemption of Senior Discount Notes. ARTICLE 4 COVENANTS Section 4.01. Payment of Notes. The Company shall pay or cause to be paid the principal of, premium, if any, and interest, on the Senior Discount Notes on the dates and in the manner provided in the Senior Discount Notes and this Indenture. Principal, premium, if any, and interest shall be considered paid on the date due if the Paying Agent, if other than the Company, holds as of the due date money deposited by, or on behalf of, the Company in immediately available funds and designated for and sufficient to pay all principal, premium, if any, and interest then due. The Company shall pay all Liquidated Damages, if any, in the same manner on the dates and in the amounts set forth in the Senior Discount Notes Registration Rights Agreement. The Company shall pay interest (including post-petition interest in any proceeding under any Bankruptcy Law) on overdue principal at the rate equal to the then applicable interest rate on the Senior Discount Notes to the extent lawful until such overdue principal is paid; it shall pay interest (including post-petition interest in any proceeding under any Bankruptcy Law) on overdue installments of interest (without regard to any applicable grace period) at the same rate to the extent lawful until such overdue installments of interest are paid. The term "Bankruptcy Law" means title 11, U.S. Code or any similar federal or state law for the relief of debtors. Section 4.02. Maintenance of Office or Agency. The Company shall maintain an office or agency (which may be an office of the Trustee or an affiliate of the Trustee, Registrar or co-registrar) where Senior Discount Notes may be surrendered for 38 registration of transfer or exchange and where notices and demands to or upon the Company in respect of the Senior Discount Notes and this Indenture may be served. The Company shall give prompt written notice to the Trustee of the location, and any change in the location, of such office or agency. If at any time the Company shall fail to maintain any such required office or agency or shall fail to furnish the Trustee with the address thereof, such presentations, surrenders, notices and demands may be made or served at the Corporate Trust Office of the Trustee. The Company may also from time to time designate one or more other offices or agencies where the Senior Discount Notes may be presented or surrendered for any or all such purposes and may from time to time rescind such designations; provided, however, that no such designation or rescission shall in any manner relieve the Company of its obligation to maintain an office or agency for such purposes. The Company shall give prompt written notice to the Trustee of any such designation or rescission and of any change in the location of any such other office or agency. The Company hereby designates the Corporate Trust Office of the Trustee as one such office or agency of the Company in accordance with Section 2.03 hereof. Section 4.03. Reports. (a) So long as any of the Senior Discount Notes remain outstanding, the Company shall cause copies of all quarterly and annual financial reports and of the information, documents, and other reports (or copies of such portions of any of the foregoing as the Securities and Exchange Commission (the "Commission") may by rules and regulations prescribe) which the Company is required to file with the Commission pursuant to Section 13(a) or 15(d) of the Exchange Act ("SEC Reports") to be filed with the Trustee within 15 days of filing with the Commission. If the Company is not subject to the requirements of Section 13(a) or 15(d) of the Exchange Act or shall cease to be required by the Commission to file SEC Reports pursuant to the Exchange Act, the Company shall nevertheless continue to cause SEC Reports, comparable to those which it would be required to file pursuant to Section 13(a) or 15(d) of the Exchange Act if it were subject to the requirements of either such section, to be so filed with the Commission (unless the Commission will not accept such a filing) and with the Trustee within the same time periods as would have applied (including under the preceding sentence) had the Company been subject to the requirements of Section 13(a) or 15(d) of the Exchange Act. Whether or not required by the Exchange Act to file SEC Reports with the Commission, so long as any Senior Discount Notes are outstanding, the Company shall furnish copies of the SEC Reports to the holders of Senior Discount Notes at the time the Company is required to file the same with the Trustee and make such information available to investors who request it in writing. In addition, the Company shall, for so long as any Senior Discount Notes remain outstanding, furnish to the holders and to securities analysts and prospective investors, upon their request, the information required to be delivered pursuant to Rule 144(d)(4) under the Securities Act. The Company shall also comply with the provisions of TIA (S) 314(a). (b) The Company shall provide the Trustee with a sufficient number of copies of all SEC Reports that the Trustee may be required to deliver to the holders of the Senior Discount Notes under this Section 4.03. 39 Section 4.04. Compliance Certificate. (a) The Company shall deliver to the Trustee, within 90 days after the end of each fiscal year of the Company, an Officers' Certificate stating that (i) a review of the activities of the Company and its Subsidiaries during the preceding fiscal year has been made under the supervision of the signing Officers with a view to determining whether the Company has (x) kept, observed, performed and fulfilled, and (y) caused each of its Subsidiaries to keep, observe, perform and fulfill, its obligations under this Indenture, and (ii) as to each such Officer signing such certificate, that to the best of his or her knowledge (A) the Company has kept, observed, performed and fulfilled, and has caused each of its Subsidiaries to keep, observe, perform and fulfill, each and every covenant contained in this Indenture and is not in default in the performance or observance of any of the terms, provisions and conditions of this Indenture to be performed or observed by it (or, if a Default or Event of Default shall have occurred, describing all such Defaults or Events of Default of which he or she may have knowledge and what action each is taking or proposes to take with respect thereto) and (B) no event has occurred and remains in existence by reason of which payments on account of the principal of or interest, if any, on the Senior Discount Notes is prohibited or if such event has occurred, a description of the event and what action each is taking or proposes to take with respect thereto. (b) So long as not contrary to the then current recommendations of the American Institute of Certified Public Accountants, the year-end financial statements delivered pursuant to Section 4.03 above shall be accompanied by a written statement of the Company's independent public accountants (who shall be a firm of established national reputation) that in making the examination necessary for certification of such financial statements, nothing has come to their attention which would lead them to believe that the Company has violated any provisions of Article 4 or Article 5 of this Indenture or, if any such violation has occurred, specifying the nature and period of existence thereof, it being understood that such accountants shall not be liable directly or indirectly to any Person for any failure to obtain knowledge of any such violation. (c) The Company shall, so long as any of the Senior Discount Notes are outstanding, deliver to the Trustee, forthwith upon any Officer becoming aware of any Default or Event of Default, an Officers' Certificate specifying such Default, Event of Default or default and what action the Company is taking or proposes to take with respect thereto. (d) The Company shall deliver to the Trustee an Officers' Certificate as required by, and in accordance with, Section 4.07(f) hereof. Section 4.05. Taxes. The Company shall pay, and shall cause each of its Subsidiaries to pay, prior to delinquency, all material taxes, assessments, and governmental levies, except as contested in good faith and by appropriate proceedings or where the failure to effect such payment is not adverse in any material respect to the holders of the Senior Discount Notes. 40 Section 4.06. Stay, Extension and Usury Laws. The Company covenants (to the extent that it may lawfully do so) that it shall not at any time insist upon, plead, or in any manner whatsoever claim or take the benefit or advantage of, any stay, extension or usury law wherever enacted, now or at any time hereafter in force, that may affect the covenants or the performance of this Indenture; and the Company (to the extent that it may lawfully do so) hereby expressly waives all benefit or advantage of any such law, and covenants that it shall not, by resort to any such law, hinder, delay or impede the execution of any power herein granted to the Trustee, but shall suffer and permit the execution of every such power as though no such law has been enacted. Section 4.07. Restricted Payments. (a) The Company shall not, and shall not permit any of its Subsidiaries to, directly or indirectly: (i) declare or pay any dividend or make any distribution on account of any Equity Interests of the Company or any of its Subsidiaries other than dividends or distributions payable (A) in Equity Interests of the Company that are not Disqualified Stock or (B) to the Company or any Subsidiary; (ii) purchase, redeem, defease, retire or otherwise acquire for value ("Retire" and correlatively, a "Retirement") any Equity Interests of the Company or any of its Subsidiaries or other Affiliate of the Company (other than any such Equity Interests owned by the Company or any Subsidiary); (iii) Retire for value any Indebtedness of (A) the Company that is subordinate in right of payment to the Senior Discount Notes or (B) any Subsidiary, except, with respect to clause (i)(A) or (i)(B) above, at final maturity or in accordance with the mandatory redemption or repayment provisions set forth in the original documentation governing such Indebtedness; or (iv) make any Restricted Investment (all such payments and other actions set forth in clauses (i) through (iv) above being collectively referred to as "Restricted Payments"), unless, at the time of such Restricted Payment: (1) no Default or Event of Default has occurred and is continuing or would occur as a consequence thereof; (2) after giving effect to such Restricted Payment on a pro forma basis as if such Restricted Payment had been made at the beginning of the applicable four-quarter period, the Company could incur at least $1.00 of additional Indebtedness pursuant to the Consolidated Cash Flow Leverage Ratio test set forth in Section 4.09(a) hereof; and (3) such Restricted Payment, together with the aggregate of all other Restricted Payments made by the Company and its Subsidiaries after the Issue Date (including any Restricted Payments made pursuant to clauses (i), (v) and (vi) of Section 4.07(b)), is less than the sum of 41 (w) 50% of the Consolidated Net Income of the Company for the period (taken as one accounting period) from June 30, 1996 to the end of the Company's most recently ended fiscal quarter for which internal financial statements are available at the time of such Restricted Payment (or, if such Consolidated Net Income for such period is a deficit, less 100% of such deficit), plus (x) 100% of the aggregate net cash proceeds received by the Company from the issue or sale of Equity Interests of the Company or of debt securities or Disqualified Stock of the Company that have been converted into such Equity Interests (other than Equity Interests (or convertible debt securities) sold to a Subsidiary of the Company and other than Disqualified Stock or debt securities that have been converted into Disqualified Stock) after June 30, 1996 (other than any such Equity Interests, the proceeds of which were used as set forth in clause (b)(ii) below), plus (y) 100% of the sum of, without duplication, (1) aggregate dividends or distributions received by the Company or any Subsidiary from any Joint Venture (other than dividends or distributions to pay any obligations of such Joint Venture to Persons other than the Company or any Subsidiary, such as income taxes), with non-cash distributions to be valued at the lower of book value or fair market value as determined by the Board of Directors, (2) the amount of the principal and interest payments received since the Issue Date by the Company or any Subsidiary from any Joint Venture and (3) the net proceeds from the sale of an Investment in a Joint Venture received by the Company or any Subsidiary; provided that there is no obligation to return any such amounts to the Joint Venture, and excluding any such dividend, distribution, interest payment or net proceeds that constitutes a return of capital invested pursuant to clause (b)(vi) of this Section 4.07, plus (z) $10.0 million. (b) The foregoing provisions in Section 4.07(a) shall not prohibit: (i) the payment of any dividend within 60 days after the date of declaration thereof, if at such date of declaration such payment would have complied with the provisions of this Indenture; (ii) the Retirement of (A) any Equity Interests of the Company or any Subsidiary of the Company, (B) Indebtedness of the Company that is subordinate to the Senior Discount Notes or (C) Indebtedness of a Subsidiary of the Company, in exchange for, or out of the proceeds of the substantially concurrent sale (other than to a Subsidiary of the Company) of, Equity Interests of the Company (other than Disqualified Stock); (iii) the Retirement of any Indebtedness of the Company subordinated in right of payment to the Senior Discount Notes in exchange for, or out of the proceeds of the substantially concurrent incurrence of Indebtedness of the Company (other than Indebtedness to a Subsidiary of the Company), but only to the extent that such new Indebtedness is permitted under Section 4.09 hereof and (1) is subordinated in right of payment to the Senior Discount Notes at least to 42 the same extent as, (2) has a Weighted Average Life to Maturity at least as long as, and (3) has no scheduled principal payments due in any amount earlier than, any equivalent amount of principal under the Indebtedness so Retired; (iv) the Retirement of any Indebtedness of a Subsidiary of the Company in exchange for, or out of the proceeds of the substantially concurrent incurrence of Indebtedness of the Company or any Subsidiary but only to the extent that such incurrence is permitted under Section 4.09 hereof and only to the extent that such Indebtedness (1) is not secured by any assets of the Company or any Subsidiary to a greater extent than the Retired Indebtedness was so secured, (2) has a Weighted Average Life to Maturity at least as long as the Retired Indebtedness and (3) if such Retired Indebtedness was an obligation of the Company, is pari passu or subordinated in right of payment to the Senior Discount Notes at least to the same extent as the Retired Indebtedness; (v) the Retirement of any Equity Interests of the Company or any Subsidiary of the Company held by any member of the Company's (or any of its Subsidiaries') management pursuant to any management equity subscription agreement or stock option agreement; provided that the aggregate price paid for all such repurchased, redeemed, acquired or retired Equity Interests shall not exceed $1.0 million in any twelve-month period plus the aggregate cash proceeds received by the Company during such twelve-month period from any reissuance of Equity Interests by the Company to members of management of the Company and its Subsidiaries; and (vi) Investments in any Joint Venture; provided that at the time any such Investment is made, such Investment shall not cause the aggregate amount of Investments at any one time outstanding under this clause (vi) to exceed the greater of (x) $25.0 million and (y) 5% of the Total Common Equity of the Company; provided, however, that at the time of, and after giving effect to, any Restricted Payment permitted under clauses (i), (ii), (iii), (iv), (v) and (vi), no Default or Event of Default shall have occurred and be continuing. (c) A Permitted Investment that ceases to be a Permitted Investment pursuant to the definition thereof set forth in Section 1.01 hereof, shall become a Restricted Investment, deemed to have been made on the date that it ceases to be a Permitted Investment. (d) The Board of Directors may designate any Subsidiary to be an Unrestricted Subsidiary if such designation would not cause a Default or an Event of Default pursuant to Article 6 hereof. For purposes of making such determination, all outstanding Investments by the Company and its Subsidiaries (except to the extent repaid in cash) in such Subsidiary so designated shall be deemed to be Restricted Payments at the time of such designation and shall reduce the amount available for Restricted Payments under paragraph (a) of this Section 4.07. All such outstanding Investments will be deemed to constitute Investments in an amount equal to the greatest of (x) the net book value of such Investments at the time of such designation, (y) the fair market value of such Investments at the time of such designation and (z) the original fair market value of such Investments at the time they were made. Such designation will only be permitted if such Restricted Payment would be permitted at such time. 43 (e) The Board of Directors of the Company may at any time designate any Unrestricted Subsidiary to be a Subsidiary; provided that such designation shall be deemed to be an incurrence of Indebtedness by a Subsidiary of the Company of any outstanding Indebtedness of such Unrestricted Subsidiary and such designation shall only be permitted if (i) such Indebtedness is permitted under Section 4.09 hereof and (ii) no Default or Event of Default pursuant to Article 6 hereof would be in existence following such designation. (f) Not later than the date of making any Restricted Payment, the Company shall deliver to the Trustee an Officers' Certificate stating that such Restricted Payment is permitted and setting forth the basis upon which the calculations required by this Section 4.07 were computed, which calculations may be based upon the Company's latest available financial statements. Section 4.08. Dividend and Other Payment Restrictions Affecting Subsidiaries. The Company shall not, and shall not permit any of its Subsidiaries to, directly or indirectly, create or otherwise cause to become effective any consensual encumbrance or restriction on the ability of any Subsidiary to: (i) pay dividends or make any other distributions to the Company or any of its Subsidiaries on its Capital Stock or with respect to any other interest or participation in, or measured by, its profits, or pay any Indebtedness owed to the Company or any of its Subsidiaries; (ii) make loans or advances to the Company or any of its Subsidiaries; or (iii) transfer any of its properties or assets to the Company or any of its Subsidiaries; except for such encumbrances or restrictions existing as of the Issue Date or under or by reason of: (a) Existing Indebtedness; (b) applicable law; (c) any instrument governing Acquired Debt as in effect at the time of acquisition (except to the extent such Indebtedness was incurred in connection with, or in contemplation of, such acquisition), which encumbrance or restriction is not applicable to any Person, or the properties or assets of any Person, other than the Person, or the property or assets of the Person, so acquired; (d) by reason of customary non-assignment provisions in leases entered into in the ordinary course of business and consistent with past practices; (e) Indebtedness in respect of a Permitted Refinancing, provided that the restrictions contained in the agreements governing such Refinancing Indebtedness are not materially more restrictive than those contained in the agreements governing the Indebtedness being refinanced; 44 (f) with respect to clause (iii) above, purchase money obligations for property acquired in the ordinary course of business, Vendor Indebtedness incurred in connection with the purchase or lease of Telecommunications Related Assets or performance bonds or similar security for performance which liens securing such obligations do not cover any asset other than the asset acquired or, in the case of performance bonds or similar security for performance, the assets associated with the Company's performance; (g) Indebtedness incurred under Section 4.09(b)(i) hereof; (h) this Indenture and the Senior Discount Notes; or (i) in the case of clauses (a), (c), (e), (g) and (h) above, any amendments, modifications, restatements, renewals, increases, supplements, refundings, replacements or refinancings thereof, provided that such amendments, modifications, restatements, renewals, increases, supplements, refundings, replacements or refinancings are not materially more restrictive with respect to such dividend and other payment restrictions than those contained in such instruments as in effect on the date of their incurrence or, if later, the Issue Date. Section 4.09. Incurrence of Indebtedness and Issuance of Disqualified Stock. (a) The Company and its Subsidiaries shall not, directly or indirectly, (i) create, incur, issue, assume, guarantee or otherwise become directly or indirectly liable for the payment of (collectively, "incur" and, correlatively, "incurred" and "incurrence") any Indebtedness (including, without limitation, Acquired Debt) or (ii) issue any Disqualified Stock; provided, however, that the Company and/or any of its Subsidiaries may incur Indebtedness (including, without limitation, Acquired Debt) or issue shares of Disqualified Stock if, after giving effect to the incurrence of such Indebtedness or the issuance of such Disqualified Stock, the Consolidated Cash Flow Leverage Ratio for the Company's most recently ended four full fiscal quarters for which internal financial statements are available immediately preceding the date of such incurrence or issuance (x) does not exceed 5.5 to 1 if such incurrence or issuance occurs on or prior to June 1, 1999 and (y) does not exceed 5.0 to 1 if such occurrence or issuance occurs after June 1, 1999, in each case, determined on a pro forma basis (including a pro forma application of the net proceeds therefrom), as if the additional Indebtedness had been incurred, or the Disqualified Stock had been issued, as the case may be, at the beginning of such four-quarter period. If the Company incurs any Indebtedness or issues or redeems any Preferred Stock subsequent to the commencement of the period for which such ratio is being calculated but prior to the event for which the calculation of the ratio is made, then the ratio will be calculated giving pro forma effect to any such incurrence of Indebtedness, or such issuance or redemption of Preferred Stock, as if the same had occurred at the beginning of the applicable period. In making such calculation on a pro forma basis, interest attributable to Indebtedness bearing a floating interest rate shall be computed as if the rate in effect on the date of computation had been the applicable rate for the entire period. (b) The foregoing limitation in Section 4.09(a) shall not apply to (with each exception to be given independent effect): (i) the incurrence by the Company and/or any of its Subsidiaries of Indebtedness under the Credit Facility in an aggregate principal amount at any one time outstanding (with letters of 45 credit being deemed to have a principal amount equal to the maximum potential liability of the Company and/or any of its Subsidiaries thereunder) not to exceed $75.0 million in the aggregate at any one time outstanding, less the aggregate amount of all Net Proceeds of Asset Sales applied to permanently reduce the commitments with respect to such Indebtedness pursuant to Section 4.10 hereof; (ii) the incurrence by the Company and/or any of its Subsidiaries of Vendor Indebtedness, provided that the aggregate amount of such Vendor Indebtedness incurred does not exceed 80% of the total cost of the Telecommunications Related Assets financed therewith (or 100% of the total cost of the Telecommunications Related Assets financed therewith if such Vendor Indebtedness was extended for the purchase of tangible physical assets and was so financed by the vendor thereof or an affiliate of such vendor); (iii) the incurrence by the Company and/or any of its Subsidiaries of the Existing Indebtedness, including the Existing Senior Notes; (iv) the incurrence by the Company and/or any of its Subsidiaries of Indebtedness in an aggregate amount not to exceed $25.0 million at any one time outstanding; (v) the incurrence by the Company of Indebtedness, but only to the extent that such Indebtedness is expressly subordinate to the payment in full of all Obligations with respect to the Senior Discount Notes and has a final maturity no earlier than, and a Weighted Average Life 46 to Maturity equal to or greater than, the final maturity and Weighted Average Life to Maturity, respectively, of the Senior Discount Notes, in an aggregate principal amount not to exceed 2.0 times the net cash proceeds received by the Company after June 30, 1996 from the issuance and sale of Equity Interests of the Company (that are not Disqualified Stock) plus the fair market value of Equity Interests (other than Disqualified Stock) issued after June 30, 1996 in connection with any acquisition of any Telecommunications Business; (vi) the incurrence (a "Permitted Refinancing") by the Company and/or any of its Subsidiaries of Indebtedness issued in exchange for, or the proceeds of which are used to refinance, replace, refund or defease ("Refinance" and correlatively, "Refinanced" and "Refinancing") Indebtedness, other than Indebtedness incurred pursuant to clause (i) above, but only to the extent that: (1) the net proceeds of such Refinancing Indebtedness shall not exceed the principal amount of and premium, if any, and accrued interest on the Indebtedness so Refinanced (or if such Indebtedness was issued at an original issue discount, the original issue price plus amortization of the original issue discount at the time of the repayment of such Indebtedness) plus the fees, expenses and costs of such Refinancing and reasonable prepayment premiums, if any, in connection therewith; (2) the Refinancing Indebtedness shall have a final maturity no earlier than, and a Weighted Average Life to Maturity equal to or greater than, the final maturity and Weighted Average Life to Maturity of the Indebtedness being Refinanced; and (3) if the Indebtedness being Refinanced is subordinated in right of payment to the Senior Discount Notes, the Refinancing Indebtedness shall be subordinated in right of payment to the Senior Discount Notes on terms at least as favorable to the holders of Senior Discount Notes as those contained in the documentation governing the Indebtedness being so Refinanced; (vii) the incurrence by the Company or any of its Subsidiaries of intercompany Indebtedness between or among the Company and any of its Subsidiaries; and (viii) the incurrence by the Company or any of its Subsidiaries of Hedging Obligations that are incurred for the purpose of fixing or hedging interest rate or foreign currency risk with respect to any floating rate Indebtedness that is permitted by the terms of this Indenture to be outstanding. For purposes of determining compliance with this Section 4.09, in the event that an item of Indebtedness, Disqualified Stock or Preferred Stock meets the criteria of more than one of the categories described in clauses (i) through (viii) above or is entitled to be incurred pursuant to Section 4.09(a), the Company shall, in its sole discretion, classify such item in any manner that complies with this Section and such item shall be treated as having been incurred pursuant to only one of such clauses or pursuant to Section 4.09(a). Accrual of interest or dividends, the accretion of accreted value or liquidation preference and the payment of interest or dividends in the form of additional Indebtedness, Common Stock or Preferred Stock shall not be deemed to be an incurrence of Indebtedness for purposes of this Section. 47 Section 4.10. Asset Sales. (a) The Company shall not, and shall not permit any of its Subsidiaries to, whether in a single transaction or a series of related transactions occurring within any twelve-month period, (i) sell, lease, convey, dispose or otherwise transfer any assets (including by way of a Sale and Leaseback Transaction) other than sales, leases, conveyances, dispositions or other transfers (A) in the ordinary course of business, (B) to the Company by any Subsidiary of the Company or from the Company to any Subsidiary of the Company, (C) that constitute a Restricted Payment, Investment or dividend or distribution permitted under Section 4.07 hereof or (D) that constitute the disposition of all or substantially all of the assets of the Company pursuant to Section 5.01 hereof or (ii) issue or sell Equity Interests in any of its Subsidiaries (other than an issuance or sale of Equity Interests of any such Subsidiary to the Company or a Subsidiary), if, in the case of either (i) or (ii) above, in a single transaction or a series of related transactions occurring within any twelve-month period, such assets or securities (x) have a Fair Market Value in excess of $2.0 million or (y) are sold or otherwise disposed of for net proceeds in excess of $2.0 million (each of the foregoing, an "Asset Sale"), unless: (a) no Default or Event of Default exists or would occur as a result thereof; (b) the Company, or such Subsidiary, as the case may be, receives consideration at the time of such Asset Sale at least equal to the Fair Market Value (evidenced by a resolution of the Board of Directors of the Company set forth in an Officers' Certificate delivered to the Trustee), of the assets or securities issued or sold or otherwise disposed of; and (c) at least 85% of the consideration therefor received by the Company or such Subsidiary is in the form of cash, provided, however, that (A) the amount of (x) any liabilities (as shown on the Company's or such Subsidiary's most recent balance sheet or in the notes thereto), of the Company or any Subsidiary of the Company (other than liabilities that are by their terms subordinated to the Senior Discount Notes) that are assumed by the transferee of any such assets and (y) any notes, obligations or other securities received by the Company or any such Subsidiary from such transferee that are immediately converted by the Company or such Subsidiary into cash, shall be deemed to be cash (to the extent of the cash received in the case of subclause (y)) for purposes of this clause (c); and (B) an amount equal to the Fair Market Value (determined as set forth in clause (b) above) of (1) Telecommunications Related Assets received by the Company or any such Subsidiary from the transferee that will be used by the Company or any such Subsidiary in the operation of a Telecommunications Business in the United States and (2) the Voting Stock of any Person engaged in the Telecommunications Business in the United States received by the Company or any such Subsidiary (provided that such Voting Stock is converted to cash within 270 days or such Person concurrently becomes or is a Subsidiary of the Company) shall be deemed to be cash for purposes of this clause (c). 48 The foregoing provisions shall not apply to a sale, lease, conveyance or other disposition of all or substantially all of the assets of the Company, which shall be governed by Article 5 hereof. (b) Within 270 days after the receipt of net proceeds of any Asset Sale, the Company (or such Subsidiary, as the case may be) may apply the Net Proceeds from such Asset Sale to (i) permanently reduce the amounts permitted to be borrowed by the Company under the terms of any of its Senior Indebtedness or (ii) the purchase of Telecommunications Related Assets or Voting Stock of any Person engaged in the Telecommunications Business in the United States (provided that such Person concurrently becomes a Subsidiary of the Company). Any Net Proceeds from any Asset Sales that are not so applied or invested as provided in the preceding sentence, shall constitute "Excess Proceeds." When the aggregate amount of Excess Proceeds exceeds $5.0 million, the Company shall be required to make an Excess Proceeds Offer in accordance with the terms of Section 3.09 hereof. Section 4.11. Transactions with Affiliates. The Company shall not, and shall not permit any of its Subsidiaries to, sell, lease, transfer or otherwise dispose of any of their respective properties or assets to, or purchase any property or assets from, or enter into any contract, agreement, understanding, loan, advance or guarantee with, or for the benefit of, any Affiliate (each of the foregoing, an "Affiliate Transaction"), unless: (i) such Affiliate Transaction is on terms that are no less favorable to the Company or the relevant Subsidiary than those that would have been obtained in a comparable transaction by the Company or such Subsidiary with an unrelated Person; (ii) such Affiliate Transaction is approved by a majority of the disinterested directors on the Board of Directors of the Company; and (iii) the Company delivers to the Trustee, with respect to any Affiliate Transaction involving aggregate payments in excess of $1.0 million, a resolution of a committee of independent directors of the Company set forth in an Officers' Certificate certifying that such Affiliate Transaction complies with clauses (i) and (ii) above; provided that (a) transactions pursuant to any employment, stock option or stock purchase agreement entered into by the Company or any of its Subsidiaries, or any grant of stock, in the ordinary course of business that are approved by the Board of Directors of the Company, (b) transactions between or among the Company and its Subsidiaries, (c) transactions permitted by Section 4.07 hereof, and (d) loans and advances to employees and officers of the Company or any of its Subsidiaries in the ordinary course of business in an aggregate principal amount not to exceed $1.0 million at any one time outstanding, shall not be deemed Affiliate Transactions. Section 4.12. Liens. The Company shall not, and shall not permit any of its Subsidiaries to, directly or indirectly, create, incur, assume or suffer to exist any Lien on any asset now owned or hereafter acquired, or any income or profits therefrom or assign or convey any right to receive income therefrom, except for Permitted Liens. Section 4.13. Limitations on Sale and Leaseback Transactions. The Company shall not, and shall not permit any of its Subsidiaries to, directly or indirectly, enter into, assume, Guarantee or otherwise become liable with respect to any Sale and Leaseback Transaction, provided that the Company or any Subsidiary of the Company may enter into any such 49 transaction if (i) the Company or such Subsidiary would be permitted under Sections 4.09 and 4.12 hereof to incur secured Indebtedness in an amount equal to the Attributable Debt with respect to such transaction, (ii) the consideration received by the Company or such Subsidiary from such transaction is at least equal to the Fair Market Value of the property being transferred, and (iii) the Net Proceeds received by the Company or such Subsidiary from such transaction are applied in accordance with Section 4.10 hereof. Section 4.14. Corporate Existence. Subject to Article 5 hereof, the Company shall do or cause to be done all things necessary to preserve and keep in full force and effect (i) its existence as a corporation, and the corporate, partnership or other existence of any Subsidiary, in accordance with the respective organizational documents (as the same may be amended from time to time) of the Company or any such Subsidiary and (ii) the rights (charter and statutory), licenses and franchises of the Company and its Subsidiaries; provided, however, that the Company shall not be required to preserve any such right, license or franchise, or the corporate, partnership or other existence of any of its Subsidiaries if the Board of Directors of the Company shall determine that the preservation thereof is no longer desirable in the conduct of the business of the Company and its Subsidiaries, taken as a whole, and that the loss thereof is not adverse in any material respect to the holders of the Senior Discount Notes. Section 4.15. Offer to Purchase Upon Change of Control. (a) Upon the occurrence of a Change of Control, the Company shall make an offer (the "Change of Control Offer") to each holder of Senior Discount Notes to repurchase all or any part (equal to $1,000 or an integral multiple thereof) of such holder's Senior Discount Notes at a purchase price equal to 101% of the aggregate principal amount thereof plus accrued and unpaid interest and Liquidated Damages, if any, thereon (or, in the case of repurchases of Senior Discount Notes prior to July 15, 2002, at a purchase price equal to 101% of the Accreted Value thereof), to the date of purchase (the "Change of Control Payment"), provided that if the date of purchase is on or after an interest record date and on or before the related interest payment date, any accrued interest shall be paid to the Person in whose name a Senior Discount Note is registered at the close of business on such record date, and no additional interest shall be paid or payable to holders who tender Senior Discount Notes pursuant to the Change of Control Offer. Within thirty (30) days following any Change of Control, the Company shall mail a notice to the Trustee and each holder stating: (1) that the Change of Control Offer is being made pursuant to this Section 4.15 and that all Senior Discount Notes or portions thereof tendered will be accepted for payment; (2) the purchase price and the purchase date, which shall be no earlier than 30 days nor later than 40 days (unless required by applicable law) from the date such notice is mailed (the "Change of Control Payment Date"); (3) that any Senior Discount Note or portion thereof not tendered will continue to accrue interest in accordance with its terms; (4) that, unless the Company defaults in the payment of the Change of Control Payment, all Senior Discount Notes or portions thereof accepted for payment pursuant to the Change of Control Offer shall cease to accrue interest after the Change of Control Payment Date; (5) that holders electing to have any Senior Discount Notes or portions thereof purchased pursuant to a Change of Control Offer will be required to surrender the Senior Discount Notes, with the form entitled "Option of Holder to Elect Purchase" on the reverse of the Senior Discount Notes completed, to the Paying Agent at the address specified in the notice prior to the close of business on the third Business Day preceding the 50 Change of Control Payment Date; (6) that holders will be entitled to withdraw their election if the Paying Agent receives, not later than the close of business on the second Business Day preceding the Change of Control Payment Date, a telegram, telex, facsimile transmission or letter setting forth the name of the holder, the principal amount at maturity of Senior Discount Notes or portions thereof delivered for purchase, and a statement that such holder is withdrawing his election to have such Senior Discount Notes or portions thereof purchased; and (7) that holders whose Senior Discount Notes are being purchased only in part will be issued new Senior Discount Notes equal in principal amount at maturity to the unpurchased portion of the Senior Discount Notes surrendered, which unpurchased portion must be equal to $1,000 in principal amount at maturity or an integral multiple thereof. The Company shall comply with the requirements of Rule 14e-1 under the Exchange Act and any other securities laws and regulations thereunder to the extent such laws and regulations are applicable in connection with the repurchase of the Senior Discount Notes or portions thereof in connection with a Change of Control. (b) On the Change of Control Payment Date, the Company shall, to the extent lawful, (i) accept for payment Senior Discount Notes or portions thereof tendered pursuant to the Change of Control Offer, (ii) deposit with the Paying Agent an amount equal to the Change of Control Payment in respect of all Senior Discount Notes or portions thereof so tendered and (iii) deliver or cause to be delivered to the Trustee the Senior Discount Notes so accepted together with an Officers' Certificate stating the Senior Discount Notes or portions thereof tendered to the Company. The Paying Agent shall promptly mail to each holder of Senior Discount Notes so accepted payment in an amount equal to the purchase price for such Senior Discount Notes or portions thereof, and the Trustee shall promptly authenticate and mail to each holder a new Senior Discount Note equal in principal amount at maturity to any unpurchased portion of the Senior Discount Notes surrendered, if any; provided, that each such new Senior Discount Note shall be in a principal amount at maturity of $1,000 or an integral multiple thereof. The Company shall publicly announce the results of the Change of Control Offer on or as soon as practicable after the Change of Control Payment Date. Section 4.16. Business Activities. The Company shall not, and shall not permit any of its Subsidiaries to, directly or indirectly, engage in any business other than the Telecommunications Business. Section 4.17. Payments for Consent. The Company shall not, and shall not permit any of its Affiliates to, directly or indirectly, pay or cause to be paid any consideration, whether by way of interest, fee or otherwise, to any holder of any Senior Discount Notes for or as an inducement to any consent, waiver or amendment of any of the terms or provisions of this Indenture or the Senior Discount Notes unless such consideration is offered to be paid or agreed to be paid to all holders of the Senior Discount Notes that consent, waive or agree to amend in the time frame set forth in the solicitation documents relating to such consent, waiver or agreement. Section 4.18. Use of Proceeds. The Company shall use the gross proceeds from the sale of the Senior Discount Notes only for the following purposes: (i) to pay the fees and expenses of the issuance of the Senior Discount Notes including any discount or commission to the Initial Purchasers of the Senior Discount Notes; 51 (ii) to be deposited into an account that complies with the provisions for the Defeasance of the Company's 13 1/2% Notes under the indenture for the 13 1/2% Notes; provided, that such funds, in whole or in part, may be used to Retire 13 1/2% Notes so long as all of the 13 1/2% Notes were so Retired; and (iii) with respect to any funds remaining after application under clauses (i) and (ii) above, to fund up to 80% of the cost of the acquisition or construction of Telecommunications Related Assets, or to the repayment of the Existing Senior Notes. Pending application of the proceeds in accordance with clause (iii) above, the Company will deposit such proceeds into a segregated account in the Company's name. The Company will deliver to the Trustee an Officer's Certificate with each annual compliance certificate certifying that the amounts in such account were applied in accordance with this Section 4.18. ARTICLE 5 SUCCESSORS Section 5.01. Merger, Consolidation or Sale of Assets. The Company shall not consolidate or merge with or into (whether or not the Company is the surviving entity), or sell, assign, transfer, lease, convey or otherwise dispose of all or substantially all of its properties or assets in one or more related transactions to another corporation, Person or entity unless: (i) the Company is the surviving entity or the entity or Person formed by or surviving any such consolidation or merger (if other than the Company) or to which such sale, assignment, transfer, lease, conveyance or other disposition has been made is a corporation organized or existing under the laws of the United States, any state thereof or the District of Columbia; (ii) the entity or Person formed by or surviving any such consolidation or merger (if other than the Company) or the entity or Person to which such sale, assignment, transfer, lease, conveyance or other disposition has been made assumes all the obligations of the Company under the Senior Discount Notes and this Indenture pursuant to a supplemental indenture in form reasonably satisfactory to the Trustee; (iii) immediately after such transaction no Default or Event of Default exists; (iv) except in connection with a Merger with or into a wholly- owned Subsidiary of the Company, the Company, or any entity or Person formed by or surviving any such consolidation or merger, or to which such sale, assignment, transfer, lease, conveyance or other disposition has been made, at the time of such transaction after giving pro forma effect thereto as if such transaction had occurred at the beginning of the applicable fiscal quarter (including any Indebtedness incurred or anticipated to be incurred in connection with or in respect of such transaction or series of transactions), either (A) could incur at least $1.00 of additional Indebtedness pursuant to the Consolidated Cash Flow Leverage Ratio test described under Section 4.09 hereof or (B) would have (x) Total Market Capitalization of at least $1.0 billion and (y) total Indebtedness in an amount no greater than 30% of its Total Market Capitalization; and 52 (v) such transaction would not result in the loss, material impairment or adverse modification or amendment of any authorization or license of the Company or its Subsidiaries that would have a material adverse effect on the business or operations of the Company and its Subsidiaries taken as a whole. Section 5.02. Successor Corporation Substituted. Upon any consolidation or merger, or any sale, lease, conveyance or other disposition of all or substantially all of the assets of the Company in accordance with Section 5.01 hereof, the successor corporation formed by such consolidation or into or with which the Company is merged or to which such sale, lease, conveyance or other disposition is made shall succeed to, and be substituted for (so that from and after the date of such consolidation, merger, sale, lease, conveyance or other disposition, the provisions of this Indenture referring to the Company shall refer instead to the successor corporation and not to the Company), and may exercise every right and power of the Company under this Indenture with the same effect as if such successor Person has been named as the Company, herein; provided, however, that the predecessor Company shall not be relieved from the obligations to pay the principal of, premium, if any, and interest on the Senior Discount Notes, except in the case of a sale of all of the Company's assets that meets the requirements of Section 5.01 hereof. ARTICLE 6 DEFAULTS AND REMEDIES Section 6.01. Events of Default. Each of the following constitutes an "Event of Default": (a) default for 30 days in the payment when due of interest or Liquidated Damages, if any, on the Senior Discount Notes; (b) default in payment when due of principal (including Accreted Value) or premium, if any, on the Senior Discount Notes at maturity, upon redemption or otherwise; (c) failure by the Company to perform or comply with the provisions of Sections 4.07, 4.09, 4.10, 4.15 or 5.01 hereof; (d) failure by the Company for 30 days after notice from the Trustee or the holders of at least 25% in principal amount at maturity of the Senior Discount Notes then outstanding to comply with its other agreements in this Indenture or the Senior Discount Notes; (e) default under any mortgage, indenture or instrument under which there may be issued or by which there may be secured or evidenced any Indebtedness for money borrowed by the Company or any of its Subsidiaries (or the payment of which is guaranteed by the Company or any of its Subsidiaries), whether such Indebtedness or Guarantee now exists, or is created after the Issue Date, which default (x) is caused by a failure to pay when due principal, premium, if any, or interest on such Indebtedness within the grace period provided in such Indebtedness (a "Payment Default"), and the principal amount of any such 53 Indebtedness, together with the principal amount of any other such Indebtedness of the Company or any Significant Subsidiary under which there has been a Payment Default or the maturity of which has been accelerated as provided in clause (y), aggregates $5.0 million or more or (y) results in the acceleration (which acceleration has not been rescinded) of such Indebtedness prior to its express maturity and the principal amount at maturity of any such Indebtedness, together with the principal amount at maturity of any other such Indebtedness under which there has been a Payment Default or the maturity of which has been so accelerated, aggregates $5.0 million or more; provided, however, that this clause (y) shall not relate to an acceleration, if any, of the Existing Senior Notes or the 13 1/2% Notes, which acceleration arises out of the issuance of the Senior Discount Notes if such Indebtedness is repaid in full within 5 business days of such acceleration; (f) failure by the Company or any of its Significant Subsidiaries to pay final judgments (other than any judgment as to which a reputable insurance company has accepted full liability in writing) aggregating in excess of $5.0 million which judgments are not paid, discharged or stayed within 45 days after their entry; and (g) the Company or any of its Significant Subsidiaries pursuant to or within the meaning of Bankruptcy Law: (A) commences a voluntary case, (B) consents to the entry of an order for relief against it in an involuntary case, (C) consents to the appointment of a Custodian of it or for all or substantially all of its property, (D) makes a general assignment for the benefit of its creditors, or (E) admits in writing that it is generally not paying its debts (other than debts which are the subject of a bona fide dispute) as they become due; or (h) a court of competent jurisdiction enters an order or decree under any Bankruptcy Law that; (A) is for relief against the Company or any of its Significant Subsidiaries in an involuntary case; (B) appoints a Custodian of the Company or any of its Significant Subsidiaries or for all or substantially all of the property of the Company or any of its Significant Subsidiaries; or (C) orders the liquidation of the Company or any of its Significant Subsidiaries; and the order or decree remains unstayed and in effect for 60 consecutive days; provided, however; that if the entry of such order or decree is appealed and dismissed on appeal or otherwise has ceased to be in effect, then the Event of Default hereunder by reason of the entry of such order or decree shall be deemed to have been cured and the related acceleration, provided that no other Event of Default has occurred and is continuing, shall be deemed rescinded. 54 The term "Custodian" means any receiver, trustee, assignee, liquidator or similar official under any Bankruptcy Law. Section 6.02. Acceleration. If any Event of Default occurs and is continuing under this Indenture, the Trustee or the holders of at least 25% in principal amount at maturity of the then outstanding Senior Discount Notes may declare all the Senior Discount Notes to be due and payable immediately. Upon such declaration, the principal of (or, if prior to July 15, 2002, the Accreted Value of), premium, if any, and accrued and unpaid interest and Liquidated Damages, if any, on the Senior Discount Notes shall be due and payable immediately. Notwithstanding the foregoing, in the case of an Event of Default arising under Sections 6.01(g) or (h) hereof with respect to the Company or any of its Significant Subsidiaries, the foregoing amount shall ipso facto become due and payable without further action or notice. No premium is payable upon acceleration of the Senior Discount Notes except that in the case of an Event of Default that is the result of an action or inaction by the Company or any of its Subsidiaries intended to avoid restrictions on or premiums related to redemptions of the Senior Discount Notes contained in this Indenture or the Senior Discount Notes, the amount declared due and payable shall include the premium that would have been applicable on a voluntary prepayment of the Senior Discount Notes or, if voluntary prepayment is not then permitted, the premium set forth in this Indenture. Holders of the Senior Discount Notes may not enforce this Indenture or the Senior Discount Notes except as provided herein. In the case of any Event of Default occurring by reason of any willful action (or inaction) taken (or not taken) by or on behalf of the Company with the intention of avoiding payment of the premium that the Company would have had to pay if the Company then had elected to redeem the Senior Discount Notes pursuant to Section 3.07 hereof, an equivalent premium shall also become and be immediately due and payable to the extent permitted by law. If an Event of Default occurs prior to July 15, 2001 by reason of any willful action (or inaction) taken (or not taken) by or on behalf of the Company with the intention of avoiding the prohibition on redemption of the Senior Discount Notes prior to such date pursuant to Section 3.07 hereof, then the premium payable for purposes of this paragraph for each of the years beginning on July 15th of the years set forth below shall be as set forth in the following table, expressed as a percentage of the amount that would otherwise be due but for the provisions of this paragraph, plus accrued interest, if any, to the date of payment: YEAR PERCENTAGE ---- ---------- 1997............................ 11.250% 1998............................ 10.125% 1999............................ 9.000% 2000............................ 7.875% 2001............................ 6.750% Section 6.03. Other Remedies. If an Event of Default occurs and is continuing, the Trustee may pursue any available remedy to collect the payment of principal, premium, if any, interest and Liquidated Damages, if any, the Senior Discount Notes or to enforce the performance of any provision of the Senior Discount Notes or this Indenture. 55 The Trustee may maintain a proceeding even if it does not possess any of the Senior Discount Notes or does not produce any of them in the proceeding. A delay or omission by the Trustee or any holder of a Note in exercising any right or remedy accruing upon an Event of Default shall not impair the right or remedy or constitute a waiver of or acquiescence in the Event of Default. All remedies are cumulative to the extent permitted by law. Section 6.04. Waiver of Past Defaults. Holders of not less than a majority in aggregate principal amount at maturity of the Senior Discount Notes then outstanding, by notice to the Trustee, may on behalf of the holders of all of the Senior Discount Notes, waive any existing Default or Event of Default and its consequences, except a continuing Default or Event of Default in the payment of interest or Liquidated Damages or premium on, or the principal of, the Senior Discount Notes. 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 6.05. Control by Majority. Holders of a majority in principal amount at maturity of the then outstanding Senior Discount Notes may 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 it. However, the Trustee may refuse to follow any direction that conflicts with the law or this Indenture that the Trustee, in its sole discretion, determines may be unduly prejudicial to the rights of other holders of Senior Discount Notes or that may involve the Trustee in personal liability. Section 6.06. Limitation on Suits. No holder of any Senior Discount Note shall have any right to institute any proceeding with respect to this Indenture or the Senior Discount Notes or for any remedy thereunder, unless: (i) the holder of a Note gives to the Trustee written notice of a continuing Event of Default; (ii) the holders of at least 25% in principal amount at maturity of the then outstanding Senior Discount Notes make a written request to the Trustee to pursue the remedy; (iii) such holder of a Senior Discount Note or holders of the Senior Discount Notes offer and, if requested, provide to the Trustee indemnity satisfactory to the Trustee against any loss, liability or expense; and (iv) the Trustee does not comply with the request within 60 days after receipt of the request and the offer and, if requested, the provision of indemnity. 56 Otherwise, no holder of any Senior Discount Note shall have any right to institute any proceeding with respect to this Indenture or the Senior Discount Notes or for any remedy thereunder, except: (x) a holder of a Senior Discount Note may institute suit for enforcement of payment of the principal of and premium, if any, or interest on such Senior Discount Note on or after the respective due dates expressed in such Senior Discount Note (including upon acceleration thereof) or (y) the institution of any proceeding with respect to this Indenture or the Senior Discount Notes or any remedy thereunder, including without limitation acceleration, by the holders of a majority in principal amount at maturity of the outstanding Senior Discount Notes; provided that, upon institution of any proceeding or exercise of any remedy such holders provide the Trustee with prompt written notice thereof. A holder of a Senior Discount Note may not use this Indenture to prejudice the rights of another holder of a Senior Discount Note or to obtain a preference or priority over another holder of a Senior Discount Note. Section 6.07. Rights of Holders of Notes to Receive Payment. Notwithstanding any other provision of this Indenture, the right of any holder of a Senior Discount Note to receive payment of principal, premium and Liquidated Damages, if any, and interest on the Senior Discount Note, on or after the respective due dates expressed in the Senior Discount Note, or to bring suit for the enforcement of any such payment on or after such respective dates, shall not be impaired or affected without the consent of the holder of the Senior Discount Note. Section 6.08. Collection Suit by Trustee. If an Event of Default specified in Section 6.01(a) or (b) hereof occurs and is continuing, the Trustee is authorized to recover judgment in its own name and as trustee of an express trust against the Company for the whole amount of principal of, premium and Liquidated Damages, if any, and interest remaining unpaid on the Senior Discount Notes and interest on overdue principal and, to the extent lawful, interest and such further amount as shall be sufficient to cover the costs and expenses of collection, including the reasonable compensation, expenses, disbursements and advances of the Trustee, its agents and counsel. Section 6.09. Trustee May File Proofs of Claim. The Trustee is authorized to file such proofs of claim and other papers or documents as may be necessary or advisable in order to have the claims of the Trustee (including any claim for the reasonable compensation, expenses, disbursements and advances of the Trustee, its agents and counsel) and the holders of the Senior Discount Notes allowed in any judicial proceedings relative to the Company (or any other obligor upon the Senior Discount Notes), the Company's creditors or the Company's property and shall be entitled and empowered to collect, receive and distribute any money or other property payable or deliverable on any such claims and any custodian in any such judicial proceeding is hereby authorized by each holder of a Note 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 of the Senior Discount Notes, to pay to 57 the Trustee any amount due to it for the reasonable compensation, expenses, disbursements and advances of the Trustee, its agents and counsel, and any other amounts due the Trustee under Section 7.07 hereof. To the extent that the payment of any such compensation, expenses, disbursements and advances of the Trustee, its agents and counsel, and any other amounts due the Trustee under Section 7.07 hereof out of the estate in any such proceeding, shall be denied for any reason, payment of the same shall be secured by a Lien on, and shall be paid out of, any and all distributions, dividends, money, securities and other properties which the holders of the Senior Discount Notes may be entitled to receive in such proceeding whether in liquidation or under any plan of reorganization or arrangement or otherwise. Nothing contained herein shall be deemed to authorize the Trustee to authorize or consent to or accept or adopt on behalf of any holder of a Note any plan of reorganization, arrangement, adjustment or composition affecting the Senior Discount Notes or the rights of any holder of a Note thereof, or to authorize the Trustee to vote in respect of the claim of any holder of a Note in any such proceeding. Section 6.10. Priorities. If the Trustee collects any money pursuant to this Article 6, it shall pay out the money in the following order: First: to the Trustee, its agents and attorneys for amounts due under Section 7.07 hereof, including payment of all compensation, expense and liabilities incurred, and all advances made, by the Trustee and the costs and expenses of collection; Second: (i) first to holders of Senior Discount Notes, for amounts due and unpaid on such Senior Discount Notes for interest, ratably, without preference or priority of any kind, according to the amounts due and payable on the Senior Discount Notes for interest, and (ii) second, to the extent any other monies are available, to holders of all Senior Discount Notes for amounts due and unpaid on all such Senior Discount Notes for principal and premium and Liquidated Damages, if any, ratably, without preference or priority of any kind, according to the amounts due and payable on the Senior Discount Notes for principal and premium and Liquidated Damages, if any; and Third: to the Company or to such party as a court of competent jurisdiction shall direct. The Trustee may fix a record date and payment date for any such payment to holders of Senior Discount Notes. Section 6.11. Undertaking for Costs. In any suit for the enforcement of any right or remedy under this Indenture or in any suit against the Trustee for any action taken or omitted by it as a Trustee, a court in its discretion may require the filing by any party litigant in the suit of an undertaking to pay the costs of the suit, and the court in its discretion may assess reasonable costs, including reasonable attorneys' fees, against any party litigant in the suit, having due regard to the merits and good faith of the claims or defenses made by the party litigant. This Section 6.11 does not apply to a suit by the Trustee, a suit by a holder of a Senior Discount Note pursuant to Section 6.07 hereof, or a suit by holders of more than 10% in principal amount at maturity of the then outstanding Senior Discount Notes. 58 ARTICLE 7 TRUSTEE Section 7.01. Duties of Trustee. (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 shall use the same degree of care and skill in their exercise as a prudent man would exercise or use under the circumstances in the conduct of his own affairs. (b) Except during the continuance of an Event of Default: (i) the duties of the Trustee shall be determined solely by the express provisions of this Indenture and the Trustee need perform only those duties that are specifically set forth in this Indenture and no others, and no implied covenants or obligations shall be read into this Indenture against the Trustee, and (ii) in the absence of bad faith on its part, the Trustee may conclusively rely, as to the truth of the statements and the correctness of the opinions expressed therein, upon certificates or opinions furnished to the Trustee and conforming to the requirements of this Indenture. However, the Trustee shall examine the certificates and opinions to determine whether or not they conform to the requirements of this Indenture. (c) The Trustee may not be relieved from liabilities for its own negligent action, its own negligent failure to act, or its own willful misconduct, except that: (i) this paragraph does not limit the effect of paragraph (b) of this Section 7.01; (ii) the Trustee shall not be liable for any error of judgment made in good faith by a Responsible Officer, unless it is proved that the Trustee was negligent in ascertaining the pertinent facts; and (iii) the Trustee shall not be liable with respect to any action it takes or omits to take in good faith in accordance with a direction received by it pursuant to Section 6.05 hereof. (d) Whether or not therein expressly so provided, every provision of this Indenture that in any way relates to the Trustee is subject to paragraphs (a), (b), and (c) of this Section 7.01. (e) No provision of this Indenture shall require the Trustee to expend or risk its own funds or incur any liability. The Trustee shall be under no obligation to exercise any of its rights and powers under this Indenture at the request of any holders of Senior Discount Notes, unless such holder shall have provided to the Trustee security and indemnity satisfactory to the Trustee against any loss, liability or expense. (f) The Trustee shall not be liable for interest on any money received by it except as the Trustee may agree in writing with the Company. Money held in trust by the Trustee need not be segregated from other funds except to the extent required by law. 59 Section 7.02. Rights of Trustee. (a) The Trustee may conclusively rely upon any document believed by it to be genuine and to have been signed or presented by the proper Person. The Trustee need not investigate any fact or matter stated in the document. (b) Before the Trustee acts or refrains from acting, it may require an Officers' 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 in reliance on such Officers' Certificate or Opinion of Counsel. The Trustee may consult with counsel and the advice of such counsel or any Opinion of Counsel shall be full and complete authorization and protection from liability in respect of any action taken, suffered or omitted by it hereunder in good faith and in reliance thereon. (c) The Trustee may act through its attorneys and agents and shall not be responsible for the misconduct or negligence of any agent appointed with due care. (d) The Trustee shall not be liable for any action it takes or omits to take in good faith which it believes to be authorized or within its rights or powers conferred upon it by this Indenture. (e) Unless otherwise specifically provided in this Indenture, any demand, request, direction or notice from the Company shall be sufficient if signed by an Officer of the Company. (f) The Trustee shall be under no obligation to exercise any of the rights or powers vested in it by this Indenture at the request or direction of any of the holders unless such holders shall have provided to the Trustee reasonable security or indemnity against the costs, expenses and liabilities that might be incurred by it in compliance with such request or direction. Section 7.03. Individual Rights of Trustee. The Trustee in its individual or any other capacity may become the owner or pledgee of Senior Discount Notes and may otherwise deal with the Company or any Affiliate of the Company with the same rights it would have if it were not Trustee. However, in the event that the Trustee acquires any conflicting interest, it must eliminate such conflict within 90 days, apply to the Commission for permission to continue as Trustee or resign. Any Agent may do the same with like rights and duties. The Trustee is also subject to Sections 7.10 and 7.11 hereof. Section 7.04. Trustee's Disclaimer. The Trustee shall not be responsible for and makes no representation as to the validity or adequacy of this Indenture or the Senior Discount Notes, it shall not be accountable for the Company's use of the proceeds from the Senior Discount Notes or any money paid to the Company or upon the Company's direction under any provision of this Indenture, it shall not be responsible for the use or application of any money received by any Paying Agent other than the Trustee, and it shall not be responsible for any statement or recital herein or any statement in the Senior Discount Notes or any other document in connection with the sale of the Senior Discount Notes or pursuant to this Indenture other than its certificate of authentication. 60 Section 7.05. Notice of Defaults. If a Default or Event of Default occurs and is continuing and if it is known to a Responsible Officer of the Trustee, the Trustee shall mail to holders of Senior Discount Notes a notice of the Default or Event of Default within 90 days after it occurs. Except in the case of a Default or Event of Default in payment of principal of, premium, if any, or interest on any Note, the Trustee may withhold the notice if and so long as a committee of its Responsible Officers in good faith determines that withholding the notice is in the interests of the holders of the Senior Discount Notes. Section 7.06. Reports by Trustee to Holders of the Senior Discount Notes. Within 60 days after each May 15th beginning with the May 15th following the date of this Indenture, the Trustee shall mail to the holders of the Senior Discount Notes a brief report dated as of such reporting date that complies with TIA (S) 313(a) (but if no event described in TIA (S) 313(a) has occurred within the twelve months preceding the reporting date, no report need be transmitted). The Trustee also shall comply with TIA (S) 313(b)(2). The Trustee shall also transmit by mail all reports as required by TIA (S) 313(c). A copy of each report at the time of its mailing to the holders of Senior Discount Notes shall be mailed to the Company and filed with the Commission and each stock exchange on which the Senior Discount Notes are listed. The Company shall promptly notify the Trustee when the Senior Discount Notes are listed on any stock exchange. Section 7.07. Compensation and Indemnity. The Company shall pay to the Trustee from time to time reasonable compensation for its acceptance of this Indenture and services hereunder. The Trustee's compensation shall not be limited by any law on compensation of a trustee of an express trust. The Company shall reimburse the Trustee promptly upon request for all reasonable disbursements, advances and expenses incurred or made by it in addition to the compensation for its services. Such expenses shall include the reasonable compensation, disbursements and expenses of the Trustee's agents and counsel. The Company shall indemnify the Trustee against any and all losses, liabilities or expenses incurred by it arising out of or in connection with the acceptance or administration of its duties under this Indenture, except any such loss, liability or expense as may be attributable to the negligence or bad faith of the Trustee. The Trustee shall notify the Company promptly of any claim for which it may seek indemnity. Failure by the Trustee to so notify the Company shall not relieve the Company of its obligations hereunder. The Company shall defend the claim and the Trustee shall cooperate in the defense. The Trustee, in its sole discretion, may elect to have separate counsel selected by it and the Company shall pay the reasonable fees and expenses of such counsel. The Company need not pay for any settlement made without its consent, which consent shall not be unreasonably withheld. The obligations of the Company under this Section 7.07 shall survive the satisfaction and discharge of this Indenture. 61 To secure the Company' payment obligations in this Section 7.07, the Trustee shall have a Lien prior to the Senior Discount Notes on all money or property held or collected by the Trustee, except that held in trust to pay principal, premium, if any, interest and Liquidated Damages, if any, on particular Senior Discount Notes. Such Lien shall survive the satisfaction and discharge of this Indenture. When the Trustee incurs expenses or renders services after an Event of Default specified in Section 6.01(g) or (h) hereof occurs, the expenses and the compensation for the services (including the fees and expenses of its agents and counsel) are intended to constitute expenses of administration under any Bankruptcy Law. Section 7.08. Replacement of Trustee. A resignation or removal of the Trustee and appointment of a successor Trustee shall become effective only upon the successor Trustee's acceptance of appointment as provided in this Section 7.08. The Trustee may resign in writing at any time and be discharged from the trust hereby created by so notifying the Company. The holders of Senior Discount Notes of a majority in principal amount at maturity of the then outstanding Senior Discount Notes may remove the Trustee by so notifying the Trustee and the Company in writing. The Company may remove the Trustee if: (a) the Trustee fails to comply with Section 7.10 hereof; (b) the Trustee is adjudged a bankrupt or an insolvent or an order for relief is entered with respect to the Trustee under any Bankruptcy Law; (c) a Custodian or public officer takes charge of the Trustee or its property; or (d) the Trustee becomes incapable of acting. If the Trustee resigns or is removed or if a vacancy exists in the office of Trustee for any reason, the Company shall promptly appoint a successor Trustee. Within one year after the successor Trustee takes office, the holders of a majority in principal amount at maturity of the then outstanding Senior Discount Notes may appoint a successor Trustee to replace the successor Trustee appointed by the Company. If a successor Trustee does not take office within 60 days after the retiring Trustee resigns or is removed, the retiring Trustee, the Company, or the holders of Senior Discount Notes of at least 10% in principal amount at maturity of the then outstanding Senior Discount Notes may petition any court of competent jurisdiction for the appointment of a successor Trustee. If the Trustee after written request by any holder of a Senior Discount Note who has been a holder of a Senior Discount Note for at least six months fails to comply with Section 7.10 hereof, such holder of a Senior Discount Note may petition any court of competent jurisdiction for the removal of the Trustee and the appointment of a successor Trustee. 62 A successor Trustee shall deliver a written acceptance of its appointment to the retiring Trustee and to the Company. Thereupon, the resignation or removal of the retiring Trustee shall become effective, and the successor Trustee shall have all the rights, powers and duties of the Trustee under this Indenture. The successor Trustee shall mail a notice of its succession to holders of the Senior Discount Notes. The retiring Trustee shall promptly transfer all property held by it as Trustee to the successor Trustee, provided all sums owing to the Trustee hereunder have been paid and subject to the Lien provided for in Section 7.07 hereof. Notwithstanding replacement of the Trustee pursuant to this Section 7.08, the Company's obligations under Section 7.07 hereof shall continue for the benefit of the retiring Trustee. Section 7.09. Successor Trustee by Merger, etc. If the Trustee consolidates, merges or converts into, or transfers all or substantially all of its corporate trust business to, another corporation, the successor corporation without any further act shall be the successor Trustee. Section 7.10. Eligibility; Disqualification. There shall at all times be a Trustee hereunder which shall be 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, shall be subject to supervision or examination by federal or state authority and shall have a combined capital and surplus of at least $25.0 million as set forth in its most recent published annual report of condition. This Indenture shall always have a Trustee who satisfies the requirements of TIA (S) 310(a)(1), (2) and (5). The Trustee is subject to TIA (S) 310(b). Section 7.11. Preferential Collection of Claims Against Company. The Trustee is subject to TIA (S) 311(a), excluding any creditor relationship listed in TIA (S) 311(b). A Trustee who has resigned or been removed shall be subject to TIA (S) 311(a) to the extent indicated therein. ARTICLE 8 LEGAL DEFEASANCE AND COVENANT DEFEASANCE Section 8.01. Option to Effect Legal Defeasance or Covenant Defeasance. The Company may, at the option of its Board of Directors evidenced by a resolution set forth in an Officers' Certificate and at any time, with respect to the Senior Discount Notes, elect to have either Section 8.02 or 8.03 hereof be applied to all outstanding Senior Discount Notes upon compliance with the conditions set forth below in this Article 8. 63 Section 8.02. Legal Defeasance and Discharge. Upon the Company's exercise under Section 8.01 hereof of the option applicable to this Section 8.02, the Company shall be deemed to have been discharged from its obligations with respect to all outstanding Senior Discount Notes on the date the conditions set forth in Section 8.04 are satisfied (hereinafter, "Legal Defeasance"). For this purpose, such Legal Defeasance means that the Company shall be deemed to have paid and discharged the entire Indebtedness represented by the outstanding Senior Discount Notes, which shall thereafter be deemed to be "outstanding" only for the purposes of Section 8.05 hereof and the other sections of this Indenture referred to in (a) and (b) below, and to have satisfied all of its other obligations under such Senior Discount Notes and this Indenture (and the Trustee, on demand of and at the expense of the Company, shall execute proper instruments acknowledging the same), except for the following which shall survive until otherwise terminated or discharged hereunder: (a) the rights of holders of outstanding Senior Discount Notes to receive from the trust described below payments in respect of the principal of, premium, if any, and interest on and Liquidated Damages with respect to such Senior Discount Notes when such payments are due, or on the redemption date, as the case may be; (b) the Company's obligations with respect to the Senior Discount Notes concerning issuing temporary Senior Discount Notes, registration of Senior Discount Notes, mutilated, destroyed, lost or stolen Senior Discount Notes and the maintenance of an office or agency for payment and money for security payments held in trust; (c) the rights, powers, trust, duties and immunities of the Trustee, and the Company's obligations in connection therewith; and (d) the Legal Defeasance provisions of this Indenture. Section 8.03. Covenant Defeasance. Upon the Company's exercise under Section 8.01 hereof of the option applicable to this Section 8.03, the Company shall be released from its obligations under the covenants contained in Sections 4.03, 4.04, 4.05, 4.07, 4.08, 4.09, 4.10, 4.11, 4.12, 4.13, 4.15, 4.16, 4.17 and 4.18 hereof and Article 5 hereof with respect to the outstanding Senior Discount Notes on and after the date the conditions set forth in Section 8.04 are satisfied (hereinafter, "Covenant Defeasance"), and the Senior Discount Notes shall thereafter be deemed 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 (it being understood that such Senior Discount Notes shall not be deemed outstanding for accounting purposes). For this purpose, such Covenant Defeasance means that, with respect to the outstanding Senior Discount Notes, the Company may omit to comply with and shall have no liability in respect of any term, condition or limitation set forth in any such covenant, whether directly or indirectly, by reason of any reference elsewhere herein to any such covenant or by reason of any reference in any such covenant to any other provision herein or in any other document and such omission to comply shall not constitute a Default or an Event of Default under Section 6.01 hereof but, except as specified above, the remainder of this Indenture and such Senior Discount Notes shall be unaffected thereby. In addition, upon the Company's exercise under Section 8.01 hereof of the option applicable to this Section 8.03, subject to the satisfaction of the conditions set forth in Section 8.04 hereof, Sections 6.01(d) through 6.01(f) hereof shall not constitute Events of Default. Section 8.04. Conditions to Legal or Covenant Defeasance. The following shall be the conditions to the application of either Section 8.02 or Section 8.03 hereof to the outstanding Senior Discount Notes: 64 (a) The Company shall irrevocably have deposited or caused to be deposited with the Trustee (or another trustee satisfying the requirements of Section 7.10 hereof who shall agree to comply with the provisions of this Article 8 applicable to it), in trust, for purpose of making the following payments, specifically pledged as security for, and dedicated solely to, the benefit of the holders of the Senior Discount Notes, (i) cash in U.S. dollars, (ii) non-callable Government Securities, or (iii) a combination thereof, in such amounts as will be sufficient, in the opinion of a nationally recognized firm of independent public accountants selected by the Company, to pay the principal of, premium and Liquidated Damages, if any, and interest on the outstanding Senior Discount Notes, on the stated maturity or on the applicable optional redemption date, as the case may be, of such principal or installment of principal of, premium, if any, or interest on or Liquidated Damages with respect to the outstanding Senior Discount Notes; (b) In the case of Legal Defeasance, the Company shall have delivered to the Trustee an opinion of counsel in the United States reasonably acceptable to the Trustee confirming that (i) the Company has received from, or there has been published by, the Internal Revenue Service a ruling or (ii) since the Issue Date, 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 counsel shall confirm that, the holders of the outstanding Senior Discount Notes will not recognize income, gain or loss for federal income tax purposes as a result of such Legal Defeasance and will be subject to federal income tax on the same amounts, in the same manner and at the same times as would have been the case if such Legal Defeasance had not occurred; (c) In the case of Covenant Defeasance, the Company shall have delivered to the Trustee an opinion of counsel in the United States reasonably acceptable to the Trustee confirming that the holders of the outstanding Senior Discount 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 shall have occurred and be continuing on the date of such deposit (other than a Default or Event of Default resulting from the borrowing of funds to be applied to such deposit) or insofar as Events of Default from bankruptcy or insolvency events are concerned, at any time in the period ending on the 91st day after the date of deposit; (e) Such Legal Defeasance or Covenant Defeasance shall not result in a breach or violation of, or constitute a default under any material agreement or instrument (other than this Indenture) to which the Company or any of its Subsidiaries is a party or by which the Company or any of its Subsidiaries is bound; (f) The Company shall have delivered to the Trustee an opinion of counsel to the effect that after the 91st day (or such other applicable date) 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; (g) 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 Senior Discount Notes over the other creditors of the Company with the intent of defeating, hindering, delaying or defrauding creditors of the Company or others; and 65 (h) The Company shall have delivered to the Trustee an Officers' Certificate and an opinion of counsel, each stating that all conditions precedent provided for relating to the Legal Defeasance or the Covenant Defeasance have been complied with. Section 8.05. Deposited Money and Government Securities to be Held in Trust; Other Miscellaneous Provisions. Subject to Section 8.06 hereof, all money and Government Securities (including the proceeds thereof) deposited with the Trustee (or other qualifying trustee, collectively for purposes of this Section 8.05, the "Trustee") pursuant to Section 8.04 hereof in respect of the outstanding Senior Discount Notes shall be held in trust and applied by the Trustee, in accordance with the provisions of such Senior Discount Notes and this Indenture, to the payment, either directly or through any Paying Agent (including the Company acting as Paying Agent) as the Trustee may determine, to the holders of such Senior Discount Notes of all sums due and to become due thereon in respect of principal, premium, if any, and interest, but such money and Government Securities (including any proceeds thereof) 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 cash or Government Securities deposited pursuant to Section 8.04 hereof or the principal and interest received in respect thereof other than any such tax, fee or other charge which by law is for the account of the holders of the outstanding Senior Discount Notes. Anything in this Article 8 to the contrary notwithstanding, the Trustee shall deliver or pay to the Company from time to time upon the request of the Company any money or Government Securities held by it as provided in Section 8.04 hereof which, in the opinion of a nationally recognized firm of independent public accountants expressed in a written certification thereof delivered to the Trustee (which may be the opinion delivered under Section 8.04(a) hereof), are in excess of the amount thereof which would then be required to be deposited to effect an equivalent Legal Defeasance or Covenant Defeasance. Section 8.06. Repayment to Company. 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, or interest on any Senior Discount Note and remaining unclaimed for two years after such principal, and premium, if any, or interest has become due and payable shall be paid to the Company on its written request or (if then held by the Company) shall be discharged from such trust; and the holder of such Senior Discount Note shall thereafter, as a creditor, look only to the Company for payment thereof, and all liability of the Trustee or such Paying Agent with respect to such trust money, and all liability of the Company as trustee thereof, shall thereupon cease; provided, however, that the Trustee or such Paying Agent, before being required to make any such repayment, may at the expense of the Company cause to be published once, in the New York Times and The Wall Street Journal (national edition), 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 or publication, any unclaimed balance of such money then remaining will be repaid to the Company. 66 Section 8.07. Reinstatement. If the Trustee or Paying Agent is unable to apply any United States Dollars or Government Securities in accordance with Section 8.02 or 8.03 hereof, 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 Senior Discount Notes shall be revived and reinstated as though no deposit had occurred pursuant to Section 8.02 or 8.03 hereof until such time as the Trustee or Paying Agent is permitted to apply all such money in accordance with Section 8.02 or 8.03 hereof, as the case may be; provided, however, that, if the Company makes any payment of principal of, premium, if any, or interest on any Senior Discount Note following the reinstatement of its obligations, the Company shall be subrogated to the rights of the holders of such Senior Discount Notes to receive such payment from the money held by the Trustee or Paying Agent. ARTICLE 9 AMENDMENT, SUPPLEMENT AND WAIVER Section 9.01. Without Consent of Holders of Senior Discount Notes. Notwithstanding Section 9.02 hereof, the Company and the Trustee may amend or supplement this Indenture or the Senior Discount Notes without the consent of any holder of Senior Discount Notes: (a) to cure any ambiguity, defect or inconsistency; (b) to provide for uncertificated Senior Discount Notes in addition to or in place of certificated Senior Discount Notes; (c) to provide for the assumption of the Company's obligations to holders of the Senior Discount Notes in the case of a merger or consolidation; (d) to make any change that would provide any additional rights or benefits to the holders of the Senior Discount Notes or that does not adversely affect the legal rights under this Indenture of any such holder; or (e) to comply with requirements of the Commission in order to effect or maintain the qualification of this Indenture under the Trust Indenture Act. Upon the request of the Company accompanied by a resolution of the Board of Directors of the Company authorizing the execution of any such amended or supplemental Indenture, and upon receipt by the Trustee of the documents described in Section 9.06 hereof, the Trustee shall join with the Company in the execution of any amended or supplemental Indenture authorized or permitted by the terms of this 67 Indenture and to make any further appropriate agreements and stipulations which may be therein contained, but the Trustee shall not be obligated to enter into such amended or supplemental Indenture which affects its own rights, duties or immunities under this Indenture or otherwise. Section 9.02. With Consent of Holders of Senior Discount Notes. The Company and the Trustee may amend or supplement this Indenture or the Senior Discount Notes or any amended or supplemental Indenture with the written consent of the holders of Senior Discount Notes of at least a majority in aggregate principal amount at maturity of the Senior Discount Notes then outstanding (including consents obtained in connection with a tender offer or exchange offer for the Senior Discount Notes), and any existing Default and its consequences or compliance with any provision of this Indenture or the Senior Discount Notes may be waived with the consent of the holders of a majority in principal amount at maturity of the then outstanding Senior Discount Notes (including consents obtained in connection with a tender offer or exchange offer for the Senior Discount Notes). Upon the request of the Company accompanied by a resolution of the Board of Directors of the Company authorizing the execution of any such amended or supplemental Indenture, and upon the filing with the Trustee of evidence satisfactory to the Trustee of the consent of the holders of Senior Discount Notes as aforesaid, and upon receipt by the Trustee of the documents described in Section 9.06 hereof, the Trustee shall join with the Company in the execution of such amended or supplemental Indenture unless such amended or supplemental Indenture affects the Trustee's own rights, duties or immunities under this Indenture or otherwise, in which case the Trustee may in its discretion, but shall not be obligated to, enter into such amended or supplemental Indenture. It shall not be necessary for the consent of the holders of Senior Discount Notes under this Section 9.02 to approve the particular form of any proposed amendment or waiver, but it shall be sufficient if such consent approves the substance thereof. After an amendment, supplement or waiver under this Section 9.02 becomes effective, the Company shall mail to the holders of Senior Discount Notes affected thereby a notice briefly describing the amendment, supplement or waiver. Any failure of the Company to mail such notice, or any defect therein, shall not, however, in any way impair or affect the validity of any such amended or supplemental Indenture or waiver. Subject to Sections 6.04 and 6.07 hereof, the holders of a majority in aggregate principal amount at maturity of the Senior Discount Notes then outstanding may waive compliance in a particular instance by the Company with any provision of this Indenture or the Senior Discount Notes. However, without the consent of each holder affected, an amendment or waiver may not (with respect to any Senior Discount Note held by a non-consenting holder of Senior Discount Notes): (i) reduce the principal amount of Senior Discount Notes whose holders must consent to an amendment, supplement or waiver; (ii) reduce the principal of or change the fixed maturity of any Note or alter the provisions with respect to the redemption of the Senior Discount Notes (other than Sections 3.09 and 4.15 hereof); (iii) reduce the rate of or change the time for payment of interest on any Senior Discount Notes; 68 (iv) waive a Default or Event of Default in the payment of principal of or premium, if any, or interest on the Senior Discount Notes (except a rescission of acceleration of the Senior Discount Notes by the holders of at least a majority in aggregate principal amount at maturity of the Senior Discount Notes and a waiver of the payment default that resulted from such acceleration); (v) make any Note payable in money other than that stated in the Senior Discount Notes; (vi) make any change in the provisions of this Indenture relating to waivers of past Defaults or the rights of holders of Senior Discount Notes to receive payments of principal of, premium, if any, or interest on the Senior Discount Notes; (vii) waive a redemption payment with respect to any Senior Discount Note (other than a payment required by Sections 3.09 or 4.15 hereof); or (viii) make any change in the foregoing amendment and waiver provisions. Section 9.03. Compliance with Trust Indenture Act. Every amendment or supplement to this Indenture or the Senior Discount Notes shall be set forth in a amended or supplemental Indenture that complies with the TIA as then in effect. Section 9.04. Revocation and Effect of Consents. Until an amendment, supplement or waiver becomes effective, a consent to it by a holder of a Senior Discount Note is a continuing consent by the holder of a Senior Discount Note and every subsequent holder of a Senior Discount Note or portion of a Note that evidences the same debt as the consenting holder's Senior Discount Note, even if notation of the consent is not made on any Senior Discount Note. However, any such holder of a Senior Discount Note or subsequent holder of a Note may revoke the consent as to its Senior Discount Note if the Trustee receives written notice of revocation before the date the waiver, supplement or amendment becomes effective. An amendment, supplement or waiver becomes effective in accordance with its terms and thereafter binds every holder of a Senior Discount Note. The Company may fix a record date for determining which holders of the Senior Discount Notes must consent to such amendment, supplement or waiver. If the Company fixes a record date, the record date shall be fixed at (i) the later of 30 days prior to the first solicitation of such consent or the date of the most recent list of holders of Senior Discount Notes furnished to the Trustee prior to such solicitation pursuant to Section 2.05 hereof or (ii) such other date as the Company shall designate. Section 9.05. Notation on or Exchange of Senior Discount Notes. The Trustee may place an appropriate notation about an amendment, supplement or waiver on any Senior Discount Note thereafter authenticated. The Company in exchange for all Senior Discount 69 Notes may issue and the Trustee shall authenticate new Senior Discount Notes that reflect the amendment, supplement or waiver. Failure to make the appropriate notation or issue a new Senior Discount Note shall not affect the validity and effect of such amendment, supplement or waiver. Section 9.06. Trustee to Sign Amendments, etc. The Trustee shall sign any amended or supplemental Indenture authorized pursuant to this Article 9 if the amendment or supplement does not adversely affect the rights, duties, liabilities or immunities of the Trustee. The Company may not sign an amendment or supplemental Indenture until the Board of Directors approves it. Section 9.07. Payment for Consents. The Company shall not, and shall not permit any of its Subsidiaries to, directly or indirectly, pay or cause to be paid any consideration, whether by way of interest, fee or otherwise, to any holder of Senior Discount Notes for or as an inducement to any consent, waiver or amendment of any of the terms or provisions of this Indenture or the Senior Discount Notes, unless such consideration is offered to be paid or agreed to be paid to all holders of the Senior Discount Notes that consent, waive or agree to amend in the time frame set forth in the solicitation documents relating to such consent, waiver or agreement. 70 ARTICLE 10 MISCELLANEOUS Section 10.01. Trust Indenture Act Controls. If any provision of this Indenture limits, qualifies or conflicts with the duties imposed by TIA (S) 318(c), the imposed duties shall control. Section 10.02. Notices. Any notice or communication by the Company or the Trustee to the other is duly given if in writing and delivered in Person or mailed by first class mail (registered or certified, return receipt requested), telex, telecopier or overnight air courier guaranteeing next day delivery, to the other's address: If to the Company: Intermedia Telecommunications Inc. 3625 Queen Palm Drive Tampa, Florida 33619 Telecopier No.: (813) 829-2390 Attention: Chief Financial Officer If to the Trustee: SunTrust Bank, Central Florida, National Association 225 East Robinson Street, Suite 250 Orlando, Florida 32801 Telephone No.: (407) 237-5179 Telecopier No.: (407) 237-5299 Attention: Corporate Trust Department The Company or the Trustee, by notice to the other may designate additional or different addresses for subsequent notices or communications. All notices and communications (other than those sent to holders of Senior Discount Notes) shall be deemed to have been duly given: at the time delivered by hand, if personally delivered; five Business Days after being deposited in the mail, postage prepaid, if mailed; when answered back, if telexed; when receipt acknowledged, if telecopied; and the next Business Day after timely delivery to the courier, if sent by overnight air courier guaranteeing next day delivery. Any notice or communication to a holder of a Senior Discount Note shall be mailed by first class mail to its address shown on the register kept by the Registrar. Any notice or communication shall also be so mailed to any Person described in TIA (S) 313(c), to the extent required by the TIA. Failure to mail a notice or communication to a holder of a Senior Discount Note or any defect in it shall not affect its sufficiency with respect to other holders of Senior Discount Notes. If a notice or communication is mailed in the manner provided above within the time prescribed, it is duly given, whether or not the addressee receives it. 71 If the Company mails a notice or communication to holders of Senior Discount Notes, it shall mail a copy to the Trustee and each Agent at the same time. Section 10.03. Communication by Holders of Senior Discount Notes with Other Holders of Senior Discount Notes. Holders of the Senior Discount Notes may communicate pursuant to TIA (S) 312(b) with other holders of Senior Discount Notes with respect to their rights under this Indenture or the Senior Discount Notes. The Company, the Trustee, the Registrar and anyone else shall have the protection of TIA (S) 312(c). Section 10.04. Certificate and Opinion as to Conditions Precedent. Upon any request or application by the Company to the Trustee to take any action under this Indenture, the Company shall furnish to the Trustee: (a) an Officers' Certificate in form and substance reasonably satisfactory to the Trustee (which shall include the statements set forth in Section 10.05 hereof) stating that, in the opinion of the signers, all conditions precedent and covenants, if any, provided for in this Indenture relating to the proposed action have been satisfied; and (b) an Opinion of Counsel in form and substance reasonably satisfactory to the Trustee (which shall include the statements set forth in Section 10.05 hereof) stating that, in the opinion of such counsel, all such conditions precedent and covenants have been satisfied. Section 10.05. Statements Required in Certificate or Opinion. Each certificate or opinion with respect to compliance with a condition or covenant provided for in this Indenture (other than a certificate provided pursuant to TIA (S) 314(a)(4)) shall include: (a) a statement that the Person making such certificate or opinion has read such covenant or condition; (b) a brief statement as to the nature and scope of the examination or investigation upon which the statements or opinions contained in such certificate or opinion are based; (c) a statement that, in the opinion of such Person, he has made such examination or investigation as is necessary to enable him to express an informed opinion as to whether or not such covenant or condition has been satisfied; and (d) a statement as to whether or not, in the opinion of such Person, such condition or covenant has been satisfied. 72 Section 10.06. Rules by Trustee and Agents. The Trustee may make reasonable rules for action by or at a meeting of holders of Senior Discount Notes. The Registrar or Paying Agent may make reasonable rules and set reasonable requirements for its functions. Section 10.07. No Personal Liability of Partners, Directors, Officers, Employees and Stockholders. No director, officer, employee, incorporator or stockholder of the Company, as such, shall have any liability for any obligations of the Company under the Senior Discount Notes or this Indenture or for any claim based on, in respect of, or by reason of such obligations or their creation. Each holder of the Senior Discount Notes by accepting a Senior Discount Note waives and releases all such liability. The waiver and release are part of the consideration for issuance of the Senior Discount Notes. Such waiver may not be effective to waive liabilities under the federal securities laws and it is the view of the Commission that such a waiver is against public policy. Section 10.08. Governing Law. The internal law of the State of New York shall govern and be used to construe this Indenture and the Senior Discount Notes. Section 10.09. No Adverse Interpretation of Other Agreements. This Indenture may not be used to interpret another indenture, loan or debt agreement of the Company or its Subsidiaries. Any such indenture, loan or debt agreement may not be used to interpret this Indenture. Section 10.10. Successors. All agreements of the Company in this Indenture and the Senior Discount Notes shall bind its successors. All agreements of the Trustee in this Indenture shall bind its successor. Section 10.11. Severability. In case any provision in this Indenture or in the Senior Discount 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 10.12. Counterpart Originals. The parties may sign any number of copies of this Indenture. Each signed copy shall be an original, but all of them together represent the same agreement. 73 Section 10.13. Table of Contents, Headings, etc. The Table of Contents, Cross-Reference Table and Headings of the articles and sections of this Indenture have been inserted for convenience of reference only, are not to be considered a part of this Indenture and shall in no way modify or restrict any of the terms or provisions hereof. [Signatures on following page] 74 SIGNATURES Dated as of July __, 1997 Intermedia Communications Inc. (SEAL) By: _________________________________ Name: Title: Attest: ___________________________ Name: Title: Dated as of July __, 1997 SunTrust Bank, Central Florida, National Association Trustee (SEAL) By: _______________________________ Name: Title: Attest: ____________________________ Name: Title: 75 EXHIBIT A (Face of Note) 11-1/4% Senior Discount Note due 2007 No. $_______________ CUSIP No. INTERMEDIA COMMUNICATIONS INC. promises to pay to Cede & Co. or its registered assigns, the principal sum of $____________ on July 15, 2007. Interest Payment Dates: July 15 and January 15, commencing January 15, 2003. Record Dates: July 1 and January 1 (whether or not a Business Day). Dated: July 9, 1997 INTERMEDIA COMMUNICATIONS INC. By:___________________________________ Title: Trustee's Certification of Authentication Dated: July 9, 1997 This is one of the Senior Discount Notes referred to in the within- mentioned Indenture: SunTrust Bank, Central Florida, National Association, as Trustee By:___________________________________ (Authorized Signatory) (SEAL) Additional provisions of this Senior Discount Note are set forth on the other side of this Senior Discount Note. A-1 (Back of Note) 11-1/4% Senior Discount Note due 2007 THIS GLOBAL SECURITY IS HELD BY THE DEPOSITARY (AS DEFINED IN THE INDENTURE GOVERNING THIS NOTE) OR ITS NOMINEE IN CUSTODY FOR THE BENEFIT OF THE BENEFICIAL OWNERS HEREOF, AND IS NOT TRANSFERABLE TO ANY PERSON UNDER ANY CIRCUMSTANCES EXCEPT THAT (I) THE TRUSTEE MAY MAKE SUCH NOTATIONS HEREON AS MAY BE REQUIRED PURSUANT TO SECTION 2.07 OF THE INDENTURE, (II) THIS GLOBAL SECURITY MAY BE EXCHANGED IN WHOLE BUT NOT IN PART PURSUANT TO SECTION 2.06(a) OF THE INDENTURE, (III) THIS GLOBAL SECURITY MAY BE DELIVERED TO THE TRUSTEE FOR CANCELLATION PURSUANT TO SECTION 2.11 OF THE INDENTURE AND (IV) THIS GLOBAL SECURITY MAY BE TRANSFERRED TO A SUCCESSOR DEPOSITARY WITH THE PRIOR WRITTEN CONSENT OF THE COMPANY. THE SECURITY (OR ITS PREDECESSOR) EVIDENCED HEREBY WAS ORIGINALLY ISSUED IN A TRANSACTION EXEMPT FORM REGISTRATION UNDER SECTION 5 OF THE UNITED STATES SECURITIES ACT OF 1933, AS AMENDED (THE "SECURITIES ACT"), AND THE SECURITY EVIDENCED HEREBY MAY NOT BE OFFERED, SOLD OR OTHERWISE TRANSFERRED IN THE ABSENCE OF SUCH REGISTRATION OR AN APPLICABLE EXEMPTION THEREFROM. EACH PURCHASER OF THE SECURITY EVIDENCED HEREBY IS HEREBY NOTIFIED THAT THE SELLER MAY BE RELYING ON THE EXEMPTION FROM THE PROVISIONS OF SECTION 5 OF THE SECURITIES ACT PROVIDED BY RULE 144A THEREUNDER. THE HOLDER OF THE SECURITY EVIDENCED HEREBY AGREES FOR THE BENEFIT OF THE COMPANY THAT (A) SUCH SECURITY MAY BE RESOLD, PLEDGED OR OTHERWISE TRANSFERRED, ONLY (1)(a) TO A PERSON WHO THE SELLER REASONABLY BELIEVES IS A QUALIFIED INSTITUTIONAL BUYER (AS DEFINED IN RULE 144A UNDER THE SECURITIES ACT) IN A TRANSACTION MEETING THE REQUIREMENTS OF RULE 144A, (b) IN A TRANSACTION MEETING THE REQUIREMENTS OF RULE 144 UNDER THE SECURITIES ACT OR (c) IN ACCORDANCE WITH ANOTHER EXEMPTION FROM THE REGISTRATION REQUIREMENTS OF THE SECURITIES ACT (AND BASED UPON AN OPINION OF COUNSEL IF THE COMPANY SO REQUESTS), (2) TO THE COMPANY OR (3) PURSUANT TO AN EFFECTIVE REGISTRATION STATEMENT AND, IN EACH CASE, IN ACCORDANCE WITH ANY APPLICABLE SECURITIES LAWS OF ANY STATE OF THE UNITED STATES OR ANY OTHER APPLICABLE JURISDICTION AND (B) THE HOLDER WILL, AND EACH SUBSEQUENT HOLDER IS REQUIRED TO, NOTIFY ANY PURCHASER FROM IT OF THE SECURITY EVIDENCED HEREBY OF THE RESALE RESTRICTIONS SET FORTH IN (A) ABOVE. Capitalized terms used herein have the meanings assigned to them in the Indenture (as defined below) unless otherwise indicated. 1. Interest. Intermedia Communications Inc., a Delaware corporation (the "Company"), promises to pay interest on the principal amount of this Senior Discount Note at the rate and in the manner specified below. Interest will not accrue prior to July 15, 2002. Thereafter, interest will accrue at the rate of 11-1/4% per annum and will be payable semi-annually, in arrears, on July 15 and January 15 of each year, commencing on January 15, 2003, or if any such day is not a Business Day on the next succeeding Business Day (each an "Interest Payment Date") to holders of record of the Senior Discount A-2 Notes at the close of business on the immediately preceding July 1 and January 1, whether or not a Business Day. Interest on the Senior Discount Notes will accrue from the most recent date to which interest has been paid or, if no interest has been paid, from July 15, 2002. Interest will be computed on the basis of a 360-day year comprised of twelve 30-day months. To the extent lawful, the Company shall pay interest on overdue principal at the then applicable interest rate on the Senior Discount Notes; it shall pay interest on overdue installments of interest (without regard to any applicable grace periods) at the same rate to the extent lawful. 2. Method of Payment. The Company will pay interest on the Senior Discount Notes (except defaulted interest) to the Persons who are registered holders of Senior Discount Notes at the close of business on the record date next preceding the Interest Payment Date, even if such Senior Discount Notes are cancelled after such record date and on or before such Interest Payment Date. The holder hereof must surrender this Senior Discount Note to a Paying Agent to collect principal payments. Principal, premium, Liquidated Damages, if any, and interest on the Senior Discount Notes will be payable at the office or agency of the Company maintained for such purpose within the City and State of New York or, at the option of the Company, payment of interest or Liquidated Damages may be made by check mailed to the holders of the Senior Discount Notes at their respective addresses set forth in the register of holders of the Senior Discount Notes; provided that all payments with respect to Senior Discount Notes the holders of which have given wire transfer instructions to the Company will be required to be made by wire transfer of immediately available funds to the accounts specified by the holders thereof. Unless otherwise designated by the Company, the Company's office or agency in New York will be the office of the Trustee maintained for such purpose. 3. Paying Agent and Registrar. Initially, the Trustee will act as Paying Agent and Registrar. The Company may change any Paying Agent, Registrar or co- registrar without prior notice to any holder of a Note. The Company may act in any such capacity. 4. Indenture. The Company issued the Senior Discount Notes under an Indenture, dated as of July 9, 1997 (the "Indenture"), between the Company and the Trustee. The terms of the Senior Discount Notes include those stated in the Indenture and those made part of the Indenture by reference to the Trust Indenture Act of 1939, as amended (15 U.S. Code (S)(S) 77aaa-77bbbb), as in effect on the date of the Indenture. The Senior Discount Notes are subject to all such terms, and holders of Senior Discount Notes are referred to the Indenture and such act for a statement of such terms. The terms of the Indenture shall govern any inconsistencies between the Indenture and the Senior Discount Notes. The Senior Discount Notes are obligations of the Company limited to the sum of $606,000,000 in aggregate principal amount at maturity ($649,000,000 in aggregate principal amount at maturity if the Initial Purchasers exercise their over-allotment option as described in the Offering Memorandum) of Senior Discount Notes. 5. Optional Redemption. The Senior Discount Notes will not be redeemable at the Company's option prior to July 15, 2002. Thereafter, the Senior Discount Notes will be subject to redemption at the option of the Company, in whole or in part, upon not less than 30 nor more than 60 days' notice to the holders thereof, at the redemption prices (expressed as percentages of principal amount) set forth below plus accrued and unpaid interest and Liquidated Damages, if any, thereon to the applicable redemption date, if redeemed during the twelve-month period beginning on July 15 of the years indicated below:
YEAR PERCENTAGE ---- ---------- 2002........................................ 105.625% 2003........................................ 103.750% 2004........................................ 101.875% 2005........................................ 100.000%
A-3 Notwithstanding the provisions of Section 3.07(a) of the Indenture, in the event of the sale by the Company prior to July 15, 2000 of its Capital Stock (other than Disqualified Stock) (i) to a Strategic Investor in a single transaction or series of related transactions for an aggregate purchase price equal to or exceeding $50.0 million or (ii) in one or more Public Offerings, up to a maximum of 25% of the aggregate principal amount at maturity of the Senior Discount Notes originally issued shall, at the option of the Company, be redeemable from the net cash proceeds of such sale or sales to such Strategic Investor (but only to the extent such proceeds consist of cash or readily marketable cash equivalents received in respect of the Capital Stock, other than Disqualified Stock, so sold) at a redemption price equal to 111-1/4% of the Accreted Value thereof with respect to the Senior Discount Notes to be redeemed on the redemption date; provided that at least 75% of the aggregate principal amount at maturity of the Senior Discount Notes originally issued remains outstanding immediately after the occurrence of such redemption and that such redemption occurs within 90 days of the date of the closing of such sale. 6. Mandatory Redemption. Except as set forth in Sections 3.09 and 4.15 of the Indenture, the Company will not be required to make mandatory redemption or sinking fund payments with respect to the Senior Discount Notes. 7. Repurchase at Option of holder. (a) Upon the occurrence of a Change of Control, the Company shall be required to make an offer to repurchase on the Change of Control Payment Date all or any part (equal to $1,000 or an integral multiple thereof) of the outstanding Senior Discount Notes at a purchase price equal to 101% of the aggregate principal amount at maturity thereof plus accrued and unpaid interest, and Liquidated Damages, if any thereon (or, in the case of repurchases of Senior Discount Notes prior to July 15, 2002, at a purchase price equal to 101% of the Accreted Value thereof) to the Change of Control Payment Date. Holders of Senior Discount Notes that are subject to an offer to purchase will receive a Change of Control Offer from the Company prior to any related Change of Control Payment Date and may elect to have such Senior Discount Notes purchased by completing the form entitled "Option of Holder to Elect Purchase" appearing below. (b) The Company shall be required when the cumulative amount of Excess Proceeds from Asset Sales exceeds $5.0 million to offer to purchase the maximum principal amount at maturity of Senior Discount Notes and Pari Passu Notes that may be purchased out of the Excess Proceeds, at an offer price in cash in an amount equal to 100% of the Accreted Value of the Senior Discount Notes to the date fixed for the closing (if such offer is prior to July 15, 2002) or 100% of the outstanding principal amount at maturity of the Senior Discount Notes (if such offer is on or after July 15, 2002) and 100% of the accreted value or 100% of the outstanding principal amount, as applicable, of the Pari Passu Notes, plus accrued and unpaid interest and Liquidated Damages thereon, if any, to the date fixed for the closing of such offer in accordance with the procedures set forth in Section 3.09 of the Indenture. If the Accreted Value and/or aggregate principal amount at maturity, as the case may be, of Senior Discount Notes and Pari Passu Notes surrendered by holders thereof exceeds the amount of Excess Proceeds, the Trustee shall select the Senior Discount Notes and Pari Passu Notes to be purchased on a pro rata basis based upon their Accreted Value or applicable principal amount at maturity (with such adjustments as may be deemed appropriate by the Company so that only Senior Discount Notes and Pari Passu Notes in denominations of $1,000, or integral multiples thereof shall be purchased). Holders of Senior Discount Notes that are the subject of an offer to purchase will receive an Excess Proceeds Offer from the Company prior to any related purchase date and may elect to have such Senior Discount Notes purchased by completing the form entitled "Option of Holder to Elect Purchase" appearing below. A-4 8. Notice of Redemption. Notice of redemption shall be mailed by first class mail at least 30 days but not more than 60 days before the redemption date to each holder of Senior Discount Notes to be redeemed at its registered address. Senior Discount Notes may be redeemed in part but only in whole multiples of $1,000, unless all of the Senior Discount Notes held by a holder of Senior Discount Notes are to be redeemed. If any Senior Discount Note is to be redeemed in part only, the notice of redemption that relates to such Senior Discount Note shall state the portion of the principal amount to be redeemed. On and after the redemption date, interest ceases to accrue on Senior Discount Notes or portions of them called for redemption. 9. Denominations, Transfer, Exchange. The Senior Discount Notes are in registered form without coupons in denominations of $1,000 and integral multiples of $1,000. The transfer of Senior Discount Notes may be registered and Senior Discount Notes may be exchanged as provided in the Indenture. The Registrar and the Trustee may require a holder of a Senior Discount Note, among other things, to furnish appropriate endorsements and transfer documents and the Company may require a holder of a Senior Discount Note to pay any taxes and fees required by law or permitted by the Indenture. Neither the Company nor the Registrar need exchange or register the transfer of any Senior Discount Note or portion of a Senior Discount Note selected for redemption. Also, neither the Company nor the Registrar need exchange or register the transfer of any Senior Discount Notes for a period of 15 days before a selection of Senior Discount Notes to be redeemed. 10. Persons Deemed Owners. Prior to due presentment to the Trustee for registration of the transfer of this Senior Discount Note, the Trustee, any Agent and the Company shall deem and treat the Person in whose name this Senior Discount Note is registered as its absolute owner for the purpose of receiving payment of principal of, premium, Liquidated Damages, if any, and interest on this Senior Discount Note and for all other purposes whatsoever, whether or not this Senior Discount Note is overdue, and neither the Trustee, any Agent nor the Company shall be affected by notice to the contrary. The registered holder of a Senior Discount Note shall be treated as its owner for all purposes. 11. Amendments, Supplement and Waivers. Subject to certain exceptions, the Indenture or the Senior Discount Notes may be amended or supplemented with the consent of the holders of at least a majority in principal amount at maturity of the Senior Discount Notes then outstanding (including consents obtained in connection with a tender offer or exchange offer for Senior Discount Notes), and any existing default or compliance with any provision of the Indenture or the Senior Discount Notes may be waived with the consent of the holders of a majority in principal amount at maturity of the then outstanding Senior Discount Notes (including consents obtained in connection with a tender offer or exchange offer for Senior Discount Notes). Without the consent of any holder of a Senior Discount Note, the Indenture or the Senior Discount Notes may be amended or supplemented to cure any ambiguity, defect or inconsistency; to provide for uncertificated Senior Discount Notes in addition to or in place of certificated Senior Discount Notes; to provide for the assumption of the Company's obligations to holders of the Senior Discount Notes in case of a merger or consolidation; to make any change that would provide any additional rights or benefits to the holders of the Senior Discount Notes or that does not adversely affect the legal rights under the Indenture of any such holder; or to comply with the requirements of the Commission in order to effect or maintain the qualification of the Indenture under the Trust Indenture Act. However, without the consent of each holder affected, an amendment or waiver may not (with respect to any Senior Discount Notes held by a non-consenting holder of Senior Discount Notes) reduce the principal amount at maturity of Senior Discount Notes whose holders must consent to an amendment, supplement or waiver; reduce the principal of or change the fixed maturity of any Senior Discount Note or alter the provisions with respect to the redemption of the Senior Discount Notes (other than a payment required by Section 3.09 or Section 4.15 of the Indenture); reduce the rate of or change the time for payment of interest on any Senior Discount Notes; waive a Default or Event of Default in the payment of principal of or premium, if any, or interest on the Senior Discount Notes (except a rescission of A-5 acceleration of the Senior Discount Notes by the holders of at least a majority in aggregate principal amount at maturity of the Senior Discount Notes and a waiver of the payment default that resulted from such acceleration); make any Senior Discount Note payable in money other than that stated in the Senior Discount Notes; make any change in the provisions of the Indenture relating to waivers of past Defaults or the rights of holders of Senior Discount Notes to receive payments of principal of, premium, if any, or interest on the Senior Discount Notes; waive a redemption payment with respect to any Senior Discount Note (other than a payment required by Section 3.09 or Section 4.15 of the Indenture) or make any change in the foregoing amendment and waiver provisions. 12. Defaults and Remedies. Events of Default include: default for 30 days in the payment when due of interest on the Senior Discount Notes; default in payment when due of principal (including Accreted Value) or premium, if any, on the Senior Discount Notes at maturity, upon redemption or otherwise; failure by the Company to perform or comply with the provisions described under Sections 4.07, 4.09, 4.10, 4.15 or 5.01 of the Indenture; failure by the Company for 30 days after notice from the Trustee or the holders of at least 25% in principal amount at maturity of the Senior Discount Notes then outstanding to comply with its other agreements in the Indenture or the Senior Discount Notes; default under any mortgage, indenture or instrument under which there may be issued or by which there may be secured or evidenced any Indebtedness for money borrowed by the Company or any of its Subsidiaries (or the payment of which is guaranteed by the Company or any of its Subsidiaries), whether such Indebtedness or Guarantee now exists, or is created after the Issue Date, which default (x) is caused by a Payment Default, and the principal amount of any such Indebtedness, together with the principal amount of any other such Indebtedness of the Company or any Significant Subsidiary under which there has been a Payment Default or the maturity of which has been accelerated as provided in clause (y), aggregates $5.0 million or more or (y) results in the acceleration (which acceleration has not been rescinded) of such Indebtedness prior to its express maturity and the principal amount of any such Indebtedness, together with the principal amount of any other such Indebtedness under which there has been a Payment Default or the maturity of which has been so accelerated, aggregates $5.0 million or more, provided, however, that this clause (y) shall not relate to an acceleration, if any, of the Existing Senior Discount Notes or the 13-1/2% Notes, which acceleration arises out of the issuance of the Senior Discount Notes if such Indebtedness is repaid in full within five business days of such acceleration; failure by the Company or any of its Subsidiaries to pay final judgments (other than any judgment as to which a reputable insurance company has accepted full liability in writing) aggregating in excess of $5.0 million which judgments are not paid, discharged or stayed within 45 days after their entry; and certain events of bankruptcy or insolvency with respect to the Company or any of its Significant Subsidiaries. If any Event of Default occurs and is continuing, the Trustee or the holders of at least 25% in principal amount at maturity of the then outstanding Senior Discount Notes may declare all the Senior Discount Notes to be due and payable immediately. Upon such declaration, the principal of (or, if prior to July 15, 2002, the Accreted Value of), premium, if any, and accrued and unpaid interest and Liquidated Damages, if any, on the Senior Discount Notes shall be due and payable immediately. Notwithstanding the foregoing, in the case of an Event of Default arising from certain events of bankruptcy or insolvency with respect to the Company or any of its Significant Subsidiaries, the foregoing amount shall ipso facto become due and payable without further action or notice. Holders of the Senior Discount Notes may not enforce the Indenture or the Senior Discount Notes except as provided in the Indenture. The holders of a majority in aggregate principal amount at maturity of the Senior Discount Notes then outstanding, by notice to the Trustee, may on behalf of the holders of all of the Senior Discount Notes, waive any existing Default or Event of Default and its consequences under the Indenture, except a continuing Default or Event of Default in the payment of interest or Liquidated Damages or premium on, or the principal of, the Senior Discount Notes. 13. Trustee Dealings with Company. The Trustee under the Indenture, in its individual or any other capacity, may make loans to, accept deposits from, and perform services for the Company or its A-6 Affiliates, and may otherwise deal with the Company or its Affiliates, as if it were not Trustee; however, if the Trustee acquires any conflicting interest, it must eliminate such conflict within 90 days, apply to the Commission for permission to continue as Trustee or resign. 14. No Personal Liabilities of Directors, Officers, Employees and Stockholders. No director, officer, employee, incorporator or stockholder of the Company, as such, shall have any liability for any obligations of the Company under the Senior Discount Notes or the Indenture or for any claim based on, in respect of, or by reason of, such obligations or their creation. Each holder of the Senior Discount Notes by accepting a Senior Discount Note waives and releases all such liability. The waiver and release are part of the consideration for issuance of the Senior Discount Notes. 15. Authentication. This Senior Discount Note shall not be valid until authenticated by the manual signature of the Trustee or an authenticating agent. 16. Abbreviations. Customary abbreviations may be used in the name of a holder of a Senior Discount Note or an assignee, such as: TEN COM (= tenants in common), TEN ENT (= tenants by the entireties), JT TEN (= joint tenants with right of survivorship and not as tenants in common), CUST (= Custodian), and U/G/M/A (= Uniform Gifts to Minors Act). 17. Additional Rights of Holders of Transfer Restricted Securities. In addition to the rights provided to holders of Senior Discount Notes under the Indenture, holders of Transfer Restricted Securities shall have all the rights set forth in the Registration Rights Agreement dated as of July 9, 1997, between the Company and the parties named on the signature pages thereof (the "Senior Discount Note Registration Rights Agreement"). 18. CUSIP Numbers. Pursuant to a recommendation promulgated by the Committee on Uniform Security Identification Procedures, the Company has caused CUSIP numbers to be printed on the Senior Discount Notes and has directed the Trustee to use CUSIP numbers in notices of redemption as a convenience to holders of Senior Discount Notes. No representation is made as to the accuracy of such numbers either as printed on the Senior Discount Notes or as contained in any notice of redemption and reliance may be placed only on the other identification numbers placed thereon. A-7 The Company will furnish to any holder of a Senior Discount Note upon written request and without charge a copy of the Indenture. Request may be made to: Intermedia Communications Inc. 3625 Queen Palm Drive Tampa, Florida 33619 Attention: Chief Financial Officer A-8 ASSIGNMENT FORM To assign this Senior Discount Note, fill in the form below: (I) or (we) assign and transfer this Senior Discount Note to - -------------------------------------------------------------------------------- (Insert assignee's soc. sec. or tax I.D. no.) - -------------------------------------------------------------------------------- - -------------------------------------------------------------------------------- - -------------------------------------------------------------------------------- - -------------------------------------------------------------------------------- (Print or type assignee's name, address and zip code) and irrevocably appoint--------------------------------------------------------- agent to transfer this Senior Discount Note on the books of the Company. The agent may substitute another to act for him. - -------------------------------------------------------------------------------- Date: ______________ Your Signature:_____________________________________________ (Sign exactly as your name appears on the face of this Note) Signature Guarantee. OPTION OF HOLDER TO ELECT PURCHASE If you want to elect to have all or any part of this Senior Discount Note purchased by the Company pursuant to Section 3.09 or Section 4.15 of the Indenture check the appropriate box: [ ] Section 3.09 [ ] Section 4.15 If you want to have only part of the Senior Discount Note purchased by the Company pursuant to Section 3.09 or Section 4.15 of the Indenture, state the amount you elect to have purchased: $ _______________ Date:____________ Your Signature:_____________________________________________ (Sign exactly as your name appears on the face of this Note) Signature Guarantee. SCHEDULE OF EXCHANGES OF INTERESTS IN THE GLOBAL SECURITY The following exchanges of a part of this Global Security for an interest in another Global Security or for a Certificated Security, or exchanges of a part of another Global Security or Certificated Security for an interest in this Global Security, have been made:
Principal Amount Amount of decrease in Amount of increase in at maturity of Signature of Principal Amount Principal Amount this Global Security authorized officer of Date of at maturity of at maturity of following such decrease Trustee or Note Exchange this Global Security this Global Security (or increase) Custodian - ----------- --------------------- --------------------- ------------------------ ---------------------
EXHIBIT B FORM OF CERTIFICATE OF TRANSFER Intermedia Communications Inc. 3625 Queen Palm Drive Tampa, Florida 33619 Attention: Chief Financial Officer SunTrust Bank, Central Florida, National Association 225 East Robinson Street, Suite 250 Orlando, Florida 32801 Attention: Corporate Trust Department Re: 11-1/4% Senior Discount Notes due 2007 -------------------------------------- Reference is hereby made to the Indenture, dated as of July 9, 1997 (the "Indenture"), between Intermedia Communications Inc., as issuer (the "Company"), - ---------- ------- and SunTrust Bank, Central Florida, National Association, as trustee. Capitalized terms used but not defined herein shall have the meanings given to them in the Indenture. ______________, (the "Transferor") owns and proposes to transfer the ---------- Senior Discount Note[s] or interest in such Senior Discount Note[s] specified in Annex A hereto, in the principal amount at maturity of $___________ in such Senior Discount Note[s] or interests (the "Transfer"), to __________ (the -------- "Transferee"), as further specified in Annex A hereto. In connection with the - ----------- Transfer, the Transferor hereby certifies that: [CHECK ALL THAT APPLY] 1. [ ] CHECK IF TRANSFEREE WILL TAKE DELIVERY OF BOOK-ENTRY INTERESTS IN THE --------------------------------------------------------------------- GLOBAL SECURITY OR CERTIFICATED SECURITIES PURSUANT TO RULE 144A. The Transfer - ---------------------------------------------------------------- is being effected pursuant to and in accordance with Rule 144A under the United States Securities Act of 1933, as amended (the "Securities Act"), and, -------------- accordingly, the Transferor hereby further certifies that the Book-Entry Interests or Certificated Securities are being transferred to a Person that the Transferor reasonably believes is purchasing the Book-Entry Interests or Certificated Securities for its own account, or for one or more accounts with respect to which such Person exercises sole investment discretion, and such Person and each such account is a "qualified institutional buyer" within the meaning of Rule 144A in a transaction meeting the requirements of Rule 144A and such Transfer is in compliance with any applicable blue sky securities laws of any state of the United States. Upon consummation of the proposed Transfer in accordance with the terms of the Indenture, the transferred Book-Entry Interest or Certificated Security will be subject to the restrictions on transfer enumerated in the Private Placement Legend printed on the Global Security and/or the Certificated Security and in the Indenture and the Securities Act. 2. [ ] CHECK AND COMPLETE IF TRANSFEREE WILL TAKE DELIVERY OF BOOK-ENTRY ----------------------------------------------------------------- INTERESTS IN THE GLOBAL SECURITY OR CERTIFICATED SECURITIES PURSUANT TO ANY - --------------------------------------------------------------------------- PROVISION OF THE SECURITIES ACT OTHER THAN RULE 144A. The Transfer is being - ---------------------------------------------------- effected in compliance with the transfer restrictions applicable to Book-Entry Interests in the Restricted Global Security and Certificated Securities bearing the Private Placement Legend and pursuant to and in accordance with the Securities Act and any applicable blue sky securities laws of any State of the United States, and accordingly the Transferor hereby further certifies that (check one): (a) [ ] such Transfer is being effected pursuant to and in accordance with Rule 144 under the Securities Act; or (b) [ ] such Transfer is being effected to the Company or a subsidiary thereof, or (c) [ ] such Transfer is being effected pursuant to an effective registration statement under the Securities Act; or (d) [ ] such Transfer is being effected to an Institutional Accredited Investor and pursuant to an exemption from the registration requirements of the Securities Act other than Rule 144A, Rule 144 or Rule 904, and the Transferor hereby further certifies that the Transfer complies with the transfer restrictions applicable to Book-Entry Interests in a Restricted Global Security or Certificated Securities bearing the Private Placement Legend and the requirements of the exemption claimed, which certification is supported by (1) a certificate executed by the Transferee in the form of Exhibit D to the Indenture and (2) an Opinion of Counsel provided by the Transferor or the Transferee (a copy of which the Transferor has attached to this certification), to the effect that (1) such Transfer is in compliance with the Securities Act and (2) such Transfer complies with any applicable blue sky securities laws of any state of the United States. Upon consummation of the proposed transfer in accordance with the terms of the Indenture, the transferred Book-Entry Interest or Certificated Security will be subject to the restrictions on transfer enumerated in the Private Placement Legend printed on the Global Security and/or the Certificated Securities and in the Indenture and the Securities Act. 4. [ ] CHECK IF TRANSFEREE WILL TAKE DELIVERY OF BOOK-ENTRY INTERESTS IN THE --------------------------------------------------------------------- UNRESTRICTED GLOBAL SECURITY OR IN CERTIFICATED SECURITIES THAT DO NOT BEAR THE - ------------------------------------------------------------------------------- PRIVATE PLACEMENT LEGEND. - ------------------------ (a) [ ] CHECK IF TRANSFER IS PURSUANT TO RULE 144. (i) The Transfer is being effected pursuant to and in accordance with Rule 144 under the Securities Act and in compliance with the transfer restrictions contained in the Indenture and any applicable blue sky securities laws of any state of the United States and (ii) the restrictions on transfer contained in the Indenture and the Private Placement Legend are not required in order to maintain compliance with the Securities Act. Upon consummation of the proposed Transfer in accordance with the terms of the Indenture, the transferred Book-Entry Interests or Certificated Securities will no longer be subject to the restrictions on transfer enumerated in the Private Placement Legend printed on the Restricted Global Security, on Certificated Securities bearing the Private Placement Legend and in the Indenture. (b) [ ] CHECK IF TRANSFER IS PURSUANT TO OTHER EXEMPTION. (i) The Transfer is being effected pursuant to and in compliance with an exemption from the registration requirements of the Securities Act other than Rule 144, Rule 903 or Rule 904 and in compliance with the transfer restrictions contained in the Indenture and any applicable blue sky securities laws of any State of the United States and (ii) the restrictions on transfer contained in the Indenture and the Private Placement Legend are not required in order to maintain compliance with the Securities Act. Upon consummation of the proposed Transfer in accordance with the terms of the Indenture, the transferred Book-Entry Interests or Certificated Securities will not be subject to the restrictions on transfer enumerated in the Private Placement Legend printed on the Restricted Global Security or Certificated Securities bearing the Private Placement Legend and in the Indenture. B-2 This certificate and the statements contained herein are made for your benefit and the benefit of the Company. --------------------------- [NAME OF TRANSFEROR] By:________________________ Name: Title: Dated: _________________, ______ B-3 ANNEX A TO CERTIFICATE OF TRANSFER 1. The Transferor owns and proposes to transfer the following: [CHECK ONE OF (a) OR (b)] (a) [ ] Book-Entry Interests in the Global Security: (i) [ ] 144A Global Security (CUSIP _________), or (ii) [ ] IAI Global Security (CUSIP ________); or (b) [ ] Restricted Certificated Securities. 2. After the Transfer the Transferee will hold: [CHECK ONE] (a) [ ] Book-Entry Interests in the: (i) [ ] 144A Global Security (CUSIP ________), or (ii) [ ] IAI Global Security (CUSIP ________); or (iii) [ ] Unrestricted Global Security (CUSIP); or (b) [ ] Restricted Certificated Securities; or (c) [ ] Certificated Securities that do not bear the Private Placement Legend, in accordance with the terms of the Indenture. B-4 EXHIBIT C FORM OF CERTIFICATE OF EXCHANGE Intermedia Communications Inc. 3625 Queen Palm Drive Tampa, Florida 33619 Attention: Chief Financial Officer SunTrust Bank, Central Florida, National Association 225 East Robinson Street, Suite 250 Orlando, Florida 32801 Attention: Corporate Trust Department Re: 11-1/4% Senior Discount Notes due 2007 -------------------------------------- (CUSIP _____________________) Reference is hereby made to the Indenture, dated as of July 9, 1997 (the "Indenture"), between Intermedia Communications Inc., as issuer (the --------- "Company") and SunTrust Bank, Central Florida, National Association, as trustee. - -------- Capitalized terms used but not defined herein shall have the meanings given to them in the Indenture. ______________, (the "Holder") owns and proposes to exchange the ------ Senior Discount Note[s] or interest in such Senior Discount Note[s] specified herein, in the principal amount at maturity of $____________ in such Senior Discount Note[s] or interests (the "Exchange"). In connection with the -------- Exchange, the Holder hereby certifies that: 1. EXCHANGE OF RESTRICTED CERTIFICATED SECURITIES OR RESTRICTED BOOK-ENTRY INTERESTS FOR CERTIFICATED SECURITIES THAT DO NOT BEAR THE PRIVATE PLACEMENT LEGEND OR UNRESTRICTED BOOK-ENTRY INTERESTS (a) [ ] CHECK IF EXCHANGE IS FROM RESTRICTED BOOK-ENTRY INTEREST TO ----------------------------------------------------------- UNRESTRICTED BOOK-ENTRY INTEREST. In connection with the Exchange of the - -------------------------------- Holder's Restricted Book-Entry Interest for Unrestricted Book-Entry Interests in an equal principal amount at maturity, the Holder hereby certifies (i) the Unrestricted Book-Entry Interests are being acquired for the Holder's own account without transfer, (ii) such Exchange has been effected in compliance with the transfer restrictions applicable to the Global Security and pursuant to and in accordance with the United States Securities Act of 1933, as amended (the "Securities Act"), (iii) the restrictions on transfer contained in the Indenture -------------- and the Private Placement Legend are not required in order to maintain compliance with the Securities Act and (iv) the Unrestricted Book-Entry Interests are being acquired in compliance with any applicable blue sky securities laws of any state of the United States. (b) [ ] CHECK IF EXCHANGE IS FROM RESTRICTED BOOK-ENTRY INTEREST TO ----------------------------------------------------------- CERTIFICATED SECURITIES THAT DO NOT BEAR THE PRIVATE PLACEMENT LEGEND. In - --------------------------------------------------------------------- connection with the Exchange of the Holder's Restricted Book-Entry Interests for Certificated Securities that do not bear the Private Placement Legend, the Holder hereby certifies (i) the Certificated Securities are being acquired for the Holder's own account without transfer, (ii) such Exchange has been effected in compliance with the transfer restrictions applicable to the Restricted Global Security and pursuant to and in accordance with the Securities Act, C-1 (iii) the restrictions on transfer contained in the Indenture and the Private Placement Legend are not required in order to maintain compliance with the Securities Act and (iv) the Certificated Securities are being acquired in compliance with any applicable blue sky securities laws of any state of the United States. (c) [ ] CHECK IF EXCHANGE IS FROM RESTRICTED CERTIFICATED SECURITIES TO --------------------------------------------------------------- UNRESTRICTED BOOK-ENTRY INTERESTS. In connection with the Holder's Exchange of - --------------------------------- Restricted Certificated Securities for Unrestricted Book-Entry Interests, (i) the Unrestricted Book-Entry Interests are being acquired for the Holder's own account without transfer, (ii) such Exchange has been effected in compliance with the transfer restrictions applicable to Restricted Certificated Securities and pursuant to and in accordance with the Securities Act, (iii) the restrictions on transfer contained in the Indenture and the Private Placement Legend are not required in order to maintain compliance with the Securities Act and (iv) the Unrestricted Book-Entry Interests are being acquired in compliance with any applicable blue sky securities laws of any state of the United States. (d) [ ] CHECK IF EXCHANGE IS FROM RESTRICTED CERTIFICATED SECURITIES TO --------------------------------------------------------------- CERTIFICATED SECURITIES THAT DO NOT BEAR THE PRIVATE PLACEMENT LEGEND. In - --------------------------------------------------------------------- connection with the Holder's Exchange of a Restricted Certificated Security for Certificated Securities that do not bear the Private Placement Legend, the Holder hereby certifies (i) the Certificated Securities that do not bear the Private Placement Legend are being acquired for the Holder's own account without transfer, (ii) such Exchange has been effected in compliance with the transfer restrictions applicable to Restricted Certificated Securities and pursuant to and in accordance with the Securities Act , (iii) the restrictions on transfer contained in the Indenture and the Private Placement Legend are not required in order to maintain compliance with the Securities Act and (iv) the Senior Discount Notes are being acquired in compliance with any applicable blue sky securities laws of any state of the United States. 2. EXCHANGE OF RESTRICTED CERTIFICATED SECURITIES OR RESTRICTED BOOK-ENTRY INTERESTS FOR RESTRICTED CERTIFICATED SECURITIES OR RESTRICTED BOOK-ENTRY INTERESTS (a) [ ] CHECK IF EXCHANGE IS FROM RESTRICTED BOOK-ENTRY INTERESTS TO ------------------------------------------------------------ RESTRICTED CERTIFICATED SECURITY. In connection with the Exchange of the - -------------------------------- Holder's Restricted Book-Entry Interest for Restricted Certificated Securities with an equal principal amount at maturity, (i) the Restricted Certificated Securities are being acquired for the Holder's own account without transfer and (ii) such Exchange has been effected in compliance with the transfer restrictions applicable to the Restricted Global Security and pursuant to and in accordance with the Securities Act, and in compliance with any applicable blue sky securities laws of any state of the United States. Upon consummation of the proposed Exchange in accordance with the terms of the Indenture, the Restricted Certificated Securities issued will be subject to the restrictions on transfer enumerated in the Private Placement Legend printed on the Restricted Certificated Securities and in the Indenture and the Securities Act. (b) [ ] CHECK IF EXCHANGE IS FROM RESTRICTED CERTIFICATED SECURITIES TO --------------------------------------------------------------- RESTRICTED BOOK-ENTRY INTERESTS. In connection with the Exchange of the - ------------------------------- Holder's Restricted Certificated Security for Restricted Book-Entry Interests in the [CHECK ONE] [ ] 144A Global Security, [ ] IAI Global Security with an equal principal amount at maturity, (i) the Certificated Securities are being acquired for the Holder's own account without transfer and (ii) such Exchange has been effected in compliance with the transfer restrictions applicable to the Restricted Certificated Security and pursuant to and in accordance with the Securities Act, and in compliance with any applicable blue sky securities laws of any state of the United States. Upon consummation of the proposed Exchange in accordance with the terms of the Indenture, the Book-Entry Interests issued will be subject to the restrictions on transfer enumerated in the Private Placement Legend printed on the relevant Restricted Global Security and in the Indenture and the Securities Act. C-2 This certificate and the statements contained herein are made for your benefit and the benefit of the Company. ------------------------------ [Insert Name of Holder] By:____________________________ Name: Title: Dated: _________________, _____ C-3 EXHIBIT D FORM OF CERTIFICATE FROM ACQUIRING INSTITUTIONAL ACCREDITED INVESTOR Intermedia Communications Inc. 3625 Queen Palm Drive Tampa, Florida 33619 Attention: Chief Financial Officer SunTrust Bank, Central Florida, National Association 225 East Robinson Street, Suite 250 Orlando, Florida 32801 Attention: Corporate Trust Department Re: 11-1/4% Senior Discount Notes due 2007 -------------------------------------- Reference is hereby made to the Indenture, dated as of July 9, 1997 (the "Indenture"), between Intermedia Communications Inc., as issuer (the --------- "Company") and SunTrust Bank, Central Florida, National Association, as trustee. - -------- Capitalized terms used but not defined herein shall have the meanings given to them in the Indenture. In connection with our proposed purchase of $____________ aggregate principal amount at maturity of: (a) [ ] Book-Entry Interests, or (b) [ ] Certificated Securities, we confirm that: 1. We understand that any subsequent transfer of the Senior Discount Notes or any interest therein is subject to certain restrictions and conditions set forth in the Indenture and the undersigned agrees to be bound by, and not to resell, pledge or otherwise transfer the Senior Discount Notes or any interest therein except in compliance with, such restrictions and conditions and the United States Securities Act of 1933, as amended (the "Securities Act"). -------------- 2. We understand that the offer and sale of the Senior Discount Notes have not been registered under the Securities Act, and that the Senior Discount Notes and any interest therein may not be offered or sold except as permitted in the following sentence. We agree, on our own behalf and on behalf of any accounts for which we are acting as hereinafter stated, that if we should sell the Senior Discount Notes or any interest therein, we will do so only (A) to the Company or any subsidiary thereof, (B) in accordance with Rule 144A under the Securities Act to a "qualified institutional buyer" (as defined therein), (C) to an institutional "accredited investor" (as defined below) that, prior to such transfer, furnishes (or has furnished on its behalf by a U.S. broker-dealer) to you and to the Company a signed letter substantially in the form of this letter and an Opinion of Counsel in form reasonably acceptable to the Company to the effect that such transfer is in compliance with the Securities Act, (D) pursuant to the provisions of Rule 144 under the Securities Act or (E) pursuant to an effective registration statement under the Securities Act, and we further agree to provide to any person purchasing the Certificated Securities D-1 or Book-Entry Interests from us in a transaction meeting the requirements of clauses (A) through (E) of this paragraph a notice advising such purchaser that resales thereof are restricted as stated herein. 3. We understand that, on any proposed resale of the Senior Discount Notes or Book-Entry Interests, we will be required to furnish to you and the Company such certifications, legal opinions and other information as you and the Company may reasonably require to confirm that the proposed sale complies with the foregoing restrictions. We further understand that the Senior Discount Notes purchased by us will bear a legend to the foregoing effect. We further understand that any subsequent transfer by us of the Senior Discount Notes or Book-Entry Interests therein acquired by us must be effected through one of the Placement Agents. 4. We are an institutional "accredited investor" (as defined in Rule 501(a)(1), (2), (3) or (7) of Regulation D under the Securities Act) and have such knowledge and experience in financial and business matters as to be capable of evaluating the merits and risks of our investment in the Senior Discount Notes, and we and any accounts for which we are acting are each able to bear the economic risk of our or its investment. 5. We are acquiring the Senior Discount Notes or Book-Entry Interests purchased by us for our own account or for one or more accounts (each of which is an institutional "accredited investor") as to each of which we exercise sole investment discretion. You and the Company are entitled to rely upon this letter and are irrevocably authorized to produce this letter or a copy hereof to any interested party in any administrative or legal proceedings or official inquiry with respect to the matters covered hereby. ------------------------------------ [Insert Name of Accredited Investor] By:_________________________________ Name: Title: Dated: _________________, ______ D-2 EX-4.2 3 CERTIFICATE OF DESIGNATION OF VOTING POWER EXHIBIT 4.2 CERTIFICATE OF DESIGNATION OF VOTING POWER, DESIGNATION PREFERENCES AND RELATIVE, PARTICIPATING, OPTIONAL AND OTHER SPECIAL RIGHTS AND QUALIFICATIONS, LIMITATIONS AND RESTRICTION OF 7% SERIES D JUNIOR CONVERTIBLE PREFERRED STOCK OF INTERMEDIA COMMUNICATIONS INC. _________________________ Pursuant to Section 151 of the General Corporation Law of the State of Delaware _________________________ Intermedia Communications Inc., a Delaware corporation (the "Company") certifies that pursuant to the authority contained in ARTICLE FOURTH of its Restated Certificate of Incorporation, as amended (the "Certificate of Incorporation"), and in accordance with the provisions of Section 151 of the General Corporation Law of the State of Delaware, the Board of Directors of the Company at a meeting duly called and held on June 23, 1997, duly approved and adopted the following resolution which resolution remains in full force and effect on the date hereof: RESOLVED, that pursuant to the authority vested in the Board of Directors by the Certificate of Incorporation, the Board of Directors does hereby designate, create, authorize and provide for the issue of a series of preferred stock having a par value of $1.00 per share, with a liquidation preference of $2,500 per share (the "Liquidation Preference") which shall be designated as Series D Junior Convertible Preferred Stock (the "Preferred Stock") consisting of 69,000 shares (which shares of preferred stock were authorized to be issued by the Company by resolution of the Board of Directors of the Company dated as of March 17, 1997 and by resolution of the stockholders of the Company dated as of May 22, 1997), having the following voting powers, preferences and relative, participating, optional and other special rights, and qualifications, limitations and restrictions thereof as follows: 1. Ranking. The Preferred Stock shall rank, with respect to dividend ------- distributions and distributions upon the liquidation, winding-up and dissolution of the Company, (i) senior to all classes of common stock of the Company and to each other class of capital stock or series of preferred stock established after July 2, 1997 by the Board of Directors the terms of which do not expressly provide that it ranks senior to or on a parity with the Preferred Stock as to dividend distributions and distributions upon the liquidation, winding-up and dissolution of the Company (collectively referred to with the common stock of the Company as "Junior Securities"); (ii) on a parity with any additional shares of Preferred Stock issued by the Company in the future and any other class of capital stock or series of preferred stock issued by the Company established after July 2, 1997 by the Board of Directors, the terms of which expressly provide that such class or series will rank on a parity with the Preferred Stock as to dividend distributions and distributions upon the liquidation, winding-up and dissolution of the Company (collectively referred to as "Parity Securities"); and (iii) junior to the Series B Preferred Stock and to each class of capital stock or series of preferred stock issued by the Company established after July 2, 1997 by the Board of Directors the terms of which expressly provide that such class or series will rank senior to the Preferred Stock as to dividend distributions and distributions upon liquidation, winding-up and dissolution of the Company (collectively referred to as "Senior Securities"). No dividend whatsoever shall be declared or paid upon, or any sum set apart for the payment of dividends upon, any outstanding share of the Preferred Stock with respect to any dividend period unless all dividends for all preceding dividend periods have been declared and paid, or declared and a sufficient sum set apart for the payment of such dividend, upon all outstanding shares of Senior Securities. 2. Dividends. --------- (i) The holders of shares of the Preferred Stock shall be entitled to receive, when, as and if dividends are declared by the Board of Directors out of funds of the Company legally available therefor, cumulative dividends from the Preferred Stock Issue Date accruing at the rate per annum of 7% of the Liquidation Preference per share, payable quarterly in arrears on each July 15, October 15, January 15 and April 15, commencing on October 15, 1997 (each a "Dividend Payment Date"). If any such date is not a Business Day, such payment shall be made on the next succeeding Business Day, to the holders of record as of the next preceding July 1, October 1, January 1 and April 1 (each, a "Record Date"). Dividends will be payable, at the option of the Company, (i) in cash, (ii) by delivery of shares of Common Stock to holders (based upon 95% of the Average Stock Price (as defined below) or (iii) through any combination of the foregoing. If the dividends are paid in shares of Common Stock, the number of shares of Common Stock to be issued on each Dividend Payment Date will be determined by dividing the total dividend to be paid on each share of Preferred Stock by 95% of the average of the high and low sales prices of the Common Stock as reported by the Nasdaq National Market or any national securities exchange upon which the Common Stock is then listed, for each of the ten consecutive trading days immediately preceding the fifth Business Day preceding the Record Date (the "Average Stock Price"). The Transfer Agent is hereby authorized and directed to aggregate any fractional shares of Common Stock that are issued as dividends, sell them at the best available price and distribute the proceeds to the holders in proportion to their respective interests therein. The Company shall pay the expenses of the Transfer Agent with respect to such sale, including brokerage commissions. Dividends payable on the Preferred Stock will be computed on the basis of a 360-day year consisting of twelve 30-day months and will be deemed to accrue on a daily basis. (ii) Dividends on the Preferred Stock shall accrue whether or not the Company has earnings or profits, whether or not there are funds legally available for the payment of such dividends and whether or not dividends are declared. Dividends will accumulate to the extent they are not paid on the Dividend Payment Date for the period to which they relate. The Company shall take all actions required or permitted under the Delaware General Corporation Law (the "DGCL") to permit the payment of dividends on the Preferred Stock, including, without limitation, through the revaluation of its assets in accordance with the DGCL, to make or keep funds legally available for the payment of dividends. (iii) No dividend whatsoever shall be declared or paid upon, or any sum set apart for the payment of dividends upon, any outstanding share of the Preferred Stock with respect to any dividend period unless all dividends for all preceding dividend periods have been declared and paid, or declared and a sufficient sum set apart for the payment of such dividend, upon all outstanding shares of Preferred Stock. Unless full cumulative dividends on all outstanding shares of Preferred Stock for all past dividend 2 periods shall have been declared and paid, or declared and a sufficient sum for the payment thereof set apart, then: (a) no dividend (other than a dividend payable solely in shares of any Junior Securities) shall be declared or paid upon, or any sum set apart for the payment of dividends upon, any shares of Junior Securities; (b) no other distribution shall be declared or made upon, or any sum set apart for the payment of any distribution upon, any shares of Junior Securities, other than a distribution consisting solely of Junior Securities; (c) no shares of Junior Securities shall be purchased, redeemed or otherwise acquired or retired for value (excluding an exchange for shares of other Junior Securities) by the Company or any of its Subsidiaries; and (d) no monies shall be paid into or set apart or made available for a sinking or other like fund for the purchase, redemption or other acquisition or retirement for value of any shares of Junior Securities by the Company or any of its Subsidiaries. Holders of the Preferred Stock will not be entitled to any dividends, whether payable in cash, property or stock, in excess of the full cumulative dividends as herein described. (iv) When dividends are declared by the Board of Directors, the Company shall issue a press release at least 15 Business Days prior to the Record Date setting forth (a) the method of payment for such dividends (cash, Common Stock or a combination thereof) and (b) the pricing period used to determine the Average Stock Price. 3. Conversion. ---------- (i) A holder of shares of Preferred Stock may convert such shares into Common Stock at any time after October 7, 1997. For the purposes of conversion, each share of Preferred Stock shall be valued at the Liquidation Preference, which shall be divided by the Conversion Price in effect on the Conversion Date to determine the number of shares issuable upon conversion, except that the right to convert shares of Preferred Stock called for redemption shall terminate at the close of business on the Business Day preceding the Redemption Date and shall be lost if not exercised prior to that time, unless the Company shall default in payment of the Optional Redemption Price. Immediately following such conversion, the rights of the holders of converted Preferred Stock shall cease and the persons entitled to receive the Common Stock upon the conversion of Preferred Stock shall be treated for all purposes as having become the owners of such Common Stock. (ii) To convert Preferred Stock, a holder must (A) surrender the certificate or certificates evidencing the shares of Preferred Stock to be converted, duly endorsed in a form satisfactory to the Company, at the office of the Company or transfer agent for the Preferred Stock, (B) notify the Company at such office that he elects to convert Preferred Stock and the number of shares he wishes to convert, (C) state in writing the name or names in which he wishes the certificate or certificates for shares of Common Stock to be issued, and (D) pay any transfer or similar tax if required. In the event that a holder fails to notify the Company of the number of shares of Preferred Stock which he wishes to convert, he shall be deemed to have elected to convert all shares represented by the certificate or certificates surrendered for conversion. The date on which the holder satisfies all those requirements is the "Conversion Date." As soon as practical, the Company shall deliver a certificate for the number of full shares of Common Stock issuable upon the conversion, and a new certificate representing the unconverted portion, if any, of the shares of Preferred Stock represented by the certificate or certificates surrendered for conversion. The person in whose name the Common Stock certificate is registered shall be treated as the stockholder of record on and after the Conversion Date. No payment or adjustment will be made for accrued and unpaid dividends on converted shares of Preferred Stock or for dividends on any Common Stock issued upon such conversion. A share of Preferred Stock surrendered for conversion during the period from the close of business on any record date for the payment of dividends to the opening of business of the corresponding Dividend Payment Date must be accompanied by a payment in 3 cash, Common Stock or a combination thereof, in an amount equal to the dividend payable on such Dividend Payment Date, unless such share of Preferred Stock has been called for redemption on a redemption date occurring during the period from the close of business on any record date for the payment of dividends to the close of business on the Business Day immediately following the corresponding Dividend Payment Date. The dividend payment with respect to a share of Preferred Stock called for redemption on a date during the period from the close of business on any record date for the payment of dividends to the close of business on the Business Day immediately following the corresponding Dividend Payment Date will be payable on such Dividend Payment Date to the record holder of such share on such record date, notwithstanding the conversion of such share after such record date and prior to such Dividend Payment Date, and the holder converting such share of Preferred Stock need not include a payment of such dividend amount upon surrender of such share of Preferred Stock for conversion. If a holder of Preferred Stock converts more than one share at a time, the number of full shares of Common Stock issuable upon conversion shall be based on the total liquidation preference of all shares of Preferred Stock converted. If the last day on which Preferred Stock may be converted is not a Business Day, Preferred Stock may be surrendered for conversion on the next succeeding Business Day. (iii) The Company shall not issue any fractional shares of Common Stock upon conversion of Preferred Stock. Instead the Company shall round the results of a conversion up to the nearest full share of Common Stock. (iv) If a holder converts shares of Preferred Stock, the Company shall pay any documentary, stamp or similar issue or transfer tax due on the issue of shares of Common Stock upon the conversion. However, the holder shall pay any such tax that is due because the shares are issued in a name other than the holder's name. (v) The Company has reserved and shall continue to reserve out of its authorized but unissued Common Stock or its Common Stock held in treasury enough shares of Common Stock to permit the conversion of the Preferred Stock in full. All shares of Common Stock that may be issued upon conversion of Preferred Stock shall be fully paid and nonassessable. The Company shall endeavor to comply with all securities laws regulating the offer and delivery of shares of Common Stock upon conversion of Preferred Stock and shall endeavor to list such shares on each national securities exchange or automated quotation system on which the Common Stock is listed. (vi) In case the Company shall pay or make a dividend or other distribution on any class of capital stock of the Company in Common Stock other than the payment of dividends in Common Stock on the Preferred Stock or any other regularly scheduled dividend on any other preferred stock which does not trigger any anti-dilution provisions in any other security, the Conversion Price in effect at the opening of business on the day following the date fixed for the determination of stockholders entitled to receive such dividend or other distribution shall be reduced by multiplying such Conversion Price by a fraction the numerator of which shall be the number of shares of Common Stock outstanding at the close of business on the date fixed for such determination and the denominator of which shall be the sum of such number of shares and the total number shares constituting such dividend or other distribution, such reduction to become effective immediately after the opening of business on the day following the date fixed for such determination of the holders entitled to such dividends and distributions. For the purposes of this paragraph 3(vi), the number of shares of Common Stock at any time outstanding shall not include shares held in the treasury of the Company. The Company will not pay any dividend or make any distribution on shares of Common Stock held in the treasury of the Company. 4 (vii) In case the Company shall issue rights, options or warrants to all holders of its Common Stock entitling them to subscribe for, purchase or acquire shares of Common Stock at a price per share less than the current market price per share (determined as provided in paragraph 3(xi) below) of the Common Stock on the date fixed for the determination of stockholders entitled to receive such rights, options or warrants, the Conversion Price in effect at the opening of business on the day following the date fixed for such determination shall be reduced by multiplying such Conversion Price by a fraction the numerator of which shall be the number of shares of Common Stock outstanding at the close of business on the date fixed for such determination plus the number of shares of Common Stock which the aggregate of the offering price of the total number of shares of Common Stock so offered for subscription, purchase or acquisition would purchase at such current market price and the denominator of which shall be the number of shares of Common Stock outstanding at the close of business on the date fixed for such determination plus the number of shares of Common Stock so offered for subscription, purchase or acquisition, such reduction to become effective immediately after the opening of business on the day following the date fixed for such determination of the holders entitled to such rights, options or warrants. However, upon the expiration of any right, option or warrant to purchase Common Stock, the issuance of which resulted in an adjustment in the Conversion Price pursuant to this paragraph 3(vii), if any such right, option or warrant shall expire and shall not have been exercised, the Conversion Price shall be recomputed immediately upon such expiration and effective immediately upon such expiration shall be increased to the price it would have been (but reflecting any other adjustments to the Conversion Price made pursuant to the provisions of this paragraph 3 after the issuance of such rights, options or warrants) had the adjustment of the Conversion Price made upon the issuance of such rights, options or warrants been made on the basis of offering for subscription or purchase only that number of shares of Common Stock actually purchased upon the exercise of such rights, options or warrants. No further adjustment shall be made upon exercise of any right, option or warrant if any adjustment shall have been made upon the issuance of such security. For the purposes of this paragraph 3(vii), the number of shares of Common Stock at any time outstanding shall not include shares held in the treasury of the Company. The Company will not issue any rights, options or warrants in respect of shares of Common Stock held in the treasury of the Company. (viii) In case the outstanding shares of Common Stock shall be subdivided into a greater number of shares of Common Stock, the Conversion Price in effect at the opening of business on the day following the day upon which such subdivision becomes effective shall be reduced, and, conversely, in case the outstanding shares of Common Stock shall each be combined into a smaller number of shares of Common Stock, the Conversion Price in effect at the opening of business on the day following the day upon which such combination becomes effective shall be increased to equal the product of the Conversion Price in effect on such date and a fraction the numerator of which shall be the number of shares of Common Stock outstanding immediately prior to such subdivision or combination, as the case may be, and the denominator of which shall be the number of shares of Common Stock outstanding immediately after such subdivision or combination, as the case may be. Such reduction or increase, as the case may be, shall become effective immediately after the opening of business on the day following the day upon which such subdivision or combination becomes effective. (ix) In case the Company shall, by dividend or otherwise, distribute to all holders of its Common Stock (A) evidences of its indebtedness or (B) shares of any class of capital stock, cash or other assets (including securities, but excluding (x) any rights, options or warrants referred to in paragraph 3(vii) above, (y) any dividend or distribution referred to in paragraph 3(vi) or 3(viii) above, and (z) cash dividends paid from the Company's retained earnings, unless the sum of (1) all such cash dividends and distributions made within the preceding 12 months in respect of which no adjustment has been made and (2) any cash and the fair market value of other consideration paid in respect of any repurchases of 5 Common Stock by the Company or any of its subsidiaries within the preceding 12 months in respect of which no adjustment has been made, exceeds 20% of the Company's market capitalization (being the product of the then current market price per share (determined as provided in paragraph 3(xi) below) of the Common Stock times the aggregate number of shares of Common Stock then outstanding on the record date for such distribution), then in each case, the Conversion Price in effect at the opening of business on the day following the date fixed for the determination of holders of Common Stock entitled to receive such distribution shall be adjusted by multiplying such Conversion Price by a fraction of which the numerator shall be the current market price per share (determined as provided in paragraph 3(xi) below) of the Common Stock on such date of determination (or, if earlier, on the date on which the Common Stock goes "ex- dividend" in respect of such distribution) less the then fair market value as determined by the Board of Directors (whose determination shall be conclusive and shall be described in a statement filed with the Transfer Agent) of the portion of the capital stock, cash or other assets or evidences of indebtedness so distributed (and for which an adjustment to the Conversion Price has not previously been made pursuant to the terms of this paragraph 3) applicable to one share of Common Stock, and the denominator shall be such current market price per share of the Common Stock, such adjustment to become effective immediately after the opening of business on the day following such date of determination of the holders entitled to such distribution. The following transactions shall be excluded from the foregoing clauses (1) and (2): (I) repurchases of Common Stock issued under the Company's stock incentive programs; and (II) dividends or distributions payable-in-kind in additional shares of, or warrants, rights, calls or options exercisable for or convertible into additional shares of Junior Securities. (x) The reclassification or change of Common Stock into securities, including securities other than Common Stock, (other than any reclassification upon a consolidation or merger to which paragraph 3(xviii) below shall apply) shall be deemed to involve (A) a distribution of such securities other than Common Stock to all holders of Common Stock (and the effective date of such reclassification shall be deemed to be "the date fixed for the determination of holders of Common Stock entitled to receive such distribution" within the meaning of paragraph 3(ix) above), and (B) a subdivision or combination, as the case may be, of the number of shares of Common Stock outstanding immediately prior to such reclassification into the number of shares of Common Stock outstanding immediately thereafter (and the effective date of such reclassification shall be deemed to be "the day upon which such subdivision becomes effective" or "the day upon which such combination becomes effective," as the case may be, and "the day upon which such subdivision or combination becomes effective" within the meaning of paragraph 3(viii) above). (xi) For the purpose of any computation under paragraph 3(vii) or 3(ix) above, the current market price per share of Common Stock on any day shall be deemed to be the average of the Closing Prices of the Common Stock for the 20 consecutive Trading Days selected by the Board of Directors commencing no more than 30 Trading Days before and ending no later than the day before the day in question; provided that, in the case of paragraph 3(ix), if the period between the date of the public announcement of the dividend or distribution and the date for the determination of holders of Common Stock entitled to receive such dividend or distribution (or, if earlier, the date on which the Common Stock goes "ex-dividend" in respect of such dividend or distribution) shall be less than 20 Trading Days, the period shall be such lesser number of Trading Days but, in any event, not less than five Trading Days. (xii) No adjustment in the Conversion Price need be made until all cumulative adjustments amount to 1% or more of the Conversion Price as last adjusted. Any adjustments that are not made shall be carried forward and taken into account in any subsequent adjustment. All calculations under this paragraph 3 shall be made to the nearest 1/10,000th of a cent or to the nearest 1/10,000th of a share, as the case may be. 6 (xiii) For purposes of this paragraph 3, "Common Stock" includes any stock of any class of the Company which has no preference in respect of dividends or of amounts payable in the event of any voluntary or involuntary liquidation, dissolution or winding-up of the Company and which is not subject to redemption by the Company. However, subject to the provisions of paragraph 3(xviii) below, shares issuable on conversion of shares of Preferred Stock shall include only shares of the class designated as Common Stock of the Company on the Preferred Stock Issue Date or shares of any class or classes resulting from any reclassification thereof and which have no preferences in respect of dividends or amounts payable in the event of any voluntary or involuntary liquidation, dissolution or winding-up of the Company and which are not subject to redemption by the Company; provided that, if at any time there shall be more than one such resulting class, the shares of each such class then so issuable shall be substantially in the proportion which the total number of shares of such class resulting from all such reclassifications bears to the total number of shares of all such classes resulting from all such reclassifications. (xiv) No adjustment in the Conversion Price shall reduce the Conversion Price below the then par value of the Common Stock. No adjustment in the Conversion Price need be made under paragraphs 3(vi), 3(vii) and 3(ix) above if the Company issues or distributes to each holder of Preferred Stock the shares of Common Stock, evidences of indebtedness, assets, rights, options or warrants referred to in those paragraphs which each holder would have been entitled to receive had Preferred Stock been converted into Common Stock prior to the happening of such event or the record date with respect thereto. (xv) Whenever the Conversion Price is adjusted, the Company shall promptly mail to holders of Preferred Stock, first class, postage prepaid, a notice of the adjustment. The Company shall file with the transfer agent for the Preferred Stock, if any, a certificate from the Company's independent public accountants briefly stating the facts requiring the adjustment and the manner of computing it. Subject to paragraph 3(xvi) below, the certificate shall be conclusive evidence that the adjustment is correct. (xvi) The Company from time to time may reduce the Conversion Price if it considers such reductions to be advisable in order that any event treated for federal income tax purposes as a dividend of stock or stock rights will not be taxable to the holders of Common Stock by any amount, but in no event may the Conversion Price be less than the par value of a share of Common Stock. Whenever the Conversion Price is reduced, the Company shall mail to holders of Preferred Stock a notice of the reduction. The Company shall mail, first class, postage prepaid, the notice at least 15 days before the date the reduced Conversion Price takes effect. The notice shall state the reduced Conversion Price and the period it will be in effect. A reduction of the Conversion Price does not change or adjust the Conversion Price otherwise in effect for purposes of paragraphs 3(vi), 3(vii), 3(viii) and 3(ix) above. (xvii) If: (A) the Company takes any action which would require an adjustment in the Conversion Price pursuant to paragraph 3(vii), 3(ix) or 3(x) above; (B) the Company consolidates or merges with, or transfers all or substantially all of its assets to, another corporation, and stockholders of the Company must approve the transaction; or (C) there is a dissolution or liquidation of the Company; 7 the Company shall mail to holders of the Preferred Stock, first class, postage prepaid, a notice stating the proposed record or effective date, as the case may be. The Company shall mail the notice at least 10 days before such date. However, failure to mail the notice or any defect in it shall not affect the validity of any transaction referred to in clause (A), (B) or (C) of this paragraph 3(xvii). (xviii) In the case of any consolidation of the Company or the merger of the Company with or into any other entity or the sale or transfer of all or substantially all the assets of the Company pursuant to which the Company's Common Stock is converted into other securities, cash or assets, upon consummation of such transaction, each share of Preferred Stock shall automatically become convertible into the kind and amount of securities, cash or other assets receivable upon the consolidation, merger, sale or transfer by a holder of the number of shares of Common Stock into which such share of Preferred Stock might have been converted immediately prior to such consolidation, merger, transfer or sale (assuming such holder of Common Stock failed to exercise any rights of election and received per share the kind and amount of consideration receivable per share by a plurality of non-electing shares). Appropriate adjustment (as determined by the Board of Directors of the Company) shall be made in the application of the provisions herein set forth with respect to the rights and interests thereafter of the holders of Preferred Stock, to the end that the provisions set forth herein (including provisions with respect to changes in and other adjustment of the Conversion Price) shall thereafter be applicable, as nearly as reasonably may be, in relation to any shares of stock or other securities or property thereafter deliverable upon the conversion of Preferred Stock. If this paragraph 3(xviii) applies, paragraphs 3(vi), 3(viii) and 3(x) do not apply. (xix) In any case in which this paragraph 3 shall require that an adjustment as a result of any event become effective from and after a record date, the Company may elect to defer until after the occurrence of such event the issuance to the holder of any shares of Preferred Stock converted after such record date and before the occurrence of such event of the additional shares of Common Stock issuable upon such conversion over and above the shares issuable on the basis of the Conversion Price in effect immediately prior to adjustment; provided, however, that if such event shall not have occurred and authorization of such event shall be rescinded by the Company, the Conversion Price shall be recomputed immediately upon such recision to the price that would have been in effect had such event not been authorized, provided that such recision is permitted by and effective under applicable laws. 4. Liquidation Rights. Upon any voluntary or involuntary liquidation, ------------------ dissolution or winding-up of the Company or reduction or decrease in its capital stock resulting in a distribution of assets to the holders of any class or series of the Company's capital stock, each holder of shares of the Preferred Stock will be entitled to payment out of the assets of the Company available for distribution of an amount equal to the Liquidation Preference per share of Preferred Stock held by such holder, plus accrued and unpaid dividends and Liquidated Damages, if any, to the date fixed for liquidation, dissolution, winding-up or reduction or decrease in capital stock, before any distribution is made on any Junior Securities, including, without limitation, common stock of the Company. After payment in full of the Liquidation Preference and all accrued dividends and Liquidated Damages, if any, to which holders of Preferred Stock are entitled, such holders will not be entitled to any further participation in any distribution of assets of the Company. If, upon any voluntary or involuntary liquidation, dissolution or winding-up of the Company, the amounts payable with respect to the Preferred Stock and all other Parity Securities are not paid in full, the holders of the Preferred Stock and the Parity Securities will share equally and ratably in any distribution of assets of the Company in proportion to the full liquidation preference and accumulated and unpaid dividends and Liquidated Damages, if any, to which each is entitled. However, neither the voluntary sale, conveyance, exchange or transfer (for cash, shares of stock, securities or other consideration) of all or substantially all of the property or assets of the Company nor 8 the consolidation or merger of the Company with or into one or more Persons will be deemed to be a voluntary or involuntary liquidation, dissolution or winding- up of the Company or reduction or decrease in capital stock, unless such sale, conveyance, exchange or transfer shall be in connection with a liquidation, dissolution or winding-up of the business of the Company or reduction or decrease in capital stock. 5. Optional Redemption. ------------------- (i) The Preferred Stock may not be redeemed at the option of the Company prior to July 19, 2000. The Preferred Stock may be redeemed for cash, in whole or in part, at the option of the Company on or after July 19, 2000, at the redemption prices specified below (expressed as percentages of the Liquidation Preference thereof), in each case, together with accumulated and unpaid dividends (including an amount in cash equal to a prorated dividend for any partial dividend period) and Liquidated Damages, if any, to the date of redemption (the "Applicable Redemption Price"), upon not less than 30 nor more than 60 days' prior written notice, if redeemed during the 12-month period commencing on July 19 of each of the years set forth below: Year Percentage ---- ---------- 2000......................... 104.00% 2001......................... 103.00% 2002......................... 102.00% 2003......................... 101.00% 2004 and thereafter.......... 100.00% No optional redemption pursuant to this paragraph 5(i) shall be authorized or made unless, prior to giving the applicable redemption notice, all accumulated and unpaid dividends for periods ended prior to the date of such redemption notice shall have been paid in cash, Common Stock or a combination thereof. (ii) In case of redemption of less than all of the shares of Preferred Stock at the time outstanding, the shares to be redeemed shall be selected pro rata or by lot as determined by the Company in its sole discretion. (iii) Notice of any redemption shall be sent by or on behalf of the Company not less than 30 nor more than 60 days prior to the date specified for redemption in such notice (the "Redemption Date"), by first class mail, postage prepaid, to all holders of record of the Preferred Stock at their last addresses as they shall appear on the books of the Company; provided, however, that no failure to give such notice or any defect therein or in the mailing thereof shall affect the validity of the proceedings for the redemption of any shares of Preferred Stock except as to the holder to whom the Company has failed to give notice or except as to the holder to whom notice was defective. In addition to any information required by law or by the applicable rules of any exchange upon which Preferred Stock may be listed or admitted to trading, such notice shall state: (i) that such redemption is being made pursuant to the optional redemption provisions hereof; (ii) the Redemption Date; (iii) the Applicable Redemption Price; (iv) the number of shares of Preferred Stock to be redeemed and, if less than all shares held by such holder are to be redeemed, the number of such shares to be redeemed; (v) the place or places where certificates for such shares are to be surrendered for payment of the Applicable Redemption Price, including any procedures applicable to redemptions to be accomplished through book-entry transfers; and (vi) that dividends on the shares to be redeemed will cease to accumulate on the Redemption Date. Upon 9 the mailing of any such notice of redemption, the Company shall become obligated to redeem at the time of redemption specified thereon all shares called for redemption. (iv) If notice has been mailed in accordance with Section 5(iii) above and provided that on or before the Redemption Date specified in such notice, all funds necessary for such redemption shall have been set aside by the Company, separate and apart from its other funds in trust for the pro rata benefit of the holders of the shares so called for redemption, so as to be, and to continue to be available therefor, then, from and after the Redemption Date, dividends on the shares of the Preferred Stock so called for redemption shall cease to accumulate, and said shares shall no longer be deemed to be outstanding and shall not have the status of shares of Preferred Stock, and all rights of the holders thereof as stockholders of the Company (except the right to receive from the Company the Applicable Redemption Price) shall cease. Upon surrender, in accordance with said notice, of the certificates for any shares so redeemed (properly endorsed or assigned for transfer, if the Company shall so require and the notice shall so state), such shares shall be redeemed by the Company at the Applicable Redemption Price. In case fewer than all the shares represented by any such certificate are redeemed, a new certificate or certificates shall be issued representing the unredeemed shares without cost to the holder thereof. (v) Any funds deposited with a bank or trust company for the purpose of redeeming Preferred Stock shall be irrevocable except that: (a) the Company shall be entitled to receive from such bank or trust company the interest or other earnings, if any, earned on any money so deposited in trust, and the holders of any shares redeemed shall have no claim to such interest or other earnings; and (b) any balance of monies so deposited by the Company and unclaimed by the holders of the Preferred Stock entitled thereto at the expiration of two years from the applicable Redemption Date shall be repaid, together with any interest or other earnings earned thereon, to the Company, and after any such repayment, the holders of the shares entitled to the funds so repaid to the Company shall look only to the Company for payment without interest or other earnings. (vi) No Preferred Stock may be redeemed except with funds legally available for such purpose. The Company shall take all actions required or permitted under the DGCL to permit any such redemption. (vii) Notwithstanding the foregoing provisions of this Section 5, unless the full cumulative dividends on all outstanding shares of Preferred Stock shall have been paid or contemporaneously are declared and paid for all past dividend periods, none of the shares of Preferred Stock shall be redeemed unless all outstanding shares of Preferred Stock are simultaneously redeemed. 6. Change of Control. ----------------- (i) Subject to paragraph (6)(v) hereof, upon the occurrence of a Change of Control, the Company shall be required to make an offer (a "Preferred Stock Change of Control Offer") to each holder of shares of Preferred Stock to repurchase all or any part of such holder's shares of Preferred Stock at an offer price in cash equal to 100% of the aggregate Liquidation Preference thereof, plus accumulated and unpaid dividends (including an amount equal to a prorated dividend for the period from the Dividend Payment Date immediately prior to the Change of Control Payment Date) and Liquidated Damages, if any, thereon to the date of repurchase (the "Change of Control Payment"). 10 (ii) Within 30 days following any Change of Control, the Company shall (a) publish a notice of the Change of Control in The Wall Street Journal or a similar daily business publication of national distribution and (b) mail a notice to each holder of Preferred Stock describing the transaction that constitutes the Change of Control, together with such other information as may be required pursuant to the securities laws, and stating: (A) that the Change of Control Offer is being made pursuant to this Certificate of Designations and that, to the extent lawful, all shares of Preferred Stock validly tendered will be accepted for payment; (B) the purchase price and the purchase date, which shall be no earlier than 30 days nor later than 60 days from the date such notice is mailed (the "Change of Control Payment Date"); (C) that any shares of Preferred Stock not tendered will continue to accrue dividends in accordance with the terms of this Certificate of Designations; (D) that, unless the Company defaults in the payment of the Change of Control Payment, all shares of Preferred Stock accepted for payment pursuant to the Change of Control Offer shall cease to accrue dividends on the Change of Control Payment Date; and (E) a description of the procedures to be followed by such holder in order to have its shares of Preferred Stock repurchased. (iii) On the Change of Control Payment Date, the Company shall, to the extent lawful, (A) accept for payment shares of Preferred Stock validly tendered pursuant to the Change of Control Offer and (B) promptly mail to each holder of shares of Preferred Stock so accepted payment in an amount equal to the purchase price for such shares and (C) unless the Company defaults in the payment for the shares of Preferred Stock tendered pursuant to the Preferred Stock Change of Control Offer, dividends will cease to accrue with respect to the shares of Preferred Stock tendered and all rights of holders of such tendered shares will terminate, except for the right to receive payment therefor, on the Change of Control Payment Date. The Company shall publicly announce the results of the Preferred Stock Change of Control Offer on or as soon as practicable after the Change of Control Payment Date. (iv) The Company shall comply with any securities laws and regulations, to the extent such laws and regulations are applicable to the repurchase of shares of the Preferred Stock in connection with a Change of Control. (v) Notwithstanding the foregoing, prior to complying with this paragraph 6, but in any event within 90 days following a Change of Control, the Company shall either (a) repay or refinance all outstanding indebtedness or (b) obtain the requisite consents, if any, under all agreements governing outstanding indebtedness necessary to permit the repurchase of the Preferred Stock required by this paragraph 6. The Company must first comply with the covenants in its outstanding indebtedness or take the actions described in the preceding sentence before it will be required to repurchase shares of Preferred Stock in the event of a Change of Control; provided, that if the Company fails to repurchase shares of Preferred Stock, the sole remedy to holders of Preferred Stock will be the voting rights arising from a Voting Rights Triggering Event. Moreover, the Company will not repurchase or redeem any Preferred Stock pursuant to this Change of Control provision prior to the Company's repurchase of the Series B Preferred Stock pursuant to the Change of Control covenants in the Series B Preferred Stock. (vi) Notwithstanding the foregoing, the Company shall not be required to make a Preferred Stock Change of Control Offer following a Change of Control if a third party makes the Preferred Stock Change of Control Offer in the manner, at the times and otherwise in compliance with the requirements set forth in this Certificate of Designations applicable to a Preferred Stock Change of Control Offer made by the Company and purchases all of the Preferred Stock validly tendered and not withdrawn under such Preferred Stock Change of Control Offer. 11 7. Voting Rights. ------------- (i) The holders of record of shares of the Preferred Stock shall have no voting rights, except as required by law and as hereinafter provided in this Section 7. (ii) Upon: (a) the accumulation of accrued and unpaid dividends on the outstanding Preferred Stock in an amount equal to six (6) quarterly dividends (whether or not consecutive); or (b) the failure of the Company to make a Preferred Stock Change of Control Offer or to repurchase all of the Preferred Stock tendered in a Preferred Stock Change of Control Offer (each of the events described in clauses (a) and (b) being referred to herein as a "Voting Rights Triggering Event"); then the holders of a majority of the outstanding shares of Preferred Stock, voting as a separate single class, shall be entitled to elect such number of members to the Board of Directors of the Company constituting at least 20% of the then existing Board of Directors before such election (rounded to the nearest whole number), provided, however, that such number shall be no less than one nor greater than two, and the number of members of the Company's Board of Directors shall be immediately and automatically increased by one or two, as the case may be. (iii) Whenever such voting right shall have vested, such right may be exercised initially either at a special meeting of the holders of Preferred Stock, called as hereinafter provided, or at any annual meeting of stockholders held for the purpose of electing directors, and thereafter at such annual meetings or by the written consent of the holders of Preferred Stock. Such right of the holders of Preferred Stock to elect directors may be exercised until (a) all dividends in arrears shall have been paid in full and (b) all other Voting Rights Triggering Events have been cured or waived, at which time the term of such directors previously elected shall thereupon terminate, and such directors shall be deemed to have resigned. (iv) At any time when such voting right shall have vested in the holders of Preferred Stock and if such right shall not already have been initially exercised, a proper officer of the Company shall, upon the written request of holders of record of 10% or more of the Preferred Stock then outstanding, addressed to the Secretary of the Company, call a special meeting of holders of Preferred Stock. Such meeting shall be held at the earliest practicable date upon the notice required for annual meetings of stockholders at the place for holding annual meetings of stockholders of the Company or, if none, at a place designated by the Secretary of the Company. If such meeting shall not be called by the proper officers of the Company within 30 days after the personal service of such written request upon the Secretary of the Company, or within 30 days after mailing the same within the United States, by registered mail, addressed to the Secretary of the Company at its principal office (such mailing to be evidenced by the registry receipt issued by the postal authorities), then the holders of record of 10% of the shares of Preferred Stock then outstanding may designate in writing a holder of Preferred Stock to call such meeting at the expense of the Company, and such meeting may be called by such person so designated upon the notice required for annual meetings of stockholders and shall be held at the place for holding annual meetings of the Company or, if none, at a place designated by such holder. Any holder of Preferred Stock that would be entitled to vote at such meeting shall have access to the stock books of the Company for the purpose of causing a meeting of stockholders to be called pursuant to the provisions of this Section 7. Notwithstanding the provisions of this paragraph, however, no such special meeting 12 shall be called if any such request is received less than 90 days before the date fixed for the next ensuing annual or special meeting of stockholders. (v) If any director so elected by the holders of Preferred Stock shall cease to serve as a director before his term shall expire, the holders of Preferred Stock then outstanding may, at a special meeting of the holders called as provided above, elect a successor to hold office for the unexpired term of the director whose place shall be vacant. (vi) The Company shall not, without the affirmative vote or consent of the holders of at least a majority of the shares of Preferred Stock then outstanding (with shares held by the Company or any of its Affiliates not being considered to be outstanding for this purpose) voting or consenting as the case may be, as one class: (a) authorize, create (by way of reclassification or otherwise) or issue any Senior Securities or any obligation or security convertible or exchangeable into or evidencing the right to purchase, shares of any class or series of Senior Securities; (b) amend or otherwise alter this Certificate of Designation (including the provisions of Section 7 hereof) in any manner that adversely affects the specified rights, preferences, privileges or voting rights of holders of Preferred Stock; (c) authorize the issuance of any additional shares of Preferred Stock; or (d) waive any existing Voting Rights Triggering Event or compliance with any provision of this Certificate of Designation; provided, however, that the Company shall not amend the Change of Control provisions of this Certificate of Designation (including the related definitions) without the approval of the holders of at least 66 2/3% of the then outstanding shares of Preferred Stock, voting or consenting, as the case may be, as one class. (vii) Without the consent of each holder affected, an amendment or waiver of the Company's Certificate of Incorporation or of this Certificate of Designation may not (with respect to any shares of Preferred Stock held by a non-consenting holder): (a) alter the voting rights with respect to the Preferred Stock or reduce the number of shares of Preferred Stock whose holders must consent to an amendment, supplement or waiver; (b) reduce the Liquidation Preference of or alter the provisions with respect to the redemption of the Preferred Stock (except as provided with respect to Section 6 hereof); (c) reduce the rate of or change the time for payment of dividends on any share of Preferred Stock; (d) waive the consequences of any failure to pay dividends on the Preferred Stock; (e) make any share of Preferred Stock payable in any form other than that stated in this Certificate of Designation; 13 (f) make any change in the provisions of this Certificate of Designation relating to waivers of the rights of holders of Preferred Stock to receive the Liquidation Preference and dividends on the Preferred Stock; (g) waive a redemption payment with respect to any share of Preferred Stock (except as provided with respect to Section 6 hereof); or (h) make any change in the foregoing amendment and waiver provisions. (viii) The Company in its sole discretion may without the vote or consent of any holders of the Preferred Stock amend or supplement this Certificate of Designation: (a) to cure any ambiguity, defect or inconsistency; (b) to provide for uncertificated Preferred Stock in addition to or in place of certificated Preferred Stock; or (c) to make any change that would provide any additional rights or benefits to the holders of the Preferred Stock or that does not adversely affect the legal rights under this Certificate of Designation of any such holder. Except as set forth above, (x) the creation, authorization or issuance of any shares of Junior Securities, Parity Securities or Senior Securities or (y) the increase or decrease in the amount of authorized capital stock of any class, including any preferred stock, shall not require the consent of the holders of the Preferred Stock and shall not be deemed to affect adversely the rights, preferences, privileges, special rights or voting rights of holders of shares of Preferred Stock. 8. Merger, Consolidation and Sale of Assets. Without the vote or consent ---------------------------------------- of the holders of a majority of the then outstanding shares of Preferred Stock, the Company may not consolidate or merge with or into, or sell, assign, transfer, lease, convey or otherwise dispose of all or substantially all of its assets to, any person unless (i) the entity formed by such consolidation or merger (if other than the Company) or to which such sale, assignment, transfer, lease, conveyance or other disposition shall have been made (in any such case, the "resulting entity") is a corporation organized and existing under the laws of the United States or any State thereof or the District of Columbia; (ii) if the Company is not the resulting entity, the Preferred Stock is converted into or exchanged for and becomes shares of such resulting entity, having in respect of such resulting entity the same (or more favorable) powers, preferences and relative, participating, optional or other special rights thereof that the Preferred Stock had immediately prior to such transaction; and (iii) immediately after giving effect to such transaction, no Voting Rights Triggering Event has occurred and is continuing. The resulting entity of such transaction shall thereafter be deemed to be the "Company" for all purposes of this Certificate of Designations. 9. Reports. The Company shall file within 15 days after it files them ------- with the Commission copies of the annual and quarterly reports and the information, documents, and other reports that the Company is required to file with the Commission pursuant to Section 13(a) or 15(d) of the Exchange Act ("SEC Reports") with the Transfer Agent. In the event the Company is not required or shall cease to be required to file SEC Reports, pursuant to the Exchange Act, the Company shall nevertheless continue to file such reports with the Commission (unless the Commission shall not accept such a filing) and the Transfer Agent. Whether or not required by the Exchange Act to file SEC Reports with the Commission, 14 so long as any Preferred Stock are outstanding, the Company shall furnish copies of the SEC Reports to the holders of Preferred Stock at the time the Company is required to make such information available to the Transfer Agent and any investors who request it in writing. In addition, the Company has agreed that, for so long as any Preferred Stock remain outstanding, it will furnish to the holders and to securities analysts and prospective investors, upon their request, the information required to be delivered pursuant to Rule 144A(d)(4) under the Securities Act. 10. Amendment. This Certificate of Designation shall not be amended, --------- either directly or indirectly, or through merger or consolidation with another entity, in any manner that would alter or change the powers, preferences or special rights of the Preferred Stock so as to affect them adversely without the affirmative vote of the holders of a majority or more of the outstanding Preferred Stock, voting separately as a class. 11. Exclusion of Other Rights. Except as may otherwise be required by ------------------------- law, the shares of Preferred Stock shall not have any voting powers, preferences and relative, participating, optional or other special rights, other than those specifically set forth in this resolution (as such resolution may be amended from time to time) and in the Certificate of Incorporation. The shares of Preferred Stock shall have no preemptive or subscription rights. 12. Headings of Subdivisions. The headings of the various subdivisions ------------------------ hereof are for convenience of reference only and shall not affect the interpretation of any of the provisions hereof. 13. Severability of Provisions. If any voting powers, preferences and -------------------------- relative, participating, optional and other special rights of the Preferred Stock and qualifications, limitations and restrictions thereof set forth in this resolution (as such resolution may be amended from time to time) is invalid, unlawful or incapable of being enforced by reason of any rule of law or public policy, all other voting powers, preferences and relative, participating, optional and other special rights of Preferred Stock and qualifications, limitations and restrictions thereof set forth in this resolution (as so amended) which can be given effect without the invalid, unlawful or unenforceable voting powers, preferences and relative, participating, optional and other special rights of Preferred Stock and qualifications, limitations and restrictions thereof shall, nevertheless, remain in full force and effect, and no voting powers, preferences and relative, participating, optional or other special rights of Preferred Stock and qualifications, limitations and restrictions thereof herein set forth shall be deemed dependent upon any other such voting powers, preferences and relative, participating, optional or other special rights of Preferred Stock and qualifications, limitations and restrictions thereof unless so expressed herein. 14. Reissuance of Preferred Stock. Shares of Preferred Stock that have ----------------------------- been issued and reacquired in any manner, including shares purchased or redeemed or exchanged or converted, shall (upon compliance with any applicable provisions of the laws of Delaware) have the status of authorized but unissued shares of preferred stock of the Company undesignated as to series and may be designated or redesignated and issued or reissued, as the case may be, as part of any series of preferred stock of the Company, provided that any issuance of such shares as Preferred Stock must be in compliance with the terms hereof. 15. Mutilated or Missing Preferred Stock Certificates. If any of the ------------------------------------------------- Preferred Stock certificates shall be mutilated, lost, stolen or destroyed, the Company shall issue, in exchange and in substitution for and upon cancellation of the mutilated Preferred Stock certificate, or in lieu of and substitution for the Preferred Stock certificate lost, stolen or destroyed, a new Preferred Stock certificate of like tenor and representing an equivalent amount of shares of Preferred Stock, but only upon receipt 15 of evidence of such loss, theft or destruction of such Preferred Stock certificate and indemnity, if requested, satisfactory to the Company and the transfer agent (if other than the Company). 16. Certain Definitions. As used in this Certificate of Designations, the ------------------- following terms shall have the following meanings (with terms defined in the singular having comparable meanings when used in the plural and vice versa), unless the context otherwise requires: "Business Day" means any day except a Saturday, a Sunday, or any day on ------------ which banking institutions in New York, New York are required or authorized by law or other governmental action to be closed. "Change of Control" means the occurrence of any of the following: (i) the ----------------- sale, lease, transfer, conveyance or other disposition (other than by way of merger or consolidation), in one or a series of related transactions, of all or substantially all of the assets of the Company and its subsidiaries, taken as a whole, (ii) the adoption of a plan relating to the liquidation or dissolution of the Company, (iii) the consummation of any transaction (including, without limitation, any merger or consolidation) the result of which is that any "person" or "group" (as such terms are used in Section 13(d)(3) of the Exchange Act) becomes the "beneficial owner" (as such term is defined in Rule 13d-3 and Rule 13d-5 under the Exchange Act), directly or indirectly through one or more intermediaries, of more than 50% of the voting power of the outstanding voting stock of the Company, unless (A) the per share of Common Stock for any five Trading Days within the period of ten consecutive Trading Days ending immediately after the announcement of such Change of Control equals or exceeds 105% of the Conversion Price then in effect or (B) at least 90% of the consideration in the transaction or transactions constituting a Change of Control pursuant to clause (iii) consists of shares of common stock traded or to be traded immediately following such Change of Control on a national securities exchange or the Nasdaq National Market and, as a result of such transaction or transactions, the Preferred Stock become convertible solely into such common stock (and any rights attached thereto), or (iv) the first day on which more than a majority of the Board of Directors are not Continuing Directors; provided, however, that a transaction in which the Company becomes a subsidiary of another entity shall not constitute a Change of Control if (A) the stockholders of the Company immediately prior to such transaction "beneficially own" (as such term is defined in Rule 13d-3 and Rule 13d-5 under the Exchange Act), directly or indirectly through one or more intermediaries, at least a majority of the voting power of the outstanding voting stock of the Company immediately following the consummation of such transaction and (B) immediately following the consummation of such transaction, no "person" or "group" (as such terms are defined above), other than such other entity (but including holders of equity interests of such other entity), "beneficially owns" (as such term is defined above), directly or indirectly through one or more intermediaries, more than 50% of the voting power of the outstanding voting stock of the Company. "Closing Price" means, for each Trading Day, the last reported sale price ------------- regular way on the Nasdaq National Market or, if the Common Stock is not quoted on the Nasdaq National Market, the average of the closing bid and asked prices in the over-the-counter market as furnished by any New York Stock Exchange member firm selected from time to time by the corporation for that purpose. "Commission" means the Securities and Exchange Commission. ---------- "Common Stock" means the Common Stock, par value $0.01 per share, of the ------------ Company. "Continuing Directors" means, as of any date of determination, any member -------------------- of the Board of Directors of the Company who (a) was a member of the Board of Directors on the date of original 16 issuance of the Preferred Stock or (b) was nominated for election to the Board of Directors with the approval of, or whose election was ratified by, at least two-thirds of the Continuing Directors who were members of the Board of Directors at the time of such nomination or election. "Conversion Price" shall initially mean $38.90 per share and thereafter ---------------- shall be subject to adjustment from time to time pursuant to the terms of paragraph 3 hereof. "Exchange Act" means the Securities Exchange Act of 1934, as amended. ------------ "Liquidated Damages" means all liquidated damages then owing under the ------------------ Registration Rights Agreement. "Person" means any individual, corporation, partnership, joint venture, ------ association, joint stock company, trust, unincorporated organization, government or any agency or political subdivision thereof or any other entity. "Preferred Stock Issue Date" means the date on which the Preferred Stock is -------------------------- originally issued by the Company under this Certificate of Designation. "Registration Rights Agreement" means the Registration Rights Agreement ----------------------------- with respect to the Preferred Stock, dated as of July 9, 1997, by and among the Company, Bear, Stearns & Co. Inc. and Salomon Brothers Inc, as such agreement may be amended, modified or supplemented from time to time. "Series B Preferred Stock" means the Company's outstanding Series B ------------------------ Redeemable Exchangeable Preferred Stock due 2009. "Trading Day" means any day on which the Nasdaq National Market or other ----------- applicable stock exchange or market is open for business. "Transfer Agent" shall be Continental Stock Transfer & Trust Co. unless and -------------- until a successor is selected by the Company. 17 IN WITNESS WHEREOF, the Company has caused this certificate to be duly executed by David C. Ruberg, Chairman of the Board, President and Chief Executive Officer of the Company and attested by Robert M. Manning, Senior Vice President, Chief Financial Officer and Secretary of the Company, this 7th day of July, 1997. INTERMEDIA COMMUNICATIONS INC. By: __________________________________ Name: David C. Ruberg Title: Chairman of the Board, President and Chief Executive Officer ATTEST: By: __________________________________ Name: Robert M. Manning Title: Senior Vice President, Chief Financial Officer and Secretary EX-4.3 4 DEPOSIT AGREEMENT INTERMEDIA COMMUNICATIONS INC. and CONTINENTAL STOCK TRANSFER & TRUST COMPANY As Depositary and HOLDERS OF DEPOSITARY RECEIPTS DEPOSIT AGREEMENT Dated as of July 9, 1997 DEPOSIT AGREEMENT, dated as of July 9, 1997, among INTERMEDIA COMMUNICATIONS INC., a Delaware corporation (the "Company"), CONTINENTAL STOCK TRANSFER & TRUST COMPANY, a New York banking corporation, as depositary (the "Depositary"), and all holders from time to time of Depositary Receipts issued hereunder. WITNESSETH WHEREAS, the Company desires to provide for the deposit of shares of 7% Series D Junior Convertible Preferred Stock, par value $1.00 per share (the "Preferred Stock"), of the Company and for the issuance of Depository Receipts evidencing Depositary Shares in respect of the Preferred Stock so deposited, all on the terms and conditions set forth in this Agreement; and WHEREAS, the Depositary Receipts are to be substantially in the form of Exhibit A annexed hereto, with appropriate insertions, modifications and omissions, as hereinafter provided in this Deposit Agreement; NOW THEREFORE, in consideration of the mutual premises contained herein, it is agreed by and among the parties hereto as follows: ARTICLE I DEFINITIONS SECTION 1.1 DEFINITIONS. The following definitions shall for all purposes, unless otherwise clearly indicated, apply to the respective terms used in this Agreement and the Depositary Receipts: "Authorizing Resolutions" means the resolutions adopted by the Company's Board of Directors establishing and setting forth the rights, preferences and privileges of the Preferred Stock. "Certificate of Incorporation" means the Restated Certificate of Incorporation, as amended from time to time, of the Company. "Certificate of Designation" means the Certificate of Designation of Voting Power, Designation Preferences and Relative, Participating, Optional or other Special Rights and Qualifications, Limitations and Restrictions, filed with the Secretary of State of the State of Delaware, setting forth the terms of the Preferred Stock. "Company" means Intermedia Communications Inc., a Delaware corporation having its principal office at 3625 Queen Palm Drive, Tampa, Florida 33619-1309, and its successors. "Common Stock" means the common stock, par value $0.01 per share, of the Company. "Corporate Trust Office" means the principal office of the Depositary in New York, NY, at which at any particular time its corporate trust business shall be administered. "Deposit Agreement" means this Agreement, as the same may be amended or supplemented from time to time. "Depositary" means Continental Stock Transfer & Trust Company, a New York banking corporation, and any successor as depositary hereunder. "Depositary Shares" means the interest in Preferred Stock deposited with the Depositary hereunder and represented by the Receipts. Each Depositary Share shall, as provided herein, represent an interest in one one-hundredth (1/100) of one share of Preferred Stock (as such fraction may from time to time be adjusted in the event of certain amendments to the Certificate of Incorporation affecting the Preferred Stock). "Depositary's Agent" means an agent appointed by the Depositary as provided, and for purposes specified, in Section 7.5. "Issue Date" means July 9, 1997. "Liquidated Damages" means all liquidated damages then owing under the Registration Rights Agreement. "Liquidation Preference" means, with respect to the Preferred Stock, a liquidation preference of $2,500 per share. "Nasdaq National Market" means the National Association of Securities Dealers, Inc. Nasdaq National Market. "Person" means any individual, partnership, firm, corporation, association, trust, unincorporated organization or other entity, as well as any syndicate or group that would be deemed to be a person under Section 13(d)(3) of the Securities Exchange Act of 1934, as amended. "Preferred Stock" means shares of the Company's 7% Series D Junior Convertible Preferred Stock, par value $1.00 per share. "Receipt" means one or more of the Depositary Receipts issued hereunder. 2 "Record Holder" as applied to a Receipt means the Person in whose name a Receipt is registered on the books of the Depositary maintained for such purpose. "Registrar" means any bank or trust company which shall be appointed to register Receipts as herein provided. "Registration Rights Agreement" means the Registration Rights Agreement with respect to the Preferred Stock, dated as of July 9, 1997, by and among the Company, Bears, Stearns & Co. Inc. and Salomon Brothers Inc, as such agreement may be amended, modified or supplemented from time to time. "Securities Act of 1933" means the Act of May 27, 1933 (15 U.S. Code, Secs. 77a-77aa), as from time to time amended. "Stockholders" means the holders of the Preferred Stock. ARTICLE II FORM OF RECEIPTS, DEPOSIT OF PREFERRED STOCK, EXECUTION AND DELIVERY, TRANSFER, SURRENDER AND REDEMPTION OF RECEIPTS SECTION 2.1 FORM AND TRANSFERABILITY OF RECEIPTS. (a) Receipts shall be engraved or printed or lithographed on steel engraved borders and shall be substantially in the form set forth in Exhibit A annexed to this Deposit Agreement, with appropriate insertions, modifications and omissions, as hereinafter provided. Receipts shall be executed by the Depositary by the manual signature of a duly authorized representative of the Depositary, provided that such signature may be a facsimile if a Registrar for the Receipts (other than the Depositary) shall have been appointed and such Receipts are countersigned by manual signature of a duly authorized representative of the Registrar. No Receipt shall be entitled to any benefits under this Deposit Agreement or be valid or obligatory for any purpose unless it shall have been executed on behalf of the Company by the manual or facsimile signature of a duly authorized officer and executed manually or, if a Registrar for the Receipts (other than the Depositary) shall have been appointed, by facsimile signature of a duly authorized representative of the Depositary and, if executed by facsimile signature of the Depositary, shall have been countersigned manually by a duly authorized representative of such Registrar. The Depositary shall record on its books each Receipt so signed and delivered as hereinafter provided. (b) Receipts shall be in denominations of any number of whole Depositary Shares, unless otherwise directed by the Company. 3 (c) Receipts may be endorsed with or have incorporated in the text thereof such legends or recitals or changes not inconsistent with the provisions of this Deposit Agreement as may be required by the Depositary at the direction of the Company or required to comply with any applicable law or any regulation thereunder or with the rules and regulations of any securities exchange or Nasdaq National Market upon which the Preferred Stock, the Depositary Shares or the Receipts may be listed or to conform with any usage with respect thereto, or to indicate any special limitations or restrictions to which any particular Receipts are subject by reason of the date of issuance of the Preferred Stock or otherwise. (d) Title to Depositary Shares evidenced by a Receipt which is properly endorsed or accompanied by a properly executed instrument of transfer, shall be transferable by delivery with the same effect as in the case of a negotiable instrument; provided, however, that until a Receipt shall be -------- ------- transferred on the books of the Depositary as provided in Section 2.6, the Depositary may, notwithstanding any notice to the contrary, treat the Record Holder thereof at such time as the absolute owner thereof for the purpose of determining the Person entitled to distribution of dividends or other distributions or to any notice provided for in this Deposit Agreement and for all other purposes. SECTION 2.2 FORM, DENOMINATION AND REGISTRATION. (a) The Depositary Shares shall be issued in the form of one or more Global Certificates ("Global Certificates"). The Global Certificates shall be deposited on the Issue Date with, or on behalf of, the Depositary Trust Company (the "DTC") and registered in the name of Cede & Co., as DTC's nominee (such nominee being referred to as the "Global Certificate Holder"). (b) So long as the Global Certificate Holder is the registered owner of any Depositary Shares, the Global Certificate Holder will be considered the sole holder under this Deposit Agreement of any Depositary Shares evidenced by the Global Certificate. Beneficial owners of Depositary Shares shall not be considered the owners or holders thereof under this Deposit Agreement for any purpose. (c) Payments in respect of the Liquidation Preference, dividends and Liquidated Damages, if any, on any Preferred Stock underlying Depositary Shares registered in the name of the Global Certificate Holder on the applicable record date shall be payable by the Company to or at the direction of the Global Certificate Holder in its capacity as the registered holder under this Deposit Agreement. The Company may treat the persons in whose name Depositary Shares, including the Global Certificate, are registered as the owners thereof for the purpose of receiving such payments. 4 (d) Any person having a beneficial interest in a Global Certificate may, upon request to the Company, exchange such beneficial interest for Depositary Shares in the form of registered definitive certificates (the "Definitive Securities"). Upon any such issuance, the Company shall register such Definitive Securities in the name of, and cause the same to be delivered to, such person or persons (or the nominee of any thereof). If (i) the Company notifies the holders in writing that the DTC is no longer willing or able to act as a depositary and the Company is unable to locate a qualified successor within 90 days or (ii) the Company, at its option, notifies the holder in writing that it elects to cause the issuance of Depositary Shares in the form of Definitive Securities under this Deposit Agreement, then, upon surrender by the Global Certificate Holder of its Global Certificate, Depositary Shares in such form will be issued to each person that the Global Certificate Holder and the DTC identify as being the beneficial owner of the related Depositary Shares. (e) Each Global Certificate shall bear a legend in substantially the following form: "UNLESS AND UNTIL IT IS EXCHANGED IN WHOLE OR IN PART FOR A SECURITY IN DEFINITIVE FORM, THIS SECURITY MAY NOT BE TRANSFERRED EXCEPT AS A WHOLE BY THE DEPOSITARY TO A NOMINEE OF THE DEPOSITARY OR BY A NOMINEE OF THE DEPOSITARY TO THE DEPOSITARY OR ANOTHER NOMINEE OF THE DEPOSITARY OR BY THE DEPOSITARY OR ANY SUCH NOMINEE TO A SUCCESSOR DEPOSITARY OR A NOMINEE OF SUCH SUCCESSOR DEPOSITARY. THE DEPOSITARY TRUST COMPANY SHALL ACT AS THE DEPOSITARY UNTIL A SUCCESSOR SHALL BE APPOINTED BY THE COMPANY AND THE TRANSFER AGENT. UNLESS THIS CERTIFICATE IS PRESENTED BY AN AUTHORIZED REPRESENTATIVE OF THE DEPOSITARY TRUST COMPANY (55 WATER STREET, NEW YORK, NEW YORK) ("DTC") TO THE ISSUER OR ITS AGENT FOR REGISTRATION OF TRANSFER, EXCHANGE OR PAYMENT, AND ANY CERTIFICATE ISSUED IS REGISTERED IN THE NAME OF CEDE & CO. OR SUCH OTHER NAME AS MAY BE REQUESTED BY AN AUTHORIZED REPRESENTATIVE OF DTC (AND ANY PAYMENT IS MADE TO CEDE & CO. OR SUCH OTHER ENTITY AS MAY BE 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." (f) The Depositary Shares, Preferred Stock issuable upon exchange for the Depositary Shares and the Common Stock issuable upon conversion of the Depositary Shares shall bear a legend to the following effect, unless the Company determines otherwise in compliance with applicable law: 5 "THE SECURITY (OR ITS PREDECESSOR) EVIDENCED HEREBY WAS ORIGINALLY ISSUED IN A TRANSACTION EXEMPT FROM REGISTRATION UNDER SECTION 5 OF THE UNITED STATES SECURITIES ACT OF 1933, AS AMENDED (THE "SECURITIES ACT"), AND THE SECURITY EVIDENCED HEREBY MAY NOT BE OFFERED, SOLD OR OTHERWISE TRANSFERRED IN THE ABSENCE OF SUCH REGISTRATION OR AN APPLICABLE EXEMPTION THEREFROM. EACH PURCHASER OF THE SECURITY EVIDENCED HEREBY IS HEREBY NOTIFIED THAT THE SELLER MAY BE RELYING ON THE EXEMPTION FROM THE PROVISIONS OF SECTION 5 OF THE SECURITIES ACT PROVIDED BY RULE 144A THEREUNDER. THE HOLDER OF THE SECURITY EVIDENCED HEREBY AGREES FOR THE BENEFIT OF THE COMPANY THAT (A) SUCH SECURITY MAY BE RESOLD, PLEDGED OR OTHERWISE TRANSFERRED, ONLY (1)(a) TO A PERSON WHO THE SELLER REASONABLY BELIEVES IS A QUALIFIED INSTITUTIONAL BUYER (AS DEFINED IN RULE 144A UNDER THE SECURITIES ACT) IN A TRANSACTION MEETING THE REQUIREMENTS OF RULE 144A, (b) IN A TRANSACTION MEETING THE REQUIREMENTS OF RULE 144 UNDER THE SECURITIES ACT, OR (c) IN ACCORDANCE WITH ANOTHER EXEMPTION FROM THE REGISTRATION REQUIREMENTS OF THE SECURITIES ACT (AND BASED UPON AN OPINION OF COUNSEL IF THE COMPANY SO REQUESTS), (2) TO THE COMPANY OR (3) 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 (B) THE HOLDER WILL, AND EACH SUBSEQUENT HOLDER IS REQUIRED TO, NOTIFY ANY PURCHASER FROM IT OF THE SECURITY EVIDENCED HEREBY OF THE RESALE RESTRICTIONS SET FORTH IN (A) ABOVE." (g) Holders of the Depositary Shares, the Preferred Stock issuable upon exchange for the Depositary Shares and the Common Stock issuable upon conversion of the Depositary Shares shall have such rights with respect to such securities as are set forth in the Registration Rights Agreement. SECTION 2.3 DEPOSIT OF PREFERRED STOCK, EXECUTION AND DELIVERY OF RECEIPTS IN RESPECT THEREOF. (a) Subject to the terms and conditions of this Deposit Agreement, any holder of Preferred Stock may deposit such Preferred Stock under this Deposit Agreement by delivery to the Depositary at its Corporate Trust Office (or at such other place as may be agreeable to the Depositary) of a certificate or certificates for the Preferred Stock to be deposited, properly endorsed or accompanied, if required by the Depositary, by a duly executed instrument of transfer or endorsement, in form satisfactory to the Depositary, together with all such certifications as may be required by the Depositary in accordance with the provisions of this Deposit Agreement, and together with a written order directing the Depositary to execute and deliver to, or upon the written order of, the Person or Persons stated in such order a Receipt for the 6 number of Depositary Shares representing such deposited Preferred Stock. (b) The Depositary shall require, at the direction of the Company, that Preferred Stock presented for deposit at any time, whether or not the register of Stockholders of the Company is closed, shall also be accompanied by an agreement or assignment, or other instrument satisfactory to the Depositary, which will provide for the prompt transfer to the Depositary or its nominee of any dividend or right to subscribe for additional Preferred Stock or to receive other property which any Person in whose name the Preferred Stock is or has been recorded may thereafter receive upon or in respect of such deposited Preferred Stock, or in lieu thereof such agreement of indemnity or other agreement as shall be satisfactory to the Depositary. (c) Subject to the terms and conditions of this Deposit Agreement, Preferred Stock may also be deposited hereunder in connection with the delivery of Receipts to represent distributions under Section 4.2 and upon exercise of the rights to subscribe referred to in Section 4.3. (d) Upon each delivery to the Depositary of a certificate or certificates for Preferred Stock to be deposited hereunder, together with the other documents above specified, the Depositary shall, as soon as transfer and recordation can be accomplished, present such certificate or certificates to the Registrar and transfer agent of the Preferred Stock for transfer and recordation in the name of the Depositary or its nominee of the Preferred Stock being deposited. Deposited Preferred Stock shall be held by the Depositary, at the Depositary's Corporate Trust Office, or at such other place or places as the Depositary shall determine. (e) Upon receipt by the Depositary of a certificate or certificates for Preferred Stock deposited in accordance with the provisions of this Section, together with the other documents required as above specified, the Depositary, subject to the terms and conditions of this Deposit Agreement, shall execute and deliver to or upon the order of the Person or Persons named in the written order delivered to the Depositary referred to in Section 2.3(a), a Receipt for the number of Depositary Shares representing the Preferred Stock so deposited and registered in such name or names as may be requested by such Person or Persons. The Depositary shall execute and deliver such Receipts at its Corporate Trust Office and at such other offices, if any, as it may designate. Delivery at other offices shall be at the risk and expense of the Person requesting such delivery. However, in each case, such delivery will be made only upon payment to the Depositary of the fee of the Depositary by the Company (unless payable by the holder) as provided in Section 7 5.7, for the execution and delivery of such Receipt and of all taxes and governmental charges and fees payable in connection with such deposit and the transfer of the deposited Preferred Stock. SECTION 2.4 OPTIONAL REDEMPTION OF PREFERRED STOCK. (a) The Company shall have the right to redeem the Preferred Stock in accordance with the terms of the Preferred Stock. Whenever the Company shall elect to redeem shares of Preferred Stock pursuant to the terms of the Preferred Stock, it shall (unless otherwise agreed in writing with the Depositary) give the Depositary not less than 60 days' notice of the date of such proposed redemption of Preferred Stock and of the number of shares held by the Depositary to be so redeemed. On the date of such redemption, provided that the Company shall then have deposited with the Depositary the amount of cash necessary to effect such redemption, the Depositary shall redeem the number of Depositary Shares representing such Preferred Stock. The Depositary shall mail notice of such redemption and the proposed simultaneous redemption of the number of Depositary Shares representing the Preferred Stock to be redeemed, by first class postage prepaid, not less than 30 and not more than 60 days prior to the date fixed for redemption of such Preferred Stock and Depositary Shares (the "Redemption Date"), to the holders of record on the record date for such redemption (determined pursuant to Section 4.4) of the Receipts evidencing the Depositary Shares to be so redeemed, at the addresses of such holders as the same appear on the records of the Depositary; but neither failure to mail any such notice to one or more such holders nor any defect in any notice shall affect the sufficiency of the proceedings for redemption as to other holders. Each such notice shall state the record date for the purposes of such redemption; the Redemption Date; the number of Depositary Shares to be redeemed and, if less than all of the Depositary Shares held by any such holder are to be redeemed, the number of such Depositary Shares held by such holder to be so redeemed; the amount of cash to be received by such holder; the place or places where Receipts evidencing Depositary Shares are to be surrendered for cash; and that dividends in respect of the Preferred Stock represented by the Depositary Shares to be redeemed will cease to accrue at the close of business on such Redemption Date. In case less than all the outstanding Depositary Shares are to be redeemed, the Depositary Shares to be so redeemed shall be selected by lot or pro rata (as nearly as may be) or in any other equitable manner determined by the Depositary to be consistent with the method determined by the Board of Directors with respect to the Preferred Stock. (b) Notice having been mailed by the Depositary as described in Section 2.4(a), from and after the Redemption Date (unless the Company shall have failed to redeem the shares of Preferred Stock to be redeemed by it as set forth in the 8 Company's notice provided for in Section 2.4(a)), all dividends in respect of the shares of Preferred Stock so called for redemption shall cease to accrue, the Depositary Shares being so redeemed shall be deemed no longer to be outstanding, all rights of the holders of Receipts evidencing such Depositary Shares shall cease and terminate and, upon surrender in accordance with said notice of the Receipts evidencing any such Depositary Shares (properly endorsed or assigned for transfer, if the Depositary shall so require), such Depositary Shares shall be redeemed by the Depositary for the consideration therefor specified in said notice, plus all money and other property, if any, represented by such Depositary Shares, including all amounts, if any, paid by the Company in respect of dividends which on the Redemption Date have accrued on the shares of Preferred Stock to be so redeemed and have not theretofore been paid. If less than all of the Depositary Shares evidenced by any Receipt are called for redemption, the Depositary will deliver to the holder of such Receipt upon its surrender to the Depositary, together with the redemption payment, a new Receipt evidencing the Depositary Shares evidenced by such prior Receipt and not called for redemption. The foregoing shall further be subject to the terms and conditions of the Preferred Stock, as set forth in the Certificate of Incorporation and Certificate of Designation. (c) Any balance of monies deposited by the Company for the purpose of redeeming Preferred Stock underlying the Depositary Shares and unclaimed by the holders of the Depositary Shares entitled thereto at the expiration of two years from the Redemption Date shall be repaid, together with any interest or earnings thereon, if any, to the Company. After any such repayment, such holders of Depositary Shares entitled to the funds so repaid to the Company shall look only to the Company for payment without interest or other earnings. SECTION 2.5 CONVERSION OF DEPOSITARY SHARES. (a) The Depositary Shares held by any holder of a Receipt or Receipts may, at the option of such holder, be converted, in whole, or from time to time in part (but only in lots of 100 Depositary Shares or integral multiples thereof if less then all the Depositary Shares held by such holder are being converted), into shares of Common Stock upon the same terms and conditions as the Preferred Stock, except that the number of shares of Common Stock received upon conversion of each Depositary Share will be equal to the number of shares of Common Stock received upon conversion of one share of Preferred Stock divided by 100. Whenever a holder of a Receipt or Receipts shall elect to convert the Depositary Shares represented by such Receipt or Receipts into shares of Common Stock pursuant to the terms of the Preferred Stock, such holder shall deliver to the Depositary or the Depositary's Agent the Receipt or Receipts evidencing the Depositary Shares to be converted, together with a written notice of conversion and an assignment of the Receipt or Receipts to the 9 Company or in blank, in form reasonably acceptable to the Depositary. In addition, if such holder surrenders such Depositary Shares for conversion during the period from the close of business on any record date fixed pursuant to Section 4.4 for the payment of dividends until the opening of business of the dividend payment date corresponding to such record date (the "Dividend Payment Date"), such Receipt or Receipts shall be accompanied by a payment in cash, Common Stock or a combination thereof (depending on the method of payment that the Company has chosen to pay the dividend) in an amount equal to the dividend payable on the Dividend Payment Date, unless such Depositary Shares have been called for redemption on a Redemption Date occurring during the period from the close of business on such record date until the close of business on the business day immediately following the Dividend Payment Date. The dividend payment with respect to Depositary Shares called for redemption on a date during the period from the close of business on such record date to the close of business on the business day immediately following the Dividend Payment Date will be payable on the Dividend Payment Date to the record holder of such Depositary Shares on such record date, notwithstanding the conversion of such Depositary Shares after such record date and prior to the Dividend Payment Date, and the holder converting such Depositary Shares need not include a payment of such dividend amount upon surrender of such Depositary Shares. Each conversion of Depositary Shares shall be deemed to have been effected immediately before the close of business on the date on which the requirements specified in the preceding sentence shall have been satisfied (the "Conversion Date"). (b) If a holder of a Receipt elects to convert less than all of the Depositary Shares evidenced by a Receipt, the Depositary will deliver to the holder of the Receipt upon its surrender to the Depositary a new Receipt evidencing the Depositary Shares evidenced by such prior Receipt and not converted, together with a certificate for the shares of Common Stock issued upon conversion. The foregoing shall further be subject to the terms and conditions of the Preferred Stock, as set forth in the Certificate of Incorporation and Certificate of Designation. (c) No fractional shares of Common Stock will be issued upon conversion of Depositary Shares. If such conversion would otherwise result in a fractional share of Common Stock being issued, the number of shares of Common Stock to be issued upon conversion shall be rounded up to the nearest whole share. (d) From and after the Conversion Date, the Depositary Shares being converted shall be deemed no longer to be outstanding, all dividends in respect of the shares of Preferred Stock converted shall cease to accrue, all rights of the holders of Receipts evidencing such Depositary Shares shall, to the 10 extent of such Depositary Shares, cease and terminate, except the right to receive shares of Common Stock into which the Depositary Shares have been converted and the right to receive any money or other property to which the holders of such Receipts were entitled upon conversion (including all amounts, if any, paid by the Company in respect of dividends which, on the Conversion Date, have accrued on the shares of Preferred Stock to be converted and have not theretofore been paid). SECTION 2.6 TRANSFER OF RECEIPTS. Subject to the terms and conditions of this Deposit Agreement, the Depositary shall make transfers on its books from time to time of Receipts upon any surrender thereof at the Depositary's Corporate Trust Office by the holder in person or by duly authorized attorney, properly endorsed or accompanied by a properly executed instrument of transfer, and duly stamped as may be required by law. Thereupon the Depositary shall execute a new Receipt or Receipts and deliver the same to or upon the order of the Person entitled thereto evidencing the same aggregate number of Depositary Shares as those evidenced by the Receipt or Receipts surrendered. SECTION 2.7 COMBINATIONS AND SPLIT-UPS OF RECEIPTS. Upon surrender of a Receipt or Receipts at the Depositary's Corporate Trust Office or at such other offices as it may designate for the purpose of effecting a split-up or combination of such Receipt or Receipts, and subject to the terms and conditions of this Deposit Agreement, the Depositary shall execute and deliver a new Receipt or Receipts in the authorized denominations requested, evidencing the same aggregate number of Depositary Shares evidenced by the Receipt or Receipts surrendered. SECTION 2.8 SURRENDER OF RECEIPTS AND WITHDRAWAL OF PREFERRED STOCK. (a) Any holder of a Receipt or Receipts representing any number of whole shares of Preferred Stock may withdraw the Preferred Stock and all money and other property, if any, represented thereby by surrendering such Receipt or Receipts, at the Depositary's Corporate Trust Office or at such other offices as the Depositary may designate for such withdrawals. Thereafter, without unreasonable delay, the Depositary shall deliver to such holder, or to the Person or Persons designated by such holder as hereinafter provided, the number of whole shares of Preferred Stock and all money and other property, if any, represented by the Receipt or Receipts so surrendered for withdrawal. If the Receipt delivered by the holder to the Depositary in connection with such withdrawal shall evidence a number of Depositary Shares in excess of the number of Depositary Shares representing the number of whole shares of Preferred Stock to be so withdrawn, the Depositary shall at the same time, in addition to such number of whole shares of Preferred Stock and such money and other property, if any, to be 11 so withdrawn, deliver to such holder, or upon his order, a new Receipt evidencing such excess number of Depositary Shares. In no event will fractional shares of Preferred Stock (or cash in lieu thereof) be distributed by the Depositary. Delivery of the Preferred Stock and money and other property being withdrawn may be made by the delivery of such certificates, documents of title and other instruments as the Depositary may deem appropriate, which, if required by the Depositary, shall be properly endorsed or accompanied by proper instruments of transfer. (b) If the Preferred Stock and the money and other property being withdrawn are to be delivered to a Person or Persons other than the Record Holder of the Receipt or Receipts being surrendered for withdrawal of Preferred Stock, such Record Holder shall execute and deliver to the Depositary a written order so directing the Depositary and the Depositary may require that the Receipt or Receipts surrendered by such holder for withdrawal of such shares of Preferred Stock be properly endorsed in blank or accompanied by a properly executed instrument of transfer in blank. (c) Delivery of the Preferred Stock and the money and other property, if any, represented by Receipts surrendered for withdrawal shall be made by the Depositary at its Corporate Trust Office, except that at the request, risk and expense of the holder that surrendered such Receipt or Receipts, and for the account of the holder thereof, such delivery may be made at such other place as may be designated by such holder. SECTION 2.9 LIMITATIONS ON EXECUTION AND DELIVERY, TRANSFER, SPLIT- UP, COMBINATION AND SURRENDER OF RECEIPTS. (a) As a condition precedent to the execution and delivery, transfer, split-up, combination or surrender of any Receipt, the Depositary, or any of the Depositary's Agents, or the Company, may require (i) payment to it of a sum sufficient for the payment (or, in the event that the Depositary or the Company shall have made such payment, the reimbursement to it) of any tax or other governmental charge with respect thereto (including any such tax or charge with respect to Preferred Stock being deposited or withdrawn), (ii) the production of proof satisfactory to it as to the identity and genuineness of any signature and (iii) compliance with such regulations, if any, as the Depositary or the Company may establish consistent with the provisions of this Deposit Agreement. (b) The deposit of Preferred Stock may be refused, or the delivery of Receipts against Preferred Stock may be suspended or the transfer of Receipts may be refused, or the transfer, split-up, combination or surrender of outstanding Receipts may be suspended (i) during any period when the register of Stockholders of the Company is closed, or (ii) if any such action is deemed necessary or advisable by the Depositary, any of 12 the Depositary's Agents or the Company at any time or from time to time because of any requirement of law or of any government or governmental body or commission, or under any provision of this Deposit Agreement or, with the approval of the Company, for any other reason. SECTION 2.10 LOST RECEIPTS, ETC. In case any Receipt shall be mutilated or destroyed or lost or stolen, the Depositary in its discretion may execute and deliver a Receipt of like form and tenor in exchange and substitution for such mutilated Receipt, or in lieu of and in substitution for such destroyed, lost or stolen Receipt, upon (a) the filing by the holder thereof with the Depositary of evidence satisfactory to the Depositary of such destruction or loss or theft of such Receipt, of the authenticity thereof and of his ownership thereof and (b) the furnishing of the Depositary with an indemnity bond or other reasonable indemnification satisfactory to it. SECTION 2.11 CANCELLATION AND DESTRUCTION OF SURRENDERED RECEIPTS. All Receipts surrendered to the Depositary or any Depositary's Agent shall be cancelled by the Depositary. Except as prohibited by applicable law or regulation, the Depositary shall, unless otherwise directed by the Company, hold on behalf of the Company such Receipts so cancelled. ARTICLE III CERTAIN OBLIGATIONS OF HOLDERS OF RECEIPTS AND THE COMPANY SECTION 3.1 FILING PROOFS, CERTIFICATES AND OTHER INFORMATION. Any Person presenting Preferred Stock for deposit or any holder of a Receipt may be required from time to time to file such proof of residence, or other matters or other information, to execute such certificates and to make such representations and warranties as the Depositary or the Company may reasonably deem necessary or proper. The Depositary or the Company may withhold the delivery or delay the transfer, redemption or exchange of any receipt or the withdrawal of the Preferred Stock represented by the Depositary Shares evidenced by any Receipt or the distribution of any dividend or other distribution or the sale of any rights or of the proceeds thereof until such proof or other information is filed or such certificates are executed or such representations and warranties are made. SECTION 3.2 PAYMENT OF TAXES OR OTHER GOVERNMENTAL CHARGES. If any tax or other governmental charge shall become payable by or on behalf of the Depositary with respect to any Receipt evidencing Depositary Shares or with respect to the Preferred Stock (or any fractional interest therein) represented by such Depositary Shares, such tax (including transfer taxes, if any) or governmental charge shall be payable by the holder of 13 such Receipt, subject to certain exceptions set forth in Section 5.7. Transfer of any Receipt or any withdrawal of Preferred Stock and all money or other property, if any, represented by the Depositary Shares evidenced by such Receipt may be refused until such payment is made, and any dividends, interest payments or other distributions may be withheld, or any part or all of the Preferred Stock or other property represented by the Depositary Shares evidenced by such Receipt and not theretofore sold may be sold for the account of the holder thereof (after attempting by reasonable means to notify such holder prior to such sale), and such dividends, interest payments or other distributions or the proceeds of any such sale may be applied to any payment of such tax or other governmental charge, the holder of such Receipt remaining liable for any deficiency. SECTION 3.3 REPRESENTATIONS AND WARRANTIES AS TO PREFERRED STOCK. In the case of the initial deposit of the Preferred Stock, the Company and, in the case of subsequent deposits thereof, each Person so depositing Preferred Stock under this Deposit Agreement shall be deemed thereby to represent and warrant that such Preferred Stock and each certificate therefore are valid and that the Person making such deposit is duly authorized so to do. The Company hereby further represents and warrants that the Preferred Stock, when issued, will be validly issued, fully paid and nonassessable. Such representations and warranties shall survive the deposit of the Preferred Stock and the issuance of Receipts. ARTICLE IV THE DEPOSITED SECURITIES; NOTICES SECTION 4.1 CASH DISTRIBUTIONS. Whenever the Depositary shall receive any cash dividend or other cash distribution on Preferred Stock, the Depositary shall, subject to Section 3.2, distribute to Record Holders of Receipts on the record date fixed pursuant to Section 4.4 such amounts of such sum as are, as nearly as practicable, in proportion to the respective numbers of Depositary Shares evidenced by the Receipts held by such holders; provided, -------- however, that in case the Company or the Depositary shall be required to - ------- withhold and does withhold from any cash dividend or other cash distribution in respect of the Preferred Stock an amount on account of taxes, the amount made available for distribution or distributed in respect of Depositary Shares shall be reduced accordingly. The Depositary shall distribute or make available for distribution, as the case may be, only such amount, however, as can be distributed without attributing to any owner of Depositary Shares a fraction of one cent, and any balance not so distributable shall be held by the Depositary (without liability for interest thereon) and shall be added to and be treated as part of the next sum received by the 14 Depositary for distribution to Record Holders of Receipts then outstanding. SECTION 4.2 DISTRIBUTIONS OTHER THAN CASH. Whenever the Depositary shall receive any distribution upon the Preferred Stock in shares of Common Stock, the Depositary shall, subject to Section 3.2, distribute to Record Holders of Receipts on the record date fixed pursuant to Section 4.4, such shares of Common Stock received by it in proportion to the respective numbers of Depositary Shares evidenced by the Receipts held by such holders, except that the Depositary may not distribute fractional shares of Common Stock. If in the opinion of the Company, after consultation with the Depositary, such distribution cannot be made proportionately among such Record Holders, or if for any reason (including any requirement that the Company or the Depositary withhold an amount on account of taxes) the Depositary deems, after consultation with the Company, such distribution not to be feasible, the Depositary may, at the direction of the Company, adopt such method as the Company deems equitable and practicable for the purpose of effecting such distribution, including the sale at public sale of the other securities or property thus received, or any part thereof, at such place or places and upon such terms as it may deem proper. No fractional shares of Common Stock will be issued as a distribution on the Preferred Stock and, if such distribution would otherwise result in a fractional share of Common Stock being issued, the Depositary shall sell the total number of shares of Common Stock that would have been represented by such fractional shares at public sale at such place or places and upon such terms it deems proper. The net proceeds of any sale made pursuant to this Section 4.2 shall, subject to Section 3.2, be distributed or made available for distribution, as the case may be, by the Depositary to Record Holders of Receipts as provided by Section 4.1 in the case of a distribution received in cash. SECTION 4.3 SUBSCRIPTION RIGHTS, PREFERENCES OR PRIVILEGES. (a) If the Company shall at any time offer or cause to be offered to the Persons in whose names Preferred Stock is recorded on the books of the Company any rights, preferences or privileges to subscribe for or to purchase any securities or any rights, preferences or privileges of any other nature, such rights, preferences or privileges shall in each such instance be made available by the Depositary to the Record Holders of Receipts in such manner as the Company may determine, either by the issue to such record holders of warrants representing such rights, preferences or privileges or by such other method as may be approved by the Company in its discretion with the approval of the Depositary; provided, -------- however, that (a) if at the time of issue or offer of any such rights, - ------- preferences or privileges the Company determines that it is not lawful or (after consultation with the Depositary) not feasible to make such rights, preferences or privileges available to holders of Receipts by the 15 issue of warrants or otherwise or (b) if and to the extent so instructed by holders of Receipts who do not desire to exercise such rights, preferences or privileges, then the Company, in its discretion (with the approval of the Depositary, in any case where the Company has determined that it is not feasible to make such rights, preferences or privileges available), may, if applicable laws or the terms of such rights, preferences or privileges permit such transfer, sell such rights, preferences or privileges at public sale, at such place or places and upon such terms as it may deem proper. The net proceeds of any such sale shall be distributed by the Depositary to the Record Holders of Receipts entitled thereto as provided by Section 4.1 in the case of a distribution received in cash. (b) If registration under the Securities Act of 1933 of the securities to which any rights, preferences or privileges relate is required in order for holders of Receipts to be offered or sold the securities to which such rights, preferences or privileges relate, the Company agrees with the Depositary that it will promptly file a registration statement pursuant to such Act with respect to such rights, preferences or privileges and securities and use its best efforts and take all steps available to it to cause such registration statement to become effective sufficiently in advance of the expiration of such rights, preferences or privileges. In no event shall the Depositary make available to the holders of Receipts any right, preference or privilege to subscribe for or to purchase any securities unless and until the Company provides to the Depositary an opinion of counsel stating that the securities to which such rights, preferences or privileges relate have been registered under the Securities Act of 1933 or do not need to be registered under such Act. (c) If any other action under the laws of any jurisdiction or any governmental or administrative authorization, consent or permit is required in order for such rights, preferences or privileges to be made available to holders of Receipts, the Company agrees with the Depositary that the Company will use its best efforts to take such action or obtain such authorization, consent or permit sufficiently in advance of the expiration of such rights, preferences or privileges to enable such holders to exercise such rights, preferences or privileges. SECTION 4.4 NOTICE OF DIVIDENDS; FIXING OF RECORD DATE FOR HOLDERS OF RECEIPTS. Whenever (a) any cash dividend or other cash distribution shall become payable or any distribution other than cash shall be made, or any rights, preferences or privileges shall at any time be offered, with respect to Preferred Stock, or (b) the Depositary shall receive notice of any meeting at which holders of Preferred Stock are entitled to vote or of which holders of Preferred Stock are entitled to notice or of any election on the part of the Company to redeem 16 any shares of Preferred Stock, the Depositary shall in each such instance fix a record date (which shall be the same date as the record date fixed by the Company with respect to the Preferred Stock) for the determination of the holders of Receipts (x) who shall be entitled to receive such dividend, distribution, rights, preferences or privileges or the net proceeds of the sale thereof, or (y) who shall be entitled to give instructions for the exercise of voting rights at any such meeting, or who shall be entitled to notice of such meeting, or (z) whose Depositary Shares are to be redeemed. SECTION 4.5 VOTING RIGHTS. Upon receipt of notice of any meeting at which the holders of Preferred Stock are entitled to vote, the Depositary shall, as soon as practicable thereafter, mail to the Record Holders of Receipts a notice which shall contain (a) such information as is contained in such notice of meeting, and (b) a statement that the holders of Receipts at the close of business on a specified record date determined pursuant to Section 4.4 will be entitled, subject to any applicable provision of law and of the Certificate of Incorporation or the Authorizing Resolution, to instruct the Depositary as to the exercise of the voting rights pertaining to the amount of Preferred Stock represented by their respective Depositary Shares, and a brief statement as to the manner in which such instructions may be given. Upon the written request of a holder of a Receipt on such record date, the Depositary shall endeavor insofar as practicable to vote or cause to be voted the amount of Preferred Stock represented by the Depositary Shares evidenced by such Receipt in accordance with the instructions set forth in such request. To the extent any such instructions request the voting of a fraction of a share of Preferred Stock, the Depositary shall aggregate such fraction with all other fractions resulting from requests with the same voting instructions and shall vote the number of whole shares resulting from such aggregation in accordance with the instructions received in such requests. The Company hereby agrees to take all reasonable action which may be deemed necessary by the Depositary in order to enable the Depositary to vote such Preferred Stock or cause such Preferred Stock to be voted. In the absence of specific written instructions from the holder of a Receipt, the Depositary will abstain from voting to the extent of the Preferred Stock represented by the Depositary Shares evidenced by such Receipt. SECTION 4.6 CHANGES AFFECTING DEPOSITED SECURITIES AND RECLASSIFICATIONS, RECAPITALIZATIONS, ETC. Upon any change in par or stated value, split-up, consolidation or any other reclassification of the Preferred Stock, or upon any recapitalization, reorganization, merger, amalgamation or consolidation or sale of all or substantially all of the Company's assets affecting the Company or to which it is a party, the Depositary shall, upon the instructions of the Company and in 17 such manner as the Company may deem equitable, (a) make such adjustments in (i) the fraction of an interest represented by one Depositary Share in one share of Preferred Stock and (ii) the ratio of the redemption price per Depositary Share to the redemption price of a share of Preferred Stock in each case as may be necessary to fully reflect the effects of such change in par or stated value, split-up, consolidation or other reclassification of the Preferred Stock, or of such recapitalization, reorganization, merger, amalgamation or such consolidation or sale and (b) treat any securities which shall be received by the Depositary in exchange for or upon conversion of or otherwise in respect of the Preferred Stock as new deposited securities under this Deposit Agreement, and Receipts then outstanding shall thenceforth represent the new deposited securities so received. In any such case the Company may in its discretion, direct the Depositary to execute and deliver additional Receipts, or may call for the surrender of all outstanding Receipts to be exchanged for new Receipts specifically describing such new deposited securities. SECTION 4.7 REPORTS. The Depositary shall make available for inspection by holders of Receipts at its Corporate Trust Office, and at such other places as it may from time to time deem advisable, any reports and communications received from the Company which are received by the Depositary as the holder of Preferred Stock unless at the time of or prior to receipt the Company advises the Depositary that such reports or communications have not been generally available to the holders of Preferred Stock. SECTION 4.8 LISTS OF RECEIPT HOLDERS. Upon request from time to time by the Company, the Depositary shall, without unreasonable delay, furnish to the Company a list, as of a recent date, of the names, addresses and holdings of Preferred Stock by all Persons in whose names Receipts are registered on the books of the Depositary. ARTICLE V THE DEPOSITARY AND THE COMPANY SECTION 5.1 MAINTENANCE OF OFFICE, AGENCIES, TRANSFER BOOKS BY THE DEPOSITARY REGISTRAR. (a) Upon execution of this Deposit Agreement in accordance with its terms, the Depositary shall maintain at its Corporate Trust Office facilities for the execution and delivery, transfer, surrender and exchange of Receipts, and at the offices of the Depositary's Agents, if any, facilities for the delivery, transfer, surrender and exchange of Receipts, all in accordance with the provisions of this Deposit Agreement. 18 (b) The Depositary shall keep books at its Corporate Trust Office for the transfer of Receipts, which books at all reasonable times shall be open for inspection by the Record Holders of Receipts, unless the Company advises the Depositary in a particular instance that such inspection is not for a proper purpose reasonably related to such Person's interest as an owner of Depositary Shares evidenced by the Receipts. The Depositary may close such books, at any time or from time to time, when deemed expedient by it in connection with the performance of its duties hereunder. (c) If the Receipts or the Depositary Shares evidenced thereby or the Preferred Stock represented by such Depositary Shares shall be quoted on the Nasdaq National Market, the Company may, upon consultation with the Depositary, appoint a Registrar for registry of such Receipts or Depositary Shares in accordance with the requirements of the Nasdaq National Market. Such Registrar (which may be the Depositary if so permitted by the requirements of the Nasdaq National Market) may be removed and a substitute registrar appointed by the Depositary upon the request or with the approval of the Company. If the Receipts of such Depositary Shares or such Preferred Stock are listed on one or more stock exchanges, the Depositary will, at the request of the Company, arrange such facilities for the delivery, transfer, surrender and exchange of such Receipts or such Depositary Share or such Preferred Stock as may be required by law or applicable stock exchange regulation. SECTION 5.2 PREVENTION OR DELAY IN PERFORMANCE BY THE DEPOSITARY, THE DEPOSITARY'S AGENTS OR THE COMPANY. Neither the Depositary nor any Depositary's Agent nor the Company shall incur any liability to any holder of any Receipt, if by reason of any provision of any present or future law, or regulation thereunder of the United States of America, or of any other governmental authority or, in the case of the Depositary or the Depositary's Agent, by reason of any provision, present or future, of the Certificate of Incorporation or the Authorizing Resolution or by reason of any act of God or war or other circumstance beyond the control of the relevant party, the Depositary, any Depositary's Agent or the Company shall be prevented or forbidden from or delayed in doing or performing any act or thing which the terms of this Deposit Agreement provide shall or may be done or performed, or by reason of any exercise of, or failure to exercise, any discretion provided for in this Deposit Agreement. SECTION 5.3 OBLIGATIONS OF THE DEPOSITARY, THE DEPOSITARY'S AGENTS AND THE COMPANY. (a) Neither the Depositary nor any Depositary's Agent nor the Company assumes any obligations or shall be subject to any liability under this Deposit Agreement to holders of Receipts other than that each of them agrees to use its best judgment and good faith in the 19 performance of such duties as are specifically set forth in this Deposit Agreement. (b) Neither the Depositary nor any Depositary's Agent nor the Company shall be under any obligation to appear in, prosecute or defend any action, suit or other proceeding with respect to Preferred Stock, Depositary Shares or Receipts, which in its opinion may involve it in expense or liability, unless indemnity satisfactory to it against all expense and liability be furnished as often as may be required. (c) Neither the Depositary nor any Depositary's Agent nor the Company shall be liable for any action or any failure to act by it in reliance upon the advice of or information from legal counsel, accountants, any Person presenting Preferred Stock for deposit, any holder of a Receipt or any other Person believed by it in good faith to be competent to give such advice or information. The Depositary, any Depositary's Agent and the Company may each rely and shall each be protected in acting upon any written notice, request, direction or other document believed by it to be genuine and to have been signed or presented by the proper party or parties. (d) The Depositary and the Depositary's Agents may own and deal in any class of securities of the Company and its affiliates and in Receipts. The Depositary may also act as transfer agent or registrar of any of the securities of the Company and its affiliates. SECTION 5.4 RESIGNATION AND REMOVAL OF THE DEPOSITARY, APPOINTMENT OF SUCCESSOR DEPOSITARY. (a) The Depositary may at any time resign as Depositary hereunder by notice of its election to do so delivered to the Company, such resignation to take effect upon the appointment of a successor depositary and its acceptance of such appointment as hereinafter provided. (b) The Depositary may at any time be removed by the Company by notice of such removal delivered to the Depositary, such removal to take effect upon the appointment of a successor depositary and its acceptance of such appointment as hereinafter provided. (c) In case at any time the Depositary acting hereunder shall resign or be removed, the Company shall, within 45 days after the delivery of the notice of resignation or removal, as the case may be, appoint a successor depositary, which shall be a bank or trust company having its principal office in the United States of America. Each successor depositary shall execute and deliver to its predecessor and to the Company an instrument in writing accepting its appointment hereunder, and thereupon such successor depositary, without any 20 further act or deed, shall become fully vested with all the rights, powers, duties and obligations of its predecessor and for all purposes shall be the Depositary under this Deposit Agreement, and such predecessor, upon payment of all sums due it and on the written request of the Company, shall promptly execute and deliver an instrument transferring to such successor all rights and powers of such predecessor hereunder, shall duly assign, transfer and deliver all rights, title and interest in the stock and any moneys or property held hereunder to such successor, and shall deliver to such successor a list of the Record Holders of all outstanding Receipts. Any successor depositary shall promptly mail notice of its appointment to the Record Holders of Receipts. (d) Any corporation into or with which the Depositary may be merged, consolidated or converted shall be the successor of such Depositary without the execution or filing of any document or any further act. Such successor depositary may authenticate the Receipts in the name of the predecessor depositary or in the name of the successor depositary. SECTION 5.5 CORPORATE NOTICES AND REPORTS. The Company agrees that it will deliver to the Depositary, and the Depositary will, promptly after receipt thereof, transmit to the Record Holders of Receipts, in each case at the address recorded in the Depositary's books, copies of all notices and reports (including, without limitation, financial statements) required by law, by the rules of any national securities exchange or the Nasdaq National Market upon which the Preferred Stock, the Depositary Shares or the Receipts are listed or by the Certificate of Incorporation and the Authorizing Resolution to be furnished by the Company to holders of Preferred Stock. Such transmission will be at the Company's expense and the Company will provide the Depositary with such number of copies of such documents as the Depositary may reasonably request. In addition, the Depositary will transmit to the holders of Receipts (at the Company's expense) such other documents as may be requested by the Company. SECTION 5.6 INDEMNIFICATION BY THE COMPANY. (a) The Company agrees to indemnify the Depositary and its directors, employees and agents (including any Depositary's Agent and any Registrar) against, and hold each of them harmless from, any loss, liability or expense (including reasonable costs of investigation, court costs, and attorneys' fees and disbursements) which may arise out of acts performed or omitted in accordance with the provisions of this Deposit Agreement, as the same may be amended, modified or supplemented from time to time, and of the Receipts (i) by the Depositary, and Registrar or any of their respective officers, employees or agents (including any Depositary's Agent), except for any loss, liability or expense arising out of negligence, bad faith or willful 21 misconduct on the part of any such Person or Persons, or (ii) by the Company or any of its agents. (b) Any Person seeking indemnification hereunder (an "indemnified person") shall notify the Company of the commencement of any indemnifiable action or claim promptly after such indemnified person becomes aware of such commencement (provided that the failure to make such notification shall not affect such indemnified person's rights otherwise than under this Section 5.6) and shall consult in good faith with the Company as to the conduct of the defense of such action or claim, which shall be reasonable in the circumstances. No indemnified person shall compromise or settle any action or claim without the consent of the Company, which consent shall not be unreasonably withheld. (c) The obligations provided in this Section 5.6 shall survive the termination of this Deposit Agreement and the succession or substitution of any person indemnified hereby. SECTION 5.7 CHARGES AND EXPENSES. The Company shall pay all transfer and other taxes and governmental charges arising solely from the existence of the depositary arrangements. The Company shall pay any and all fees of the Depositary as shall be agreed to between the Company and the Depositary, and all charges of the Depositary in connection with the initial deposit of the Preferred Stock and the initial issuance of the Depositary Receipts, distribution of information to the holders of Receipts with respect to matters on which holders of Preferred Stock are entitled to vote, withdrawals of the Preferred Stock by holders of the Receipts and any redemption or conversion of the Depositary Receipts. All other transfer and other taxes and governmental charges shall be at the expense of holders of Depositary Shares. If, at the request of a holder of Receipts, the Depositary incurs charges or expenses for which it is not otherwise liable hereunder, such holder will be liable for such charges and expenses. All other reasonable charges and expenses of the Depositary and any Depositary's Agent hereunder and of any Registrar (including, in each case, reasonable fees and expenses of counsel) incident to the performance of their respective obligations hereunder will be paid upon consultation and agreement between the Depositary and the Company as to the amount and nature of such charges and expenses. The Depositary shall present its statement for charges and expenses to the Company monthly or at such other intervals as the Company and the Depositary may agree. ARTICLE VI AMENDMENT AND TERMINATION 22 SECTION 6.1 AMENDMENT. The form of the Receipts and any provision of this Deposit Agreement may at any time and from time to time be amended by agreement between the Company and the Depositary in any respect which they may deem necessary or desirable. Any amendment which shall impose any fees, taxes or charges (other than fees and charges provided for herein), or which shall otherwise prejudice any substantial existing right of holders of Receipts, shall not become effective as to outstanding Receipts until the expiration of 90 days after notice of such amendment shall have been given to the Record Holders of outstanding Receipts. Every holder of an outstanding Receipt at the time any such amendment so becomes effective shall be deemed, by continuing to hold such Receipt, to consent and agree to such amendment and to be bound by this Deposit Agreement as amended thereby. In no event shall any amendment impair the right, subject to the provisions of Sections 2.8 and 2.9 and Article III, of any owner of any Receipts to instruct the Depositary to deliver to the holder of Receipts representing whole shares of Preferred Stock the whole shares of Preferred Stock represented by such Receipts and all money and other property, if any, represented by such Receipts, except in order to comply with mandatory provisions of applicable law. SECTION 6.2 TERMINATION. (a) Whenever so directed by the Company, the Depositary will terminate this Deposit Agreement by mailing notice of such termination to the Record Holders of all Receipts then outstanding at least 30 days prior to the date fixed in such notice for such termination. The Depositary may likewise terminate this Deposit Agreement if at any time 45 days shall have expired after the Depositary shall have delivered to the Company written notice of its election to resign and a successor depositary shall not have been appointed and accepted its appointment as provided in Section 5.4. (b) If any Receipts shall remain outstanding after the date of termination of this Deposit Agreement, the Depository thereafter shall discontinue the transfer of Receipts, shall suspend the distribution of dividends to the holders thereof, and shall not give any further notices (other than notice of such termination) or perform any further acts under this Deposit Agreement, except that the Depositary shall continue to (i) collect dividends and other distributions pertaining to the Preferred Stock, (ii) sell rights, preferences or privileges as provided in this Deposit Agreement, and (iii) deliver the Preferred Stock and any money and other property, without liability for interest thereon, represented by Receipts upon surrender thereof by the holders thereof. At any time after the expiration of two years from the date of termination, the Depositary shall sell the Preferred Stock then held hereunder at public or private sale, at such places and upon such terms as the Depositary deems proper and may thereafter hold the net proceeds of any such sale, together with any money and other property held 23 by it hereunder, without liability for interest, for the benefit, pro rata in accordance with their holdings, of the holders of Receipts which have not theretofore been surrendered. After making such sale, the Depositary shall be discharged from all obligations under this Deposit Agreement, except to account for such net proceeds and money and other property. Upon the termination of this Deposit Agreement, the Company shall be discharged from all obligations under this Deposit Agreement except for its obligations to the Depositary, any Depositary's Agent and any Registrar under Sections 5.6 and 5.7. ARTICLE VII MISCELLANEOUS SECTION 7.1 COUNTERPARTS. This Deposit Agreement may be executed in any number of counterparts, and by each of the parties hereto on separate counterparts, each of which counterparts, when so executed and delivered, shall be deemed an original, but all such counterparts taken together shall constitute one and the same instrument. Copies of this Deposit Agreement shall be filed with the Depositary and the Depositary's Agents and shall be open to inspection during business hours at the Depositary's Corporate Trust Office and the respective offices of the Depositary's Agents, if any, by any holder of a Receipt. SECTION 7.2 EXCLUSIVE BENEFITS OF PARTIES. This Deposit Agreement is for the exclusive benefit of the parties hereto, and their respective successors hereunder, and shall not be deemed to give any legal or equitable right, remedy or claim to any other Person whatsoever. SECTION 7.3 INVALIDITY OF PROVISIONS. In case any one or more of the provisions contained in this Deposit Agreement or in the Receipts should be or become invalid, illegal or unenforceable in any respect, the validity, legality and enforceability of the remaining provisions contained herein or therein shall in no way be affected, prejudiced or disturbed thereby. SECTION 7.4 NOTICES. (a) Any and all notices to be given to the Company hereunder or under the Depositary Receipts shall be in writing and shall be deemed to have been duly given if personally delivered or sent by mail or telecopy confirmed by letter, addressed to the Company at 3625 Queen Palm Drive, Tampa, Florida 33619-1309, Attention: Chief Financial Officer, Telecopy: (813) 829-2390, or at any other place to which the Company may specify in writing to the Depositary. (b) Any and all notices to be given to the Depositary hereunder or under the Depositary Receipts shall be in 24 writing and shall be deemed to have been duly given if personally delivered or sent by mail or by telecopy confirmed by letter, addressed to the Depositary, at 2 Broadway, 19th Floor, New York, New York 10004, Attention: Compliance Department, Telecopy: (212) 509-5150, or at any other place to which the Depositary may specify in writing to the Company. (c) Any and all notices given to a Record Holder of a Receipt hereunder or under the Depositary Receipts shall be in writing and shall be deemed to have been duly given if personally delivered or sent by mail or by telecopy confirmed by letter, addressed to such Record Holder at the address of such Record Holder as it appears on the books of the Depositary, or if such holder shall have filed with the Depositary a written request that notices intended for such holder be mailed to some other address, at the address designated in such request. (d) Delivery of a notice sent by mail or by telecopy shall be deemed to be effected at the time when a duly addressed letter containing the same (or a confirmation thereof in the case of a telecopy message) is deposited, postage prepaid, in a post office letter box. The Depositary or the Company, may, however, act upon any telecopy message received by it from the other or from any holder of a Receipt, notwithstanding that such telecopy message shall not subsequently be confirmed by letter as aforesaid. SECTION 7.5 DEPOSITARY'S AGENTS. The Depositary may from time to time appoint Depositary's Agents to act in any respect or the Depositary for the purposes of this Deposit Agreement and may at any time appoint additional Depositary's Agents. The Depositary will notify the Company of any such action. SECTION 7.6 HOLDERS OF RECEIPTS ARE PARTIES. The holders of Receipts from time to time shall be deemed to be parties to this Deposit Agreement and shall be bound by all of the terms and conditions hereof and of the Receipts by acceptance of delivery thereof. SECTION 7.7 GOVERNING LAW. The Deposit Agreement and the Receipts and all rights hereunder and thereunder and provisions hereof and thereof shall be governed by, and construed in accordance with, the internal laws of the State of New York without reference to the principles of conflicts of law thereof. The Company and the Depositary agree that the federal courts in the State of New York for the Southern District of New York shall have jurisdiction to hear and determine any suit, action or proceeding and to settle any dispute between them that may arise out of or in connection with this Deposit Agreement and, for such purposes, each irrevocably submits to the non-exclusive jurisdiction of such courts. 25 SECTION 7.8 WAIVER OF JURY TRIAL. EACH OF THE COMPANY AND THE -------------------- DEPOSITARY HEREBY WAIVES TRIAL BY JURY IN ANY ACTION, PROCEEDING OR COUNTERCLAIM BROUGHT BY OR AGAINST IT BY THE OTHER PARTY ON ANY MATTERS WHATSOEVER, IN CONTRACT OR IN TORT, ARISING OUT OF OR IN ANY WAY CONNECTED WITH THIS AGREEMENT. SECTION 7.9 ASSIGNMENT. This Deposit Agreement may not be assigned by either the Company or the Depositary without the consent of the other party. SECTION 7.10 HEADINGS. The headings of articles and sections in this Deposit Agreement and in the form of a Receipt set forth in Exhibit A hereto have been inserted for convenience only and are not to be regarded as a part of this Deposit Agreement or to have any bearing upon the meaning or interpretation of any provision contained herein or in the Receipts. [SIGNATURE PAGE FOLLOWS] 26 IN WITNESS WHEREOF, INTERMEDIA COMMUNICATIONS INC. and CONTINENTAL STOCK TRANSFER & TRUST COMPANY have duly executed this Agreement as of the day and year first above set forth and all holders of Receipts shall become parties hereto by and upon acceptance by them of delivery of Receipts issued in accordance with the terms hereof. INTERMEDIA COMMUNICATIONS INC. Attest:_____________________ By: ______________________________ Name: Title: CONTINENTAL STOCK TRANSFER & TRUST COMPANY Attest:_____________________ By: ______________________________ Name: Title: 27 EX-99.1 5 PRESS RELEASE Logo of Intermedia Communications INTERMEDIA COMMUNICATIONS CONTACT: CHRIS BROWN 3625 Queen Palm Drive INTERMEDIA COMMUNICATIONS Tampa, Florida 33619 813-829-2408 (813) 829-0011 http://www.icix.net FAX (813) 829-2913 INTERMEDIA COMMUNICATIONS COMPLETES CONCURRENT PRIVATE OFFERINGS OF $150 MILLION IN CONVERTIBLE PREFERRED STOCK AND $350 MILLION IN SENIOR DISCOUNT NOTES - -------------------------------------------------------------------------------- Tampa, FL--(July 10, 1997)--Intermedia Communications (Nasdaq/NM:ICIX) today announced that it has completed its concurrent private offerings of $150 million in Series D Convertible Preferred Stock and $350 million gross proceeds in Senior Discount Notes. The concurrent offerings totaled $500 million, $100 million more than the previously announced total. The Series D Preferred Stock Dividend will accrue at a rate per annum equal to 7%, payable quarterly, in cash or Intermedia Common Stock, at Intermedia's option. The Series D Preferred Stock may be converted at the option of the holder into Intermedia Common Stock at a conversion price of $38.90 per share, subject to some adjustments. It may be converted at any time after October 7, 1997. The 11-1/4% Senior Discount Notes are due on July 15, 2007, with cash interest accruing after July 15,2002, and being paid semi-annually in arrears beginning on July 15, 2003. The Senior Discount Notes will be redeemable, at the option of the Company, on or after July 15, 2002, and are pari passu with all other senior indebtedness. The proceeds will be used to retire or defease Intermedia's outstanding 13-1/2% Senior Notes due 2005, to fund the continued implementation of the Company's business plan, and for general corporate purposes. Intermedia Communications is one of the nation's fastest growing telecommunications companies, offering an integrated package of local, long distance, voice, data and Internet services to business and government customers in the eastern U.S. Intermedia is headquartered in Tampa, Florida, with sales offices in over 20 cities throughout the East. Intermedia stock is traded on the Nasdaq Stock Market's National Market under the symbol ICIX. For information about Intermedia's services or other corporate data, visit Intermedia's site on the World Wide Web at http://www.icix.net. -END- -----END PRIVACY-ENHANCED MESSAGE-----