<PAGE>
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- --------------------------------------------------------------------------------
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
OCTOBER 7, 1999
(Date of earliest event reported)
METROMEDIA FIBER NETWORK, INC.
(Exact name of Registrant as specified in its charter)
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<S> <C> <C>
DELAWARE 000-23269 11-3168327
(State of Incorporation) (Commission File No.) (IRS Employer
Identification No.)
</TABLE>
ONE NORTH LEXINGTON AVENUE,
WHITE PLAINS, NEW YORK 10601
(Address of principal executive offices, including zip code)
(914) 421-6700
(Registrant's telephone number, including area code)
NOT APPLICABLE
(Former name or former address, if changed since last report)
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<PAGE>
ITEM 5. OTHER EVENTS.
On October 7, 1999, the Registrant and Bell Atlantic Investments, Inc., a
wholly owned subsidiary of Bell Atlantic Corporation ("Bell Atlantic
Investments") announced that they had entered into a Securities Purchase
Agreement under which Bell Atlantic Investments has agreed to purchase from the
Registrant (a) up to 25,558,109 newly issued shares of the Registrant's Class A
Common Stock at a price of $28.00 per share (the "Shares"), and (b) one or more
convertible subordinated notes in an aggregate principal amount of up to
$975,281,364, which notes are convertible into shares of the Registrant's Class
A Common Stock at a conversion price of $34.00 per share (the "Notes"). A copy
of the Registrant's press release announcing this transaction is attached as
Exhibit 99.1 to this Current Report on Form 8-K (this "Report"). The terms of
this issuance and sale are more fully described in the Securities Purchase
Agreement that is filed as Exhibit 10.1 to this Report. The closing of the
issuance and sale of the Shares and Notes under the Securities Purchase
Agreement is subject to (i) the expiration of the waiting period under the
Hart-Scott-Rodino Antitrust Improvements Act of 1976, as amended, (ii) approvals
from various regulatory authorities, (iii) with respect to that portion of the
issuance of the Shares and the Notes in the aggregate in excess of 19.9% of the
number of shares of the Registrant's common stock outstanding at the closing
(assuming conversion of all Notes to be acquired by Bell Atlantic Investments),
the approval of the Registrant's stockholders, and (iv) other customary closing
conditions.
At the closing of the issuance and sale of the Shares and the Notes, the
Registrant will enter into an Indenture with U.S. Bank Trust National
Association, as Trustee, governing the terms of the Notes. The form of Indenture
is filed as Exhibit 10.2 to this Report.
At the closing of the issuance and sale of the Shares and the Notes, the
Registrant and Bell Atlantic Investments will enter into registration rights
agreements giving Bell Atlantic Investments registration rights with respect to
the Shares and the Notes. The form of Equity Registration Rights Agreement is
filed as Exhibit 10.3 to this Report and the form of Notes Registration Rights
Agreement is filed as Exhibit 10.4 to this Report.
As a condition to closing, the Registrant and Bell Atlantic Investments,
together with Metromedia Company, Mr. John Kluge and Mr. Stuart Subotnick, have
agreed to enter into a Stockholders Agreement. The form of Stockholders
Agreement is filed as Exhibit 10.5 to this Report. Under the Stockholders
Agreement, except under certain circumstances, Bell Atlantic Investments will
agree to a "standstill" provision under which it will not acquire more than 22%
of the Registrant's common stock and will not participate in certain acquisition
proposals, tender offers, proxy solicitations or similar transactions with
respect to the Registrant without the consent of the Registrant's board of
directors for a period of ten years. The parties to the Stockholders Agreement
have also agreed to a number of restrictions on their respective abilities to
sell their shares of the Registrant's common stock during a period of two years
following closing of the transactions contemplated by the Securities Purchase
Agreement. In addition, the Stockholders Agreement provides for certain
tag-along rights and rights of first refusal among the parties. Metromedia
Company and Messrs. Kluge and Subotnick have agreed to vote all of their shares
of the Registrant's Class B Common Stock (which constitute more than 58% of the
voting power of the Registrant's common stock) in favor of the issuance by the
Company of the Shares and the Notes in the aggregate in excess of 19.9% of the
number of shares of the Registrant's common stock outstanding at the closing.
Bell Atlantic Investments will also have the right to have an observer at
meetings of the Registrant's board of directors, and after converting its Notes
into shares of Class A Common Stock, Bell Atlantic Investments will have the
right to appoint two directors to the Registrant's board of directors, assuming
that Bell Atlantic Investments continues to own at least 5% of the Registrant's
outstanding common stock.
2
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* * *
This Report contains or incorporates by reference forward-looking statements
within the meaning of Section 27A of the Securities Act of 1933, as amended, and
Section 21E of the Securities Exchange Act of 1934, as amended, that include,
among others, (1) statements by the Registrant concerning the benefits expected
to result from certain business activities and transactions, (2) the
Registrant's plans to complete its communications network and (3) other
statements by the Registrant of expectations, beliefs, future plans and
strategies, anticipated developments and other matters that are not historical
facts. The Registrant cautions the reader that these forward-looking statements
are subject to risks and uncertainties, including financial, regulatory
environment, and trend projections, that could cause actual events or results to
differ materially from those expressed or implied by the statements. Such risks
and uncertainties include those risks, uncertainties and risk factors
identified, among other places, in documents filed with Securities and Exchange
Commission. The most important factors that could prevent the Registrant from
achieving its stated goals include, but are not limited to: (a) the Registrant's
failure to construct its communications network on schedule and on budget; (b)
operating and financial risks related to managing rapid growth, integrating
acquired businesses and sustaining operating cash flow to meet the Registrant's
debt service requirements, make capital expenditures and fund operations; (c)
potential fluctuation in quarterly results; (d) volatility of stock price; (e)
intense competition in the communications services market; (f) dependence on new
product development; (g) the Registrant's ability to achieve year 2000
compliance; (h) rapid and significant changes in technology and markets; (i)
adverse changes in the regulatory or legislative environment affecting the
Registrant's business; and (j) failure to maintain necessary rights of way.
These cautionary statements should be considered in connection with any
subsequent written or oral forward-looking statements that may be issued by the
Registrant or persons acting on its behalf. The Registrant undertakes no
obligation to review or confirm analysts' expectations or estimates or to
release publicly any revisions to any forward-looking statements to reflect
events or circumstances after the date hereof or to reflect the occurrence of
unanticipated events.
ITEM 7. FINANCIAL STATEMENTS AND EXHIBITS
(a) Financial Statements, Pro Forma Financial Information and Exhibits.
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<S> <C>
Exhibit Securities Purchase Agreement, dated as of October 7, 1999, by and between the
10.1 Registrant and Bell Atlantic Investments, Inc.
Exhibit Form of Indenture, by and between the Registrant and U.S. Bank Trust National
10.2 Association, as Trustee
Exhibit Form of Equity Registration Rights Agreement by and between the Registrant and
10.3 Bell Atlantic Investments, Inc.
Exhibit Form of Notes Registration Rights Agreement by and between the Registrant and
10.4 Bell Atlantic Investments, Inc.
Exhibit Form of Stockholders Agreement by and among the Registrant, Bell Atlantic
10.5 Investments, Inc., Metromedia Company, Mr. John W. Kluge and Mr. Stuart
Subotnick
Exhibit Press Release, dated October 7, 1999, of the Registrant and Bell Atlantic
99.1 Investments, Inc.
</TABLE>
3
<PAGE>
SIGNATURES
Pursuant to the requirements of the Securities Exchange Act of 1934, the
registrant has duly caused this report to be signed on its behalf by the
undersigned hereunto duly authorized.
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<S> <C> <C>
METROMEDIA FIBER NETWORK, INC.
By: /s/ GERARD BENEDETTO
-----------------------------------------
Name: Gerard Benedetto
Title: Senior Vice President and
Chief Financial Officer
</TABLE>
Date: October 15, 1999
4
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EXHIBIT INDEX
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<C> <C> <S>
Exhibit -- Securities Purchase Agreement, dated as of October 7, 1999, by and between
10.1 Metromedia Fiber Network, Inc. and Bell Atlantic Investments, Inc.
Exhibit -- Form of Indenture by and between Metromedia Fiber Network, Inc. and U.S. Bank
10.2 Trust National Association, as Trustee
Exhibit -- Form of Equity Registration Rights Agreement by and between Metromedia Fiber
10.3 Network, Inc. and Bell Atlantic Investments, Inc.
Exhibit -- Form of Notes Registration Rights Agreement by and between Metromedia Fiber
10.4 Network, Inc. and Bell Atlantic Investments, Inc.
Exhibit -- Form of Stockholders Agreement by and among Metromedia Fiber Network, Inc.,
10.5 Bell Atlantic Investments, Inc., Metromedia Company, Mr. John W. Kluge and Mr.
Stuart Subotnick
Exhibit -- Press Release, dated October 7, 1999, of Metromedia Fiber Network, Inc. and
99.1 Bell Atlantic Investments, Inc.
</TABLE>
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EXHIBIT 10.1
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SECURITIES PURCHASE AGREEMENT
dated as of October 7, 1999
by and between
METROMEDIA FIBER NETWORK, INC.
and
BELL ATLANTIC INVESTMENTS, INC.
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<PAGE>
TABLE OF CONTENTS
SECURITIES PURCHASE AGREEMENT
Section Page
- ------- ----
1. DEFINITIONS........................................................1
2. PURCHASE OF SECURITIES............................................10
2.1 Purchase of Securities at First Closing...........................10
2.2 Closing...........................................................10
2.3 First Closing Deliveries..........................................12
2.3A Second Closing Deliveries.........................................12
2.4 Use of Proceeds...................................................13
2.5. First Closing Adjustments.........................................13
3. PURCHASER'S REPRESENTATIONS AND WARRANTIES........................14
3.1 Investment Intention..............................................14
3.2 Accredited Investor...............................................14
3.3 Corporate Existence...............................................14
3.4 Corporate Power; Authorization; Enforceable Obligations...........14
3.5 Brokers...........................................................15
3.6 Disclosure of Information.........................................15
3.7 Investment Experience.............................................15
3.8 Restricted Securities.............................................15
3.9 Investigation.....................................................15
3.10 Purchaser.........................................................15
4. COMPANY'S REPRESENTATIONS AND WARRANTIES..........................16
4.1 Authorized and Outstanding Shares of Capital Stock................16
4.2 Authorization and Issuance of Securities..........................16
4.3 Securities Laws...................................................16
4.4 Corporate Existence; Compliance with Law; Permits.................17
4.5 Subsidiaries......................................................17
4.6 Corporate Power; Authorization; Enforceable Obligations...........18
4.7 SEC Documents; Financial Statements; Undisclosed Liabilities......18
4.8 Ownership of Property.............................................19
4.9 Material Contracts................................................20
4.10 Environmental Protection..........................................20
4.11 Labor Matters.....................................................21
4.12 Taxes.............................................................21
4.13 No Litigation.....................................................22
4.14 Brokers...........................................................22
4.15 Patents, Trademarks, Copyrights and Licenses......................22
4.16 Ordinary Course of Business; No Material Adverse Change...........22
4.17 ERISA.............................................................23
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Section Page
- ------- ----
4.18 Insurance.........................................................24
4.19 Year 2000 Compliance..............................................24
4.20 Regulatory Matters................................................24
4.21 No Vote...........................................................24
4.22 Employment Agreements.............................................24
4.23 Investment Company Act............................................25
5. COVENANTS OF COMPANY AND PURCHASER................................25
5.1 Conduct Business in Ordinary Course...............................25
5.2 Director..........................................................26
5.3 Regulatory and Other Authorizations...............................28
5.4 Access to Information.............................................29
5.5 Further Assurances................................................29
5.6 Use of Proceeds...................................................29
5.7 Affiliate Contracts...............................................30
5.8 Notification of Certain Events....................................30
5.9 Modification of Terms in Certain Circumstances....................30
5.10 Proxy Statement; Registration Statement...........................30
6. FIRST CLOSING CONDITIONS TO OBLIGATION OF PURCHASER...............32
6.1 Representations and Warranties....................................32
6.2 Covenants.........................................................32
6.3 HSR Act...........................................................32
6.4 No Orders.........................................................32
6.5 No Investigations.................................................32
6.6 Opinion of Counsel................................................33
6.7 Transaction Documents.............................................33
6.8 Material Adverse Change...........................................33
6.9 Delivery of Securities............................................33
6.10 Consents and Approvals............................................33
6.11 Parent Ownership; Certain Other Events............................34
6.12 Good Standing Certificates........................................34
6.13 Franchise Agreement...............................................34
6A. SECOND CLOSING CONDITIONS TO OBLIGATION OF PURCHASER..............34
6.1A Representations and Warranties....................................34
6.2A Covenants.........................................................35
6.3A HSR Act...........................................................35
6.4A No Orders.........................................................35
6.5A No Investigations.................................................35
6.6A Opinion of Counsel................................................35
6.7A Transaction Documents.............................................36
6.8A Delivery of Securities............................................36
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Section Page
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6.9A Consents and Approvals............................................36
6.10A Parent Ownership..................................................36
6.11A Good Standing Certificates........................................36
6.12A Consummation of the First Closing.................................36
7. FIRST CLOSING CONDITIONS TO OBLIGATION OF COMPANY.................37
7.1 Representations and Warranties....................................37
7.2 Covenants.........................................................37
7.3 HSR Act...........................................................37
7.4 No Orders.........................................................37
7.5 Transaction Documents.............................................37
7.6 No Investigations.................................................37
7.7 Consents and Approvals............................................38
7.8 Franchise Agreement...............................................38
7A. SECOND CLOSING CONDITIONS TO OBLIGATION OF COMPANY................38
7.1A Representations and Warranties....................................38
7.2A Covenants.........................................................38
7.3A HSR Act...........................................................38
7.4A No Orders.........................................................38
7.5A Transaction Documents.............................................39
7.6A No Investigations.................................................39
7.7A Consents and Approvals............................................39
7.8A Stockholder Approval..............................................39
7.9A Consummation of the First Closing.................................39
8. INDEMNIFICATION...................................................39
8.1 Indemnification...................................................39
8.2 Limitations on Indemnification for Breaches of Representations,
Warranties and Covenants..........................................40
8.3 General Indemnification Procedures................................40
8.4 Tax Treatment of Indemnity Payments...............................42
9. MISCELLANEOUS.....................................................42
9.1 Successors and Assigns............................................42
9.2 Amendments; Etc...................................................42
9.3 Entire Agreement..................................................42
9.4 Fees, Costs and Expenses..........................................42
9.5 Severability......................................................43
9.6 Governing Law.....................................................43
9.7 Waiver of Jury Trial..............................................43
9.8 Notices...........................................................43
9.9 Survival..........................................................44
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Section Page
- ------- ----
9.10 Section and Other Headings........................................45
9.11 Counterparts......................................................45
9.12 Publicity.........................................................45
9.13 Termination.......................................................45
9.14 Remedies..........................................................46
iv
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TABLE OF CONTENTS
SECURITIES PURCHASE AGREEMENT
Schedules
Schedule 3.4 - Corporate Power; Authorization: Enforceable Obligation
Schedule 4.1 - Authorized and Outstanding Shares of Capital Stock
Schedule 4.4(a) - Corporate Existence; Compliance with Law
Schedule 4.4(b) - Permits
Schedule 4.5 - Subsidiaries
Schedule 4.6 - Required Consents
Schedule 4.7(b) - SEC Documents; Financial Statements; Undisclosed
Liabilities
Schedule 4.9 - Material Contracts
Schedule 4.10 - Environmental Protection
Schedule 4.11 - Labor Matters
Schedule 4.12 - Taxes
Schedule 4.13 - Litigation
Schedule 4.15 - Patents, Trademarks, Copyrights and Licenses
Schedule 4.16 - Ordinary Course of Business; No Material Adverse Change
Schedule 4.17 - ERISA
Schedule 4.17(b)- ERISA Compliance
Schedule 4.20 - Regulatory
Schedule 6.5 - No Investigations
Schedule 6.13 - Form of Franchise Agreement
Exhibits
Exhibit A [Intentionally Omitted]
Exhibit B Notes Registration Rights Agreement
Exhibit C Indenture
Exhibit D Stockholders Agreement
Exhibit E Shares Registration Rights Agreement
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SECURITIES PURCHASE AGREEMENT
SECURITIES PURCHASE AGREEMENT, dated as of October 7, 1999, by and between
Metromedia Fiber Network, Inc., a Delaware corporation ("Company"), and Bell
Atlantic Investments, Inc., a Delaware corporation ("Purchaser").
W I T N E S S E T H:
WHEREAS, Company has agreed to issue and sell to Purchaser, and Purchaser
has agreed to purchase from Company, upon the terms and conditions hereinafter
provided, the following: (i) up to 25,558,109 shares (the "Shares") of the
Company's Class A Common Stock, $0.01 par value per share (the "Class A Common
Stock"), and (ii) one or more convertible subordinated notes in the aggregate
principal amount of up to $975,281,364, which shall be governed by, and are
convertible into shares of Class A Common Stock pursuant to, and in accordance
with, the terms of the Indenture (as hereinafter defined) (the "Convertible
Notes").
NOW, THEREFORE, in consideration of the premises and the covenants
hereinafter contained, it is agreed as follows:
1. DEFINITIONS
"Affiliate" shall have the meaning given such term in Rule 12b-2 under the
Exchange Act.
"Affiliate Contracts" shall mean all agreements, contracts and other
instruments between Company or any of its Subsidiaries, on the one hand, and
Metromedia Company or any of its Affiliates, on the other hand.
"Agreement" shall mean this Securities Purchase Agreement, including all
amendments, modifications and supplements hereto and any appendices, exhibits
and schedules hereto or thereto, and shall refer to such agreement as the same
may be in effect at the time such reference becomes operative.
"Basket" shall have the meaning set forth in Section 8.2(a) hereof.
"Beneficial Ownership" (including correlative meanings) shall mean the
ownership of a security (as defined in the Securities Act) as defined under Rule
13d-3 under the Exchange Act.
"Benefit Plans" shall have the meaning set forth in Section 4.17(a)
hereof.
"Business Day" shall mean any day that is not a Saturday, a Sunday or a
day on which commercial banks are required or permitted by law to be closed in
the City of New York in the State of New York.
"Business Plan" shall have the meaning set forth in Section 2.4 hereof.
<PAGE>
"Charges" shall mean all federal, state, county, city, municipal, local,
foreign or other governmental (including, without limitation, PBGC) taxes at the
time due and payable, levies, assessments, charges or Liens upon or relating to
(i) Company's or any of its Subsidiaries' employees, payroll, income or gross
receipts, (ii) Company's or any of its Subsidiaries' ownership or use of any of
its assets, or (iii) any other aspect of Company's or any of its Subsidiaries'
business.
"Class A Common Stock" shall have the meaning set forth in the recitals to
this Agreement.
"Class B Common Stock" shall mean the Company's Class B Common Stock, par
value $.01 per share.
"Class B Permitted Holder" shall have the meaning ascribed to such term in
the Company Charter.
"Common Stock" shall mean collectively the Class A Common Stock and the
Class B Common Stock and any recapitalization or reclassification of either such
class of Common Stock.
"Company" shall have the meaning set forth in the first paragraph of this
Agreement.
"Company Charter" shall mean the Amended and Restated Certificate of
Incorporation of Company as the same may be amended from time to time.
"Company Plans" shall have the meaning set forth in Section 4.17(a)
hereof.
"Company SEC Documents" shall have the meaning set forth in Section 4.7(a)
hereof.
"Company Stockholders Meeting" shall have the meaning set forth in
Section 5.10(a) hereof.
"Confidentiality Agreement" shall have the meaning set forth in Section
5.4 hereof.
"Conversion Price" shall have the meaning set forth in the Indenture.
"Convertible Notes" shall have the meaning set forth in the recitals to
this Agreement.
"Environmental Laws" shall mean all foreign, federal, state and local
laws, statutes, ordinances and regulations, now or hereafter in effect, and in
each case as amended or supplemented from time to time, and any judicial or
administrative interpretation thereof, including any applicable judicial or
administrative order, consent decree or judgment, relative to the applicable
real estate, relating to the regulation and protection of worker health and
safety, the environment and natural resources (including ambient air, surface
water, groundwater, wetlands, land surface or subsurface strata, wildlife,
aquatic species
2
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and vegetation). Environmental Laws include but are not limited to the
Comprehensive Environmental Response, Compensation, and Liability Act of 1980,
as amended (42 U.S.C. ss. 9601 et seq.) ("CERCLA"); the Hazardous Material
Transportation Act, as amended (49 U.S.C. ss. 1801 et seq.); the Federal
Insecticide, Fungicide, and Rodenticide Act, as amended (7 U.S.C. ss. 136 et
seq.); the Resource Conservation and Recovery Act, as amended (42 U.S.C. ss.
6901 et seq.) ("RCRA"); the Toxic Substance Control Act, as amended (15 U.S.C.
ss. 2601 et seq.); the Clean Air Act, as amended (42 U.S.C. ss. 740 et seq.);
the Federal Water Pollution Control Act, as amended (33 U.S.C. ss. 1251 et
seq.); the Occupational Safety and Health Act, as amended (29 U.S.C. ss. 651 et
seq.) ("OSHA"); and the Safe Drinking Water Act, as amended (42 U.S.C. ss. 300f
et seq.), and any and all regulations promulgated thereunder, and all analogous
state and local counterparts or equivalents and any transfer of ownership
notification or approval statutes that relate to worker health and safety or the
environment.
"Environmental Liabilities and Costs" shall mean all liabilities,
obligations, responsibilities, remedial actions, losses, damages, punitive
damages, consequential damages, treble damages, costs and expenses (including
all fees, disbursements and expenses of counsel, experts and consultants and
costs of investigation and feasibility studies), fines, penalties, sanctions and
interest incurred as a result of any claim, suit, action or demand by any
Person, whether based in contract, tort, implied or express warranty, strict
liability, criminal or civil statute or common law (including any thereof
arising under any Environmental Law, permit, order or agreement with any
Governmental Authority) and which relate to any environmental condition
regulated under any Environmental Law or in connection with any other
environmental matter or Spill or the presence of a Hazardous Substance or
threatened Spill of any Hazardous Substance.
"ERISA" shall mean the Employee Retirement Income Security Act of 1974 (or
any successor legislation thereto), as amended from time to time and any
regulations promulgated thereunder.
"ERISA Affiliate" shall mean, with respect to Company, any trade or
business (whether or not incorporated) under common control with Company and
which, together with Company, are treated as a single employer within the
meaning of Sections 414(b), (c), (m) or (o) of the IRC, excluding Purchaser and
each other Person which would not be an ERISA Affiliate if Purchaser did not own
any issued and outstanding shares of Stock of Company or the Convertible Notes.
"Exchange Act" shall mean the Securities Exchange Act of 1934, as amended,
and all rules and regulations promulgated thereunder.
"Facility" shall have the meaning set forth in Section 4.10(a) hereof.
"FCC" shall mean the Federal Communications Commission.
"Fiber Optic Private Network Agreement" shall mean the Fiber Optic Private
Network Agreement by and between Bell Atlantic Global Networks, Inc. and
Metromedia Fiber Network Services, Inc., on terms mutually agreeable to the
proposed parties thereto,
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as such agreement may be amended, supplemented or otherwise modified from time
to time in accordance with the terms thereof.
"First Closing" shall have the meaning set forth in Section 2.2(a) hereof.
"First Closing Date" shall have the meaning set forth in Section 2.2(a)
hereof.
"First Closing Date Notes" shall have the meaning set forth in Section 2.5
hereof.
"First Closing Date Notes Purchase Price" shall have the meaning set forth
in Section 2.1(b) hereof.
"First Closing Date Shares" shall have the meaning set forth in Section
2.5 hereof.
"First Closing Date Shares Purchase Price" shall have the meaning set
forth in Section 2.1(a) hereof.
"First Closing Termination Date" shall have the meaning set forth in
Section 9.13(a)(iii) hereof.
"Franchise Agreement" means the Franchise Agreement, dated as of December
20, 1993, between the City of New York and National Fiber Network, Inc., as such
agreement may be amended, supplemented or otherwise modified from time to time
and in accordance with the terms thereof.
"Future Company SEC Documents" shall have the meaning set forth in Section
4.7(a) hereof.
"GAAP" shall mean generally accepted accounting principles in the United
States of America as in effect from time to time.
"Governmental Authority" shall mean any nation or government, any state,
local or other political subdivision thereof, any court, arbitrator, official,
agency, department or other Person exercising executive, legislative, judicial,
regulatory or administrative functions of or pertaining to government, or any
foreign, federal, state or local govern mental or regulatory agency, authority,
commission or instrumentality.
"Group" shall have the meaning given such term in Section 13(d)(3) of the
Exchange Act.
"Hazardous Substance" shall have the meaning set forth in Section 4.10(a)
hereof.
"HSR Act" shall mean the Hart-Scott-Rodino Antitrust Improvements Act of
1974, as amended.
"Indemnified Party" shall have the meaning set forth in Section 8.3(a)
hereof.
"Indemnifying Party" shall have the meaning set forth in Section 8.3(a)
hereof.
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"Indemnity Payment" shall have the meaning set forth in Section 8.4
hereof.
"In-Region States" has the meaning assigned to such term in the
Telecommunications Act.
"Indenture" shall mean the Indenture by and among Company and U.S. Bank
Trust National Association, as trustee, substantially in the form attached
hereto as Exhibit C, as such indenture may be amended, supplemented or otherwise
modified from time to time in accordance with the terms thereof.
"InterLATA Services" has the meaning assigned to such term in the
Telecommunications Act.
"Investment Company Act" shall have the meaning set forth in Section 4.23
hereof.
"IRC" shall mean the Internal Revenue Code of 1986, as amended, and any
successor thereto.
"IRS" shall mean the Internal Revenue Service, or any successor thereto.
"Lien" shall mean any mortgage or deed of trust, pledge, hypothecation,
preemptive right, assignment, deposit arrangement, lien, charge, claim, security
interest, easement or encumbrance, or preference, priority or other security
agreement or preferential arrangement of any kind or nature whatsoever
(including any title retention agreement, any financing lease having
substantially the same economic effect as any of the foregoing, and the filing
of, or agreement to give, any financing statement perfecting a security interest
as to assets owned by the relevant Person under the Uniform Commercial Code or
comparable law of any jurisdiction).
"Losses" shall have the meaning set forth in Section 8.1(a) hereof.
"Material Adverse Change" shall mean any change, occurrence or effect that
is or is reasonably likely to be materially adverse to the business, assets,
operations, condition (financial or otherwise), or results of operations of
Company and its Subsidiaries, taken as a whole; provided, however, that changes,
occurrences or effects (i) resulting from events, changes, developments,
condition or circumstances in worldwide, national or local conditions
(political, regulatory, economic or otherwise), (ii) relating to the industries
in which Company operates, (iii) relating to the failure by Company to meet the
revenue or earnings predictions of equity analysts as reflected in the First
Call consensus estimate, or any other external revenue or earnings predictions
or expectations for any period ending on or after the date of this Agreement,
and (iv) relating to changes in law or accounting principles occurring after the
date of this Agreement, shall, in each case, not be deemed to constitute a
"Material Adverse Change."
"Material Adverse Effect" shall mean any change, occurrence or effect that
is or is reasonably likely to be materially adverse to the business, assets,
operations, condition
5
<PAGE>
(financial or otherwise), or results of operations of Company and its
Subsidiaries, taken as a whole.
"Material Contracts" shall mean (i) all of Company's and its Subsidiaries'
material contracts that would be required to be filed with the SEC pursuant to
item 601(b)(10) of Regulation S-K of the Securities Act, (ii) all agreements,
leases or other instruments to which Company or any of its Subsidiaries is a
party or by which Company, its Subsidiaries or its properties are bound, which
involve payments by or to Company or its Subsidiaries of more than $10,000,000,
(iii) all of Company's and its Subsidiaries' loan agreements, bank lines of
credit agreements, indentures, mortgages, deeds of trust, pledge and security
agreements, factoring agreements, conditional sales contracts, letters of
credit, guarantees or any other instruments evidencing or representing
indebtedness of Company or any of its Subsidiaries, (iv) all non-competition and
similar agreements to which Company or any of its Subsidiaries is a party that
materially restrict Company's or any of its Subsidiaries' ability to engage in
any business, (v) all contracts for the employment of any executive officer of
Company or its Subsidiaries, (vi) all collective bargaining, union and similar
labor contracts of Company or its Subsidiaries, (vii) all warrant, option or
other agreements or instruments providing for the purchase or acquisition by any
means, or the right to purchase or acquire, shares of capital stock of Company
or any of its Subsidiaries with a value in excess of $5,000,000, (viii) all
material joint venture or partnership agreements, (ix) all material licenses
relating to intellectual property owned or used by Company or any of its
Subsidiaries, (x) all standstill agreements, and (xi) all Affiliate Contracts.
"Multiemployer Plan" shall mean a "multiemployer plan" as defined in
Section 3(37) of ERISA, and to which Company, any of its Subsidiaries or any
ERISA Affiliate is making, is obligated to make, has made or been obligated to
make, contributions on behalf of participants who are or were employed by any of
them.
"NASDAQ/NMS" shall have the meaning set forth in Section 5.10(a) hereof.
"Notes Registration Rights Agreement" shall mean the Registration Rights
Agreement relating to the Convertible Notes, by and between Company and
Purchaser, substantially in the form attached hereto as Exhibit B, as such
agreement may be amended, supplemented or otherwise modified from time to time
and in accordance with the terms thereof.
"Original Per Share Purchase Price" shall have the meaning set forth in
Section 5.9 hereof.
"Other Per Share Purchase Price" shall have the meaning set forth in
Section 5.9 hereof.
"Parent" shall mean Metromedia Company and its respective Parent Related
Persons.
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"Parent Related Persons" shall mean Related Persons (as such term is
defined in the 10% Notes Indenture).
"PBGC" shall mean the Pension Benefit Guaranty Corporation or any
successor thereto.
"Permit" shall mean any license, franchise, permit, consent, approval,
waiver or certificate.
"Permitted Liens" shall mean the following: (i) Liens for taxes or
assessments or other governmental charges or levies, to the extent such amounts
are not yet due and payable or are being contested in good faith by appropriate
proceedings or to the extent that nonpayment thereof is permitted by the terms
of this Agreement; (ii) pledges or deposits securing obligations under workmen's
compensation, unemployment insurance, social security or public liability laws
or similar legislation; (iii) pledges or deposits securing bids, tenders,
contracts (other than contracts for the payment of money) or leases to which
Company or any of its Subsidiaries is a party as lessee made in the ordinary
course of business; (iv) Liens arising solely by virtue of any statutory or
common law provision relating to bankers' liens, rights of set-off or similar
rights and remedies as to deposit accounts or other funds maintained with a
creditor depository institution; (v) workers, mechanics, suppliers, carriers,
warehousemen's or other similar liens arising in the ordinary course of business
and securing indebtedness, not yet due and payable; (vi) deposits securing or in
lieu of surety, appeal or customs bonds in proceedings to which Company or any
of its Subsidiaries is a party; (vii) Liens arising in the ordinary course of
business in connection with obligations that are not overdue or which are being
contested in good faith and by appropriate proceedings, including, but not
limited to, Liens under bid, performance and other surety bonds, appeal bonds,
landlord Liens arising under leases of real property, Liens on advance or
progress payments received from customers under contracts for the sale, lease or
license of goods, software or services and upon the products being sold or
licensed, in each case securing performance of the underlying contract or the
repayment of such advances in the event final acceptance of performance under
such contracts does not occur, and Liens upon funds collected temporarily from
others pending payment or remittance on their behalf; and (viii) zoning
restrictions, easements, licenses, or other restrictions on the use of real
property or other minor irregularities in title (including leasehold title)
thereto, so long as the same do not materially impair the use, value, or
marketability of such real property, leases or leasehold estates.
"Person" shall mean any individual, sole proprietorship, partnership,
limited liability company, joint venture, trust, unincorporated organization,
association, corporation, institution, public benefit corporation, entity or
government (whether foreign, federal, state, county, city, municipal or
otherwise, including, any instrumentality, division, agency, body or department
thereof).
"Proxy Statement" shall have the meaning set forth in Section 5.10(a)
hereof.
"Purchaser" shall have the meaning set forth in the first paragraph of
this Agreement.
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"Purchaser Directors" shall have the meaning set forth in Section 5.2(a)
hereof.
"Purchaser Representative" shall have the meaning set forth in Section
5.2(e) hereof.
"Regulatory Relief Date" means the date on which the Purchaser has
obtained pursuant to Section 271 of the Telecommunications Act, the approval of
the FCC to provide InterLATA Services in all states that are, with respect to
Purchaser, In-Region States (as such term is defined in Section 271(i)(1) of the
Telecommunications Act), such approval to be either an affirmative approval or a
waiver from the restrictions of the Telecommunications Act.
"Requisite Company Vote" shall mean the approval of the issuance and sale
of the Second Closing Date Shares and the Second Closing Date Notes and the
issuance of shares of Class A Common Stock issuable upon the conversion of the
Second Closing Date Notes pursuant to this Agreement by a majority of holders of
Class A Common Stock and Class B Common Stock, voting as a single class, that
are present in person or by proxy at a duly called meeting of Company's
stockholders.
"SEC" shall mean the U.S. Securities and Exchange Commission, or any
successor thereto.
"Second Closing" shall have the meaning set forth in Section 2.2(b)
hereof.
"Second Closing Date" shall have the meaning set forth in Section 2.2(b)
hereof.
"Second Closing Date Notes" shall have the meaning set forth in Section
2.2(b)(ii) hereof.
"Second Closing Date Notes Purchase Price" shall have the meaning set
forth in Section 2.2(b)(ii) hereof.
"Second Closing Date Shares" shall have the meaning set forth in Section
2.2(b)(i) hereof.
"Second Closing Date Shares Purchase Price" shall have the meaning set
forth in Section 2.2(b)(i) hereof.
"Second Closing Termination Date" shall have the meaning set forth in
Section 9.13(a)(iii).
"Securities Act" shall mean the Securities Act of 1933, as amended, and
all rules and regulations promulgated thereunder.
"Shares" shall have the meaning set forth in the recitals to this
Agreement.
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"Shares Registration Rights Agreement" shall mean the Equity Registration
Rights Agreement, relating to the Shares, by and between Company and Purchaser,
substantially in the form attached hereto as Exhibit E, as such agreement may be
amended, supplemented or otherwise modified from time to time in accordance with
the terms thereof.
"Spill" shall have the meaning set forth in Section 4.10(a) hereof.
"Stock" shall mean all shares, options, warrants, general or limited
partnership interests, limited liability company membership interests,
participations or other equivalents (regardless of how designated) of or in a
corporation, partnership, limited liability company or equivalent entity whether
voting or nonvoting, including, without limitation, common stock, preferred
stock, or any other "equity security" (as such term is defined in Rule 3a11-1
under the Exchange Act).
"Stockholders Agreement" shall mean the Stockholders Agreement among
Purchaser, Company, Parent and each Class B Permitted Holder, substantially in
the form attached hereto as Exhibit D, as such agreement may be amended,
supplemented or otherwise modified from time to time in accordance with the
terms thereof.
"Subsidiary" shall mean, with respect to any Person, (i) any corporation
of which an aggregate of 50% or more of the outstanding Stock having ordinary
voting power to elect a majority of the board of directors of such corporation
(irrespective of whether, at the time, Stock of any other class or classes of
such corporation shall have or might have voting power by reason of the
happening of any contingency) is at the time, directly or indirectly, owned
legally or beneficially by such Person and/or one or more Subsidiaries of such
Person, and (ii) any partnership, joint venture or other entity in which such
Person and/or one or more Subsidiaries of such Person shall have an interest
(whether in the form of voting or participation in profits or capital
contributions) of 50% or more.
"System" shall have the meaning set forth in Section 4.19 hereof.
"Telecommunications Act" means the U.S. federal statute known as the
Communications Act of 1934, as amended by the Telecommunications Act of 1996, as
amended.
"10% Notes Indenture" shall mean that certain Indenture, dated as of
November 25, 1998, between Company and IBJ Schroder Bank & Trust Company, as
trustee, relating to Company's 10% Series A and Series B Senior Notes due 2008,
as the same may be amended, supplemented or otherwise modified from time to
time.
"Third-Party Claim" shall have the meaning set forth in Section 8.3(a)
hereof.
"Transaction Documents" shall mean this Agreement, the Fiber Optic Private
Network Agreement, the Shares Registration Rights Agreement, the Notes
Registration Rights Agreement, the Indenture and the Stockholders Agreement.
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"Year 2000 Compliant" shall have the meaning set forth in Section 4.19
hereof.
Any accounting term used in this Agreement shall have, unless otherwise
specifically provided herein, the meaning customarily given such term in
accordance with GAAP, and all financial computations hereunder shall be
computed, unless otherwise specifically provided herein, in accordance with GAAP
consistently applied. That certain terms or computations are explicitly modified
by the phrase "in accordance with GAAP" shall in no way be construed to limit
the foregoing.
The words "herein," "hereof" and "hereunder" and other words of similar
import refer to this Agreement as a whole, including any exhibits and schedules
hereto, as the same may from time to time be amended, modified or supplemented,
and not to any particular section, subsection or clause contained in this
Agreement. The words "includes" or "including" and other words of similar import
shall mean "including, without limitation," unless the context expressly
otherwise requires.
Wherever from the context it appears appropriate, each term stated in
either the singular or plural shall include the singular and the plural, and
pronouns stated in the masculine, feminine or neuter gender shall include the
masculine, the feminine and the neuter.
2. PURCHASE OF SECURITIES
2.1 Purchase of Securities at First Closing. (a) At the First
Closing referred to in Section 2.2(a) below, subject to the terms and conditions
set forth herein, Company shall issue and sell to Purchaser, and Purchaser shall
purchase from Company, 23,027,856 shares of Class A Common Stock plus the number
of shares of Class A Common Stock issuable pursuant to Section 2.5 below for the
price per share equal to $28.00 (such price, in the aggregate, the "First
Closing Date Shares Purchase Price").
(b) At the First Closing, subject to the terms and conditions
set forth herein, Company shall issue and sell to Purchaser, and Purchaser shall
purchase from Company, Convertible Notes in the aggregate principle amount of
$790,855,674 plus the aggregate principal amount of the Convertible Notes being
purchased pursuant to Section 2.5 below for the price of 100% of the aggregate
principal amount of the Convertible Notes to be purchased at the First Closing
(such price, in the aggregate, the "First Closing Date Notes Purchase Price").
(c) Company and Purchaser agree to treat the First Closing
Date Shares Purchase Price as the purchase price for the First Closing Date
Shares and the First Closing Date Notes Purchase Price as the purchase price for
the First Closing Date Notes for all tax purposes unless a contrary treatment is
required by law.
2.2 Closing. (a) The closing of the purchase and sale of the First
Closing Date Shares and the First Closing Date Notes hereunder (the "First
Closing") shall be held at the offices of Weil, Gotshal & Manges LLP, 767 Fifth
Avenue, New York, New York, at 10:00 a.m. on the date that all of the conditions
set forth in Articles 6 and 7 are
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satisfied or waived, or at such other time and place as Company and Purchaser
mutually agree (the date of the First Closing being hereinafter referred to as
the "First Closing Date"). The obligations of the Company and the Purchaser to
consummate the First Closing shall not, in any manner, be conditioned upon the
consummation of the Second Closing.
(b) On the Business Day following the date the conditions set
forth in Section 6A and Section 7A are satisfied or waived (the "Second Closing
Date"), Purchaser shall purchase from Company and Company shall sell to
Purchaser at a closing (the "Second Closing") to be held at the offices of Weil,
Gotshal & Manges LLP, 767 Fifth Avenue, New York, New York (or at such other
date and place as Company and Purchaser mutually agree) the following:
(i) a number of shares of Class A Common Stock (the
"Second Closing Date Shares") equal to the difference between (x)
25,558,109 and (y) the amount of First Closing Date Shares, for the price
per share equal to $28.00 (such price, in the aggregate, the "Second
Closing Date Shares Purchase Price"); provided, that, if the number of
shares to be sold pursuant to this Section 2.2(b)(i) would cause Purchaser
to Beneficially Own in excess of 9.9% of the issued and outstanding shares
of Common Stock on the Second Closing Date after giving effect to the
issuance of the Second Closing Date Shares, such number shall be reduced
so that such number of shares equals 9.9% of the issued and outstanding
shares of Common Stock on the Second Closing Date after giving effect to
the issuance of the Second Closing Date Shares; and
(ii) a principal amount of Notes (the "Second Closing
Date Notes") equal to the difference between (x) $975,281,364 and (y) the
principal amount of the First Closing Date Notes, for the price of 100% of
the aggregate principal amount of the Notes to be so purchased (such
price, in the aggregate, the "Second Closing Date Notes Purchase Price");
provided, that, if the number of shares of Class A Common Stock into which
the First Closing Date Notes and the Second Closing Date Notes would
convert exceeds 10% of the issued and outstanding shares of Common Stock
on the Second Closing Date after giving effect on an as-converted basis to
the issuance of the Second Closing Date Notes and the Second Closing Date
Shares, such principal amount of the Second Closing Date Notes shall be
reduced so that such Second Closing Date Notes and the First Closing Date
Notes would, in the aggregate, convert into 10% of the issued and
outstanding shares of Common Stock on the Second Closing Date, after
giving effect on an as-converted basis to the issuance of the Second
Closing Date Shares and the Second Closing Date Notes.
(c) Company and Purchaser agree to treat the Second Closing
Date Shares Purchase Price as the purchase price for the Second Closing Date
Shares and the Second Closing Date Notes Purchase Price as the purchase price
for the Second Closing Date Notes for all tax purposes unless a contrary
treatment is required by law.
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2.3 First Closing Deliveries. (a) At the First Closing, Company will
deliver to Purchaser (i) a certificate or certificates representing the First
Closing Date Shares and (ii) a note or notes representing the First Closing Date
Notes in the form attached as Exhibit A to the Indenture against payment of the
First Closing Date Shares Purchase Price and the First Closing Date Notes
Purchase Price, as the case may be, therefor by wire transfer of immediately
available funds to an account designated by Company in writing two (2) Business
Days prior to the First Closing Date.
(b) The certificate or certificates representing the First
Closing Date Shares shall be subject to a legend restricting transfer under the
Securities Act, such legend to be substantially as follows:
"The shares represented by this certificate have been acquired for
investment and have not been registered under the Securities Act of 1933,
as amended. Such shares may not be sold or transferred in the absence of
such registration or an opinion of counsel reasonably satisfactory to the
Company as to the availability of an exemption from registration.
The shares represented by this certificate are subject to restrictions on
transfer, including any sale, pledge or other hypothecation, set forth in
a stockholders agreement between the Company, Bell Atlantic Investments,
Inc., Metromedia Company and certain other stockholders of the Company, a
copy of which agreement may be obtained at no cost by written request made
by the holder of record of this certificate to the secretary of the
Company at the Company's principal executive offices."
(c) Company agrees to remove from the First Closing Date
Shares the first legend set forth in paragraph (b) above in connection with a
transfer pursuant to an effective Registration Statement (as defined in the
Shares Registration Rights Agreement) or upon receipt of an opinion of counsel
in form and substance reasonably satisfactory to Company that the First Closing
Date Shares are eligible for transfer without registration under the Securities
Act. Company agrees to remove from the First Closing Date Shares the second
legend set forth in paragraph (b) above in accordance with the provisions of the
Stockholders Agreement.
2.3A Second Closing Deliveries. (a) At the Second Closing, Company
will deliver to Purchaser (i) a certificate or certificates representing the
Second Closing Date Shares and (ii) a note or notes representing the Second
Closing Date Notes in the form attached as Exhibit A to the Indenture against
payment of the Second Closing Date Shares Purchase Price and the Second Closing
Date Notes Purchase Price, as the case may be, therefor by wire transfer of
immediately available funds to an account designated by Company in writing two
(2) Business Days prior to the Second Closing Date.
(b) The certificate or certificates representing the Second
Closing Date Shares shall be subject to a legend restricting transfer under the
Securities Act, such legend to be substantially as follows:
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"The shares represented by this certificate have been acquired for
investment and have not been registered under the Securities Act of 1933,
as amended. Such shares may not be sold or transferred in the absence of
such registration or an opinion of counsel reasonably satisfactory to the
Company as to the availability of an exemption from registration.
The shares represented by this certificate are subject to restrictions on
transfer, including any sale, pledge or other hypothecation, set forth in
a stockholders agreement between the Company, Bell Atlantic Investments,
Inc., Metromedia Company and certain other stockholders of the Company, a
copy of which agreement may be obtained at no cost by written request made
by the holder of record of this certificate to the secretary of the
Company at the Company's principal executive offices."
(c) Company agrees to remove from the Second Closing Date
Shares the first legend set forth in paragraph (b) above in connection with a
transfer pursuant to an effective Registration Statement (as defined in the
Shares Registration Rights Agreement) or upon receipt of an opinion of counsel
in form and substance reasonably satisfactory to Company that the Second Closing
Date Shares are eligible for transfer without registration under the Securities
Act. Company agrees to remove from the Second Closing Date Shares the second
legend set forth in paragraph (b) above in accordance with the provisions of the
Stockholders Agreement.
2.4 Use of Proceeds. Company shall use the proceeds of the First
Closing Date Notes Purchase Price and the Second Closing Date Notes Purchase
Price for the cost of the engineering, construction, installation, acquisition,
lease, development or improvement of telecommunications assets and the proceeds
of the First Closing Date Shares Purchase Price and the Second Closing Date
Shares Purchase Price for the foregoing uses and for working capital and general
corporate purposes, in each case, as the same have been set forth in, or
otherwise contemplated by, Company's business plan (the "Business Plan")
presented to Purchaser.
2.5. First Closing Adjustments. If, between the date hereof and the
First Closing Date, Company shall issue any shares of Class A Common Stock for
any reason (i) the number of shares of Class A Common Stock to be purchased by
Purchaser at the First Closing hereunder pursuant to Section 2.1(a) and (ii) the
aggregate principal amount of the Convertible Notes to be purchased by Purchaser
at the First Closing hereunder pursuant to Section 2.1(b) shall both be
automatically increased, as the case may be, such that (x) in the case of clause
(i), Purchaser shall Beneficially Own the lesser of (I) 9.9% of the shares of
Common Stock then issued and outstanding on the First Closing Date without
giving effect to such issuance of shares of Class A Common Stock to Purchaser
and (II) 25,558,109 shares of Class A Common Stock (such shares of Class A
Common Stock to be so purchased at the First Closing after giving effect to the
foregoing, (the "First Closing Date Shares"), and (y) in the case of clause
(ii), the principal amount of the Convertible Notes to be purchased by Purchaser
at the First Closing shall be equal to the lesser of (A) the product of (I) 10%
of the shares of Common Stock then issued
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and outstanding on the First Closing Date (without giving effect to such
issuance of the First Closing Date Notes or the First Closing Date Shares to
Purchaser) multiplied by (II) $34.00 and (B) $975,281,364 (such Notes to be so
purchased at the First Closing after giving effect to the foregoing, the "First
Closing Date Notes").
3. PURCHASER'S REPRESENTATIONS AND WARRANTIES
Purchaser makes the following representations and warranties to Company:
3.1 Investment Intention. As of the date hereof, Purchaser is
purchasing, and, as of the First Closing Date and the Second Closing Date (if
any) Purchaser will purchase, the securities pursuant to this Agreement for its
own account, for investment purposes and not with a present view to the
distribution thereof.
3.2 Accredited Investor. Purchaser is an "accredited investor" (as
that term is defined in Rule 501 of Regulation D under the Securities Act) and
by reason of its business and financial experience, it has such knowledge,
sophistication and experience in business and financial matters as to be capable
of evaluating the merits and risks of the prospective investment, is able to
bear the economic risk of such investment and is able to afford a complete loss
of such investment.
3.3 Corporate Existence. Purchaser is a corporation duly organized,
validly existing and in good standing under the laws of the State of Delaware.
3.4 Corporate Power; Authorization; Enforceable Obligations. The
execution, delivery and performance by Purchaser of this Agreement and the other
Transaction Documents to be executed by it, and the consummation of the
transactions contemplated hereby and thereby: (i) are within Purchaser's
corporate power; (ii) have been duly authorized by all necessary corporate
action; (iii) do not require the consent or approval of, or any filing with, any
Governmental Authority or any other Person (except in connection with consents,
approvals or filings that may result from the matters set forth on Schedule
4.4(b) hereto, except for filings under the HSR Act and filings specified in
Schedule 4.6 hereto and except to the extent previously obtained or made or as
specified in Schedule 3.4 hereto or as would not materially impair Purchaser's
ability to consummate the transactions contemplated by this Agreement or any
other Transaction Document); and (iv) are not in contravention of any provision
of Purchaser's certificate of incorporation or by-laws. This Agreement has been,
and each of the other Transaction Documents to which Purchaser is a party will
be, at or prior to each of the First Closing and the Second Closing (if any),
duly executed and delivered by Purchaser and (assuming the due authorization,
execution and delivery by the other parties hereto and thereto), this Agreement
constitutes, and the other Transaction Documents when so executed and delivered
will constitute, the legal, valid and binding obligations of Purchaser,
enforceable against it in accordance with their respective terms, subject to
applicable bankruptcy, insolvency, fraudulent conveyance, reorganization,
moratorium and similar laws affecting creditors' rights and remedies generally,
and subject, as to enforceability, to general principles of equity, including
principles of commercial reasonableness, good faith and fair dealing (regardless
of whether enforcement is sought in a proceeding at law or in equity).
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3.5 Brokers. Except for those brokers or finders to whom Purchaser
is solely responsible for the payment of any brokerage or finder's fees, no
broker acting on behalf of Purchaser brought about the consummation of any of
the transactions contemplated pursuant to this Agreement and Purchaser does not
have any obligation to any Person in respect of any brokerage or finder's fees
(or any similar obligation) in connection with the transactions contemplated by
this Agreement.
3.6 Disclosure of Information. Purchaser has had full access to all
information it considers necessary or appropriate to make an informed investment
decision with respect to the securities to be purchased by it pursuant to this
Agreement. Purchaser has had an opportunity to ask questions and receive answers
from Company regarding the terms and conditions of the offering of the
securities pursuant to this Agreement and to obtain additional information
necessary to verify any information furnished to Purchaser or to which Purchaser
had access.
3.7 Investment Experience. Purchaser understands that the purchase
of the securities pursuant to this Agreement involves substantial risk.
Purchaser has experience as an investor in securities of companies and
acknowledges that it is able to fend for itself, can bear the economic risk of
its investment in Company and has such knowledge and experience in financial or
business matters that it is capable of evaluating the merits and risks of this
investment in Company and protecting its own interests in connection with this
investment.
3.8 Restricted Securities. Purchaser understands that the securities
to be purchased by it pursuant to this Agreement are characterized as
"restricted securities" under the Securities Act inasmuch as they are being
acquired from Company in a transaction not involving a public offering, and that
under the Securities Act such securities may be resold without registration
under the Securities Act only in certain limited circumstances. Purchaser is
familiar with Rule 144 of the Securities Act, as presently in effect, and
understands the resale limitations imposed thereby and by the Securities Act.
3.9 Investigation. Purchaser has conducted its own investigation of
Company and hereby acknowledges that the only representations and warranties of
Company in connection with Purchaser's purchase of the securities pursuant to
this Agreement are those expressly made by Company in Article 4 of this
Agreement.
3.10 Purchaser. Purchaser is a significant subsidiary of Bell
Atlantic Corporation and has, as of the date hereof, and will have as of each of
the First Closing Date and the Second Closing Date (if any), a consolidated
tangible net worth (as determined in accordance with GAAP) of not less than $2
billion.
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4. COMPANY'S REPRESENTATIONS AND WARRANTIES
Company makes the following representations and warranties to Purchaser:
4.1 Authorized and Outstanding Shares of Capital Stock. As of
October 5, 1999, the authorized capital stock of Company consisted of (a)
2,404,031,240 shares of Class A Common Stock, $0.01 par value per share, of
which 198,835,335 shares were issued and outstanding; (b) 522,254,782 shares of
Class B Common Stock, $0.01 par value per share, of which 33,769,272 shares were
issued and outstanding; and (c) 20,000,000 shares of Preferred Stock, $0.01 par
value per share, none of which were issued and outstanding. All of such issued
and outstanding shares are validly issued, fully paid and non-assessable. No
shares of capital stock are held by Company as treasury stock as of the date of
this Agreement and no shares of capital stock of Company shall be held by
Company as treasury stock as of the First Closing and the Second Closing (if
any). Except as set forth on Schedule 4.1 hereto and agreements with brokers or
finders to whom Company is solely responsible for the payment of any brokerage
or finder's fees, (i) there is no existing option, warrant, call, commitment or
other agreement to which Company or any of its Subsidiaries is a party
requiring, and there are no convertible securities of Company outstanding which
upon conversion would require, the issuance of any additional shares of Stock of
Company or other securities convertible into shares or equity securities of
Company, other than the securities to be issued pursuant to this Agreement, and
(ii) there are no agreements to which Company is a party with respect to the
voting or transfer of the Stock of Company. Except as set forth on Schedule 4.1
hereto, there are no stockholders' preemptive rights or rights of first refusal
or other similar rights with respect to the issuance of Stock by Company. True,
correct and complete copies of the certificate of incorporation and by-laws of
Company have been made available to Purchaser.
4.2 Authorization and Issuance of Securities. The issuance of the
securities pursuant to this Agreement has been duly authorized by all necessary
corporate action on the part of Company (except in the case of the issuance of
the Second Closing Date Shares, Second Closing Date Notes and the shares of
Class A Common Stock that may be issued upon conversion of the Second Closing
Date Notes, which remain subject to the Requisite Company Vote) and, upon
delivery to Purchaser of the securities to be issued pursuant to this Agreement
against payment in accordance with the terms hereof, the securities to be issued
pursuant to this Agreement will have been validly issued, free and clear of all
Liens. The issuance of shares of Class A Common Stock upon conversion of the
Convertible Notes has been duly authorized by all necessary corporate action on
the part of Company (except for the Requisite Company Vote) and, when issued
upon conversion of the Convertible Notes, such Class A Common Stock will have
been validly issued, fully paid and non-assessable. Company has duly reserved an
adequate number of shares of Class A Common Stock for issuance pursuant to the
terms of the Convertible Notes.
4.3 Securities Laws. In reliance in part on the investment
representations contained in Sections 3.1, 3.2, 3.6, 3.7, 3.8 and 3.9, the
offer, issuance, sale and delivery of the securities to be issued pursuant to
this Agreement, as provided in this Agreement, are exempt from the registration
requirements of the Securities Act and all applicable state
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securities laws, and are otherwise in compliance with such laws. Neither Company
nor any Person acting on its behalf has taken or will take any action (including
any offering of any securities of Company under circumstances which would
require the integration of such offering with the offering of the securities to
be issued pursuant to this Agreement under the Securities Act and the rules and
regulations of the SEC thereunder) which would subject the offering, issuance or
sale of the securities to be issued pursuant to this Agreement, to the
registration requirements of Section 5 of the Securities Act.
4.4 Corporate Existence; Compliance with Law; Permits. (a) Company
and each of its Subsidiaries (i) is a corporation duly organized, validly
existing and in good standing under the laws of the State of Delaware in the
case of Company and each jurisdiction as set forth on Schedule 4.4(a) hereto in
the case of its Subsidiaries; (ii) is duly qualified as a foreign corporation
and in good standing under the laws of each jurisdiction as set forth on
Schedule 4.4(a) hereto where its ownership or lease of property or the conduct
of its business requires such qualification (except for jurisdictions in which
such failure to so qualify or to be in good standing would not, individually or
in the aggregate, have a Material Adverse Effect); (iii) has the requisite
corporate power and authority and the legal right to own, pledge, mortgage or
otherwise encumber and operate its properties, to lease the property it operates
under lease, and to conduct its business as now being conducted; (iv) is in
compliance with its certificate or articles of incorporation and by-laws; and
(v) is in compliance with all applicable provisions of law, except for such
non-compliance which would not, individually or in the aggregate, have a
Material Adverse Effect.
(b) Each of Company and its Subsidiaries has obtained all
material Permits from all Persons, including Governmental Authorities, that are
needed for the ownership of and the conduct or operation of their respective
businesses as currently being conducted (including all Permits required by any
Environmental Law, all health and safety Permits, all certificates of occupancy
and all certificates of public convenience and necessity or the equivalent). All
Permits issued by any Governmental Authority to Company or any of its
Subsidiaries for the purpose of building, maintaining or operating any
telecommunications systems or providing any telecommunications services
(including all franchise agreements with any Governmental Authority or
certificates of public convenience and necessity, but excluding Permits relating
solely to construction or rights of way for construction) are listed on Schedule
4.4(b) hereto. Except as set forth on Schedule 4.4(b) hereto or as would not,
individually or in the aggregate, have a Material Adverse Effect: (i) all such
Permits are in full force and effect (provided that, in the case of certificates
of public convenience and necessity, the Material Adverse Effect qualification
shall not be applicable); (ii) no violations have occurred, are continuing to
occur or have been recorded in respect of any such Permit; (iii) no claim is
pending or, to the knowledge of Company and its Subsidiaries, threatened, to
revoke or limit any such Permit; and (iv) each of Company and its Subsidiaries
is in compliance with the terms and conditions of all such Permits in all
respects.
4.5 Subsidiaries. There currently exist no Subsidiaries of Company
other than as set forth on Schedule 4.5 hereto, which sets forth such
Subsidiaries, together with their respective jurisdictions of organization, and
the authorized and outstanding capital Stock of each such Subsidiary, by class
and number and percentage of each class owned by Company
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or a Subsidiary of Company or any other Person. There are no options, warrants,
rights to purchase or similar rights covering capital Stock for any such
Subsidiary. Except as set forth on Schedule 4.5 hereto or in the Company SEC
Documents, neither Company nor any of its Subsidiaries is engaged in any joint
venture or partnership with any other Person.
4.6 Corporate Power; Authorization; Enforceable Obligations. (a) The
execution, delivery and performance by Company of this Agreement, the other
Transaction Documents to which it is a party and all instruments and documents
to be delivered by Company, the issuance and sale of the securities hereunder
and the consummation of the other transactions contemplated by any of the
foregoing: (i) are within Company's corporate power and authority; (ii) have
been duly authorized by all necessary or proper corporate action (except for the
Requisite Company Vote); (iii) are not in contravention of any provision of
Company's certificate of incorporation or by-laws; (iv) will not violate any law
or regulation, or any order or decree of any court or governmental
instrumentality to which Company or any of its Subsidiaries is a party or to
which its assets are bound; (v) will not conflict with or result in the breach
or termination of, constitute a default under or accelerate any performance
required by, any indenture, mortgage, deed of trust, lease, agreement or other
instrument to which Company or any of its Subsidiaries is a party or by which
Company, any of its Subsidiaries or any of their respective property is bound;
(vi) will not result in the creation or imposition of any Lien upon any of the
property of Company or any of its Subsidiaries; and (vii) do not require the
consent or approval of, or any filing by Company or any of its Subsidiaries
with, any Governmental Authority or any other Person (except, in the case of
clauses (iv) through (vii), as would not have, individually or in the aggregate,
a Material Adverse Effect or that would adversely affect the ability of Company
to consummate, or that would prevent or delay in any material respect, the
transactions contemplated by this Agreement or any other Transaction Documents
in any material respect, and except for filings under the HSR Act, filings
specified in Schedule 3.4 hereof and to the extent previously obtained or made
or as specified in Schedule 4.6 hereof). This Agreement has been, and each of
the other Transaction Documents will be at or prior to Closing, duly executed
and delivered by Company and (assuming the due authorization, execution and
delivery by the other parties hereto and thereto) this Agreement constitutes,
and the other Transaction Documents when so executed and delivered will
constitute, the legal, valid and binding obligations of Company, enforceable
against it in accordance with its terms, subject to applicable bankruptcy,
insolvency, fraudulent conveyance, reorganization, moratorium and similar laws
affecting creditors' rights and remedies generally, and subject, as to
enforceability, to general principles of equity, including principles of
commercial reasonableness, good faith and fair dealing (regardless of whether
enforcement is sought in a proceeding at law or in equity).
4.7 SEC Documents; Financial Statements; Undisclosed Liabilities.
(a) Each form, report, schedule, registration statement and definitive proxy
statement filed by Company with the SEC since August 1, 1997 and prior to the
date hereof (as such documents have been amended prior to the date hereof, the
"Company SEC Documents"), as of their respective dates, complied in all material
respects with the applicable requirements of the Securities Act and the Exchange
Act. None of the Company SEC Documents, as of their respective dates, contains
any untrue statement of a material fact or omits to state a material fact
required to be stated therein or necessary to make the statements therein, in
the
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light of the circumstances under which they were made, not misleading. Company
has made available to Purchaser true, accurate and complete copies of all of the
Company SEC Documents. The consolidated financial statements of Company and its
Subsidiaries included in such reports comply as to form in all material respects
with applicable accounting requirements and with the published rules and
regulations of the SEC with respect thereto, have been prepared in accordance
with GAAP applied on a consistent basis throughout the periods involved (except
as may be indicated in the notes thereto or, in the case of the unaudited
interim financial statements, as permitted by Form 10-Q of the SEC) and fairly
present in all material respects (subject, in the case of the unaudited interim
financial statements, to normal, year-end audit adjustments) the consolidated
financial position of Company and its Subsidiaries as at the dates thereof and
the consolidated results of their operations and cash flows for the periods then
ended. Since December 31, 1998, neither Company nor any of its Subsidiaries has
incurred any material liabilities or obligations (whether absolute, accrued,
fixed, contingent, liquidated, unliquidated or otherwise and whether due or to
become due) of any nature, except liabilities, obligations or contingencies (a)
which are reflected on the audited balance sheet of Company and its Subsidiaries
as at December 31, 1998, (including the notes hereto), or (b) which (i) were
incurred in the ordinary course of business after December 31, 1998 and
consistent with past practices, or (ii) are disclosed or reflected in the
Company SEC Documents filed after December 31, 1998. Since August 1, 1997, the
Company has timely filed with the SEC all forms, reports and other documents
required to be filed prior to the date hereof, and no Subsidiary of Company has
filed, or been required to file, any form, report or other document with the
SEC, in each case, pursuant to the Securities Act, the Exchange Act or the rules
and regulations thereunder. From the date hereof until the Second Closing Date,
Company will timely file all forms, reports, schedules and registration
statements required to be filed by the Securities Act or Exchange Act ("Future
Company SEC Documents"). All such Future Company SEC Documents and the
consolidated financial statements included therein shall comply in all material
respects with the representations and warranties made by Company in this Section
4.7 with respect to the Company SEC Documents.
(b) Except as set forth on Schedule 4.7(b) or described in the
Company SEC Documents, no dividends or other distributions have been declared,
paid or made upon any shares of capital Stock of Company, nor have any shares of
capital Stock of Company been redeemed, retired, purchased or otherwise acquired
for value by Company since December 31, 1998.
4.8 Ownership of Property. Each of Company and its Subsidiaries has
good and valid and insurable fee simple title to its owned real property, free
and clear of all Liens, except Permitted Liens. Each of Company and its
Subsidiaries has valid leasehold interests in each of its leases, good and valid
title to, or valid leasehold interests in, all of its other properties and
assets free and clear of all Liens, except Permitted Liens. Each of such leases
is valid and enforceable in accordance with its terms (subject to applicable
bankruptcy, insolvency, fraudulent conveyance, reorganization, moratorium and
similar laws affecting creditors' rights and remedies generally, and subject, as
to enforceability, to general principles of equity, including principles of
commercial reasonableness, good faith and fair dealing (regardless of whether
enforcement is sought in a proceeding at law or in
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equity) and is in full force and effect, except to the extent that such lack of
validity or enforceability would not, individually or in the aggregate, have a
Material Adverse Effect. None of Company, any of its Subsidiaries nor, to its
knowledge, any other party to any such lease is in default of its obligations
thereunder or has delivered or received any notice of default under any such
lease, nor has any event occurred which, with the giving of notice, the passage
of time or both, would constitute a default under any such lease, except to the
extent that such default would not reasonably be expected to have, individually
or in the aggregate, a Material Adverse Effect. Neither Company nor any of its
Subsidiaries is obligated under or a party to, any option, right of first
refusal, or any other contractual right to purchase, acquire, sell, assign or
dispose of any material real property owned or leased by Company or such
Subsidiary.
4.9 Material Contracts. Schedule 4.9 hereto contains a true, correct
and complete list of all Material Contracts that are described in clauses (i),
(iii) (to the extent related to indebtedness for borrowed money in excess of
$10,000,000), (iv), (viii), (x) and (xi) of the definition of "Material
Contracts." Each Material Contract is a valid and binding agreement of Company
or its Subsidiaries, as the case may be, enforceable against Company or such
Subsidiary in accordance with its terms, except as would not have a Material
Adverse Effect (subject to applicable bankruptcy, insolvency, fraudulent
conveyance, reorganization, moratorium and similar laws affecting creditors'
rights and remedies generally, and subject, as to enforceability, to general
principles of equity, including principles of commercial reasonableness, good
faith and fair dealing (regardless of whether enforcement is sought in a
proceeding at law or in equity)). Company and each of its Subsidiaries has
fulfilled or received a waiver from all obligations required pursuant to the
Material Contracts to have been performed by Company or such Subsidiary on its
part except as would not, individually or in the aggregate, result in a Material
Adverse Effect. Except as set forth in Schedule 4.9 hereto, neither Company nor
any of its Subsidiaries is in default or breach, nor to Company's or its
Subsidiaries' knowledge is any third party in default or breach, under or with
respect to any Material Contract except as would not, individually or in the
aggregate, result in a Material Adverse Effect.
4.10 Environmental Protection. (a) Except as set forth on Schedule
4.10 hereto, to Company's and its Subsidiaries' knowledge, all real property
owned, leased or otherwise operated by Company and its Subsidiaries (each, a
"Facility") is free of contamination from any substance, waste or material (i)
currently identified to be toxic or hazardous pursuant to, or which could
reasonably be expected to result in liability under, any Environmental Law or
(ii) within the definition of a substance which is toxic or hazardous under any
Environmental Law, including any asbestos, pcb, radioactive substance, methane,
volatile hydrocarbons, industrial solvents, oil or petroleum or chemical liquids
or solids, liquid or gaseous products, or any other material or substance which,
could reasonably be expected to result in any Environmental Liabilities and
Costs ("Hazardous Substance") which, in either case, could have, individually or
in the aggregate, a Material Adverse Effect. Except as set forth on Schedule
4.10 hereto or in the Company SEC Documents, neither Company nor any of its
Subsidiaries has caused or suffered to occur any release, spill, migration,
leakage, discharge, spillage, uncontrolled loss, seepage, or filtration of
Hazard Substances at or from the Facility (a "Spill") which
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could, individually or in the aggregate, result in Environmental Liabilities and
Costs which could reasonably be expected to have a Material Adverse Effect.
(b) Company and each Subsidiary have generated, treated,
stored and disposed of any Hazardous Substances in full compliance with
applicable Environmental Laws, except for such non-compliances which could not
reasonably be expected to have, individually or in the aggregate, a Material
Adverse Effect.
(c) Except as set forth on Schedule 4.10, Company and each
Subsidiary have obtained, or have applied for, and are in compliance with all
Permits required under Environmental Laws (except for such failures which would
not reasonably be expected to have, individually or in the aggregate, a Material
Adverse Effect) and neither Company nor any of its Subsidiaries has any
knowledge of any proceedings to substantially modify or to revoke any such
Permit.
(d) Except as set forth on Schedule 4.10 hereto or in the
Company SEC Documents, there are no investigations, proceedings or litigation
pending or, to Company's or its Subsidiaries' knowledge, threatened affecting or
against Company, any of its Subsidiaries or the Facilities relating to
Environmental Laws or Hazardous Substances which could reasonably be expected to
have, individually or in the aggregate, a Material Adverse Effect.
4.11 Labor Matters. (a) There are no strikes or other labor disputes
against Company or any of its Subsidiaries pending or, to Company's or its
Subsidiaries' knowledge, threatened. To Company's or its Subsidiaries'
knowledge, there is no organizing activity involving Company or any of its
Subsidiaries pending or threatened by any labor union or group of employees.
There are no representation proceedings pending or, to Company's or its
Subsidiaries' knowledge, threatened with the National Labor Relations Board, and
no labor organization or group of employees of Company or its Subsidiaries has
made a pending demand for recognition. There are no complaints or charges
against Company or any of its Subsidiaries pending or, to Company's or its
Subsidiaries' knowledge, threatened to be filed with any Governmental Authority
based on, arising out of, in connection with, or otherwise relating to the
employment or termination of employment by Company or any of its Subsidiaries of
any individual that would have, individually or in the aggregate, a Material
Adverse Effect.
(b) Except as set forth on Schedule 4.11 hereto or in the Company
SEC Documents, neither Company nor any of its Subsidiaries is, or during the
five (5) years preceding the date hereof was, a party to any labor or collective
bargaining agreement and there are no labor or collective bargaining agreements
which pertain to employees of Company or its Subsidiaries.
4.12 Taxes. Except as set forth on Schedule 4.12, all material
federal, state, local and foreign tax returns, reports and statements required
to be filed by Company and its Subsidiaries have been timely filed with the
appropriate Governmental Authority and all such returns, reports and statements
are true, correct and complete in all material respects. All material Charges
and other impositions due and payable for the periods
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covered by such returns, reports and statements have been paid prior to the date
on which any fine, penalty, interest or late charge may be added thereto for
nonpayment thereof, or any such fine, penalty, interest, late charge or loss has
been paid. No material tax audits or other administrative or judicial
proceedings are pending or, to the Company's knowledge, threatened with regard
to any Charges for which Company or any Subsidiary may be liable and no material
assessment of Charges is proposed against Company or any Subsidiary.
4.13 No Litigation. Except as disclosed on Schedule 4.13 hereto or
in the Company SEC Documents, no action, claim or proceeding is now pending or,
to the knowledge of Company or its Subsidiaries, threatened against Company or
any of its Subsidiaries, at law, in equity or otherwise, before any court,
board, commission, agency or instrumentality of any foreign, federal, state, or
local government or of any agency or subdivision thereof, or before any
arbitrator or panel of arbitrators which would reasonably be expected to have,
individually or in the aggregate, a Material Adverse Effect.
4.14 Brokers. Except for those brokers or finders to whom Company is
solely responsible for the payment of any brokerage or finder's fees, no broker
or finder acting on behalf of Company or any of its Subsidiaries brought about
the consummation of the transactions contemplated pursuant to this Agreement and
neither Company nor any of its Subsidiaries has any obligation to any Person in
respect of any brokerage or finder's fees (or any similar obligation) in
connection with the transactions contemplated by this Agreement.
4.15 Patents, Trademarks, Copyrights and Licenses. Except as set
forth on Schedule 4.15 hereto and except with respect to those patents,
trademarks, copyrights and licenses the loss of which would not have,
individually or in the aggregate, a Material Adverse Effect, Company and each of
its Subsidiaries owns or has the right to use all licenses, patents, patent
applications, copyrights, service marks, trademarks and registrations and
applications for registration thereof, and trade names necessary to continue to
conduct its business as heretofore conducted by it and now being conducted by
it. To Company's knowledge, Company and each of its Subsidiaries conducts its
businesses without infringement or claim of infringement of any license, patent,
copyright, service mark, trademark, trade name, trade secret or other
intellectual property right of others except where the same would not reasonably
be expected to have, individually or in the aggregate, a Material Adverse
Effect. To Company's knowledge, there is no infringement by others of any
license, patent, copyright, service mark, trademark, trade name, trade secret or
other intellectual property right of Company or any of its Subsidiaries, except
where the same would not reasonably be expected to have, individually or in the
aggregate, a Material Adverse Effect.
4.16 Ordinary Course of Business; No Material Adverse Change. Except
as set forth on Schedule 4.16 hereto or in response to the events described
therein, or as disclosed in the Company SEC Documents, since June 30, 1999,
Company and each of its Subsidiaries has conducted its operations only in the
ordinary course of business consistent with past practice. Except as disclosed
on Schedule 4.16 hereto or in the Company SEC
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Documents, no event has occurred since June 30, 1999 which has had or would be
reasonably expected to have, individually or in the aggregate, a Material
Adverse Change.
4.17 ERISA. (a) Schedule 4.17(a) hereto sets forth a list of each
material pension, retirement, savings, disability, dental, health, life, death
benefit, group insurance, profit-sharing, deferred compensation, stock option,
bonus, incentive, severance pay or other employee benefit plan, trust,
arrangement, contract, commitment, agreement or policy (collectively, "Benefit
Plans") sponsored or maintained by Company or its Subsidiaries, in which present
or former employees of Company or any Subsidiary participate (collectively, the
"Company Plans"). Correct and complete copies of the following documents, which
are correct and complete in all material respects, with respect to each of the
Company Plans (other than a Multiemployer Plan), have been made available to
Purchaser, to the extent applicable: (i) any plans, all material amendments
thereto and related trust documents, and amendments thereto; (ii) the most
recent Forms 5500 and all schedules thereto and the most recent actuarial
report, if any; (iii) the most recent IRS determination letter; (iv) summary
plan descriptions; (v) material written communications to employees relating to
the Company Plans; and (vi) written descriptions of all material non-written
agreements relating to the Company Plans.
(b) No Company Plan is subject to Title VI of ERISA. Except as
set forth in Schedule 4.17(b) hereto and except as, individually or in the
aggregate, would not or would not reasonably be expected to have a Material
Adverse Effect: (A) the Company Plans have been administered and are in
compliance with the terms of such plan and all applicable laws, (B) no
"reportable event" (as such term is used in Section 4043 of ERISA other than
those events for which the thirty (30) day notice has been waived pursuant to
the regulations), "prohibited transaction" (as such term is used in Section 406
of ERISA or Section 4975 of the IRC) or "accumulated funding deficiency" (as
such term is used in Section 412 or 4971 of the IRC) has heretofore occurred
with respect to any Company Plan and (C) each Company Plan intended to qualify
under Section 401(a) of the IRC has received a favorable determination from the
IRS regarding its qualified status and no notice has been received from the IRS
with respect to the revocation of such qualification. None of the Company Plans
provides for post-employment life or health insurance, benefits or coverage for
any participant or any beneficiary of a participant, except as may be required
under the Consolidated Omnibus Budget Reconciliation Act of 1985, as amended,
and at the expense of the participant or the participant's beneficiary.
(c) There is no litigation or administrative or other
proceeding involving any Company Plan nor has Company or any of its Subsidiaries
received notice that any such proceeding is threatened, in each case, that would
have or would reasonably be expected to have a Material Adverse Effect. Neither
Company nor any of its Subsidiaries has incurred, nor, to Company's knowledge,
is reasonably likely to incur, any withdrawal liability with respect to any
Multiemployer Plan which remains unsatisfied in an amount which would have,
individually or in the aggregate, a Material Adverse Effect. The termination of,
or withdrawal from, any Company Plan or Multiemployer Plan to which Company or
any of its Subsidiaries contributes, on or prior to the Second Closing
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Date, will not subject Company or any of its Subsidiaries to any liability under
Title IV of ERISA that would have, individually or in the aggregate, a Material
Adverse Effect.
4.18 Insurance. There are in full force and effect for the benefit
of Company and its Subsidiaries insurance policies and bonds providing adequate
coverage from reputable and financially sound insurers in amounts sufficient to
insure the assets and risks of Company and its Subsidiaries in accordance with
prudent business practice in the industry of Company and Subsidiaries. No notice
has been given or claim made to cancel or void any such policies or bonds or to
reduce the coverage provided thereby, except as would not have, individually or
in the aggregate, a Material Adverse Effect.
4.19 Year 2000 Compliance. Each system comprised of software,
hardware, databases or embedded control systems (microprocessor controlled or
controlled by any robotic or other device) (collectively, a "System") that
constitutes any material part of, or is used in connection with the use,
operation or enjoyment of, any material tangible or intangible asset or real
property of Company or any of its Subsidiaries will not be materially adversely
affected by the advent of the year 2000, the advent of the twenty-first century
or the transition from the twentieth century through the year 2000 and into the
twenty-first century ("Year 2000 Compliant") in a manner that could reasonably
be expected to have, individually or in the aggregate, a Material Adverse
Effect. Company has no reason to believe that it or any of its Subsidiaries may
incur material expenses arising from or relating to the failure of any of their
Systems as a result of the advent of the year 2000, the advent of the
twenty-first century or the transition from the twentieth century through the
year 2000 and into the twenty-first century.
4.20 Regulatory Matters. Except as provided in Schedule 4.20 hereto
and as would not have, individually or in the aggregate, a Material Adverse
Effect, each of Company and its Subsidiaries: (i) has completed all regulatory
applications, filings and tariffs, has received all regulatory certificates or
other approvals, and has otherwise complied with all regulatory requirements
necessary to offer any and all services currently offered by Company or any of
its Subsidiaries; and (ii) with respect to any planned or future services that
it may offer, it will complete all regulatory applications, filings and tariffs,
will obtain all regulatory certificates or other approvals and will otherwise
comply with all regulatory requirements necessary to offer any and all such
services.
4.21 No Vote. No vote or consent of Company's stockholders or of the
holder's of the Company's 10% Series A or Series B Senior Notes due 2008 is
required to approve this Agreement or any of the other Transaction Documents or
for Company to consummate the transactions and perform its obligations
contemplated hereby and thereby, except to obtain the Requisite Company Vote in
connection with the issuance of the Second Closing Date Shares, the Second
Closing Date Notes and the shares of Class A Common Stock issuable upon
conversion of the Second Closing Date Notes.
4.22 Employment Agreements. The execution by Company of this
Agreement and the other Transaction Documents and the consummation of the
transactions contemplated hereby and thereby will not result in Company being
required to make any
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payments, or accelerate or increase any payments required to be made by Company,
under any employment agreement to which Company or any of its Subsidiaries is a
party.
4.23 Investment Company Act. Company and each Subsidiary of Company
either (i) is not an "investment company," or a company "controlled" by, or an
"affiliated company" with respect to, an "investment company," within the
meaning of the Investment Company Act of 1940, as amended, and the rules and
regulations promulgated thereunder (the "Investment Company Act") or (ii)
satisfies all conditions for an exemption from the Investment Company Act, and,
accordingly, neither Company nor any Subsidiary of Company is required to be
registered under the Investment Company Act.
5. COVENANTS OF COMPANY AND PURCHASER
5.1 Conduct Business in Ordinary Course. (a) From the date hereof
until the First Closing, except as contemplated by this Agreement or with the
prior written consent of Purchaser, Company shall, and shall cause its
Subsidiaries to:
(i) conduct their businesses only in the ordinary course
consistent with past practice;
(ii) use their reasonable best efforts to (A) preserve
the present business operations, organization (including management
and the sales force) and goodwill of Company and its Subsidiaries,
and (B) preserve their present relationship with Persons having
material business dealings with Company and its Subsidiaries;
(iii) maintain (A) all of the assets and properties of
Company and its Subsidiaries in their current condition, ordinary
wear and tear excepted, and (B) insurance upon all of the properties
and assets of Company and its Subsidiaries in such amounts and of
such kinds comparable to that in effect on the date of this
Agreement;
(iv) (A) maintain the books, accounts and records of
Company and its Subsidiaries in the ordinary course of business
consistent with past practices, (B) continue to collect accounts
receivable and pay accounts payable utilizing normal procedures, and
(C) comply with all material contractual and other obligations
applicable to the operation of Company and its Subsidiaries; and
(v) comply in all material respects with applicable
laws, including Environmental Laws.
(b) From the date hereof until the First Closing (except, in
the case of clauses (i), (ii), (iii) and, to the extent applicable, (vi) below,
which shall be from the date hereof until the Second Closing), except as
otherwise expressly contemplated by this Agreement or with the prior written
consent of Purchaser, Company shall not, and shall cause its Subsidiaries not
to:
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(i) declare, set aside, make or pay any dividend or
other distribution in respect of the capital stock of Company or any
of its Subsidiaries or repurchase, redeem or otherwise acquire any
outstanding shares of the capital stock or other securities of, or
other ownership interests in, Company or any of its Subsidiaries;
(ii) effect any recapitalization, reclassification,
stock split or like change in the capitalization of Company or any
of its Subsidiaries;
(iii) amend the certificate of incorporation or by-laws
of Company;
(iv) introduce any material change with respect to the
operation of Company or any of its Subsidiaries, including any
material change in the types, nature, composition or quality of its
products or services, or make any material change in product
specifications or prices or terms of distributions of such products,
except in accordance with the Business Plan;
(v) conduct their respective businesses in a manner or
take, or cause to be taken, any action that would reasonably be
expected to prevent or materially delay Company or Purchaser from
consummating the transactions contemplated hereby or by the other
Transaction Documents in accordance with the terms hereof or thereof
(regardless of whether such action would otherwise be permitted or
not prohibited hereunder) as a result of antitrust concerns or
telecommunications regulatory concerns, including those relating to
building, maintaining or operating any telecommunications systems or
providing any telecommunications services; or
(vi) agree to do anything prohibited by this Section 5.1
or anything that would make any of the representations and
warranties of Company in this Agreement or the other Transaction
Documents untrue or incorrect in any material respect as of any time
through and including the First Closing Date or the Second Closing
Date, as the case may be.
5.2 Director. (a) From and after the date that any of the
Convertible Notes held by Purchaser or any of its Affiliates are converted
pursuant to and in accordance with the Indenture and, upon such conversion,
Purchaser and its Affiliates Beneficially Own at least 5% of the then issued and
outstanding shares of Common Stock, Purchaser shall be entitled to designate, at
its option, two individuals who shall be reasonably satisfactory to Company at
the time of initial designation to serve on its Board of Directors (the
"Purchaser Directors"). One of the Purchaser Directors shall be one of Company's
directors that is elected by holders of Class B Common Stock in accordance with
Article THIRD, Section 4.2(a)(iv) of the Company Charter (unless no such shares
remain issued and outstanding, in which case, such designee shall be a Class A
Director (as defined in the Company Charter) or such other director elected by
the then holders of common stock of Company) and shall serve in such capacity in
accordance with the
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Company Charter and by-laws of Company. The other Purchaser Director shall be
one of Company's directors that is elected by holders of Class A Common Stock in
accordance with Article THIRD, Section 4.2(a)(iv) of the Company Charter (unless
no such shares remain issued and outstanding, in which case, such designee shall
be a director elected by the then holders of common stock of Company) and shall
serve in such capacity in accordance with the Company Charter and by-laws of
Company. Promptly following such designations, Company's Board of Directors will
take all action necessary to elect the Purchaser Directors as members of
Company's Board of Directors and thereafter Company shall continue to nominate
the Purchaser Directors, solicit proxies and otherwise encourage their
respective re-election, in each case, to the extent Company takes such action
with respect to the election of its other directors.
(b) Purchaser shall provide (or cause to be provided) to
Company the information about the Purchaser Directors that it is required under
applicable federal securities laws to be included in any proxy statement or
other solicitation materials relating to any stockholder solicitation or action
by Company's stockholders relating to the election of directors.
(c) Notwithstanding anything in this Agreement to the
contrary, the obligations that Company has under this Section 5.2 will
terminate, without further action by any Person, upon the date on which
Purchaser and its Affiliates no longer Beneficially Own, for a period of ninety
(90) consecutive days, in excess of 5% of the then issued and outstanding shares
of Common Stock. At such time, each of the Purchaser Directors shall promptly
resign their respective positions as members of Company's Board of Directors.
(d) In the event that Purchaser shall desire to appoint either
or both of the directors it is entitled to designate to Company's Board of
Directors in accordance with Section 5.2(a) above otherwise than in connection
with a solicitation of or action by Company's stockholders relating to the
election of directors, then as soon as practicable upon written notice from
Purchaser, Company shall cause such person or persons to be appointed to its
Board of Directors.
(e) From and after the First Closing Date and otherwise in the
event Purchaser shall be entitled to designate directors to Company's Board of
Directors in accordance with Section 5.2(a) above but does not exercise its
right to designate at least one such director, Purchaser shall be entitled to
designate in writing, from time to time, to Company's Board of Directors one
representative (the "Purchaser Representative") as an observer (with no right to
vote) at each meeting of Company's Board of Directors and such Board of
Directors shall furnish (or cause to be furnished) to Purchaser, to the
attention of the Purchaser Representative, and at the same time and in the same
manner furnished to the directors of Company, notice of each such meeting and
any other materials relevant to such meeting as provided to the directors of
Company. The Purchaser Representative shall treat all such information as
confidential in accordance with such duties regarding confidentiality as would
be generally applicable to a director receiving such information.
Notwithstanding the foregoing, Purchaser agrees that the Purchaser
Representative shall be
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required to excuse himself or herself from any meeting of Company's Board of
Directors if at any time the outside counsel of Company reasonably determines
that (i) the participation of the Purchaser Representative presents a conflict
of interest or a potential conflict of interest, whether the conflict arises out
of Purchaser's business, Company's business or any other matter or (ii) the
Purchaser Representative must be excused from deliberations of Company's Board
of Directors so as to maintain the legal privilege of such deliberations.
(f) For so long as Purchaser shall be entitled to have a
director on or an observer to Company's Board of Directors in accordance with
this Section 5.2, Company shall take all permissible action necessary so that
Purchaser can effect its rights under this Section 5.2, and shall not amend,
modify or alter its certificate of incorporation or by-laws in a manner that
would adversely affect or contravene Purchaser's rights under this Section 5.2.
5.3 Regulatory and Other Authorizations. (a) Each of Company and
Purchaser shall use its reasonable best efforts (and cooperate fully with the
other party in promptly seeking) to obtain all authorizations, consents, orders
and approvals of Governmental Authorities that may be or may become necessary
for the execution and delivery of, and the performance of its obligations
pursuant to, this Agreement and the other Transaction Documents, including:
(i) making, as promptly as practicable after the date
hereof an appropriate filing of a Notification and Report Form
pursuant to the HSR Act with respect to the transactions
contemplated by this Agreement, which filing shall request early
termination of the waiting periods imposed by the HSR Act;
(ii) complying at as early a date as possible with any
Request for Additional Information to cause termination of the
waiting periods under the HSR Act and to prevent the entry by a
court of competent jurisdiction of an order enjoining the
consummation of the transactions contemplated by this Agreement; and
(iii) prior to the exercise of Purchaser's conversion
rights with respect to the Convertible Notes under the Indenture,
making an appropriate filing of a Notification and Report Form
pursuant to the HSR Act with respect to the transactions
contemplated in the Indenture, which filing shall request early
termination of the waiting periods imposed by the HSR Act and
complying at as early a date as possible with any Request for
Additional Information to cause termination of the waiting periods
under the HSR Act and to prevent the entry by a court of competent
jurisdiction of an order enjoining the consummation of the
transactions contemplated by the Indenture.
(b) On and after the Regulatory Relief Date, Company shall use
its reasonable best efforts (and cooperate fully with Purchaser) to comply with
the provisions of Section 272 of the Telecommunications Act as implemented by
the FCC, and
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the accounting and other rules, regulations and orders of any Governmental
Authority that may be or may become necessary for the execution and delivery of,
and the performance of its obligations pursuant to, this Agreement and the other
Transaction Documents.
(c) Nothing in this Section 5.3 shall require Company or any
of its Affiliates or Purchaser or any of its Affiliates to sell or otherwise
dispose of, or permit the sale or other disposition of, any assets, in each
case, whether as a condition to obtaining any approval from a Governmental
Authority or any other Person or for any other reason.
5.4 Access to Information. Company shall, and shall cause each of
its Subsidiaries to, afford to Purchaser and to the officers, employees,
accountants, counsel, financial advisors and other representatives of Purchaser,
reasonable access during normal business hours during the period prior to the
First Closing Date to all of their respective properties, books, contracts,
commitments, personnel and records and, during such period, Company shall, and
shall cause each of its Subsidiaries to, furnish promptly to Purchaser (i) a
copy of each Future Company SEC Document and (ii) all other information
concerning their respective business, properties and personnel as Purchaser may
reasonably request. Except as required by applicable law, Purchaser will hold,
and will cause its respective officers, employees, accountants, counsel,
financial advisors and other representatives and Affiliates to hold, any
nonpublic information in confidence to the extent required by, and in accordance
with, the provisions of the Non-Disclosure Agreement, dated August 9, 1999,
among Company, Parent and Bell Atlantic Corporation (the "Confidentiality
Agreement").
5.5 Further Assurances. From the date hereof until the Second
Closing Date, each of Company and Purchaser shall use its reasonable best
efforts to (i) take all actions necessary or appropriate to consummate the
transactions contemplated by this Agreement and other Transaction Documents and
(ii) cause the fulfillment at the earliest practicable date of all of the
conditions to their respective obligations to consummate the transactions
contemplated by this Agreement and the other Transaction Documents (other than
with respect to those conditions set forth in Section 6.11 hereof). Without
limiting the foregoing, such actions shall include obtaining all Permits of
Governmental Authorities, making all filings and required submissions with
Governmental Authorities, obtaining all consents and approvals from parties to
any agreements or contracts with Company or any of its Subsidiaries as are
necessary for the consummation of the transactions contemplated hereby and by
the other Transaction Documents, defending any lawsuit or legal challenges,
whether judicial or administrative, challenging this Agreement or the other
Transaction Documents or any of the transactions contemplated hereby or thereby
and providing all information reasonably requested by a party hereto for the
purpose of taking any of the actions described above.
5.6 Use of Proceeds. Company will use the proceeds of the First
Closing Date Shares Purchase Price, the Second Closing Date Shares Purchase
Price, the First Closing Date Notes Purchase Price and the Second Closing Date
Notes Purchase
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Price only for lawful purposes in accordance with Section 2.4 hereof, as
applicable and such uses shall not contravene any applicable law or any
provisions hereof.
5.7 Affiliate Contracts. From the date hereof until the Second
Closing Date, Company shall not, and shall cause its Subsidiaries not to, amend,
modify or waive any provision of, or terminate or allow to be terminated, any
Affiliate Contract in any manner materially adverse to Company or any of its
Subsidiaries.
5.8 Notification of Certain Events. From the date hereof until the
First Closing Date, Company shall promptly notify Purchaser of the existence of
any event referred to in Section 6.11 or Section 6.10A hereof.
5.9 Modification of Terms in Certain Circumstances. From the date
hereof until the First Closing Date, if Company consummates, publicly announces
or otherwise has entered into an agreement with respect to the private sale of
25,000,000 or more shares of its Stock to a Person or any Group (other than the
transactions contemplated by this Agreement) pursuant to a transaction that is
exempt from the registration requirements of the Securities Act (excluding the
issuance of any shares of Class A Common Stock upon the exercise or conversion
of outstanding options and warrants to purchase shares of Class A Common Stock)
for a purchase price per share of Class A Common Stock (the "Other Per Share
Purchase Price") that is less than $28.00 (the "Original Per Share Purchase
Price"), then the provisions of this Agreement will be deemed modified and
amended so that: (i) the First Closing Date Shares Purchase Price and the Second
Closing Date Shares Purchase Price shall be equal to the number of First Closing
Date Shares or Second Closing Date Shares, as the case may be, multiplied by the
Other Per Share Purchase Price; (ii) the Conversion Price (as defined in the
Indenture) shall be equal to the Other Per Share Purchase Price multiplied by a
fraction the numerator of which is $34.00 and the denominator of which is the
Original Per Share Purchase Price; and (iii) the First Closing Date Notes
Purchase Price and the Second Closing Date Notes Purchase Price shall be equal
to the amount of First Closing Date Notes or Second Closing Date Notes, as the
case may be, divided by $34.00, and then such quotient shall be multiplied by
the Other Per Share Purchase Price multiplied by a fraction the numerator of
which is $34.00 and the denominator of which is the Original Per Share Purchase
Price. Company shall promptly notify Purchaser of the existence of any
transaction with respect to which this Section 5.9 would apply.
5.10 Proxy Statement; Registration Statement. (a) As promptly as
practicable after the execution of this Agreement, Company shall make a good
faith determination in consultation with Purchaser whether stockholder approval
is required for (i) the issuance of the First Closing Date Shares and the First
Closing Date Notes (and the shares of Class A Common Stock issuable upon
conversion of such notes), or (ii) solely for the issuance of the Second Closing
Date Shares and the Second Closing Date Notes (and the shares of Class A Common
Stock issuable upon conversion of such notes). If the Company concludes based on
the advice of outside counsel, after consultation with counsel to Purchaser,
that approval is required for the issuance of the First Closing Date Shares and
the First Closing Date Notes (and the shares of Class A Common Stock
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issuable upon conversion of such notes) because of the issuance of the Second
Closing Date Shares and the Second Closing Date Notes, and the Second Closing
Date Shares and the Second Closing Date Notes (and the shares of Class A Common
Stock issuable upon conversion of such notes), Company and Purchaser shall use
their reasonable best efforts to consummate the First Closing as promptly as
practicable, but shall not be obligated in its sole discretion to consummate,
and the Agreement shall be modified inter alia to delete all references to, the
Second Closing, or the Second Closing Date, and references to the Second Closing
Date Shares and the Second Closing Date Notes. In the event the Company
determines that the Requisite Company Vote is only required for the issuance of
the Second Closing Date Shares and Second Closing Date Notes (and the shares of
Class A Common Stock issuable upon conversion of such notes) the Company shall
prepare and file with the SEC in connection with its next succeeding Annual
Meeting of Stockholders (or next special meeting if prior to such Annual
Meeting) a proxy statement of the Company relating to the meeting of the
Company's stockholders (the "Company Stockholders Meeting") to be held to
consider approval of the issuance of the issuance of the Second Closing Date
Shares and Second Closing Date Notes (and the shares of Class A Common Stock
issuable upon conversion of such notes) (the "Proxy Statement"). The Company
shall use its reasonable best efforts to cause the Proxy Statement to become
cleared as promptly as practicable by the SEC. The Company shall use its
reasonable commercial efforts to file the Proxy Statement no later than April
20, 2000, and to hold the Company Stockholders Meeting no later than May 31,
2000. The Purchaser or the Company, as the case may be, shall furnish all
information concerning the Purchaser or the Company as the other party may
reasonably request in connection with such actions and the preparation of the
Proxy Statement. As promptly as practicable after the Proxy Statement is cleared
by the SEC, the Proxy Statement will be mailed to the stockholders of the
Company. The Company shall cause the Proxy Statement to comply as to form and
substance in all material respects with the applicable requirements of (i) the
Exchange Act, including Sections 14(a) and 14(d) thereof and the respective
regulations promulgated thereunder and (ii) the rules and regulations of
NASDAQ's National Market ("NASDAQ/NMS").
(b) The Company will, through its Board of Directors,
unanimously recommend, and the Proxy Statement shall include the unanimous and
unconditional recommendation of the Board of Directors of the Company, to the
stockholders of the Company that they vote, as required by NASDAQ/NMS, in favor
of the issuance of the Second Closing Date Shares and the Second Closing Date
Notes (and the shares of Class A Common Stock issuable upon conversion of such
notes).
(c) The Company shall call and hold the Company Stockholders
Meeting as promptly as practicable after the mailing date of the Proxy Statement
for the purpose of voting upon the issuance of the Second Closing Date Shares
and Second Closing Date Notes (and the shares of Class A Common Stock issuable
upon conversion of such notes). The Company shall use its reasonable best
efforts (through its agents or otherwise) to solicit from its stockholders
proxies in favor of the issuance of the Second Closing Date Shares and Second
Closing Date Notes (and the shares of Class A Common
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Stock issuable upon conversion of such notes), and shall take all other action
necessary to secure the Requisite Company Vote.
6. FIRST CLOSING CONDITIONS TO OBLIGATION OF PURCHASER
Purchaser's obligation to purchase the First Closing Date Shares and First
Closing Date Notes at the First Closing and consummate the transactions
contemplated hereby are subject to the satisfaction or fulfillment on or prior
to the First Closing Date of the following conditions:
6.1 Representations and Warranties. The representations and
warranties of Company contained in Article 4 of this Agreement (i) that are
qualified as to materiality or Material Adverse Effect shall be true and correct
in all respects as provided herein and (ii) that are not so qualified shall be
true and correct in all material respects, in each case, as of the date of this
Agreement and as of such First Closing Date as though made at and as of such
First Closing Date, except to the extent that they expressly refer to an earlier
or specific time, in which case they shall be true and correct as of such time.
Purchaser shall have received a certificate signed on behalf of Company by an
officer of Company to such effect on the First Closing Date. Purchaser shall
have also received a certificate signed on behalf of Company by an officer of
Company certifying as to the matters contained in Section 4.1 hereof as of the
First Closing Date.
6.2 Covenants. All covenants and agreements contained in this
Agreement to be performed by Company on or prior to the First Closing Date shall
have been performed or complied with in all material respects. Purchaser shall
have received a certificate signed on behalf of Company by an officer of Company
to such effect on the First Closing Date.
6.3 HSR Act. The waiting period (and any extensions thereof) under
the HSR Act applicable to the transactions contemplated hereby shall have
expired or been terminated.
6.4 No Orders. No statute, rule, regulation, decree, preliminary or
permanent injunction, temporary restraining order or other order or ruling of
any nature of any Governmental Authority shall be in effect that (i) restrains,
prevents or materially changes the transactions contemplated hereby, or (ii)
requires or requests any amendment, modification or waiver of any provision of
this Agreement or any of the other Transaction Documents.
6.5 No Investigations. There shall not be any pending suit, action,
investigation or proceeding by any Governmental Authority that seeks to (i)
restrain or prohibit the purchase and sale of the First Closing Date Shares or
the First Closing Date Notes or any of the other transactions contemplated by
this Agreement, (ii) require the payment of any damages, fees or other amounts
by Purchaser or any of its Affiliates in connection with the purchase of the
First Closing Date Shares or the First Closing Date Notes by Purchaser or the
consummation of the transactions contemplated hereby or by any other Transaction
Document that are, individually or in the aggregate, in an amount in
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excess of the amount set forth on Schedule 6.5 hereto, (iii) prohibit or limit
the ownership or operation by Purchaser or any of its Affiliates of, or compel
Purchaser or any of its Affiliates to dispose of or hold separate, any business
or assets, in each case, as a result of the purchase of the First Closing Date
Shares or the First Closing Date Notes or any of the other transactions
contemplated by this Agreement, or (iv) require any amendment, modification or
waiver of any provision of this Agreement or any of the other Transaction
Documents.
6.6 Opinion of Counsel. Purchaser shall have received an opinion
reasonably satisfactory to it, dated as of the First Closing Date, of Paul,
Weiss, Rifkind, Wharton & Garrison, outside counsel to Company, with respect to
(or to the effect that, as applicable, and subject to customary exceptions and
qualifications): (i) the due authorization, execution and delivery by Company of
this Agreement and each other Transaction Document, to which Company is a party;
(ii) the validity, binding nature and enforceability as to Company of this
Agreement and each other Transaction Document to which Company is a party which
is governed by New York law; (iii) due incorporation and good standing of
Company; (iv) due authorization and valid issuance of the First Closing Date
Shares or the First Closing Date Notes to be issued and sold pursuant to this
Agreement (including that the same are free from preemptive rights pursuant to
law or the Company Charter); (v) registration under the Securities Act was not
required for the offer and sale of the First Closing Date Shares or the First
Closing Date Notes pursuant to this Agreement; and (vi) the execution and
delivery by Company of this Agreement and each other Transaction Document to
which it is a party and the performance by Company of its obligations hereunder
and thereunder will not conflict with, constitute a default under or violate (A)
the Company Charter or by-laws of Company, (B) any judgment, injunction or order
of any Governmental Authority binding on Company of which such counsel is aware,
or (C) the 10% Notes Indenture and the Master Loan and Security Agreement, dated
as of April 14, 1999, by and between Company and AboveNet Communications, Inc.
6.7 Transaction Documents. Each of the Transaction Documents shall
have been duly and validly executed and delivered by each of the parties
thereto. The Fiber Optic Private Network Agreement shall have been executed and
remain in full force and effect.
6.8 Material Adverse Change. No Material Adverse Change shall have
occurred since the date hereof.
6.9 Delivery of Securities. Certificate or certificates representing
the First Closing Date Shares and note or notes representing the First Closing
Date Notes in the form attached as Exhibit A to the Indenture shall have been,
or shall at the First Closing be, validly delivered and transferred to
Purchaser, free and clear of any and all Liens.
6.10 Consents and Approvals. All consents and approvals of all
Governmental Authorities and all other Persons that are necessary to consummate
the transactions contemplated hereby and for Purchaser to receive the benefits
contemplated by this Agreement shall have been obtained.
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6.11 Parent Ownership; Certain Other Events.
(a) As of the First Closing, Parent shall own of record and
beneficially such number of shares of Common Stock that represents not less than
50.1% of the voting power of all of the issued and outstanding shares of Common
Stock as of such time. As of the First Closing, the Class B Permitted Holders
shall own of record and beneficially all of the Stock of Parent.
(b) At any time between the date hereof and the First Closing
Date, neither Company nor any other Person shall have publicly announced a
transaction which, if effected, would result in, or consummated a transaction
that resulted in, a Change of Control (as such term is defined in the
Stockholders Agreement) or any other transaction of the type that is referred to
in Section 2.3(c) of the Stockholders Agreement.
(c) At any time between the date hereof and the First Closing
Date, Company shall not have consummated, publicly announced or filed a
registration statement with respect to the issuance or sale pursuant to a
registration statement to be filed under the Securities Act of 25,000,000 or
more shares of Stock or other equity or convertible debt securities that are
convertible into 25,000,000 or more shares of Common Stock (excluding with
respect to the issuance of Class A Common Stock upon the exercise of employee
stock options, warrants, calls, options or other rights to purchase or otherwise
acquire shares of capital stock of Company in effect, existing or outstanding,
as the case may be, as of the date hereof).
6.12 Good Standing Certificates. Purchaser shall have received from
Company long-form good standing certificates, dated within five (5) Business
Days preceding the First Closing Date, and related bring-down memoranda, dated
as of the First Closing Date, for Company and each of its domestic Subsidiaries
issued by the Secretary of State in the jurisdiction of organization of each
such entity.
6.13 Franchise Agreement. The Franchise Agreement in effect on the
date hereof shall have been amended and restated substantially in the form of
Schedule 6.13 hereto.
6A. SECOND CLOSING CONDITIONS TO OBLIGATION OF PURCHASER
Purchaser's obligation to purchase the Second Closing Date Shares and
Second Closing Date Notes at the Second Closing are subject to the satisfaction
or fulfillment on or prior to the Second Closing Date of the following
conditions:
6.1A Representations and Warranties. The representations and
warranties of Company contained in Article 4 of this Agreement (other than
Section 4.16) (i) that are qualified as to materiality or Material Adverse
Effect shall be true and correct in all respects as provided herein and (ii)
that are not so qualified shall be true and correct in all material respects, in
each case, as of the date of this Agreement and as of such Second Closing Date
as though made at and as of such Second Closing Date, except to the extent
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that they expressly refer to an earlier or specific time, in which case they
shall be true and correct as of such time. Purchaser shall have received a
certificate signed on behalf of Company by an officer of Company to such effect
on the Second Closing Date. Purchaser shall have also received a certificate
signed on behalf of Company by an officer of Company certifying as to the
matters contained in Section 4.1 hereof as of the Second Closing Date.
6.2A Covenants. All covenants and agreements contained in this
Agreement to be performed by Company on or prior to the Second Closing Date
shall have been performed or complied with in all material respects. Purchaser
shall have received a certificate signed on behalf of Company by an officer of
Company to such effect on the Second Closing Date.
6.3A HSR Act. The waiting period (and any extensions thereof) under
the HSR Act applicable to the transactions to be consummated on the Second
Closing hereby shall have expired or been terminated.
6.4A No Orders. No statute, rule, regulation, decree, preliminary or
permanent injunction, temporary restraining order or other order or ruling of
any nature of any Governmental Authority shall be in effect that (i) restrains,
prevents or materially changes the transactions contemplated hereby, or (ii)
requires or requests any amendment, modification or waiver of any provision of
this Agreement or any of the other Transaction Documents.
6.5A No Investigations. There shall not be any pending suit, action,
investigation or proceeding by any Governmental Authority that seeks to (i)
restrain or prohibit the purchase and sale of the securities hereunder or any of
the other transactions contemplated by this Agreement, (ii) require the payment
of any damages, fees or other amounts by Purchaser or any of its Affiliates in
connection with the purchase of the securities by Purchaser pursuant to this
Agreement or the consummation of the transactions contemplated hereby or by any
other Transaction Document that are, individually or in the aggregate, in an
amount in excess of the amount set forth on Schedule 6.5 hereto, (iii) prohibit
or limit the ownership or operation by Purchaser or any of its Affiliates of, or
compel Purchaser or any of its Affiliates to dispose of or hold separate, any
business or assets, in each case, as a result of the purchase of the securities
pursuant to this Agreement or any of the other transactions contemplated by this
Agreement, or (iv) require any amendment, modification or waiver of any
provision of this Agreement or any of the other Transaction Documents.
6.6A Opinion of Counsel. Purchaser shall have received an opinion
reasonably satisfactory to it, dated as of the Second Closing Date, of Paul,
Weiss, Rifkind, Wharton & Garrison, outside counsel to Company, with respect to
(or to the effect that, as applicable, and subject to customary exceptions and
qualifications): (i) the due authorization, execution and delivery by Company of
this Agreement and each other Transaction Document, to which Company is a party;
(ii) the validity, binding nature and enforceability as to Company of this
Agreement and each other Transaction Document to which Company is a party which
is governed by New York law; (iii) due incorporation and
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good standing of Company; (iv) due authorization and valid issuance of the
Second Closing Date Shares and Second Closing Date Notes to be issued and sold
pursuant to this Agreement (including that the same are free from preemptive
rights pursuant to law or the Company Charter); (v) registration under the
Securities Act was not required for the offer and sale of the Second Closing
Date Shares and the Second Closing Date Notes pursuant to this Agreement; and
(vi) the execution and delivery by Company of this Agreement and each other
Transaction Document to which it is a party and the performance by Company of
its obligations hereunder and thereunder will not conflict with, constitute a
default under or violate (A) the Company Charter or by-laws of Company, (B) any
judgment, injunction or order of any Governmental Authority binding on Company
of which such counsel is aware, or (C) the 10% Notes Indenture and the Master
Loan and Security Agreement, dated as of April 14, 1999, by and between Company
and AboveNet Communications, Inc.
6.7A Transaction Documents. Each of the Transaction Documents shall
have been duly and validly executed and remain in full force and effect.
6.8A Delivery of Securities. Certificate or certificates
representing the Second Closing Date Shares and a note or notes evidencing the
Second Closing Date Notes in the form attached as Exhibit A to the Indenture
shall have been, or shall at the Second Closing be, validly delivered and
transferred to Purchaser, free and clear of any and all Liens.
6.9A Consents and Approvals. All consents and approvals of all
Governmental Authorities and all other Persons that are necessary to consummate
the transactions contemplated hereby and for Purchaser to receive the benefits
contemplated by this Agreement shall have been obtained.
6.10A Parent Ownership. (a) As of the Second Closing, Parent shall
own of record and beneficially such number of shares of Common Stock that
represents not less than 50.1% of the voting power of all of the issued and
outstanding shares of Common Stock as of such time. As of the Second Closing,
the Class B Permitted Holders shall own of record and beneficially all of the
Stock of Parent.
(b) At any time between the date hereof and the Second Closing
Date, neither Company nor any other Person shall have publicly announced a
transaction which, if effected, would result in, or consummated a transaction
that resulted in, a Change of Control (as such term is defined in the
Stockholders Agreement) or any other transaction of the type that is referred to
in Section 2.3(c) of the Stockholders Agreement.
6.11A Good Standing Certificates. Purchaser shall have received from
Company long-form good standing certificates, dated within five (5) Business
Days preceding the Second Closing Date, and related bring-down memoranda, dated
as of the Second Closing Date, for Company and each of its domestic Subsidiaries
issued by the Secretary of State in the jurisdiction of organization of each
such entity.
6.12A Consummation of the First Closing. The First Closing shall
have been consummated in accordance with the terms of this Agreement.
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7. FIRST CLOSING CONDITIONS TO OBLIGATION OF COMPANY
Company's obligation to issue or sell the First Closing Date Shares and
the First Closing Date Notes at the First Closing and consummate the
transactions contemplated hereby are subject to the satisfaction or fulfillment
on or prior to the First Closing Date of the following conditions:
7.1 Representations and Warranties. The representations and
warranties of Purchaser contained in Article 3 of this Agreement (i) that are
qualified as to materiality or Material Adverse Effect shall be true and correct
in all respects as provided herein and (ii) that are not so qualified shall be
true and correct in all material respects, in each case, as of the date of this
Agreement and as of such First Closing Date as though made at and as of such
First Closing Date, except to the extent that they expressly refer to an earlier
or specific time, in which case they shall be true and correct as of such time.
Company shall have received a certificate signed on behalf of Purchaser by an
officer of Purchaser to such effect on the First Closing Date.
7.2 Covenants. All covenants and agreements contained in this
Agreement to be performed by Purchaser on or prior to the First Closing Date
shall have been performed or complied with in all material respects. Company
shall have received a certificate signed on behalf of Purchaser by an officer of
Purchaser to such effect on the First Closing Date.
7.3 HSR Act. The waiting period (and any extensions thereof) under
the HSR Act applicable to the transactions contemplated hereby shall have
expired or been terminated.
7.4 No Orders. No statute, rule, regulation, decree, preliminary or
permanent injunction, temporary restraining order or other order of any nature
of any Governmental Authority shall be in effect that restrains or prevents the
transactions contemplated hereby; provided, however, that in the case of a
decree, injunction or other order, Company shall have used reasonable efforts to
prevent the entry of any such decree, injunction or other order and to appeal as
promptly as possible any such decree, injunction or other order.
7.5 Transaction Documents. Each of the Transaction Documents shall
have been duly and validly executed and delivered by the each of the parties
thereto.
7.6 No Investigations. There shall not be any pending suit, action,
investigation or proceeding by any Governmental Authority that seeks to (i)
restrain or prohibit the purchase and sale of the First Closing Date Shares or
First Closing Date Notes or any of the other transactions contemplated by this
Agreement, (ii) require the payment of any damages, fees or amounts by Company
or any of its Affiliates in connection with the purchase of the First Closing
Date Shares or First Closing Date Notes by Purchaser or the consummation of the
transactions contemplated hereby or by any other Transaction Document that are,
individually or in the aggregate, in an amount in excess of the amount set forth
on Schedule 6.5 hereto, (iii) compel Company or any of its Affiliates to dispose
of
37
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or hold separate any business or assets, in each case, as a result of the
purchase of the First Closing Date Shares or First Closing Date Notes or any of
the other transactions contemplated by this Agreement, or (iv) require any
amendment, modification or waiver of any provision of this Agreement or any of
the other Transaction Documents.
7.7 Consents and Approvals. All consents and approvals of all
Governmental Authorities and all other Persons that are necessary to consummate
the transactions contemplated hereby and for Company to receive the benefits
contemplated by this Agreement shall have been obtained.
7.8 Franchise Agreement. The Franchise Agreement in effect on the
date hereof shall have been amended and restated substantially in the form of
Schedule 6.13 hereto.
7A. SECOND CLOSING CONDITIONS TO OBLIGATION OF COMPANY
Company's obligation to issue or sell the Second Closing Date Shares and
the Second Closing Date Notes at the Second Closing are subject to the
satisfaction or fulfillment on or prior to the Second Closing Date of the
following conditions:
7.1A Representations and Warranties. The representations and
warranties of Purchaser contained in Article 3 of this Agreement (i) that are
qualified as to materiality or Material Adverse Effect shall be true and correct
in all respects as provided herein and (ii) that are not so qualified shall be
true and correct in all material respects, in each case, as of the date of this
Agreement and as of such Second Closing Date as though made at and as of such
Second Closing Date, except to the extent that they expressly refer to an
earlier or specific time, in which case they shall be true and correct as of
such time. Company shall have received a certificate signed on behalf of
Purchaser by an officer of Purchaser to such effect on the Second Closing Date.
7.2A Covenants. All covenants and agreements contained in this
Agreement to be performed by Purchaser on or prior to the Second Closing Date
shall have been performed or complied with in all material respects. Company
shall have received a certificate signed on behalf of Purchaser by an officer of
Purchaser to such effect on the Second Closing Date.
7.3A HSR Act. The waiting period (and any extensions thereof) under
the HSR Act applicable to the transactions to be consummated on the Second
Closing hereby shall have expired or been terminated.
7.4A No Orders. No statute, rule, regulation, decree, preliminary or
permanent injunction, temporary restraining order or other order of any nature
of any Governmental Authority shall be in effect that restrains or prevents the
transactions contemplated hereby; provided, however, that in the case of a
decree, injunction or other order, Company shall have used reasonable efforts to
prevent the entry of any such decree, injunction or other order and to appeal as
promptly as possible any such decree, injunction or other order.
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7.5A Transaction Documents. Each of the Transaction Documents shall
have been duly and validly executed and remain in full force and effect.
7.6A No Investigations. There shall not be any pending suit, action,
investigation or proceeding by any Governmental Authority that seeks to (i)
restrain or prohibit the purchase and sale of the securities hereunder or any of
the other transactions contemplated by this Agreement, (ii) require the payment
of any damages, fees or amounts by Company or any of its Affiliates in
connection with the purchase of the securities pursuant to this Agreement by
Purchaser or the consummation of the transactions contemplated hereby or by any
other Transaction Document that are, individually or in the aggregate, in an
amount in excess of the amount set forth on Schedule 6.5 hereto, (iii) compel
Company or any of its Affiliates to dispose of or hold separate any business or
assets, in each case, as a result of the purchase of the securities pursuant to
this Agreement or any of the other transactions contemplated by this Agreement,
or (iv) require any amendment, modification or waiver of any provision of this
Agreement or any of the other Transaction Documents.
7.7A Consents and Approvals. All consents and approvals of all
Governmental Authorities and all other Persons that are necessary to consummate
the transactions contemplated hereby and for Company to receive the benefits
contemplated by this Agreement shall have been obtained.
7.8A Stockholder Approval. The issuance of and sale of the Second
Closing Date Shares and the Second Closing Date Notes and the issuance of shares
of Class A Common Stock issuable upon conversion of the Second Closing Date
Notes pursuant to this Agreement shall have been duly approved by the Requisite
Company Vote.
7.9A Consummation of the First Closing. The First Closing shall have
been consummated in accordance with the terms of this Agreement.
8. INDEMNIFICATION
8.1 Indemnification. (a) Subject to the terms and conditions of this
Article 8 and Section 9.9 hereof, Company agrees to indemnify and hold Purchaser
and each of its officers, directors and Affiliates harmless from and against any
and all liabilities, obligations, damages, losses, deficiencies, costs,
penalties, interest and expenses (including, without limitation, reasonable
attorneys' fees) (collectively, "Losses"), including those arising from
third-party claims, arising out of, based upon, attributable to or resulting
from: (i) the failure of any of the representations or warranties of Company set
forth in Sections 4.2, 4.3, 4.4, 4.6, 4.12, 4.14, 4.17, 4.19, 4.20 and 4.21
hereof, to be true and correct as of the First Closing Date; and (ii) the breach
of any covenant or other agreement on the part of Company under the terms of
this Agreement, in each case, to the extent not waived by Purchaser.
(b) Subject to the terms and conditions of this Article 8 and
Section 9.9 hereof, Purchaser agrees to indemnify and hold Company and each of
its
39
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officers, directors and Affiliates harmless from and against any and all Losses,
including those arising from third-party claims, arising out of, based upon,
attributable to or resulting from: (i) the failure of any of the representations
or warranties of Purchaser set forth in Sections 3.1, 3.2, 3.3, 3.4, 3.5, 3.6,
3.7 and 3.8 hereof, to be true and correct as of the First Closing Date; and
(ii) the breach of any covenant or other agreement on the part of Purchaser
under the terms of this Agreement.
8.2 Limitations on Indemnification for Breaches of Representations,
Warranties and Covenants. (a) An Indemnifying Party (as defined below) shall not
have any liability to an Indemnified Party (as defined below) under clause (i)
of Section 8.1(a) hereof or clause (i) of Section 8.1(b) hereof, as the case may
be, unless the aggregate amount of Losses to such Indemnified Party finally
determined to arise thereunder based upon, attributable to or resulting from the
failure of any representation or warranty to be true and correct exceeds
$25,000,000 (the "Basket") and, subject to Section 8.2(b) below, and in such
event, such Indemnifying Party shall only be required to pay the entire amount
of such Losses in excess of the Basket.
(b) The aggregate amount that an Indemnified Party shall be
entitled to recover pursuant to Section 8.1 for any Loss or Losses shall not
exceed $845,000,000.
(c) The amount of an Indemnifying Party's liability under this
Article 8 to an Indemnified Party for any Loss shall be determined by taking
into account any insurance proceeds actually received by such Indemnified Party
with respect to such Loss (after deducting reasonable costs and expenses
incurred in connection with recovery of such proceeds).
(d) Except for claims of fraud or similar claims, the
indemnification provided in this Article 8 shall be the sole and exclusive
remedy after the First Closing Date in the case of the First Closing Date Shares
and the First Closing Date Notes, or the Second Closing Date in the case of the
Second Closing Date Shares and the Second Closing Date Notes, for any claims for
indemnification relating to the subject matter of this Agreement for which
indemnification is available; provided that nothing contained herein shall limit
rights or remedies expressly provided for in this Agreement or any other
Transaction Document or rights or remedies which, as a matter of applicable law
or public policy, cannot be limited or waived.
8.3 General Indemnification Procedures.
(a) A Person entitled to make a claim for indemnification
under Section 8.1 (an "Indemnified Party") against a party (the "Indemnifying
Party") required thereunder to indemnify such Indemnified Party not involving a
claim or action by a third party shall give written notice of the assertion of
such claim covered by such indemnity to the Indemnifying Party, which notice
shall set forth in reasonable detail, the amount of such claim and a description
of the basis for such claim with reference to the provision of this Agreement
under which liability is asserted. In the event that any suit, action or
proceedings shall be instituted by any third party or that any claim or demand
shall be
40
<PAGE>
asserted by any third party in respect of which indemnification may be sought
under Section 8.1 or 8.2 (a "Third-Party Claim"), the Indemnified Party shall
reasonably promptly cause written notice of the assertion of such Third Party
Claim of which it has knowledge to be forwarded to the Indemnifying Party. The
Indemnifying Party shall have the right, at its sole option and expense, to be
represented by counsel of its choice and to defend against, negotiate, settle or
otherwise take over control and deal with any Third- Party Claim, and if the
Indemnifying Party elects to defend against, negotiate, settle or otherwise take
over control and deal with any Third-Party Claim, the Indemnifying Party's
choice of counsel must be reasonably satisfactory to the Indemnified Party, and
the Indemnifying Party shall within twenty (20) days of such notice (or sooner,
if the nature of the Third-Party Claim so requires) notify the Indemnified Party
of its intent to do so. If the Indemnifying Party elects not to defend against,
negotiate, settle or otherwise take over control and deal with any Third-Party
Claim, fails to notify the Indemnified Party of its election as herein provided
or contests its obligation to indemnify the Indemnified Party for such Losses
under this Agreement, the Indemnified Party may defend against, negotiate,
settle or otherwise deal with such Third-Party Claim; provided, that if the
Indemnifying Party contests its obligations to indemnify the Indemnified Party,
and if it is finally determined that any such Third-Party Claim was not a claim
for which indemnification was available under this Article 8, the Indemnified
Party shall reimburse the Indemnifying Party for any expenses advanced on its
behalf; provided, further, that the Indemnified Party shall keep the
Indemnifying Party fully informed of the facts of the Third-Party Claim and the
progress of the defense thereof. If the Indemnified Party defends any
Third-Party Claim, then the Indemnifying Party shall reimburse the Indemnified
Party for the reasonable and documented expenses of defending such Third- Party
Claim with respect to which it is entitled to be indemnified hereunder upon
submission of periodic bills. If the Indemnifying Party shall assume the defense
of any Third-Party Claim, the Indemnified Party may participate, at his, her or
its own expense, in the defense of such Third-Party Claim; provided, however,
that such Indemnified Party shall be entitled to participate in any such defense
with separate counsel at the expense of the Indemnifying Party (as provided
above) if (i) so requested by the Indemnifying Party to participate or (ii) in
the reasonable opinion of counsel to the Indemnified Party, a conflict or
potential conflict exists between the Indemnified Party and the Indemnifying
Party that would make such separate representation advisable; and provided
further, that the Indemnifying Party shall not be required to pay for more than
one such counsel for all Indemnified Parties in connection with any Third-Party
Claim. The parties hereto agree to cooperate fully with each other in connection
with the defense, negotiation or settlement of any such Third-Party Claim.
(b) After any final judgment or award shall have been rendered
by a court, arbitration board or administrative agency of competent jurisdiction
and the expiration of the time in which to appeal therefrom, or a settlement
(which is reasonably acceptable to the Indemnifying Party) shall have been
consummated, or the Indemnified Party and the Indemnifying Party shall have
arrived at a mutually binding agreement with respect to a claim for
indemnification under Section 8.1, including any Third-Party Claim, the
Indemnified Party shall forward to the Indemnifying Party notice of any sums due
and owing by the Indemnifying Party pursuant to this Agreement, with respect to
such matter
41
<PAGE>
and the Indemnifying Party shall be required to make payment of all sums so due
and owing to such Indemnified Party by wire transfer of immediately available
funds within ten (10) Business Days after the date of such notice.
(c) The failure of the Indemnified Party to give reasonably
prompt notice of any Third-Party Claim shall not release, waive or otherwise
affect the Indemnifying Party's obligations with respect thereto except to the
extent that the Indemnifying Party can demonstrate actual loss and prejudice as
a result of such failure.
8.4 Tax Treatment of Indemnity Payments. The parties agree that any
indemnity payment made pursuant to this Article 8 (an "Indemnity Payment") shall
be treated by the parties for all tax purposes as an adjustment to the First
Closing Date Shares Purchase Price; provided, however, that if the amount of any
indemnity payments exceeds the First Closing Date Shares Purchase Price, any
such excess shall be treated for all tax purposes as an adjustment to the First
Closing Date Notes Purchase Price.
9. MISCELLANEOUS
9.1 Successors and Assigns. No party may assign this Agreement or
any of its rights or obligations hereunder to any Person without the prior
written consent of the other party; provided, however, that Purchaser may assign
its rights and obligations hereunder to any direct or indirect majority-owned
subsidiary of Bell Atlantic Corporation to whose board of directors or
comparable governing body Bell Atlantic Corporation or one of its majority-owned
subsidiaries appointed a majority of the members; provided, that, any such
assignee shall agree in writing to be bound hereby and no such assignment shall
act as a novation of Purchaser's obligations hereunder unless the consolidated
net worth, as determined in accordance with GAAP, of the assignee prior to and
after giving effect to such assignment equals or exceeds $2 billion. This
Agreement shall be binding upon and shall inure to the benefit of the parties
hereto and their respective successors and permitted assigns. Except as provided
in Article 8, nothing in this Agreement shall create or be deemed to create any
third party beneficiary rights in any Person not a party to this Agreement.
9.2 Amendments; Etc. No amendment, modification, termination, or
waiver of any provision of this Agreement, and no consent to any departure by a
party to this Agreement from any provision of this Agreement, shall be effective
unless it shall be in writing making specific reference hereto and signed and
delivered by each other party to this Agreement, and then it shall be effective
only in the specific instance and for the specific purpose for which it is
given.
9.3 Entire Agreement. This Agreement, the other Transaction
Documents and the Confidentiality Agreement, embody the entire agreement and
understanding of the parties and supersede all prior agreements or
understandings with respect to the subject matter thereof.
9.4 Fees, Costs and Expenses. Except as otherwise provided in
Article 8, all fees, costs and expenses (including attorneys' fees and expenses)
incurred by any
42
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party hereto in connection with the preparation, negotiation and execution of
this Agreement and the consummation of the transactions contemplated hereby,
shall be the sole and exclusive responsibility of such party.
9.5 Severability. Wherever possible, each provision of this
Agreement shall be interpreted in such manner as to be effective and valid under
applicable law, but if any provision of this Agreement shall be prohibited by or
invalid under applicable law, such provision shall be ineffective to the extent
of such prohibition or invalidity, without invalidating the remainder of such
provision or the remaining provisions of this Agreement.
9.6 Governing Law. This Agreement and the obligations arising
hereunder shall be governed by, and construed and enforced in accordance with,
the laws of the State of New York applicable to contracts made and performed in
such State, without regard to the principles thereof regarding conflict of laws,
and any applicable laws of the United States of America. Purchaser and Company
agree to submit to personal jurisdiction and to waive any objection as to venue
in the federal or New York State courts located in the County of New York, State
of New York. Service of process on Purchaser or Company in any action arising
out of or relating to any of the Transaction Documents shall be effective if
mailed to such party at the address listed in Section 9.8 hereof.
9.7 Waiver of Jury Trial. The parties hereto waive all right to
trial by jury in any action or proceeding to enforce or defend any rights under
the Transaction Documents.
9.8 Notices. All notices and other communications given or made
pursuant hereto shall be in writing and shall be deemed to have been duly given
or made and shall be effective (i) upon receipt if delivered personally, (ii)
upon receipt of a transmission confirmation if sent by facsimile (with a
confirming copy sent by overnight courier), and (iii) on the next Business Day
if sent by Federal Express, United Parcel Service, Express Mail or other
reputable overnight courier to the parties at the following addresses (or at
such other address for a party as shall be specified by notice):
If to Company:
Arnold L. Wadler, Esq.
Metromedia Fiber Network, Inc.
c/o Metromedia Company
One Meadowlands Plaza
East Rutherford, New Jersey 07073-2137
Telecopy Number: (201) 531-2803
43
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with a copy to:
Paul, Weiss, Rifkind, Wharton & Garrison
1285 Avenue of the Americas
New York, New York 10019-6064
Attn: Douglas A. Cifu, Esq.
Telecopy Number: (212) 757-3990
If to Purchaser:
Bell Atlantic Investments, Inc.
1095 Avenue of the Americas
30th Floor
New York, New York 10036
Attn: President
Telecopy Number: (212) 597-2790
with copies to:
Bell Atlantic Corporation
1095 Avenue of the Americas
New York, New York 10036
Attn: Associate General Counsel-Mergers & Acquisitions
Telecopy Number: (212) 764-2739
and
Weil, Gotshal & Manges LLP
767 Fifth Avenue
New York, New York 10153
Attn: Frederick S. Green, Esq.
Telecopy Number: (212) 310-8007
The giving of any notice required hereunder may be waived in writing by the
party entitled to receive such notice. Failure or delay in delivering copies of
any notice, demand, request, consent, approval, declaration or other
communication to the Persons designated above to receive copies shall in no way
adversely affect the effectiveness of such notice, demand, request, consent,
approval, declaration or other communication.
9.9 Survival. The representations and warranties contained in
Sections 3.1, 3.2, 3.3, 3.4, 3.5, 3.6, 3.7, 3.8, 4.2, 4.3, 4.4, 4.6, 4.12, 4.14,
4.17, 4.19, 4.20 and 4.21 hereof, and the applicable obligations of the parties
to indemnify each other pursuant to Section 8.1 hereof, shall survive the
execution, delivery and acceptance hereof by the parties hereto and the First
Closing, and any examination or due diligence inquiry by a party hereto, until
the later of (i) December 31, 2000 and (ii) the date that is one year
44
<PAGE>
after the First Closing Date; provided, however, that the representations and
warranties contained in Section 4.19 shall survive only until March 31, 2000 to
the extent the First Closing has occurred prior thereto or, if the First Closing
occurs after March 31, 2000, it will expire at the First Closing. Except as set
forth in the preceding sentence, no other representation or warranty in this
Agreement shall survive the First Closing. All covenants and agreements
contained in this Agreement (which terms do not include representations and
warranties) shall, except as provided in such covenant or agreement, survive the
First Closing and shall remain operative and in full force and effect. The
obligations to indemnify and hold harmless a Person pursuant to Article 8 hereof
shall survive only until the expiration of the applicable survival period
referred to above for the representation and warranty under which the claim for
indemnification is being made; provided, however, that such obligations to
indemnify and hold harmless shall not terminate with respect to any such item as
to which an Indemnified Party shall have, before the expiration of the
applicable period, previously made a bona fide good faith claim by delivering a
notice (stating in reasonable detail the basis of such claim) to the
Indemnifying Party.
9.10 Section and Other Headings. The article, section and other
headings contained in this Agreement are for reference purposes only and shall
not affect the meaning or interpretation of this Agreement.
9.11 Counterparts. This Agreement may be executed in any number of
counterparts, each of which shall be deemed to be an original and all of which
together shall be deemed to be one and the same instrument.
9.12 Publicity. Neither Purchaser nor Company shall issue any press
release or make any public disclosure regarding the transactions contemplated
hereby unless such press release or public disclosure is approved by the other
party in advance. Notwithstanding the foregoing, each of the parties hereto may,
in documents required to be filed by it with the SEC or other regulatory bodies,
make such statements with respect to the transactions contemplated hereby as
each may be advised by counsel is legally necessary or advisable, and may make
such disclosure as it is advised by its counsel is required by law, subject, in
any such case, to advance consultation with Purchaser.
9.13 Termination. (a) This Agreement may be terminated and the
transactions contemplated hereby may be abandoned at any time prior to the First
Closing Date or the Second Closing Date:
(i) by mutual written consent of the parties hereto;
(ii) by either Company or Purchaser if the other
materially breaches this Agreement and such breach remains uncured
for thirty (30) days after receipt by the breaching party of written
notice thereof;
(iii) by either Company or Purchaser if (A) the First
Closing Date shall not have occurred on or before March 31, 2000
(the "First Closing Termination Date"); provided, however, that, in
the event
45
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that, after Company and Purchaser have made the initial filings they
are required to make under the HSR Act or pursuant to Section 5.3
hereof, any Governmental Authority has requested additional
information from Company or Purchaser or has not approved or
otherwise indicated its intention that it will not approve the
transactions contemplated by the Transaction Documents in connection
with such filings, the First Closing Termination Date shall
automatically be extended to June 30, 2000 and (B) with respect to
the Second Closing, the Second Closing Date shall not have occurred
on or prior to the later of (x) April 30, 1999 and (y) the First
Closing Date (the "Second Closing Termination Date"); provided,
however, that in the event the Company has submitted its Proxy
Statement to the SEC and such Proxy Statement has not been approved
for mailing to the Company's stockholders, the Second Closing
Termination Date shall be extended until 30 days following the date
such Proxy Statement is mailed to stockholders ; and
(iv) by either Company or Purchaser, if either such
party in good faith reasonably determines that any of the applicable
conditions to such party's obligations will not be fulfilled by the
First Closing Termination Date or the Second Closing Termination
Date, as the case may be and delivers to the other party written
notice to such effect containing a description of any such
conditions it believes will not be satisfied, in which case, this
Agreement shall terminate within ten (10) days after receipt of such
notice by the other party unless the other party reasonably
demonstrates that such condition is capable of being satisfied and
such party has taken and continues to take diligent steps to so
remedy such condition.
The right to terminate this Agreement under this Section 9.13 shall
not be available to any party whose failure to fulfill any obligation under this
Agreement has been the cause of, or resulted in, the inability of any condition
to be satisfied.
(b) In the event of termination of this Agreement by either
Company or Purchaser as provided in this Section 9.13, this Agreement shall
forthwith become null and void and there shall be no liability or obligation on
the part of Company or Purchaser, except with respect to the last sentence in
Section 5.4 hereof, Sections 9.4, 9.6, 9.8, 9.12 hereof and this Section 9.13;
provided, however, that in the case of termination as provided in Section
9.13(a)(ii) hereof, the breaching party shall not be absolved from any liability
with respect to a breach of this Agreement.
9.14 Remedies. Subject to Section 8.2(d), Purchaser's rights and
remedies under this Agreement shall be cumulative and nonexclusive of any other
rights and remedies which Purchaser may have under any other agreement,
including the other Transaction Documents, by operation of law or otherwise.
[Signatures appear on following page.]
46
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IN WITNESS WHEREOF, Company and Purchaser have executed this Agreement as
of the day and year first above written.
METROMEDIA FIBER NETWORK, INC.
By: /s/ Silvia Kessel
-------------------------------------
Name: Silvia Kessel
Title: Executive Vice President
BELL ATLANTIC INVESTMENTS, INC.
By: /s/ Phil Seskin
-------------------------------------
Name: Phil Seskin
Title: Authorized Signatory
47
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EXHIBIT 10.2
================================================================================
METROMEDIA FIBER NETWORK, INC.
$[ ]
6.15% CONVERTIBLE SUBORDINATED NOTES DUE [2009]
INDENTURE
----------------------------
Dated as of [ ], [1999]
----------------------------
U.S. Bank Trust National Association
Trustee
================================================================================
<PAGE>
Table of Contents
Page
----
ARTICLE 1. DEFINITIONS AND INCORPORATION BY REFERENCE...................... 1
Section 1.01 Definitions............................................ 1
Section 1.02 Other Definitions...................................... 12
Section 1.03 Trust Indenture Act Definitions........................ 12
Section 1.04 Rules of Construction.................................. 13
ARTICLE 2. THE NOTES....................................................... 13
Section 2.01 Form and Dating; Payment of Interest................... 13
Section 2.02 Designation; Amount and Issue of Notes; Execution and
Authentication......................................... 15
Section 2.03 Registrar and Paying Agent............................. 16
Section 2.04 Paying Agent to Hold Money in Trust.................... 17
Section 2.05 Holder Lists........................................... 17
Section 2.06 Transfer and Exchange.................................. 17
Section 2.07 Replacement Notes...................................... 31
Section 2.08 Outstanding Notes...................................... 32
Section 2.09 Treasury Notes......................................... 32
Section 2.10 Temporary Notes........................................ 32
Section 2.11 Cancellation........................................... 33
Section 2.12 Defaulted Interest..................................... 33
Section 2.13 CUSIP Numbers.......................................... 34
ARTICLE 3. REDEMPTION AND PREPAYMENT....................................... 34
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......................... 35
Section 3.05 Deposit of Redemption Price............................ 36
Section 3.06 Notes Redeemed in Part................................. 36
Section 3.07 Optional Redemption.................................... 36
Section 3.08 Mandatory Redemption................................... 37
ARTICLE 4. CONVERSION...................................................... 37
Section 4.01 Conversion Privilege................................... 37
Section 4.02 Conversion Procedure................................... 38
Section 4.03 Fractional Shares...................................... 39
Section 4.04 Taxes on Conversion.................................... 39
Section 4.05 Company to Provide Stock............................... 39
Section 4.06 Adjustment of Conversion Price......................... 40
Section 4.07 No Adjustment.......................................... 46
Section 4.08 Adjustment for Tax Purposes............................ 47
Section 4.09 Notice of Adjustment................................... 47
Section 4.10 Notice of Certain Transactions......................... 47
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Page
----
Section 4.11 Effect of Reclassification, Consolidation, Merger
or Sale, Transfer or Conveyance on Conversion
Privilege ............................................. 47
Section 4.12 Trustee's Disclaimer................................... 48
Section 4.13 Voluntary Reduction.................................... 49
ARTICLE 5. COVENANTS....................................................... 49
Section 5.01 Payment of Notes....................................... 49
Section 5.02 SEC Reports............................................ 49
Section 5.03 Compliance Certificates................................ 50
Section 5.04 Maintenance of Office or Agency........................ 51
Section 5.05 Further Instruments and Acts........................... 51
Section 5.06 Liquidation............................................ 52
Section 5.07 Change of Control...................................... 52
Section 5.08 Corporate Existence.................................... 53
Section 5.09 Payment of Taxes and Other Claims...................... 53
Section 5.10 Maintenance of Properties.............................. 54
Section 5.11 Insurance.............................................. 54
Section 5.12 Rating................................................. 54
Section 5.13 Payments for Consent................................... 54
Section 5.14 Limitation on Senior Subordinated Indebtedness......... 55
ARTICLE 6. SUCCESSORS...................................................... 55
Section 6.01 Merger, Consolidation, or Sale of Assets............... 55
Section 6.02 Successor Corporation Substituted...................... 56
ARTICLE 7. DEFAULTS AND REMEDIES........................................... 56
Section 7.01 Events of Default...................................... 56
Section 7.02 Acceleration........................................... 58
Section 7.03 Other Remedies......................................... 58
Section 7.04 Waiver of Past Defaults................................ 58
Section 7.05 Control by Majority.................................... 59
Section 7.06 Limitation on Suits.................................... 59
Section 7.07 Rights of Holders of Notes to Receive Payment.......... 59
Section 7.08 Collection Suit by Trustee............................. 60
Section 7.09 Trustee May File Proofs of Claim....................... 60
Section 7.10 Priorities............................................. 60
Section 7.11 Undertaking for Costs.................................. 61
ARTICLE 8. TRUSTEE......................................................... 61
Section 8.01 Duties of Trustee...................................... 61
Section 8.02 Rights of Trustee...................................... 63
Section 8.03 Individual Rights of Trustee........................... 64
Section 8.04 Trustee's Disclaimer................................... 64
Section 8.05 Notice of Defaults..................................... 64
Section 8.06 Reports by Trustee to Holders of the Notes............. 65
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Page
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Section 8.07 Compensation and Indemnity............................. 65
Section 8.08 Replacement of Trustee................................. 66
Section 8.09 Successor Trustee by Merger, Etc....................... 67
Section 8.10 Eligibility; Disqualification.......................... 67
Section 8.11 Preferential Collection of Claims Against Company...... 67
Section 8.12 Co-Trustee............................................. 68
ARTICLE 9. LEGAL DEFEASANCE AND COVENANT DEFEASANCE........................ 68
Section 9.01 Option to Effect Legal Defeasance or Covenant
Defeasance ............................................ 68
Section 9.02 Legal Defeasance and Discharge......................... 69
Section 9.03 Covenant Defeasance.................................... 69
Section 9.04 Conditions to Legal or Covenant Defeasance............. 70
Section 9.05 Deposited Money and Government Securities to be Held
in Trust; Other Miscellaneous Provisions............... 71
Section 9.06 Repayment to Company................................... 72
Section 9.07 Reinstatement.......................................... 72
Section 9.08 Survival............................................... 72
ARTICLE 10. AMENDMENT, SUPPLEMENT AND WAIVER............................... 73
Section 10.01 Without Consent of Holders of Notes.................... 73
Section 10.02 With Consent of Holders of Notes....................... 74
Section 10.03 Compliance with Trust Indenture Act.................... 75
Section 10.04 Revocation and Effect of Consents...................... 75
Section 10.05 Notation on or Exchange of Notes....................... 76
Section 10.06 Trustee to Sign Amendments, Etc........................ 76
ARTICLE 11. SATISFACTION AND DISCHARGE..................................... 76
Section 11.01 Satisfaction and Discharge of Indenture................ 76
Section 11.02 Application of Trust Money............................. 77
ARTICLE 12. SUBORDINATION.................................................. 78
Section 12.01 Notes Subordinated to Senior Indebtedness.............. 78
Section 12.02 Notes Subordinated to Prior Payment of All Senior
Indebtedness on Dissolution, Liquidation,
Reorganization, Etc., of the Company................... 78
Section 12.03 Holders to Be Subrogated to Right of Holders of Senior
Indebtedness........................................... 80
Section 12.04 Obligations of the Company Unconditional............... 80
Section 12.05 Company Not to Make Payment With Respect to Notes in
Certain Circumstances.................................. 81
Section 12.06 Notice to Trustee...................................... 82
Section 12.07 Application by Trustee of Money Deposited With It...... 82
Section 12.08 Subordination Rights Not Impaired by Acts or Omissions
of Company or Holders of Senior Indebtedness........... 83
Section 12.09 Trustee to Effectuate Subordination.................... 83
iii
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Page
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Section 12.10 Right of Trustee to Hold Senior Indebtedness........... 83
Section 12.11 Article Not to Prevent Events of Default............... 84
Section 12.12 No Fiduciary Duty Created to Holders of Senior
Indebtedness........................................... 84
Section 12.13 Article Applicable to Paying Agents.................... 84
ARTICLE 13. MISCELLANEOUS.................................................. 84
Section 13.01 Trust Indenture Act Controls........................... 84
Section 13.02 Notices................................................ 84
Section 13.03 Communication by Holders of Notes with Other Holders
of Notes............................................... 86
Section 13.04 Certificate and Opinion as to Conditions Precedent..... 86
Section 13.05 Statements Required in Certificate or Opinion.......... 87
Section 13.06 Rules by Trustee and Agents............................ 87
Section 13.07 No Personal Liability of Directors, Officers, Employees
and Shareholders....................................... 87
Section 13.08 Governing Law.......................................... 87
Section 13.09 Consent to Jurisdiction and Service.................... 88
Section 13.10 No Adverse Interpretation of Other Agreements.......... 88
Section 13.11 Successors............................................. 88
Section 13.12 Severability........................................... 88
Section 13.13 Counterpart Originals.................................. 88
Section 13.14 Table of Contents, Headings, Etc....................... 89
iv
<PAGE>
INDENTURE, dated as of [ ], [1999], by and between
Metromedia Fiber Network, Inc., a Delaware corporation (the "Company"), and U.S.
Bank Trust National Association, a National banking 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 6.15%
Convertible Subordinated Notes due [2009] (the "Notes"):
ARTICLE 1.
DEFINITIONS AND INCORPORATION BY REFERENCE
Section 1.01 Definitions.
"144A Global Note" means a global note in the form of Exhibit A
hereto bearing the Global Note Legend and the Private Placement Legend and
deposited with or on behalf of, and registered in the name of, the Depositary or
its nominee that will be issued in a denomination equal to the outstanding
aggregate principal amount of the Notes sold or resold in reliance on Rule 144A.
"Affiliate" of any specified Person means any other Person directly
or indirectly controlling, 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 that
beneficial ownership of 10% or more of the Voting Stock of a Person shall be
deemed to be control.
"Agent" means any Registrar, Paying Agent, Conversion 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.
"Bankruptcy Law" means Title 11, U.S. Code or any similar federal or
state law for the relief of debtors.
"Board of Directors" means the board of directors or other governing
body of the Company or, if the Company is owned or managed by a single entity,
the
<PAGE>
2
board of directors or other governing body of such entity, or, in either case,
any committee thereof duly authorized to act on behalf of such board or
governing body.
"Board Resolution" means a duly authorized resolution of the Board
of Directors.
"Business Day" means any day other than a Legal Holiday.
"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, participation, rights or other equivalents (however
designated) of corporate stock, (iii) in the case of a partnership or limited
liability company, partnership or membership interests (whether general or
limited) and (iv) 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, the issuing Person.
"CEDEL Bank" means CEDEL Bank, SA.
"Change of Control" means the occurrence of any of the following:
(i) any "person" or "group" (as such terms are used in Section 13(d)(3) of the
Exchange Act), other than a Permitted Holder, is or becomes the beneficial
owner, directly or indirectly, of 35% or more of the Voting Stock (measured by
voting power rather than by number of shares) of the Company and the Permitted
Holders own, in the aggregate, a lesser percentage of the total Voting Stock
(measured by voting power rather than by number of shares) of the Company than
such person and do not have the right or ability by voting power, contract or
otherwise to elect or designate for election a majority of the board of
directors of the Company (for the purposes of this clause, such other person
shall be deemed to "beneficially own" any Voting Stock of a specified
corporation held by a parent corporation if such other person beneficially owns,
directly or indirectly, more than 35% of the Voting Stock (measured by voting
power rather than by number of shares) of such parent corporation and the
Permitted Holders beneficially own, directly or indirectly, in the aggregate a
lesser percentage of Voting Stock (measured by voting power rather than by
number of shares) of such parent corporation and do not have the right or
ability by voting power, contract or otherwise to elect or designate for
election a majority of the board of directors of such parent corporation), (ii)
during any period of two consecutive years, Continuing Directors cease for any
reason to constitute a majority of the Board of Directors of the Company, (iii)
the Company consolidates or merges with or into any other Person, or any Person
consolidates with, or merges with or into, the Company, other than a
consolidation or merger (a) of the Company into a Wholly Owned Subsidiary of the
Company or (b) pursuant to a transaction in which the outstanding Voting Stock
of the Company is changed into or exchanged for cash, securities or other
property with the effect that the beneficial owners of the outstanding Voting
Stock of the Company immediately prior to such transaction, beneficially own,
directly or indirectly, at least a majority of the Voting Stock (measured by
voting power rather than number of shares) of the surviving corporation
<PAGE>
3
immediately following such transaction, (iv) the sale, 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, to any Person other than a
Wholly Owned Subsidiary of the Company or a Permitted Holder or a Related
Person; provided, however, that sales, transfers, conveyances or other
dispositions in the ordinary course of business of capacity on fiber optic or
cable systems owned, controlled or operated by the Company or any of its
Subsidiaries or of telecommunications capacity or transmission rights, rights of
way or conduit acquired by the Company or any of its Subsidiaries for use in the
business of the Company or any of its Subsidiaries, including, without
limitation, for sale, lease, transfer, conveyance or other disposition to any
customer of the Company or any of its Subsidiaries shall not be deemed a
disposition of assets for purposes of this clause (iv), or (v) the adoption of a
plan relating to the total liquidation of the Company.
"Class A Common Stock" means the Class A Common Stock, par value
$0.01 per share, of the Company.
"Class B Common Stock" means the Class B Common Stock, par value
$0.01 per share, of the Company.
"Common Stock" means collectively the Class A Common Stock and the
Class B Common Stock, determined as a single class assuming shares of Class B
Common Stock had been converted into shares of Class A Common Stock.
"Company" means Metromedia Fiber Network, Inc., a Delaware
corporation, and any and all successors thereto.
"Communications Act" means the U.S. federal statute known as the
Communications Act of 1934, as amended by the Telecommunications Act of 1996, as
amended.
"Continuing Directors" means individuals who at the beginning of the
period of determination constituted the Board of Directors of the Company,
together with any new directors whose election by such Board of Directors or
whose nomination for election by the shareholders of the Company was approved by
a vote of a majority of the directors of the Company then still in office who
were either directors at the beginning of such period or whose election or
nomination for election was previously so approved or is the designee of any one
of the Permitted Holders or any combination thereof or was nominated or elected
by any such Permitted Holder(s) or any of their designees.
"Corporate Trust Office of the Trustee" shall be at the address of
the Trustee specified in Section 13.02 hereof or such other address as to which
the Trustee may give notice to the Company.
<PAGE>
4
"Currency Agreement" means, with respect to any Person, any foreign
exchange contract, currency swap agreement or other similar agreement as to
which such Person is a party or beneficiary.
"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.
"Definitive Note" means a certificated Note registered in the name
of the Holder thereof and issued in accordance with Section 2.06 hereof, in the
form of Exhibit A hereto except that such Note shall not bear the Global Note
Legend and shall not have the "Schedule of Exchanges of Interests in the Global
Note" attached thereto, but may bear the Private Placement Legend, if
applicable.
"Depositary" means, with respect to the 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 Notes, and any and all successors thereto
appointed as depositary hereunder and having become such pursuant to the
applicable provision of this Indenture.
"Distribution Compliance Period" means the 40-day distribution
compliance period as defined in Rule 903(b) of Regulation S.
"Euroclear" means Morgan Guaranty Trust Company of New York,
Brussels office, as operator of the Euroclear system.
"Exchange Act" means the Securities Exchange Act of 1934, as amended
(or any successor Act), and the rules and regulations promulgated thereunder (or
respective successor thereto).
"Franchise Agreements" means (a) the Franchise Agreement, dated as
of December 20, 1993, between the City of New York and National Fiber Network,
Inc., and (b) the Franchise Agreement, dated as of June 28, [1999], by and
between Montgomery County, Maryland, and Metromedia Fiber Network Services,
Inc., as each may be amended, modified or supplemented from time to time.
"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 have been approved by a significant segment
of the accounting profession, which are in effect on the Issue Date.
"Global Note Legend" means the legend set forth in Section
2.06(g)(ii), which is required to be placed on all Global Notes issued under
this Indenture.
<PAGE>
5
"Global Notes" means, individually and collectively, each of the
Restricted Global Notes and the Unrestricted Global Notes, in the form of
Exhibit A hereto, issued in accordance with Article 2 hereof.
"Government Securities" means securities that are (a) direct
obligations (or certificates representing an ownership interest in such
obligations) of the United States of America (including any agency or
instrumentality thereof) of the payment of which the full faith and credit of
the United States of America is pledged, (b) obligations of a Person controlled
or supervised by and acting as an agency or instrumentality of the United States
of America the payment of which is unconditionally guaranteed as a full faith
and credit obligation by the United States of America, or (c) obligations of a
Person the payment of which is unconditionally guaranteed as a full faith and
credit obligation by the United States of America.
"Hedging Obligations" means, with respect to any Person, the
obligations of such Person under any Interest Rate Agreement or Currency
Agreement.
"Holder" means a Person in whose name a Note is registered on the
Registrar's or any co-registrar's books.
"IAI Global Note" means a Global Note in substantially the form of
Exhibit A hereto bearing the Global Note Legend and the Private Placement Legend
and deposited with or on behalf of, and registered in the name of, the
Depositary or its nominee, that shall be initially issued in a denomination
equal to $0, but shall thereafter be revised to represent the outstanding
principal amount of the Notes transferred to Institutional Accredited Investors.
"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 banker's acceptances
or the balance of the deferred and unpaid purchase price of any property 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 letters of credit (or reimbursement agreements in respect thereof),
banker's acceptances and Hedging Obligations) would appear as a liability upon a
balance sheet of such Person prepared in accordance with GAAP, as well as all
Indebtedness of others secured by a Lien on any asset of such Person (whether or
not such Indebtedness is assumed by such Person) and, to the extent not
otherwise included, any guarantee by such Person of any Indebtedness of any
other Person. The amount of any Indebtedness outstanding as of any date shall be
(i) the accreted value thereof, in the case of any Indebtedness issued with
original issue discount, but the accretion of original issue discount in
accordance with the original terms of Indebtedness issued with an original issue
discount will not be deemed to be an incurrence, and (ii) the principal amount
<PAGE>
6
thereof, together with any interest thereon that is more than 30 days past due,
in the case of any other Indebtedness.
"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 Note through a Participant.
"In-Region State" shall have the meaning assigned to such term in
Section 271(i)(1) of the Communications Act.
"Initial Purchaser" means Bell Atlantic Investments, Inc., a
Delaware corporation.
"Institutional Accredited Investor" means an institution that is an
"accredited investor" within the meaning of Rule 501(a)(1), (2), (3) or (7)
under the Securities Act.
"Interest Payment Date" shall have the meaning assigned to that term
in Section 2.01 hereof.
"Interest Rate Agreement" means, with respect to any Person, any
interest rate protection agreement, interest rate future agreement, interest
rate option agreement, interest rate swap agreement, interest rate cap
agreement, interest rate collar agreement, interest rate hedge agreement or
other similar agreement or arrangement to which such Person is a party or
beneficiary.
"InterLATA Service" shall have the meaning assigned to such term in
Section 3 of the Communications Act.
"Issue Date" means the date of first issuance of the Notes under the
Indenture.
"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 on
such payment for the intervening period.
"Lien" means, with respect to any asset, any mortgage, lien, pledge,
charge, Note 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 Note
interest in, and any filing of or
<PAGE>
7
agreement to give any financing statement under the Uniform Commercial Code (or
equivalent statutes) of any jurisdiction).
"Non-U.S. Person" means a Person who is not a U.S. Person.
"Note Custodian" means the Person specified in Section 2.03 hereof
as the Note Custodian with respect to the Global Notes or any successor entity
thereto appointed as Note Custodian hereunder and having become such pursuant to
the applicable provision of this Indenture.
"Notes" has the meaning assigned to it in the preamble to this
Indenture.
"Officer" means the President, the Chief Executive Officer, any Vice
President and the Chief Financial Officer of the Company.
"Officers' Certificate" means a certificate signed by two Officers.
"Opinion of Counsel" means an opinion from legal counsel who is
reasonably acceptable to the Trustee and that meets the requirements of Section
13.05 hereof. The counsel may be an employee of or counsel to the Company, any
subsidiary of the Company, any Affiliate of the Company or the Trustee.
"Participant" means, with respect to the Depositary, Euroclear or
CEDEL Bank, a Person who has an account with the Depositary, Euroclear or CEDEL
Bank, respectively (and, with respect to The Depositary Trust Company, shall
include Euroclear and CEDEL Bank).
"Paying Agent" has the meaning provided in Section 2.03, except
that, for the purposes of Article 8, the Paying Agent shall not be the Company
or a Subsidiary of the Company or an Affiliate of any of them. The term "Paying
Agent" includes any additional Paying Agent.
"Permitted Holder" means Metromedia Company, its general partners
and their respective Related Persons and Persons that would constitute a Class B
Permitted Holder as defined in the Company's Amended and Restated Certificate of
Incorporation as in effect on the date hereof.
"Person" means any individual, corporation, partnership, joint
venture, limited liability company, incorporated or unincorporated association,
joint-stock company, trust, unincorporated organization or government or other
agency or political subdivision thereof or other entity of any kind.
"Private Placement Legend" means the legend set forth in Section
2.06(g)(i) to be placed on all Notes issued under this Indenture except where
otherwise permitted by the provisions of this Indenture.
<PAGE>
8
"QIB" means a "qualified institutional buyer" as defined in Rule
144A.
"Record Date" for the interest payable on any Interest Payment Date
means the [ ] or [ ] (whether or not a Business Day), as the case
may be, next preceding such Interest Payment Date.
"Registrar" has the meaning provided in Section 2.03.
"Registration Rights Agreement" means the Notes Registration Rights
Agreement, dated as of the date hereof, by and among the Company and the other
parties named on the signature pages thereof, as such agreement may be amended,
modified or supplemented from time to time.
"Registration Statement" means the Note Registration Statement as
defined in the Registration Rights Agreement.
"Regulated Person" means any "Bell operating company" or any
"affiliate" of a Bell operating company, as such terms are defined in Section 3
of the Communications Act.
"Regulation S" means Regulation S promulgated under the Securities
Act.
"Regulation S Global Note" means a Regulation S Temporary Global
Note or Regulation S Permanent Global Note, as appropriate.
"Regulation S Permanent Global Note" means a permanent global Note
in the form of Exhibit A hereto bearing the Global Note Legend and the Private
Placement Legend and deposited with or on behalf of and registered in the name
of the Depositary or its nominee, issued in a denomination equal to the
outstanding principal amount of the Regulation S Temporary Global Note upon
expiration of the Distribution Compliance Period.
"Regulation S Temporary Global Note" means a temporary global Note
in the form of Exhibit A hereto bearing the Global Note Legend, the Private
Placement Legend and the Regulation S Temporary Global Note Legend and deposited
with or on behalf of and registered in the name of the Depositary or its
nominee, issued in a denomination equal to the outstanding principal amount of
the Notes initially sold in reliance on Rule 903 of Regulation S.
"Regulatory Relief Date" means, with respect to a Holder which is a
Regulated Person, the date on which such Regulated Person has obtained pursuant
to Section 271 of the Communications Act, the approval of the Federal
Communications Commission to provide InterLATA Services in all states that are,
with respect to such Regulated Person, In-Region States (as such term is defined
in Section 271(i)(1) of the
<PAGE>
9
Communications Act), such approval to be either an affirmative approval or a
waiver from the restrictions of the Communications Act.
"Related Person" means any Person who controls, is controlled by or
is under common control with a Permitted Holder; provided, that for purposes of
this definition, "control" means the beneficial ownership of more than 50% of
the total voting power of a Person normally entitled to vote in the election of
directors, managers or trustees, as applicable, of a Person.
"Responsible Officer" when used with respect to the Trustee, means
any officer within the Corporate Trust Administration 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 Definitive Note" means a Definitive Note bearing the
Private Placement Legend.
"Restricted Global Note" means a Global Note bearing the Private
Placement Legend and includes the 144A Global Notes, the IAI Global Note and the
Regulation S Global Note.
"Restricted Note" means either a Restricted Definitive Note or a
Restricted Global Note.
"Rule 144" means Rule 144 promulgated under the Securities Act.
"Rule 144A" means Rule 144A promulgated under the Securities Act.
"Rule 903" means Rule 903 promulgated under the Securities Act.
"Rule 904" means Rule 904 promulgated under the Securities Act.
"SEC" means the Securities Exchange Commission.
"Securities Act" means the Securities Act of 1933, as amended (or
any successor Act), and the rules and regulations promulgated thereunder (or
respective successor thereto).
"Senior Indebtedness" means the principal of, premium, if any,
interest, and other amounts payable on or in respect of any Indebtedness of the
Company, whether outstanding on the date of original issuance or thereafter
created, incurred or assumed (including, without limitation, the Company's
Series A and Series B 10% Senior Notes due 2008 issued pursuant to the
Indenture, dated as of
<PAGE>
10
November 25, 1998, by and between the Company and IBJ Schroder Bank & Trust
Company as the same may be amended, supplemented or modified from time to time),
unless, in the case of any particular Indebtedness, the instrument creating or
evidencing the same or pursuant to which the same is outstanding expressly
provides that such Indebtedness shall not be senior in right of payment to the
Notes. Notwithstanding the foregoing, "Senior Indebtedness" shall not include
(a) Indebtedness evidenced by the Notes, (b) Indebtedness that is pursuant to
the instrument creating such Indebtedness expressly subordinate or junior in
right of payment to any Indebtedness of the Company, (c) Indebtedness which,
when incurred and without respect to any election under Section 1111(b) or Title
11, United States Code, (d) Indebtedness for goods, materials or services
purchased in the ordinary course of business or Indebtedness consisting of trade
account payables or other current liabilities incurred in the ordinary course of
business, (e) Indebtedness of or amounts owed by the Company for compensation to
employees or for services rendered to the Company, or (f) Indebtedness of the
Company to a Wholly Owned Subsidiary or any other Affiliate of the Company or
any of such Affiliate's Wholly Owned Subsidiaries.
"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 Act, as such Regulation is in effect on the date
hereof.
"Special Record Date" for the payment of any Defaulted Interest
means a date fixed by the Trustee pursuant to Section 2.12 hereof.
"Stated Maturity" means, with respect to any installment of interest
or principal (including any mandatory sinking fund payment of interest or
principal) on any series of Indebtedness, the date on which such payment of
interest or principal (including any mandatory sinking fund payment of interest
or principal) was scheduled to be paid in the original documentation governing
such Indebtedness, and shall not include any contingent obligations to repay,
redeem or repurchase any such interest or principal prior to the date originally
scheduled for the payment thereof.
"Stockholders Agreement" means the Stockholders Agreement, dated as
of the date hereof, by and among the Company, the Initial Purchaser and the
Stockholders listed on Schedule I thereto.
"Subsidiary" means, with respect to any Person, (i) any corporation,
association or other 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 that 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 of one or more
Subsidiaries of such Person (or any combination thereof).
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11
"TIA" means the Trust Indenture Act of 1939 (15 U.S.C. ss.ss.
77aaa-77bbbb) as in effect on the date on which this Indenture is qualified
under the TIA, except as set forth in Section 9.03.
"Trading Day" means (a) if the applicable security is listed or
admitted for trading on the New York Stock Exchange or another national security
exchange, a day on which the New York Stock Exchange or another national
security exchange is open for business, (b) if the applicable security is quoted
on the Nasdaq National Market or another United States automated interdealer
quotation system, a day on which trades may be made on thereon, or (c) if the
applicable security is not so listed, admitted for trading or quoted, any day
other than a Saturday or Sunday or a day on which banking institutions in the
State of New York are authorized or obligated by law or executive order to
close.
"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 Definitive Note" means one or more Definitive Notes
that do not bear and are not required to bear the Private Placement Legend.
"Unrestricted Global Note" means one or more Global Notes in the
form of Exhibit A attached hereto that bears the Global Note Legend and that has
the Schedule of Exchanges of Interests in the Global Note attached thereto, and
that is deposited with or on behalf of and registered in the name of the
Depositary, representing a series of Notes that do not bear the Private
Placement Legend.
"U.S. Person" means a U.S. person as defined in Rule 902(k) under
the Securities Act.
"Voting Stock" of any Person as of any date means the Capital Stock
of such Person that is at the time entitled to vote in the election of the Board
of Directors of such Person.
"Wholly Owned Subsidiary" of any Person means a Subsidiary of such
Person all of the outstanding Capital Stock or other ownership interests of
which (other than directors' qualifying shares) shall at the time be owned by
such Person or by one or more Wholly Owned Subsidiaries of such Person.
<PAGE>
12
Section 1.02 Other Definitions.
Defined in
Term Section
---- -------
"Accepted Purchased Shares" 4.06
"Authentication Order" 2.02
"Change of Control Offer" 5.07
"Change of Control Payment" 5.07
"Change of Control Payment Date" 5.07
"Closing Price" 4.06
"Conversion Agent" 2.03
"Conversion Date" 4.02
"Conversion Price" 4.01
"Conversion Shares" 4.06
"Covenant Defeasance" 9.03
"Current Market Price" 4.06
"Distribution Date" 4.06
"Default Notice" 12.05
"DTC" 2.03
"Event of Default" 7.01
"ex" date 4.06
"Expiration Time" 4.06
"Fair Market Value" 4.06
"Legal Defeasance" 9.02
"pay the Notes" 12.02
"Paying Agent" 2.03
"Purchased Shares" 4.06
"Registrar" 2.03
"Rights" 4.06
"Tender Expiration Time" 4.06
Section 1.03 Trust Indenture Act Definitions.
Whenever this Indenture refers to a provision of the TIA, the
provision is incorporated by reference in and made a part of this Indenture.
The following TIA terms used in this Indenture have the following
meanings:
"indenture securities" means the Notes;
"indenture Note Holder" means a Holder of a Note;
"indenture to be qualified" means this Indenture;
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"indenture trustee" or "institutional trustee" means the Trustee;
and
"obligor" on the Notes means the Company and any successor obligor
upon the Notes.
All other terms used but not otherwise defined 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 term has the meaning assigned to it;
(2) an accounting term not otherwise defined has the meaning
assigned to it in accordance with GAAP;
(3) "or" is not exclusive;
(4) words in the singular include the plural, and in the plural
include the singular;
(5) provisions apply to successive events and transactions; and
(6) references to sections of or rules under the Securities Act
shall be deemed to include substitute, replacement of successor sections or
rules adopted by the SEC from time to time.
ARTICLE 2.
THE NOTES
Section 2.01 Form and Dating; Payment of Interest.
(a) General.
The Notes and the Trustee's certificate of authentication shall be
substantially in the form of Exhibit A hereto. The Notes may have notations,
legends or endorsements required by law, stock exchange rule or usage or
agreements to which the Company is subject. The Notes shall be in denominations
of $1,000 and integral multiples thereof. Each Note shall be dated the date of
its authentication and shall bear interest from its date of issue and shall be
payable semiannually on each [ ] and [ ] (each, an "Interest
Payment Date "), commencing [ ], except as otherwise specified on the
faces of the forms of Notes, attached as Exhibit A hereto.
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The person in whose name any Note (or its predecessor Note) is
registered at the close of business on any record date with respect to any
interest payment date (including any Note that is converted after the record
date and on or before the interest payment date) shall be entitled to receive
the interest payable on such interest payment date notwithstanding the
cancellation of such Note upon any transfer, exchange or conversion subsequent
to the record date and prior to such interest payment date. Interest may, at the
option of the Company, be paid by check mailed to the address of such person as
it appears on the Note register; provided that, with respect to any Holder of an
interest in any Global Note, interest on such Holder's Notes shall be paid by
wire transfer in immediately available funds to Cede & Co., the nominee of the
Depositary, as registered owner of the Restricted Global Notes and the
Regulation S Global Note. The term "Record Date" with respect to any Interest
Payment Date shall mean the [ ] or [ ] preceding said
[ ] or [ ] Interest Payment Dates, respectively.
Interest on the Notes shall be computed on the basis of a 360-day
year composed of twelve 30-day months.
The terms and provisions contained in the 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 Note conflicts with the express provisions of this Indenture,
the provisions of this Indenture shall govern and be controlling.
(b) Global Notes.
Notes issued in global form shall be substantially in the form of
Exhibit A attached hereto (including the Global Note Legend thereon and the
"Schedule of Exchanges of Interests in the Global Note" attached thereto). Notes
issued in definitive form shall be substantially in the form of Exhibit A
attached hereto (but without the Global Note Legend thereon and without the
"Schedule of Exchanges of Interests in the Global Note" attached thereto). Each
Global Note shall represent such of the aggregate principal amount of the
outstanding Notes as shall be specified therein and each shall provide that it
shall represent the aggregate principal amount of outstanding Notes from time to
time endorsed thereon and that the aggregate principal amount of outstanding
Notes represented thereby may from time to time be reduced or increased, as
appropriate, to reflect exchanges, repurchases and redemptions. Any endorsement
of a Global Note to reflect the amount of any increase or decrease in the
aggregate principal amount of outstanding 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.
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(c) Temporary Global Notes.
Notes offered and sold in reliance on Regulation S shall be issued
initially in the form of the Regulation S Temporary Global Note, which shall be
deposited on behalf of the purchasers of the Notes represented thereby with the
Note Custodian, and registered in the name of the Depositary or the nominee of
the Depositary for the accounts of designated agents holding on behalf of
Euroclear or Cedel Bank, duly executed by the Company and authenticated by the
Trustee as hereinafter provided. The Distribution Compliance Period shall be
terminated upon the receipt by the Trustee of (i) a written certificate from the
Depositary, together with copies of certificates from Euroclear and Cedel Bank
certifying that they have received certification of non-United States beneficial
ownership of 100% of the aggregate principal amount of the Regulation S
Temporary Global Note (except to the extent of any beneficial owners thereof who
acquired an interest therein during the Distribution Compliance Period pursuant
to another exemption from registration under the Securities Act and who will
take delivery of a beneficial ownership interest in a 144A Global Note or an IAI
Global Note bearing a Private Placement Legend, all as contemplated by Section
2.06(a)(ii) hereof), and (ii) an Officers' Certificate and an authentication
order pursuant to Section 2.02 hereof from the Company. Following the
termination of the Distribution Compliance Period, the Company shall instruct
the Trustee that the Distribution Compliance Period has expired and shall
instruct the Trustee to exchange beneficial interests in the Regulation S
Temporary Global Note for beneficial interests in Regulation S Permanent Global
Notes pursuant to the Applicable Procedures. Simultaneously with the
authentication of Regulation S Permanent Global Notes, the Trustee shall cancel
the Regulation S Temporary Global Note. The aggregate principal amount of the
Regulation S Temporary Global Note and the Regulation S Permanent Global Notes
may from time to time be increased or decreased by adjustments made on the
records of the Trustee and the Depositary or its nominee, as the case may be, in
connection with transfers of interest as hereinafter provided.
(d) Euroclear and CEDEL Bank Procedures Applicable.
The provisions of the "Operating Procedures of the Euroclear System"
and "Terms and Conditions Governing Use of Euroclear" and the "General Terms and
Conditions of CEDEL Bank" and "Customer Handbook" of CEDEL Bank shall be
applicable to transfers of beneficial interests in the Regulation S Temporary
Global Note and the Regulation S Permanent Global Notes that are held by
Participants through Euroclear or CEDEL Bank.
Section 2.02 Designation; Amount and Issue of Notes; Execution and
Authentication.
The Notes shall be designated as "6.15% Convertible Subordinated
Notes due [2009]." Notes not to exceed the aggregate principal amount of
$[ ] upon the execution of this Indenture, or from time to time
thereafter, may be executed
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by the Company and delivered to the Trustee for authentication, and the Trustee
shall thereupon authenticate and make available for delivery said Notes upon the
written order (an "Authentication Order") of the Company, signed by two Officers
or one Officer and the Secretary or an Assistant Security of the Company by
manual or facsimile signature, without any further action by the Company.
If an Officer, Secretary or Assistant Secretary whose signature is
on a Note no longer holds that office at the time a Note is authenticated, the
Note shall nevertheless be valid.
A Note shall not be valid until authenticated by the manual
signature of the Trustee. The signature shall be conclusive evidence that the
Note has been authenticated under this Indenture.
The Trustee may appoint an authenticating agent acceptable to the
Company to authenticate Notes. An authenticating agent may authenticate Notes
whenever the Trustee may do so. Each reference in this Indenture to
authentication by the Trustee includes authentication by such agent. An
authenticating agent has the same rights as an Agent to deal with Holders or an
Affiliate of the Company.
Section 2.03 Registrar and Paying Agent.
The Company shall maintain an office or agency where Notes may be
presented for registration of transfer or for exchange (the "Registrar"), an
office or agency where Notes may be presented for payment (the "Paying Agent"),
and an office or agency where Notes may be presented for conversion (the
"Conversion Agent"). The Registrar shall keep a register of the 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, the term "Paying Agent" includes any additional paying agent, and
the term "Conversion Agent" includes any additional conversion agent. The
Company may change any Paying Agent, Conversion Agent or Registrar without
notice to any Holder. The Company shall notify the Trustee 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, Paying Agent or
Conversion Agent, the Trustee shall act as such. The Company or any of its
Subsidiaries may act as Paying Agent, Registrar or Conversion Agent.
The Company initially appoints The Depository Trust Company ("DTC")
to act as Depositary with respect to the Global Notes.
The Company initially appoints the Trustee to act as the Registrar,
Paying Agent and Conversion Agent and to act as Note Custodian with respect to
the Global Notes and as agent for service of notice and demands.
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The Trustee is authorized to enter into a letter of representations
with DTC in the form provided to the Trustee by the Company and to act in
accordance with such letter.
Section 2.04 Paying Agent to Hold Money in Trust.
Not later than each due date of principal, premium, if any, and
interest on the Notes, the Company shall deposit with the Paying Agent money in
immediately available funds sufficient to pay such principal, premium, if any,
and interest so becoming due. The Company shall require each Paying Agent other
than the Trustee to agree in writing that the Paying Agent will hold in trust
for the benefit of Holders or the Trustee all money held by the Paying Agent for
the payment of principal, or interest on the 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 such money held by
it to the Trustee. The Company at any time may require a Paying Agent to pay all
such 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
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 for
the Notes.
Section 2.05 Holder Lists.
The Trustee shall preserve in as current a form as is reasonably
practicable the most recent list available to it of the names and addresses of
all Holders and shall otherwise comply with TIA ss. 312(a). If the Trustee is
not the Registrar, the Company shall furnish to the Trustee at least seven
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
Notes and the Company shall otherwise comply with TIA ss. 312(a).
Section 2.06 Transfer and Exchange.
(a) Transfer and Exchange of Global Notes.
A Global Note 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 Notes will be exchanged by the Company for Definitive
Notes if (i) the Company delivers to the Trustee a 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
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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
Notes (in whole but not in part) should be exchanged for Definitive Notes and
delivers a written notice to such effect to the Trustee; provided, however, that
in no event shall the Regulation S Temporary Global Note be exchanged by the
Company for Definitive Notes prior to the expiration of the Distribution
Compliance Period. Upon the occurrence of either of the preceding events in (i)
or (ii) above, Definitive Notes shall be issued in such names as the Depositary
shall instruct the Trustee. Global Notes also may be exchanged or replaced, in
whole or in part, as provided in Sections 2.06, 2.07 and 2.10 hereof. Every Note
authenticated and delivered in exchange for, or in lieu of, a Global Note or any
portion thereof, pursuant to Sections 2.06, 2.07 or 2.10 hereof, shall be
authenticated and delivered in the form of, and shall be, a Global Note. A
Global Note may not be exchanged for another Note other than as provided in this
Section 2.06(a); however, beneficial interests in a Global Note may be
transferred and exchanged as provided in Section 2.06 hereof.
(b) Transfer and Exchange of Beneficial Interests in the Global
Notes.
The transfer and exchange of beneficial interests in the
Global Notes shall be effected through the Depositary, in accordance with the
provisions of this Indenture and the Applicable Procedures. Beneficial interests
in the Restricted Global Notes shall be subject to restrictions on transfer
comparable to those set forth herein and therein to the extent required by the
Securities Act. Transfers of beneficial interests in the Global Notes 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 Note.
Beneficial interests in any Restricted Global Note may be transferred to
Persons who take delivery thereof in the form of a beneficial interest in
the same Restricted Global Note in accordance with the transfer
restrictions set forth in the Private Placement Legend; provided, however,
that prior to the expiration of the Distribution Compliance Period,
transfers of beneficial interests in the Regulation S Temporary Global
Note may not be made to a U.S. Person or for the account or benefit of a
U.S. Person (other than the Initial Purchaser). Beneficial interests in
any Unrestricted Global Note may be transferred to Persons who take
delivery thereof in the form of a beneficial interest in an Unrestricted
Global Note. 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 Notes. In connection with all transfers and exchanges of beneficial
interests that are not subject to Section 2.06(b)(i) above, the transferor
of such beneficial interest must deliver to the Registrar either (A) (1) a
written order
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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 another Global
Note 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
Definitive Note 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 Definitive Note shall be registered to effect the transfer or
exchange referred to in (1) above; provided, however, that in no event
shall Definitive Notes be issued upon the transfer or exchange of
beneficial interests in the Regulation S Temporary Global Note prior to
the expiration of the Distribution Compliance Period. Upon satisfaction of
all of the requirements for transfer or exchange of beneficial interests
in Global Notes contained in this Indenture and the Notes or otherwise
applicable under the Securities Act, the Trustee shall adjust the
principal amount of the relevant Global Note(s) pursuant to Section
2.06(h) hereof.
(iii) Transfer of Beneficial Interests to Another Restricted Global
Note. A beneficial interest in any Restricted Global Note may be
transferred to a Person who takes delivery thereof in the form of a
beneficial interest in another Restricted Global Note if the transfer
complies with the requirements of Section 2.06(b)(ii) above and the
Registrar receives the following:
(A) if the transferee will take delivery in the form of a
beneficial interest in the 144A Global Note, 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 Regulation S Temporary Global Note or the
Regulation S Permanent Global Note, 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 transferee will take delivery in the form of a
beneficial interest in the IAI Global Note, then the transferor must
deliver a certificate in the form of Exhibit B hereto, including the
certifications and certificates and Opinion of Counsel required by
item (3) thereof, if applicable.
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(iv) Transfer and Exchange of Beneficial Interests in Restricted
Global Notes for Beneficial Interests in Unrestricted Global Notes. A
beneficial interest in any Restricted Global Note may be exchanged by any
holder thereof for a beneficial interest in an Unrestricted Global Note or
transferred to a Person who takes delivery thereof in the form of a
beneficial interest in an Unrestricted Global Note if the exchange or
transfer complies with the requirements of Section 2.06(b)(ii) above and:
(A) such transfer is effected pursuant to the Registration
Statement in accordance with the Registration Rights Agreement; or
(B) the Registrar receives the following:
(1) if the holder of such beneficial interest in a
Restricted Global Note proposes to exchange such beneficial
interest for a beneficial interest in an Unrestricted Global
Note, a certificate from such holder in the form of Exhibit C
hereto, including the certifications in item (1)(a) thereof;
or
(2) if the holder of such beneficial interest in a
Restricted Global Note proposes to transfer such beneficial
interest to a Person who shall take delivery thereof in the
form of a beneficial interest in an Unrestricted Global Note,
a certificate from such holder in the form of Exhibit B
hereto, including the certifications in item (4) thereof;
and, in each such case set forth in this subparagraph (B), if the
Company or the Registrar so requests or if the Applicable Procedures
so require, an Opinion of Counsel in form reasonably acceptable to
the Company or the Registrar, as applicable, to the effect that such
exchange or transfer is in compliance with the Securities Act and
that the restrictions on transfer contained herein and in the
Private Placement Legend are no longer required in order to maintain
compliance with the Securities Act.
If any such transfer is effected pursuant to subparagraph (A) or (B)
above at a time when an Unrestricted Global Note 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 Notes in an aggregate principal amount equal to the
aggregate principal amount of beneficial interests transferred pursuant to
subparagraph (A) or (B) above.
Beneficial interests in an Unrestricted Global Note cannot be
exchanged for, or transferred to Persons who take delivery thereof in the form
of, a beneficial interest in a Restricted Global Note.
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(c) Transfer or Exchange of Beneficial Interests for Definitive
Notes.
(i) Beneficial Interests in Restricted Global Notes to Restricted
Definitive Notes. If any holder of a beneficial interest in a Restricted
Global Note proposes to exchange such beneficial interest for a Restricted
Definitive Note or to transfer such beneficial interest to a Person who
takes delivery thereof in the form of a Restricted Definitive Note, then,
upon receipt by the Registrar of the following documentation:
(A) if the holder of such beneficial interest in a Restricted
Global Note proposes to exchange such beneficial interest for a
Restricted Definitive Note, 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, 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
903 or Rule 904, 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, 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,
certificates and Opinion of Counsel required by item (3) thereof, if
applicable;
(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,
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upon confirmation of such receipt, the Trustee shall cause the aggregate
principal amount of the applicable Global Note 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 Definitive Note in the appropriate principal amount. Any
Definitive Note issued in exchange for a beneficial interest in a
Restricted Global Note pursuant to this Section 2.06(c) shall be
registered in such name or names and in such authorized denomination or
denominations as the holder of such beneficial interest shall instruct the
Registrar through instructions from the Depositary and the Participant or
Indirect Participant. The Trustee shall deliver such Definitive Notes to
the Persons in whose names such Notes are so registered. Any Definitive
Note issued in exchange for a beneficial interest in a Restricted Global
Note 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) Beneficial Interests in Regulation S Temporary Global Note to
Definitive Notes. Notwithstanding Sections 2.06(c)(i)(A) and (C) hereof, a
beneficial interest in the Regulation S Temporary Global Note may not be
exchanged for a Definitive Note or transferred to a Person who takes
delivery thereof in the form of a Definitive Note prior to the expiration
of the Distribution Compliance Period.
(iii) Beneficial Interests in Restricted Global Notes to
Unrestricted Definitive Notes. A holder of a beneficial interest in a
Restricted Global Note may exchange such beneficial interest for an
Unrestricted Definitive Note or may transfer such beneficial interest to a
Person who takes delivery thereof in the form of an Unrestricted
Definitive Note only if:
(A) such transfer is effected pursuant to the Registration
Statement in accordance with the Registration Rights Agreement; or
(B) the Registrar receives the following:
(1) if the holder of such beneficial interest in a
Restricted Global Note proposes to exchange such beneficial
interest for a Definitive Note 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; or
(2) if the holder of such beneficial interest in a
Restricted Global Note proposes to transfer such beneficial
interest to a Person who shall take delivery thereof in the
form of a Definitive Note that does not bear the Private
Placement
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Legend, a certificate from such holder in the form of Exhibit
B hereto, including the certifications in item (4) thereof;
and, in each such case set forth in this subparagraph (B), if the Company
or the Registrar so requests or if the Applicable Procedures so require,
an Opinion of Counsel in form reasonably acceptable to the Company or the
Registrar, as applicable, to the effect that such exchange or transfer is
in compliance with the Securities Act and that the restrictions on
transfer contained herein and in the Private Placement Legend are no
longer required in order to maintain compliance with the Securities Act.
(iv) Beneficial Interests in Unrestricted Global Notes to
Unrestricted Definitive Notes. If any holder of a beneficial interest in
an Unrestricted Global Note proposes to exchange such beneficial interest
for a Definitive Note or to transfer such beneficial interest to a Person
who takes delivery thereof in the form of a Definitive Note, then, upon
satisfaction of the conditions set forth in Section 2.06(b)(ii) hereof,
the Trustee shall cause the aggregate principal amount of the applicable
Global Note 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 Definitive Note in
the appropriate principal amount. Any Definitive Note issued in exchange
for a beneficial interest pursuant to this Section 2.06(c)(iv) shall be
registered in such name or names and in such authorized denomination or
denominations as the holder of such beneficial interest shall instruct the
Registrar through instructions from the Depositary and the Participant or
Indirect Participant. The Trustee shall deliver such Definitive Notes to
the Persons in whose names such Notes are so registered. Any Definitive
Note issued in exchange for a beneficial interest pursuant to this Section
2.06(c)(iv) shall not bear the Private Placement Legend.
(d) Transfer and Exchange of Definitive Notes for Beneficial
Interests.
(i) Restricted Definitive Notes to Beneficial Interests in
Restricted Global Notes. If any Holder of a Restricted Definitive Note
proposes to exchange such Note for a beneficial interest in a Restricted
Global Note or to transfer such Restricted Definitive Notes to a Person
who takes delivery thereof in the form of a beneficial interest in a
Restricted Global Note, then, upon receipt by the Registrar of the
following documentation:
(A) if the Holder of such Restricted Definitive Note proposes
to exchange such Note for a beneficial interest in a Restricted
Global Note, a certificate from such Holder in the form of Exhibit C
hereto, including the certifications in item (2)(b) thereof;
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(B) if such Restricted Definitive Note is being transferred to
a QIB in accordance with Rule 144A, a certificate to the effect set
forth in Exhibit B hereto, including the certifications in item (1)
thereof;
(C) if such Restricted Definitive Note is being transferred to
a Non-U.S. Person in an offshore transaction in accordance with Rule
903 or Rule 904, a certificate to the effect set forth in Exhibit B
hereto, including the certifications in item (2) thereof;
(D) if such Restricted Definitive Note 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 Restricted Definitive Note 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, certificates and Opinion of Counsel required by item
(3) thereof, if applicable;
(F) if such Restricted Definitive Note 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 Restricted Definitive Note 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,
upon confirmation of such receipt, the Trustee shall cancel the Restricted
Definitive Note, increase or cause to be increased the aggregate principal
amount of, in the case of clause (A) above, the appropriate Restricted Global
Note, in the case of clause (B) above, the 144A Global Note, and in the case of
clause (C) above, the Regulation S Global Note, and in all other cases, the IAI
Global Note.
(ii) Restricted Definitive Notes to Beneficial Interests in
Unrestricted Global Notes. A Holder of a Restricted Definitive Note may
exchange such Note for a beneficial interest in an Unrestricted Global
Note or transfer such Restricted Definitive Note to a Person who takes
delivery thereof in the form of a beneficial interest in an Unrestricted
Global Note only if:
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(A) such transfer is effected pursuant to the Registration
Statement in accordance with the Registration Rights Agreement; or
(B) the Registrar receives the following:
(1) if the Holder of such Definitive Notes proposes to
exchange such Notes for a beneficial interest in the
Unrestricted Global Note, a certificate from such Holder in
the form of Exhibit C hereto, including the certifications in
item (1)(c) thereof; or
(2) if the Holder of such Definitive Notes proposes to
transfer such Notes to a Person who shall take delivery
thereof in the form of a beneficial interest in the
Unrestricted Global Note, a certificate from such Holder in
the form of Exhibit B hereto, including the certifications in
item (4) thereof;
and, in each such case set forth in this subparagraph (B), if the
Company or Registrar so requests or if the Applicable Procedures so
require, an Opinion of Counsel in form reasonably acceptable to the
Company or Registrar, as applicable, to the effect that such
exchange or transfer is in compliance with the Securities Act and
that the restrictions on transfer contained herein and in the
Private Placement Legend are no longer required in order to maintain
compliance with the Securities Act.
Upon satisfaction of the conditions of any of the subparagraphs in
this Section 2.06(d)(ii), the Trustee shall cancel the Definitive Notes and
increase or cause to be increased the aggregate principal amount of the
Unrestricted Global Note.
(iii) Unrestricted Definitive Notes to Beneficial Interests in
Unrestricted Global Notes. A Holder of an Unrestricted Definitive Note may
exchange such Note for a beneficial interest in an Unrestricted Global
Note or transfer such Definitive Notes to a Person who takes delivery
thereof in the form of a beneficial interest in an Unrestricted Global
Note at any time. Upon receipt of a request for such an exchange or
transfer, the Trustee shall cancel the applicable Unrestricted Definitive
Note and increase or cause to be increased the aggregate principal amount
of one of the Unrestricted Global Notes.
If any such exchange or transfer from a Definitive Note to a
beneficial interest in a Global Note is effected pursuant to subparagraphs
(ii)(A), (ii)(B) or (iii) above at a time when an Unrestricted Global Note has
not yet been issued, the Company shall issue and, upon receipt of an
Authentication Order in accordance with
<PAGE>
26
Section 2.02 hereof, the Trustee shall authenticate one or more Unrestricted
Global Notes in an aggregate principal amount equal to the aggregate principal
amount of Definitive Notes so transferred.
(e) Transfer and Exchange of Definitive Notes for Definitive Notes.
Upon request by a Holder of Definitive Notes and such Holder's
compliance with the provisions of this Section 2.06(e), the Registrar shall
register the transfer or exchange of Definitive Notes. Prior to such
registration of transfer or exchange, the requesting Holder shall present or
surrender to the Registrar the Definitive Notes duly endorsed or accompanied by
a written instruction of transfer in form reasonably 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, required pursuant to
the following provisions of this Section 2.06(e).
(i) Restricted Definitive Notes to Restricted Definitive Notes. Any
Restricted Definitive Note may be transferred to and registered in the
name of Persons who take delivery thereof in the form of a Restricted
Definitive Note if the Registrar receives the following:
(A) if the transfer will be made pursuant to Rule 144A, 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 903 or 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
exception from the registration requirements of the Securities Act,
then the transferor must deliver a certificate in the form of
Exhibit B hereto, including the certifications, certificates and
Opinion of Counsel required by item (3) thereof, if applicable.
(ii) Restricted Definitive Notes to Unrestricted Definitive Notes.
Any Restricted Definitive Note may be exchanged by the Holder thereof for
an Unrestricted Definitive Note or transferred to a Person or Persons who
take delivery thereof in the form of an Unrestricted Definitive Note if:
(A) any such transfer is effected pursuant to the Registration
Statement in accordance with the Registration Rights Agreement; or
(B) the Registrar receives the following:
<PAGE>
27
(1) if the Holder of such Restricted Definitive Notes
proposes to exchange such Notes for an Unrestricted Definitive
Note, a certificate from such Holder in the form of Exhibit C
hereto, including the certifications in item (1)(d) thereof;
or
(2) if the Holder of such Restricted Definitive Notes
proposes to transfer such Notes to a Person who shall take
delivery thereof in the form of an Unrestricted Definitive
Note, a certificate from such Holder in the form of Exhibit B
hereto, including the certifications in item (4) thereof;
and, in each such case set forth in this subparagraph (B), if the
Company or Registrar so requests, an Opinion of Counsel in form
reasonably acceptable to the Company or Registrar, as applicable, to
the effect that such exchange or transfer is in compliance with the
Securities Act and that the restrictions on transfer contained
herein and in the Private Placement Legend are no longer required in
order to maintain compliance with the Securities Act.
(iii) Unrestricted Definitive Notes to Unrestricted Definitive
Notes. A Holder of Unrestricted Definitive Notes may transfer such Notes
to a Person who takes delivery thereof in the form of an Unrestricted
Definitive Note. Upon receipt of a request to register such a transfer,
the Registrar shall register the Unrestricted Definitive Notes pursuant to
the instructions from the Holder thereof.
(f) [Intentionally Omitted]
(g) Legends. The following legends shall appear on the face of all
Global Notes and Definitive Notes 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
Note and each Definitive Note (and all Notes issued in exchange
therefor or substitution thereof) shall bear the legend in
substantially the following form:
"THE NOTES EVIDENCED HEREBY HAVE NOT BEEN REGISTERED UNDER THE SECURITIES
ACT OF 1933, AS AMENDED (THE "SECURITIES ACT"), OR OTHER SECURITIES LAWS.
NEITHER THIS NOTE NOR ANY INTEREST OR PARTICIPATION HEREIN MAY BE
REOFFERED, SOLD, ASSIGNED, TRANSFERRED, PLEDGED, ENCUMBERED OR OTHERWISE
DISPOSED OF IN THE ABSENCE OF
<PAGE>
28
SUCH REGISTRATION UNLESS THE TRANSACTION IS EXEMPT FROM, OR NOT SUBJECT
TO, THE REGISTRATION REQUIREMENTS OF THE SECURITIES ACT. THE HOLDER OF
THIS SECURITY BY ITS ACCEPTANCE HEREOF (1) REPRESENTS THAT (A) IT IS A
"QUALIFIED INSTITUTIONAL BUYER" (AS DEFINED IN RULE 144A UNDER THE
SECURITIES ACT), (B) IT IS NOT A U.S. PERSON AND IS ACQUIRING ITS NOTE IN
AN "OFFSHORE TRANSACTION" PURSUANT TO RULE 903 OR 904 OF REGULATION S
UNDER THE SECURITIES ACT OR (C) IT IS AN INSTITUTIONAL "ACCREDITED
INVESTOR" WITHIN THE MEANING OF SUBPARAGRAPH (a)(1), (2), (3) OR (7) OF
RULE 501 UNDER THE SECURITIES ACT THAT IS PURCHASING FOR ITS OWN ACCOUNT
OR FOR THE ACCOUNT OF SUCH AN INSTITUTIONAL ACCREDITED INVESTOR FOR
INVESTMENT PURPOSES AND NOT WITH A VIEW TO OR FOR OFFER OR SALE IN
CONNECTION WITH ANY DISTRIBUTION IN VIOLATION OF THE SECURITIES ACT, (2)
AGREES THAT IT WILL NOT PRIOR TO (X) THE DATE WHICH IS TWO YEARS (OR SUCH
SHORTER PERIOD OF TIME AS PERMITTED BY RULE 144(K) UNDER THE SECURITIES
ACT OR ANY SUCCESSOR PROVISION THEREUNDER) AFTER THE LATER OF THE ORIGINAL
ISSUE DATE HEREOF (OR OF ANY PREDECESSOR OF THIS NOTE) OR THE LAST DAY ON
WHICH THE COMPANY OR ANY AFFILIATE OF THE COMPANY WAS THE OWNER OF ANY
NOTE (OR ANY PREDECESSOR OF THIS NOTE) AND (Y) SUCH LATER DATE, IF ANY, AS
MAY BE REQUIRED BY APPLICABLE LAW (THE "RESALE RESTRICTION TERMINATION
DATE"), OFFER, SELL OR OTHERWISE TRANSFER THIS NOTE EXCEPT (A) TO THE
COMPANY, (B) PURSUANT TO A REGISTRATION STATEMENT WHICH HAS BEEN DECLARED
EFFECTIVE UNDER THE SECURITIES ACT, (C) FOR SO LONG AS THE NOTES ARE
ELIGIBLE FOR RESALE PURSUANT TO RULE 144A, TO A PERSON IT REASONABLY
BELIEVES IS A "QUALIFIED INSTITUTIONAL BUYER" AS DEFINED IN RULE 144A
UNDER THE SECURITIES ACT THAT PURCHASES FOR ITS OWN ACCOUNT OR FOR THE
ACCOUNT OF A QUALIFIED INSTITUTIONAL BUYER TO WHOM NOTICE IS GIVEN THAT
THE TRANSFER IS BEING MADE IN RELIANCE ON RULE 144A INSIDE THE UNITED
STATES, (D) PURSUANT TO OFFERS AND SALES TO NON-U.S. PERSONS THAT OCCUR
OUTSIDE THE UNITED STATES WITHIN THE MEANING OF REGULATION S UNDER THE
SECURITIES ACT, (E) TO AN INSTITUTIONAL "ACCREDITED INVESTOR" WITHIN THE
MEANING OF SUBPARAGRAPH (a)(1), (2), (3) OR (7) OF RULE 501 UNDER THE
SECURITIES ACT THAT IS PURCHASING FOR ITS OWN ACCOUNT OR FOR THE ACCOUNT
OF SUCH AN INSTITUTIONAL ACCREDITED INVESTOR FOR INVESTMENT PURPOSES AND
NOT WITH A VIEW TO OR FOR OFFER OR SALE IN CONNECTION WITH ANY
DISTRIBUTION IN VIOLATION OF THE
<PAGE>
29
SECURITIES ACT OR (F) PURSUANT TO ANY OTHER AVAILABLE EXEMPTION FROM THE
REGISTRATION REQUIREMENTS OF THE SECURITIES ACT AND (3) AGREES THAT IT
WILL GIVE TO EACH PERSON TO WHOM THIS NOTE IS TRANSFERRED A NOTICE
SUBSTANTIALLY TO THE EFFECT OF THIS LEGEND; PROVIDED THAT THE COMPANY
SHALL HAVE THE RIGHT PRIOR TO ANY SUCH OFFER, SALE OR TRANSFER (I)
PURSUANT TO CLAUSE (D) OR (F) TO REQUIRE THE DELIVERY OF AN OPINION OF
COUNSEL, CERTIFICATION AND/OR OTHER INFORMATION SATISFACTORY TO IT, AND
(II) IN EACH OF THE FOREGOING CASES, TO REQUIRE THAT A CERTIFICATION OF
TRANSFER IN THE FORM APPEARING IN THE INDENTURE GOVERNING THIS NOTE IS
COMPLETE AND DELIVERED BY THE TRANSFEROR TO THE TRUSTEE. THIS LEGEND WILL
BE REMOVED UPON THE REQUEST OF THE HOLDER AFTER THE RESALE RESTRICTION
TERMINATION DATE. AS USED HEREIN, THE TERMS "OFFSHORE TRANSACTION,"
"UNITED STATES" AND "U.S. PERSON" HAVE THE MEANINGS GIVEN TO THEM BY
REGULATION S UNDER THE SECURITIES ACT."
(B) Notwithstanding the foregoing, any Global Note or
Definitive Note issued pursuant to subparagraphs (b)(iv), (c)(iii),
(c)(iv), (d)(ii), (d)(iii), (e)(ii) or (e)(iii) to this Section 2.06
(and all Notes issued in exchange thereof or substitution thereof)
shall not bear the Private Placement Legend.
(ii) Global Note Legend. Each Global Note shall bear a legend in
substantially the following form:
"THIS GLOBAL NOTE 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 2.06 OF THE INDENTURE, (II) THIS
GLOBAL NOTE MAY BE EXCHANGED IN WHOLE BUT NOT IN PART PURSUANT TO SECTION
2.06(a) OF THE INDENTURE, (III) THIS GLOBAL NOTE MAY BE DELIVERED TO THE
TRUSTEE FOR CANCELLATION PURSUANT TO SECTION 2.11 OF THE INDENTURE AND
(IV) THIS GLOBAL NOTE MAY BE TRANSFERRED TO A SUCCESSOR DEPOSITARY WITH
THE PRIOR WRITTEN CONSENT OF THE COMPANY."
(iii) Regulation S Temporary Global Note Legend. The Regulation S
Temporary Global Note shall bear a legend in substantially the following
form:
<PAGE>
30
"THE RIGHTS ATTACHING TO THIS REGULATION S TEMPORARY GLOBAL NOTE, AND THE
CONDITIONS AND PROCEDURES GOVERNING ITS EXCHANGE FOR CERTIFICATED NOTES,
ARE AS SPECIFIED IN THE INDENTURE (AS DEFINED HEREIN). NEITHER THE HOLDER
NOR THE BENEFICIAL OWNERS OF THIS REGULATION S TEMPORARY GLOBAL NOTE SHALL
BE ENTITLED TO RECEIVE PAYMENT OF INTEREST HEREON."
(h) Cancellation and/or Adjustment of Global Notes.
At such time as all beneficial interests in a particular Global Note
have been exchanged for Definitive Notes or a particular Global Note has been
redeemed, repurchased or canceled in whole and not in part, each such Global
Note shall be returned to or retained and canceled by the Trustee in accordance
with Section 2.11 hereof. At any time prior to such cancellation, if any
beneficial interest in a Global Note is exchanged for or transferred to a Person
who will take delivery thereof in the form of a beneficial interest in another
Global Note or for Definitive Notes, the principal amount of Notes represented
by such Global Note shall be reduced accordingly and an endorsement shall be
made on such Global Note 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 Note, such other Global Note
shall be increased accordingly and an endorsement shall be made on such Global
Note 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, subject to the other provisions of this Section 2.06, execute and
the Trustee shall authenticate Global Notes and Definitive Notes upon the
Company's order or at the Registrar's request in accordance with the
provisions of Section 2.02 hereof.
(ii) No service charge shall be made to a holder of a beneficial
interest in a Global Note or to a Holder of a Definitive Note for any
registration of transfer or exchange, but the Company may require payment
of a sum sufficient to cover any transfer tax or similar governmental
charge payable in connection therewith (other than any such transfer taxes
or similar governmental charge payable upon exchange or transfer pursuant
to Sections 2.10, 3.06, 5.07 and 10.05 hereof).
(iii) The Registrar shall not be required to register the transfer
of or exchange any Note selected for redemption in whole or in part,
except the unredeemed portion of any Note being redeemed in part.
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31
(iv) All Global Notes and Definitive Notes issued upon any
registration of transfer or exchange of Global Notes or Definitive Notes
shall be the valid obligations of the Company, evidencing the same debt,
and entitled to the same benefits under this Indenture, as the Global
Notes or Definitive Notes 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 any Notes during a period beginning at the
opening of business 15 Business Days before the day of the mailing of a
notice of redemption or repurchase under Section 3.02 or 5.07 hereof, as
applicable, and ending at the close of business on such day, (B) to
register the transfer of or to exchange any Note so selected for
redemption or repurchase in whole or in part, except the unredeemed
portion of any Note being redeemed or repurchased in part or (C) to
register the transfer of or to exchange a 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 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
Note for the purpose of receiving payment of principal of and interest on
such 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 Notes and Definitive
Notes in accordance with the provisions of Section 2.02 hereof.
(viii) All certifications, certificates and Opinions of Counsel
required to be submitted to the Registrar pursuant to this Section 2.06 to
effect a registration of transfer or exchange may be submitted by
facsimile.
Section 2.07 Replacement Notes.
If any mutilated Note is surrendered to the Trustee or the Company
and the Trustee receives evidence to its satisfaction of the destruction, loss
or theft of any Note, the Company shall issue and the Trustee, upon receipt of
an Authentication Order, shall authenticate a replacement 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 reasonable
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 require the payment of a sum sufficient to
cover any tax or other governmental charge that may be imposed in relation
thereto, and may charge for its expenses (including the fees and expenses of the
Trustee and reasonable attorneys' fees and expenses) in replacing a Note.
<PAGE>
32
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.
If any mutilated, lost, stolen or destroyed Note has become or is
about to become due and payable, the Company, in its sole discretion, may,
instead of issuing a new Note, pay such Note.
Section 2.08 Outstanding Notes.
The Notes outstanding at any time are all the Notes authenticated by
the Trustee except for those canceled by it, those delivered to it for
cancellation, those reductions in the interest in a Global Note effected by the
Trustee in accordance with the provisions hereof, and those described in this
Section 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 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 Note is held by a bona fide purchaser or protected purchaser.
If the principal amount of any Note is considered paid under Section
5.01 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 thereto) holds, on a redemption date or maturity date, money
sufficient to pay Notes payable on that date, then on and after that date such
Notes 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 aggregate
principal amount of Notes have concurred in any direction, waiver or consent,
Notes owned by the Company, or by any Subsidiary or 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 Notes that the Trustee knows are so owned
shall be so disregarded.
Section 2.10 Temporary Notes.
Until certificates representing Notes are ready for delivery, the
Company may prepare and the Trustee, upon receipt of an Authentication Order,
shall authenticate temporary Notes. Temporary Notes shall be substantially in
the form of certificated Notes but may have variations that the Company
considers appropriate for temporary Notes and as shall be reasonably acceptable
to the Trustee. Without unreasonable delay, the Company shall prepare and the
Trustee shall authenticate
<PAGE>
33
definitive Notes in exchange for temporary Notes. Holders of temporary Notes
shall be entitled to all of the benefits of this Indenture.
Section 2.11 Cancellation.
The Company at any time may deliver Notes to the Trustee for
cancellation. The Registrar and Paying Agent shall forward to the Trustee any
Notes surrendered to them for registration of transfer, exchange or payment. The
Trustee and no one else shall cancel all Notes surrendered for registration of
transfer, exchange, payment, replacement or cancellation and shall destroy
canceled Notes (subject to the record retention requirements of the Exchange
Act). Certification of the destruction of all canceled Notes shall be delivered
to the Company. The Company may not issue new Notes to replace Notes that it has
paid or that have been delivered to the Trustee for cancellation.
Section 2.12 Defaulted Interest.
If the Company defaults in a payment of interest on the 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, in each case at the rate provided
in the Notes and in Section 5.01 hereof. The Company shall notify the Trustee in
writing of the amount of defaulted interest proposed to be paid on each Note and
the date of the proposed payment. The Company shall fix or cause to be fixed
each such Special Record Date and payment date, provided that no such Special
Record Date shall be less than 10 days prior to the related payment date for
such defaulted interest. At least 15 days before the Special Record Date, the
Company (or, upon the written request of the Company, the Trustee in the name
and at the expense of the Company) shall mail or cause to be mailed to Holders a
notice that states the Special Record Date, the related payment date and the
amount of such interest to be paid. The defaulted interest shall be considered
paid upon deposit with the Trustee or the Paying Agent of an amount of money
equal to the aggregate amount proposed to be paid in respect of such defaulted
interest, and interest on such defaulted interest shall thereafter cease to
accrue from that date. The Company may make payment of any defaulted interest in
any other lawful manner not inconsistent with the requirements of any securities
exchange or other trading market on which the securities of the Company are
listed or traded, and upon such notice as may be required by such exchange or
trading market, if, after written notice given by the Company to the Trustee of
the proposed payment, such manner of payment shall be deemed practicable by the
Trustee.
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34
Section 2.13 CUSIP Numbers.
The Company in issuing the Notes shall use "CUSIP" numbers (if then
generally in use), and, if so, the Trustee shall use CUSIP numbers in notices of
redemption as a convenience to Holders; provided that any such notice may state
that no representation is made as to the correctness of such numbers either as
printed on the Notes or as contained in any notice of a redemption and that
reliance may be placed only on the other identification numbers printed on the
Notes, and any such redemption shall not be affected by any defect in or the
omission of such numbers. The Company will promptly notify the Trustee of any
change in the CUSIP numbers.
ARTICLE 3.
REDEMPTION AND PREPAYMENT
Section 3.01 Notices to Trustee.
If the Company elects to redeem Notes pursuant to the optional
redemption provisions of Section 3.07 hereof, it shall furnish to the Trustee,
at least 45 days 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 redemption date, (iii) the principal
amount of Notes to be redeemed, (iv) the redemption price, and (v) the CUSIP
numbers of the Notes to be redeemed.
Section 3.02 Selection of Notes to Be Redeemed.
If less than all of the Notes are to be redeemed at any time, the
Trustee shall select the Notes to be redeemed or purchased among the Holders of
the Notes in compliance with the requirements of the principal national
securities exchange, if any, on which the Notes are listed or, if the Notes are
not so listed, on a pro rata basis or by lot. In the event of a partial
redemption by lot, the particular Note 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 Notes not previously called
for redemption.
The Trustee shall promptly notify the Company in writing of the
Notes selected for redemption and, in the case of any Note selected for partial
redemption, the principal amount thereof to be redeemed. Notes and portions of
Notes selected shall be in amounts of $1,000 or whole multiples of $1,000;
provided, however, that if all of the Notes of a Holder are to be redeemed, the
entire outstanding amount of 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 Notes called for redemption also
apply to portions of Notes called for redemption.
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35
Section 3.03 Notice of Redemption.
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 Notes are to be redeemed at such Holder's
registered address.
The notice shall identify the 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
principal amount of such Note to be redeemed and that, after the redemption date
upon surrender of such Note, a new Note or Notes in principal amount equal to
the unredeemed portion shall be issued upon cancellation of the original Note;
(d) the name and address of the Paying Agent;
(e) that 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 Notes called for redemption ceases to accrue on and after
the redemption date;
(g) the paragraph of the Notes and/or Section of this Indenture
pursuant to which the 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 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, any Notes called for redemption become irrevocably due and payable on
the redemption date at the redemption price. A notice of redemption may not be
conditional.
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36
Section 3.05 Deposit of Redemption Price.
Prior to 11:00 a.m. New York City time on the redemption date, the
Company shall deposit with the Trustee or with the Paying Agent money sufficient
to pay the redemption price of and accrued interest on all Notes to be redeemed
on that date. The Trustee or the Paying Agent shall promptly return to the
Company any money 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 on, all Notes to be redeemed.
If the Company complies with the provisions of the preceding
paragraph, on and after the redemption date, interest shall cease to accrue on
the Notes or the portions of Notes called for redemption. If a Note is redeemed
on or after a Record Date but on or prior to the related Interest Payment Date,
then any 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 principal, from the redemption date until
such principal 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 Notes and in
Section 5.01 hereof.
Section 3.06 Notes Redeemed in Part.
Upon surrender of a Note that is redeemed in part, the Company shall
issue and, upon the Company's written request, the Trustee shall authenticate,
for the Holder at the expense of the Company, a new Note equal in principal
amount to the unredeemed portion of the Note surrendered.
Section 3.07 Optional Redemption.
(a) The Notes shall not be redeemable at the Company's option prior
to ________________, 200[4].(1) Thereafter, the Notes shall be subject to
redemption at any time at the option of the Company, in whole or in part, upon
not less than 45 nor more than 60 days' notice, at the redemption prices
(expressed as percentages of principal amount) set forth below, plus accrued and
unpaid interest thereon to the applicable redemption date (subject to the right
of Holders of record on the relevant Record Date to receive interest due on the
relevant Interest Payment Date), if redeemed during the twelve-month period
beginning on _____________ (____________(1) for the year 200[4]) of the years
indicated below:
- ----------
(1) Two days following the first Interest Payment Date after the fifth
anniversary of the Closing Date.
<PAGE>
37
Percentage of
Principal
Year Amount
- ---- -------
200[4].................................................... 102.733%
200[5].................................................... 102.050%
200[6].................................................... 101.367%
200[7].................................................... 100.683%
200[8] and thereafter..................................... 100.000%
(b) 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.
The Company shall not be required to make mandatory redemption or
sinking fund payments with respect to the Notes.
ARTICLE 4.
CONVERSION
Section 4.01 Conversion Privilege.
Subject to the further provisions of this Section 4.01, a Holder of
a Note may convert such Note at the Conversion Price then in effect into Class A
Common Stock (i) at any time after the Regulatory Relief Date, if at such time
such Holder is a Regulated Person, or (ii) at any time, if such Holder is not a
Regulated Person; provided, however, that the Initial Purchaser or any of its
Affiliates or any Holder that acquires Notes pursuant to any Transfer (as
defined in the Stockholders Agreement) other than pursuant to a Public Resale
(as defined in the Stockholders Agreement) may not convert such Note if, after
giving effect to such conversion, such Holder would be deemed to be an
"affiliate" as that term is defined in, and for the purposes of, either of the
Franchise Agreements; provided, further, that, if such Note is called for
redemption pursuant to Article 3, such conversion right shall terminate at the
close of business on the Business Day immediately preceding the redemption date
for such Note (unless the Company shall default in making the redemption payment
when due, in which case the conversion right shall terminate at the close of
business on the date such default is cured and such Note is redeemed); provided,
further, that, if the Holder of a Note tenders such Note pursuant to a Change of
Control Offer, such Note may only be converted if such Holder properly withdraws
its election to participate in the Change of Control Offer prior to consummation
of the Change of Control Offer. The number of shares of Class A Common Stock
issuable upon conversion of a Note shall be determined by dividing the principal
amount of the Note or portion thereof surrendered for conversion by the
Conversion Price in effect on the
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Conversion Date. The initial conversion price shall be $34.00 and is subject to
adjustment as provided in this Article 4 (the "Conversion Price").
A Holder may convert a portion of a Note equal to $1,000 or any
integral multiple thereof. Provisions of this Indenture that apply to conversion
of all of a Note also apply to conversion of a portion of a Note.
A Holder of Notes is not entitled to any rights of a holder of Class
A Common Stock until such Holder has converted its Notes to Class A Common
Stock, and only to the extent such Notes are deemed to have been converted into
Class A Common Stock pursuant to this Article 4.
Section 4.02 Conversion Procedure.
To convert a Note, a Holder must (a) complete and manually sign the
conversion notice on the back of the Note and deliver such notice to the
Conversion Agent; (b) surrender the Note to the Conversion Agent, (c) furnish
appropriate endorsements and transfer documents if required by the Registrar or
the Conversion Agent, and (d) pay any transfer or similar tax, if required
pursuant to Section 4.04 hereof. The date on which the Holder satisfies all of
those requirements is the "Conversion Date." As soon as practicable after the
Conversion Date, the Company shall deliver to the Holder through the Conversion
Agent a certificate for the number of whole shares of Class A Common Stock
issuable upon the conversion, payment for accrued interest on such Note to the
extent required by this Section 4.02 and cash in lieu of any fractional shares
pursuant to Section 4.03. The Company may, at any time and as a condition to
delivering such shares of Class A Common Stock, require any Holder to deliver a
representation and warranty made to the Company and an officer's certificate
certifying as to whether or not such Holder is a Regulated Person as of the
Conversion Date and certifying the number of issued and outstanding shares of
Common Stock "Beneficially Owned" (as defined in Rule 13d-3 under the Exchange
Act) by such Holder as of the Conversion Date. The Company may also rely upon
the stock ledger and corporate records of the Company. The Trustee shall have no
obligation to make any such determination.
The person in whose name the certificate is registered shall be
deemed to be a shareholder of record on the Conversion Date; provided, however,
that no surrender of a Note on any date when the stock transfer books of the
Company shall be closed shall be effective to constitute the person or persons
entitled to receive the shares of Class A Common Stock upon such conversion as
the record holder or holders of such shares of Class A Common Stock on such
date, but such surrender shall be effective to constitute the person or persons
entitled to receive such shares of Class A Common Stock as the record holder or
holders thereof for all purposes at the close of business on the next succeeding
day on which such stock transfer books are open; provided, further, that such
conversion shall be at the Conversion Price in effect on the Conversion Date as
if the stock transfer books of the Company had not
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39
been closed. Upon conversion of a Note, such person shall no longer be a Holder
of such Note.
If any Holder surrenders a Note for conversion after the close of
business on the record date for the payment of an installment of interest and
before the close of business on the related interest payment date, the Company
shall pay accrued interest through the Conversion Date to the Holder of such
Note on such record date.
If a Holder converts more than one Note at the same time, the number
of shares of Class A Common Stock issuable upon the conversion shall be based on
the aggregate principal amount of Notes converted.
Upon surrender of a Note that is converted in part, the Company
shall execute, and the Trustee shall authenticate and deliver to the Holder, a
new Note equal in principal amount to the unconverted portion of the Note
surrendered.
Section 4.03 Fractional Shares.
The Company will not issue fractional shares of Class A Common Stock
upon conversion of Notes. In lieu thereof, the Company will pay an amount in
cash based upon the Closing Price of the Class A Common Stock on the Trading Day
immediately prior to the Conversion Date.
Section 4.04 Taxes on Conversion.
If a Holder converts a Note, the Company shall pay any documentary,
stamp or similar issue or transfer tax due on the issue of shares of Class A
Common Stock upon such conversion. However, the Holder shall pay any such tax
which is due because the Holder requests the shares to be issued in a name other
than the Holder's name. The Conversion Agent may refuse to deliver the
certificate representing the Class A Common Stock being issued in a name other
than the Holder's name until the Conversion Agent receives a sum sufficient to
pay any tax which will be due because the shares are to be issued in a name
other than the Holder's name. Nothing herein shall preclude any tax withholding
required by law or regulation.
Section 4.05 Company to Provide Stock.
The Company shall, prior to issuance of any Notes hereunder, and
from time to time as it may be necessary, reserve, out of its authorized but
unissued Class A Common Stock, a sufficient number of shares of Class A Common
Stock to permit the conversion of all outstanding Notes into shares of Class A
Common Stock.
All shares of Class A Common Stock delivered upon conversion of the
Notes shall be newly issued shares or treasury shares, shall be duly authorized,
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40
validly issued, fully paid and nonassessable and shall be free from preemptive
rights and free of any lien or adverse claim.
The Company will endeavor promptly to comply with all federal and
state securities laws regulating the offer and delivery of shares of Class A
Common Stock upon conversion of Notes, if any, and will list or cause to have
quoted such shares of Class A Common Stock on each national securities exchange
or in the over-the-counter market or such other market on which the Class A
Common Stock is then listed or quoted.
Section 4.06 Adjustment of Conversion Price.
The Conversion Price shall be adjusted from time to time by the
Company as follows:
(a) In case the Company shall (i) pay a dividend in shares of Class
A Common Stock to the holders of the Class A Common Stock, (ii) make a
distribution in shares of Class A Common Stock to the holders of the Class A
Common Stock, (iii) subdivide or split its outstanding Class A Common Stock into
a smaller number of shares, or (iv) combine its outstanding Class A Common Stock
into a smaller number of shares, the Conversion Price in effect immediately
prior thereto shall be adjusted so that the Holder of any Note thereafter
surrendered for conversion shall be entitled to receive that number of shares of
Class A Common Stock which it would have owned or been entitled to receive had
such Note been converted immediately prior to the happening of such event. An
adjustment made pursuant to this subsection (a) shall become effective as of the
close of business on the record date in the case of a dividend in shares or
distribution and shall become effective as of the close of business on the
effective date in the case of a subdivision, split or combination.
(b) In case the Company shall issue rights or warrants to all or
substantially all holders of its Class A Common Stock entitling them (for a
period commencing no earlier than the record date described below and expiring
not more than 60 days after such record date) to subscribe for or purchase
shares of Class A Common Stock (or securities convertible into Class A Common
Stock) at a price per share less than the Current Market Price per share of
Class A Common Stock (as determined in accordance with subsection (g) of this
Section 4.06) at the record date for the determination of shareholders entitled
to receive such rights or warrants, the Conversion Price in effect as of the
close of business on the record date thereto shall be adjusted so that the same
shall equal the price determined by multiplying the Conversion Price in effect
on the record date by a fraction of which the numerator shall be the number of
shares of Class A Common Stock outstanding on such record date, plus the number
of shares which the aggregate offering price of the total number of shares of
Class A Common Stock so offered (or the aggregate conversion price of the
convertible notes so offered) would purchase at such Current Market Price, and
of which the denominator shall be the number of shares of Class A Common Stock
<PAGE>
41
outstanding on such record date plus the number of additional shares of Class A
Common Stock offered (or into which the convertible notes so offered are
convertible). Such adjustment shall be made successively whenever any such
rights, warrants or convertible notes are issued, and shall become effective as
of the close of business on such record date. If at the end of the period during
which such rights or warrants are exercisable not all rights or warrants shall
have been exercised, the adjusted Conversion Price shall be immediately
readjusted to what it would have been based upon the number of additional shares
of Class A Common Stock actually issued (or the number of shares of Class A
Common Stock issuable upon conversion of convertible Notes actually issued).
(c) In case the Company shall, by dividend or otherwise, distribute
to all holders of its Common Stock, cash (excluding (x) any regular cash
dividend on the Common Stock to the extent that the aggregate cash dividend per
share of Common Stock in any four fiscal quarters does not exceed the greater of
(A) the amount per share of Common Stock of the cash dividend on the Common
Stock for the preceding four fiscal quarters to the extent that such dividend
for the preceding four fiscal quarters did not require any adjustment of the
Conversion Price pursuant to this Section 4.06(c) (as adjusted to reflect
subdivisions or combinations of the Common Stock), and (B) 3.75% of the
arithmetic average of the Closing Prices (as set forth in Section 4.06(g))
during the ten Trading Days immediately prior to the date of declaration of such
dividend, (y) any dividend or distribution in connection with the liquidation,
dissolution or winding up of the Company, whether voluntary or involuntary, and
(z) any cash that is distributed as part of a distribution requiring a
Conversion Price adjustment pursuant to Section 4.06(e)), then, in such case,
the Conversion Price shall be decreased so that the same shall equal the price
determined by multiplying the Conversion Price in effect immediately prior to
the close of business on the record date of such action by a fraction of which
the numerator shall be the Current Market Price of the Class A Common Stock on
such record date less the amount of cash so distributed (and not excluded as
provided above) applicable to one share of Common Stock and the denominator
shall be Current Market Price of the Class A Common Stock on such record date,
such decrease shall be effective immediately prior to the opening of business on
the day following the record date of such action; provided, however, that in the
event the portion of cash so distributed applicable to one share of Common Stock
is equal to or greater than the Current Market Price of the Class A Common Stock
on such record date, in lieu of the foregoing adjustment, adequate provision
shall be made so that each Holder shall have the right to receive upon
conversion the amount of cash such Holder would have received had such Holder
converted each Note on the record date. In the event that such dividend or
distribution is not so paid or made, the Conversion Price shall again be
adjusted to be the Conversion Price which would then be in effect if such
dividend or distribution had not been declared. If any adjustment is required to
be made as set forth in this Section 4.06(c) as a result of a distribution that
is a regular dividend, such adjustment shall be based upon the amount by which
such distribution exceeds the amount of the regular cash dividend permitted to
be excluded pursuant hereto. If an adjustment is required to be made as set
forth in this Section 4.06(c) above as a
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42
result of a distribution that is not a regular dividend, such adjustment shall
be based upon the full amount of the distribution.
(d) In case a tender or exchange offer made by the Company or any
Subsidiary of the Company for all or any portion of the Common Stock shall
expire and such tender or exchange offer (as amended upon the expiration
thereof) shall require the payment to stockholders of consideration per share of
Common Stock having a fair market value (as determined by the Board of
Directors, whose determination shall be conclusive and described in a Board
Resolution) that, as of the last time (the "Expiration Time") tenders or
exchanges may be made pursuant to such tender or exchange offer (as it may be
amended), exceeds the Current Market Price of the Class A Common Stock on the
Trading Day next succeeding the Expiration Time, the Conversion Price shall be
decreased so that the same shall equal the price determined by multiplying the
Conversion Price in effect immediately prior to the Expiration Time by a
fraction of which the numerator shall be the product of the number of Class A
Common Stock outstanding (including any tendered or exchanged shares) on the
Expiration Time multiplied by the Current Market Price of the Class A Common
Stock on the Trading Day next succeeding the Expiration Time, less the fair
market value (determined as aforesaid) of the aggregate consideration payable to
stockholders based on the acceptance (up to any maximum specified in the terms
of the tender or exchange offer) of all shares validly tendered or exchanged and
not withdrawn as of the Expiration Time (the shares deemed so accepted, up to
any such maximum, being referred to as the "Purchased Shares") and the
denominator shall be the product of the number of Class A Common Stock
outstanding (less any Purchased Shares) on the Expiration Time and the Current
Market Price of the Class A Common Stock on the Trading Day next succeeding the
Expiration Time, such reduction to become effective immediately prior to the
opening of business on the day following the Expiration Time. In the event that
the Company is obligated to purchase shares pursuant to any such tender or
exchange offer, but the Company is permanently prevented by applicable law from
effecting any such purchases or all such purchases are rescinded, the Conversion
Price shall again be adjusted to be the Conversion Price which would then be in
effect if such tender or exchange offer has not been made.
(e) In case the Company shall distribute to all or substantially all
holders of its Class A Common Stock any shares of capital stock of the Company
(other than Class A Common Stock), evidences of indebtedness or other non-cash
assets (including securities of any Person), or shall distribute to all holders
of its Class A Common Stock rights or warrants to subscribe for or purchase any
of its securities (excluding those referred to in subsection (b) of this Section
4.06), then in each such case the Conversion Price shall be adjusted so that the
same shall equal the price determined by multiplying the Conversion Price in
effect as of the close of business on the record date for such distribution by a
fraction of which the numerator shall be the Current Market Price of the Class A
Common Stock on the record date mentioned below less the fair market value on
such record date (as reasonably determined by the Board of Directors, whose
determination shall be conclusive evidence of such fair market value and set
forth in a Board Resolution delivered to the
<PAGE>
43
Trustee in an Officers' Certificate) of the portion of the capital stock,
evidences of indebtedness or other assets so distributed or of such rights or
warrants applicable to one share of Class A Common Stock (determined on the
basis of the number of shares of Class A Common Stock outstanding on the record
date), and of which the denominator shall be the Current Market Price per share
(as determined in accordance with subsection (g) of this Section 4.06) of the
Class A Common Stock on such record date. Such adjustment shall become effective
as of the close of business on the record date for the determination of
shareholders entitled to receive such distribution. Notwithstanding the
foregoing, in the event that the Company shall distribute rights or warrants
(other than those referred to in subsection (b) of this Section 4.06) ("Rights")
pro rata to holders of Class A Common Stock, the Company may, in lieu of making
any adjustment pursuant to this Section 4.06, make proper provision so that each
holder of a Note who converts such Note (or any portion thereof) after the
record date for such distribution and prior to the expiration or redemption of
the Rights shall be entitled to receive upon such conversion, in addition to the
shares of Class A Common Stock issuable upon such conversion (the "Conversion
Shares"), a number of Rights to be determined as follows: (i) if such conversion
occurs on or prior to the date for the distribution to the holders of Rights of
separate certificates evidencing such Rights (the "Distribution Date"), the same
number of Rights to which a holder of a number of shares of Class A Common Stock
equal to the number of Conversion Shares is entitled at the time of such
conversion in accordance with the terms and provisions of and applicable to the
Rights and (ii) if such conversion occurs after the Distribution Date, the same
number of Rights to which a holder of the number of shares of Class A Common
Stock into which the principal amount of the Note so converted was convertible
as of the close of business on the Distribution Date would have been entitled on
the Distribution Date in accordance with the terms and provisions of and
applicable to the Rights.
(f) In case of a tender or exchange offer made by a Person other
than the Company or any Subsidiary of the Company for an amount which increases
the offeror's ownership of Class A Common Stock to more than 35% of the Class A
Common Stock outstanding and shall involve the payment by such Person of
consideration per share of Class A Common Stock having a fair market value (as
determined by the Board of Directors, whose determination shall be conclusive,
and described in a Board Resolution) at the last time (the "Tender Expiration
Time") tenders or exchanges may be made pursuant to such tender or exchange
offer (as it shall have been amended) that exceeds the Current Market Price per
share of the Class A Common Stock on the Trading Day next succeeding the Tender
Expiration Time, and in which, as of the Tender Expiration Time, the Board of
Directors is not recommending rejection of the offer, the Conversion Price shall
be decreased so that the same shall equal the price determined by multiplying
the Conversion Price in effect immediately prior to the Tender Expiration Time
by a fraction of which the numerator shall be the number of shares of Class A
Common Stock outstanding (including any tendered or exchanged shares) at the
Tender Expiration Time multiplied by the Current Market Price of the Class A
Common Stock on the Trading Day next succeeding the Tender Expiration Time and
the denominator shall be the
<PAGE>
44
sum of (x) the fair market value (determined as aforesaid) of the aggregate
consideration payable to stockholders based on the acceptance (up to any maximum
specified in the terms of the tender or exchange offer) of all shares validly
tendered or exchanged and not withdrawn as of the Tender Expiration Time (the
shares deemed so accepted, up to any such maximum, being referred to as the
"Accepted Purchased Shares") and (y) the product of the number of shares of
Class A Common Stock outstanding (less any Accepted Purchased Shares) at the
Tender Expiration Time and the Current Market Price of the Class A Common Stock
on the Trading Day next succeeding the Tender Expiration Time, such decrease to
become effective immediately prior to the opening of business on the day
following the Tender Expiration Time. In the event that such Person is obligated
to purchase shares pursuant to any such tender or exchange offer, but such
Person is permanently prevented by applicable law from effecting any such
purchases or all such purchases are rescinded, the Conversion Price shall again
be adjusted to be the Conversion Price which would then be in effect if such
tender or exchange offer had not been made. Notwithstanding the foregoing, the
adjustment described in this Section 4.06(f)) shall not be made if, (a) as of
the Tender Expiration Time, the offering documents with respect to such offer
disclose a plan or intention to cause the Company to engage in any transaction
described in Article 6 or (b) if the Initial Purchaser does not beneficially own
all of the Notes.
(g) For purposes of this Section 4.06, the following terms shall
have the meaning indicated:
(i) "Closing Price" with respect to any securities on any date shall
mean the closing sale price, regular way, on such day or, in case no such
sale takes place on such day, the average of the reported closing bid and
asked prices, regular way, in each case on the New York Stock Exchange,
or, if such security is not listed or admitted to trading on such
Exchange, on the principal security exchange or quotation system in the
United States on which such security is quoted or listed or admitted to
trading, or, the average of the closing bid and asked prices of such
security on the over-the-counter market on the day in question as reported
by the Nasdaq National Market or a similar generally accepted reporting
service, or if not so available, in such manner as furnished by any New
York Stock Exchange member firm selected from time to time by the Board of
Directors for that purpose, or a price determined in good faith by the
Board of Directors or, to the extent permitted by applicable law, a duly
authorized committee thereof, whose determination shall be conclusive.
(ii) "Current Market Price" shall mean the average of the daily
Closing Prices per share of Class A Common Stock for the ten consecutive
Trading Days immediately prior to the date in question; provided, however,
that (A) if the "ex" date (as hereinafter defined) for any event (other
than the issuance or distribution requiring such computation) that
requires an adjustment to the Conversion Price pursuant to this Section
4.06 occurs during
<PAGE>
45
such ten consecutive Trading Days, the Closing Price for each Trading Day
prior to the "ex" date for such other event shall be adjusted by
multiplying such Closing Price by the fraction by which the Conversion
Price is so required to be adjusted as a result of such other event, and
(B) if the "ex" date for any event (other than the issuance or
distribution requiring such computation) that requires an adjustment to
the Conversion Price pursuant to Section 4.06(a), (b), (c), (d) or (e)
occurs on or after the "ex" date for the issuance or distribution
requiring such computation and prior to the day in question, the Closing
Price for each Trading Day on and after the "ex" date for such other event
shall be adjusted by multiplying such Closing Price by the same fraction
by which the Conversion Price is so required to be adjusted as a result of
such other event, and (C) if the "ex" date for the issuance or
distribution requiring such computation is prior to the day in question,
after taking into account any adjustment required pursuant to clause (A)
or (B) of this proviso, the Closing Price for each Trading Day on or after
such "ex" date shall be adjusted by adding thereto the amount of any cash
and the Fair Market Value (as determined by the Board of Directors in a
manner consistent with any determination of such value for purposes of
Section 4.06(d), (e) or (f), whose determination shall be conclusive and
described in a resolution of the Board of Directors) of the evidences of
indebtedness, shares of capital stock or assets being distributed
applicable to one share of Class A Common Stock as of the close of
business on the day before such "ex" date. For purposes of any computation
under Section 4.06(f), the Current Market Price of the Class A Common
Stock on any date shall be deemed to be the average of the daily Closing
Prices per share of Class A Common Stock for such day and the next two
succeeding Trading Days; provided, however, that if the "ex" date for any
event (other than the tender or exchange offer requiring such computation)
that requires an adjustment to the Conversion Price pursuant to Section
4.06(a), (b), (c), (d), (e) or (f) occurs on or after the Expiration Time
or Tender Expiration Time, as the case may be, for the tender or exchange
offer requiring such computation and prior to the day in question, the
Closing Price for each Trading Day on and after the "ex" date for such
other event shall be adjusted by multiplying such Closing Price by the
same fraction by which the Conversion Price is so required to be adjusted
as a result of such other event. For purposes of this paragraph, the term
"ex" date, (1) when used with respect to any issuance or distribution,
means the first date on which the Class A Common Stock trades regular way
on the relevant exchange or in the relevant market from which the Closing
Price was obtained without the right to receive such issuance or
distribution, (2) when used with respect to any subdivision or combination
of shares of Class A Common Stock, means the first date on which the Class
A Common Stock trades regular way on such exchange or in such market after
the time at which such subdivision or combination becomes effective, and
(3) when used with respect to any tender or exchange offer, means the
first date on which the Class A Common Stock trades regular way on such
exchange or in such market after the Expiration Time or Tender Expiration
Time, as the case may be, of such offer.
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46
(iii) "Fair Market Value" shall mean the amount which a willing
buyer would pay a willing seller in an arm's length transaction.
(h) In any case in which this Section 8(e) shall require that an
adjustment be made on a record date established for purposes of this Section
4.06, the Company may elect to defer (but only until five Business Days
following the filing by the Company with the Trustee of the certificate
described in Section 4.09) issuing to the Holder of any Note converted after
such record date but prior to the issue date, the shares of Class A Common Stock
and other capital stock of the Company issuable upon such conversion over and
above the shares of Class A Common Stock and other capital stock of the Company
issuable upon such conversion only on the basis of the Conversion Price prior to
adjustment; and, in lieu of the shares the issuance of which is so deferred, the
Company shall issue or cause its transfer agents to issue due bills or other
appropriate evidence prepared by the Company of the right to receive such
shares. If any distribution in respect of which an adjustment to the Conversion
Price is required to be made as of the record date or effective date therefor is
not thereafter made or paid by the Company for any reason, the Conversion Price
shall be readjusted to the Conversion Price which would then be in effect if
such record date had not been fixed or such effective date had not occurred.
Section 4.07 No Adjustment.
No adjustment in the Conversion Price shall be required unless the
adjustment would require an increase or decrease of at least 1% in the
Conversion Price as last adjusted; provided, however, that any adjustments which
by reason of this Section 4.07 are not required to be made shall be carried
forward and taken into account in any subsequent adjustment. All calculations
under this Article 4 shall be made to the nearest cent or to the nearest
one-hundredth of a share, as the case may be.
No adjustment need be made for a transaction referred to in Section
4.06 if all Holders are entitled to participate in the transaction on a basis
and with notice to same extent as holders of Class A Common Stock participate in
the transaction. The Company shall give notice to the Trustee of any such
determination.
No adjustment need be made for rights to purchase Class A Common
Stock or issuances of Class A Common Stock pursuant to a Company plan for
reinvestment of dividends or interest.
No adjustment need be made for a change in the par value or a change
to no par value of the Class A Common Stock.
To the extent that the Notes become convertible into the right to
receive cash, no adjustment need be made thereafter as to the cash. Interest
will not accrue on the cash.
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47
Section 4.08 Adjustment for Tax Purposes.
The Company shall be entitled to make such reductions in the
Conversion Price, in addition to those required by Section 4.06, as it in its
discretion shall determine to be advisable in order that any stock dividends,
subdivisions of shares, distributions of rights to purchase stock or Notes or
distributions of Notes convertible into or exchangeable for stock hereafter made
by the Company to its stockholders shall not be taxable, provided that such
reduction does not have an adverse effect for tax purposes, or otherwise, on
holders of the Notes.
Section 4.09 Notice of Adjustment.
Whenever the Conversion Price is adjusted, the Company shall
promptly mail to Holders a notice of the adjustment and file with the Trustee an
Officers' Certificate briefly stating the facts requiring the adjustment, the
manner of computing it and the new Conversion Price.
Section 4.10 Notice of Certain Transactions.
In the event that:
(a) the Company takes any action which would require an adjustment
in the Conversion Price;
(b) the Company consolidates or merges with, or transfers all or
substantially all of its property and assets to, another corporation and
shareholders of the Company must approve the transaction; or
(c) there is a dissolution or liquidation of the Company,
the Company shall mail to Holders and file with the Trustee a notice stating the
proposed record or effective date, as the case may be. The Company shall mail
the notice before such date to the same extent as such notice is mailed to the
stockholders of the Company. Failure to mail such notice or any defect therein
shall not affect the validity of any transaction referred to in clause (a), (b)
or (c) of this Section 4.10.
Section 4.11 Effect of Reclassification, Consolidation, Merger or
Sale, Transfer or Conveyance on Conversion Privilege.
If any of the following shall occur, namely: (a) any
reclassification or change of shares of Class A Common Stock issuable upon
conversion of the Notes (other than a change in par value, or from par value to
no par value, or from no par value to par value, or as a result of a subdivision
or combination, or any other change for which an adjustment is provided in
Section 4.06); (b) any consolidation or merger to which the Company is a party
other than a merger in which the Company is the
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48
continuing corporation and which does not result in any reclassification of, or
change (other than a change in name, or in par value, or from par value to no
par value, or from no par value to par value, or as a result of a subdivision or
combination) in, outstanding shares of Class A Common Stock; or (c) any sale,
transfer or conveyance of all or substantially all of the property and assets of
the Company to any Person, then the Company, or such successor or purchasing
corporation, as the case may be, shall, as a condition precedent to such
reclassification, change, consolidation, merger, sale or conveyance, execute and
deliver to the Trustee a supplemental indenture providing that the Holder of
each Note then outstanding shall have the right to convert such Note into the
kind and amount of shares of stock and other Notes and property (including cash)
receivable upon such reclassification, change, consolidation, merger, sale,
transfer or conveyance by a holder of the number of shares of Class A Common
Stock deliverable upon conversion of such Note immediately prior to such
reclassification, change, consolidation, merger, sale, transfer or conveyance.
Such supplemental indenture shall provide for adjustments of the Conversion
Price which shall be as nearly equivalent as may be practicable to the
adjustments of the Conversion Price provided for in this Article 4. If, in the
case of any such consolidation, merger, sale, transfer or conveyance, the stock
or other Notes and property (including cash) receivable thereupon by a holder of
Class A Common Stock include shares of stock or other Notes and property of a
corporation other than the successor or purchasing corporation, as the case may
be, in such consolidation, merger, sale, transfer or conveyance, then such
supplemental indenture shall also be executed by such other corporation and
shall contain such additional provisions to protect the interests of the Holders
of the Notes as the Board of Directors shall reasonably consider necessary by
reason of the foregoing. The provisions of this Section 4.11 shall similarly
apply to successive consolidations, mergers, sales, transfer or conveyances.
In the event the Company shall execute a supplemental indenture
pursuant to this Section 4.11, the Company shall promptly file with the Trustee
(x) an Officers' Certificate briefly stating the reasons therefor, the kind or
amount of shares of stock or other Notes or property (including cash) receivable
by Holders of the Notes upon the conversion of their Notes after any such
reclassification, change, consolidation, merger, sale, transfer or conveyance,
any adjustment to be made with respect thereto and that all conditions precedent
have been complied with, and (y) an Opinion of Counsel that all conditions
precedent have been complied with.
Section 4.12 Trustee's Disclaimer.
The Trustee shall have no duty to determine when an adjustment under
this Article 4 should be made, how it should be made or what such adjustment
should be, but may accept as conclusive evidence of that fact or the correctness
of any such adjustment, and shall be protected in relying upon, an Officers'
Certificate including the Officers' Certificate with respect thereto which the
Company is obligated to file with the Trustee pursuant to Section 4.09. The
Trustee makes no representation as to the validity or value of any Notes or
assets issued upon conversion of Notes, and the
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49
Trustee shall not be responsible for the Company's failure to comply with any
provisions of this Article 4.
The Trustee shall not be under any responsibility to determine the
correctness of any provisions contained in any supplemental indenture executed
pursuant to Section 4.11, but may accept as conclusive evidence of the
correctness thereof, and shall be fully protected in relying upon, the Officers'
Certificate with respect thereto which the Company is obligated to file with the
Trustee pursuant to Section 4.11.
Section 4.13 Voluntary Reduction.
The Company from time to time may reduce the Conversion Price by any
amount for any period of time if the period is at least 20 days or such longer
period as may be required by law and if the reduction is irrevocable during the
period; provided, however, that in no event may the Conversion Price be less
than the par value of a share of Class A Common Stock.
ARTICLE 5.
COVENANTS
Section 5.01 Payment of Notes.
The Company shall promptly make all payments of principal, interest
and premium, if any, in respect of the Notes on the dates and in the manner
provided in the Notes and this Indenture. An installment of principal, interest
or premium, if any, shall be considered paid on the date it is due if the Paying
Agent (other than the Company) holds by 11:00 a.m., New York City time, on that
date money in immediately available funds, deposited by the Company or an
Affiliate thereof, sufficient to pay all principal, interest and premium, if
any. The Company shall pay interest (including post-petition interest in any
proceeding under Bankruptcy Law) on overdue principal and premium, if any, at
the rate equal to 1% per annum in excess of the then applicable interest rate on
the Notes to the extent lawful; it shall pay interest (including post-petition
interest in any proceeding under Bankruptcy Law) on overdue installments of
interest at the same rate to the extent lawful.
Section 5.02 SEC Reports.
(a) The Company shall file all reports and other information and
documents which it is required to file with the SEC pursuant to Section 13 or
15(d) of the Exchange Act, and at the same time, the Company shall file copies
of all such reports, information and other documents with the Trustee.
(b) In the event the Company is at any time no longer subject to the
reporting requirements of Section 13 or 15(d) of the Exchange Act, so long as
any
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50
Notes are outstanding, the Company will furnish to the Trustee and the Holders
of the Notes (i) all quarterly and annual financial and other information that
would be required to be contained in a filing with the SEC on Forms 10-Q and
10-K if the Company were required to file such Forms, including a "Management's
Discussion and Analysis of Financial Condition and Results of Operations" that
describes the financial condition and results of operations of the Company and
its Consolidated Subsidiaries and, with respect to the annual information only,
a report thereon by the Company's certified independent accountants, and (ii)
all current reports that would be required to be filed with the SEC on Form 8-K
if the Company were required to file such reports, in each case within the time
periods specified in the SEC's rules and regulations. In addition, whether or
not required by the rules and regulations of the SEC, the Company will file a
copy of all such information and reports with the SEC for public availability
within the time periods specified in the SEC's rules and regulations (unless the
SEC will not accept such a filing) and make such information available to
securities analysts and prospective investors upon request. The Company shall at
all times comply with TIA Section 314(a).
(c) For so long as any Notes remain outstanding (and regardless of
the penultimate sentence of paragraph (b) above), the Company shall 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.
Section 5.03 Compliance Certificates.
(a) The Company shall deliver to the Trustee within 90 days after
the end of each fiscal year, an Officers' Certificate stating that 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 kept, observed, performed and fulfilled its
obligations under this Indenture, and further stating, as to each such Officer
signing such certificate, that to the best of his or her knowledge the Company
has kept, observed, performed and fulfilled 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 (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 the Company is
taking or proposes to take with respect thereto) and that to the best of his or
her knowledge 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 Notes is
prohibited or if such event has occurred, a description of the event and what
action the Company is taking or proposes to take with respect thereto. For
purposes of this paragraph, such compliance shall be determined without regard
to any period of grace or requirement of notice provided under this Indenture.
(b) So long as not contrary to the then current recommendation of
the American Institute of Certified Public Accountants, the year-end financial
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51
statements delivered pursuant to Section 5.03(a) hereof 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 that would lead them to believe that the Company has violated
any provisions of Articles 4, 5 or 6 hereof 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 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 or Event
of Default and what action the Company is taking or proposes to take with
respect thereto.
Section 5.04 Maintenance of Office or Agency.
The Company shall maintain in the Borough of Manhattan, the City of
New York, an office or agency (which may be an office of the Trustee or an
affiliate of the Trustee, Registrar or co-registrar) where Notes may be
surrendered for registration of transfer or for exchange and where notices and
demands to or upon the Company in respect of the Notes and this Indenture may be
served. The Company shall give prompt written notice to the Trustee of the
location, and any change in the location, of such office or agency. If at any
time the Company shall fail to maintain any such required office or agency or
shall fail to furnish the Trustee with the address thereof, such presentations,
surrenders, notices and demands may be made or served at the Corporate Trust
Office of the Trustee.
The Company may also from time to time designate one or more other
offices or agencies where the Notes may be presented or surrendered for any or
all such purposes and may from time to time rescind such designations; provided,
however, that no such designation or rescission shall in any manner relieve the
Company of its obligation to maintain an office or agency in the Borough of
Manhattan, the City of New York for such purposes. The Company shall give prompt
written notice to the Trustee of any such designation or rescission and of any
change in the location of any such other office or agency.
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 5.05 Further Instruments and Acts.
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Upon request of the Trustee, the Company will execute and deliver
such further instruments and do such further acts as may be reasonably necessary
or proper to carry out more effectively the purposes of this Indenture.
Section 5.06 Liquidation.
The Company shall not adopt any plan of liquidation which provides
for, contemplates or the effectuation of which is preceded by (A) the sale,
lease, conveyance or other disposition of all or substantially all the assets of
the Company otherwise than substantially as an entirety in accordance with
Article 6 and (B) the distribution of all or substantially all of the proceeds
of such sale, lease, conveyance or other disposition and the remaining assets of
the Company to holders of Class A Common Stock of the Company, unless the
Company shall in connection with the adoption of such plan make provision for,
or agree that prior to making any liquidating distributions it will make
provision for, the satisfaction of the Company's obligations under this
Indenture and under the Notes as to the payment of principal, interest and
premium, if any, thereof.
Section 5.07 Change of Control.
(a) Upon the occurrence of a Change of Control, each Holder of Notes
will have the right to require the Company to purchase all or any part (equal to
$1,000 or an integral multiple thereof) of such Holder's Notes pursuant to the
offer described below (the "Change of Control Offer") at a purchase price in
cash equal to 100% of the aggregate principal amount thereof (the "Change of
Control Payment") plus accrued and unpaid interest and premium, if any, thereon
to the date of purchase (subject to the right of Holders of record on the
relevant Record Date to receive interest and premium, if any, due on the
relevant Interest Payment Date), provided, however, that the Company shall not
be obligated to repurchase Notes pursuant to this covenant in the event that it
has exercised its rights to redeem all of the Notes as described in Section 3.07
hereof. Within 30 days following any Change of Control, the Company will mail a
notice to each Holder (with a copy to the Trustee) describing the transaction or
transactions that constitute the Change of Control and offering to purchase
Notes on the date specified in such notice, which date shall be no earlier than
30 and no later than 60 days from the date such notice is mailed (the "Change of
Control Payment Date"), in accordance with the procedures required by this
Indenture and described in such notice.
The Company will comply with the requirements of Rule 14e-1 under
the Exchange Act and any other securities laws and regulations to the extent
such laws and regulations are applicable in connection with the purchase of
Notes as a result of a Change of Control. To the extent that the provisions of
any securities laws or regulations conflict with any of the provisions of this
Section 5.07, the Company will comply with the applicable securities laws and
regulations and will be deemed not to have breached its obligations under this
covenant by virtue thereof.
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53
(b) On the Change of Control Payment Date, the Company will, to the
extent lawful, (1) accept for payment all Notes or portions thereof properly
tendered pursuant to the Change of Control Offer, (2) deposit with the Paying
Agent an amount equal to the Change of Control Payment plus accrued and unpaid
interest and premium, if any, thereon in respect of all Notes or portions
thereof so tendered and (3) deliver or cause to be delivered to the Trustee
Notes so accepted together with an Officers' Certificate stating the aggregate
principal amount of Notes or portions thereof being purchased by the Company.
The Paying Agent will promptly mail or deliver to each Holder of Notes so
tendered the Change of Control Payment plus accrued and unpaid interest and
premium, if any, thereon for such Notes, and upon written direction of the
Company, the Trustee will promptly authenticate and mail or deliver (or cause to
be transferred by book entry) to each Holder a new Note equal in principal
amount to any unpurchased portion of Notes surrendered, if any, provided that
each such new Note will be in a principal amount of $1,000 or an integral
multiple thereof. The Company will publicly announce the results of the Change
of Control Offer on or as soon as practicable after the Change of Control
Payment Date.
(c) Notwithstanding anything to the contrary set forth in this
Section 5.07, the Company shall not be required to make a Change of Control
Offer upon the occurrence of a Change of Control if a third party makes the
Change of Control Offer in the manner, at the times and otherwise in compliance
with the requirements set forth in this Section 5.07, and purchases all Notes
validly tendered and not withdrawn under such Change of Control Offer.
Section 5.08 Corporate Existence.
Subject to Article 6, the Company will do or cause to be done all
things necessary to preserve and keep in full force and effect the corporate,
partnership or other existence, rights (charter and statutory), licenses and
franchises of the Company and each of its Subsidiaries, in accordance with the
respective organizational documents (as the same may be amended from time to
time) of the Company and each of its Subsidiaries; provided, however, that the
Company shall not be required to preserve any such right, license or franchise
if the Board of Directors shall determine in good faith 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.
Section 5.09 Payment of Taxes and Other Claims.
The Company will pay or discharge or cause to be paid or discharged,
before the same shall become delinquent, all taxes, assessments and governmental
charges levied or imposed upon the Company or any of its Subsidiaries or upon
the income, profits or property of the Company or any of its Subsidiaries;
provided, however, that the Company shall not be required to pay or discharge or
cause to be paid or discharged any such tax, assessment, charge or claim whose
amount, applicability or validity is being contested in good faith by
appropriate proceedings
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54
promptly instituted and diligently concluded and shall not have been finally
determined or the period within which such proceedings may be initiated shall
not have expired.
Section 5.10 Maintenance of Properties.
The Company will cause all properties owned by the Company or any
Subsidiary, or used, useful or held for use in the conduct of its business or
the business of any Subsidiary to be maintained and kept in good condition,
repair and working order and supplied with all necessary equipment and will
cause to be made all necessary repairs, renewals, replacements, betterments and
improvements thereof, all as in the judgment of the Company may be necessary so
that the business carried on in connection therewith may be properly and
advantageously conducted at all times; provided, however, that nothing in this
Section shall prevent the Company or any Subsidiary from discontinuing the
maintenance of any of such properties, if such discontinuance or disposal is, in
the judgment of the Company, desirable in the conduct of its business or the
business of any of its Subsidiaries and not disadvantageous in any material
respect to the Holders.
Section 5.11 Insurance.
The Company will at all times keep all of its and its Subsidiaries'
properties which are of an insurable nature insured with insurance, believed by
the Company to be responsible, against loss or damage to the extent that
property of similar character is usually so insured by corporations similarly
situated and owning like properties.
Section 5.12 Rating.
The Company shall use its reasonable best efforts to have the Notes
rated by an established rating agency (which, for so long as is commercially
reasonable to do so, will be either Standard & Poor's Rating Group, a division
of McGraw-Hill, Inc., and Moody's Investors Service) as requested by the Initial
Purchaser and to maintain a rating through and including the Stated Maturity for
the Notes; provided, however, that the Company shall not be required to maintain
a specified rating.
Section 5.13 Payments for Consent.
The Company will not, and will not permit any of its Subsidiaries
to, directly or indirectly, pay or cause to be paid any consideration to or for
the benefit of any Holder of Notes for or as an inducement to any consent,
waiver or amendment of any of the terms or provisions of this Indenture or the
Notes unless such consideration is offered to be paid or is paid to all Holders
of the 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.
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Section 5.14 Limitation on Senior Subordinated Indebtedness.
The Company shall not incur, create, issue, assume, guarantee or
otherwise become liable for any Indebtedness that is subordinate or junior in
right of payment to any Senior Indebtedness unless such Indebtedness is pari
passu with, or subordinated in right of payment to, the Notes; provided that the
foregoing limitation shall not apply if any of the Notes are held by Persons
other than the Initial Purchaser or its Affiliates.
ARTICLE 6.
SUCCESSORS
Section 6.01 Merger, Consolidation, or Sale of Assets.
(a) The Company shall not, directly or indirectly, consolidate or
merge with or into (whether or not the Company is the surviving corporation), or
sell, assign, transfer, convey or otherwise dispose of all or substantially all
of its properties or assets, in one or more related transactions, to another
Person unless: (i) the Company is the surviving corporation or the Person formed
by or surviving any such consolidation or merger (if other than the Company) or
to which such sale, assignment, transfer, conveyance or other disposition shall
have 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 Person
formed by or surviving any such consolidation or merger (if other than the
Company) or the Person to which such sale, assignment, transfer, conveyance or
other disposition shall have been made assumes all the obligations of the
Company under the Registration Rights Agreement, the Notes, and this Indenture
pursuant to a supplemental indenture in a form reasonably satisfactory to the
Trustee; (iii) no Default or Event of Default (or an event that, with the
passing of time or giving of notice or both, would constitute an Event of
Default) shall exist or shall occur immediately after giving effect on a pro
forma basis to such transaction; and (iv) the Company shall have delivered to
the Trustee an Officers' Certificate and an Opinion of Counsel, each stating
that such consolidation, merger or transfer and such supplemental indenture (if
any) comply with the Indenture. The Company shall not, directly or indirectly,
lease all or substantially all of its properties or assets, in one or more
related transactions, to any other Person. The provisions of this covenant will
not be applicable to a sale, assignment, transfer, conveyance or other
disposition of assets solely between or among the Company and its Wholly Owned
Subsidiaries.
(b) For purposes of this Article 6, the transfer (by assignment,
sale or otherwise) of all or substantially all of the properties and assets of
one or more Subsidiaries, the Company's interest in which constitutes all or
substantially all of the properties and assets of the Company, shall be deemed
to be the transfer of all or substantially all of the properties and assets of
the Company.
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Section 6.02 Successor Corporation Substituted.
Upon any consolidation or merger or any transfer of all or
substantially all of the assets of the Company in accordance with Section 6.01
hereof, the successor Person formed by such consolidation or into which the
Company is merged or to which such transfer is made shall succeed to and (except
in the case of a lease) be substituted for (so that from and after the date of
such consolidation, merger or transfer, the provisions of this Indenture
referring to the "Company" shall refer instead to the successor Person 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 had been named
herein as the Company, and (except in the case of a lease) the Company shall be
released from the obligations under the Notes and this Indenture except with
respect to any obligations that arise from, or are related to, such transaction.
ARTICLE 7.
DEFAULTS AND REMEDIES
Section 7.01 Events of Default.
"Events of Default" are:
(a) default for 30 days in the payment of interest on the Notes
(whether or not prohibited by Article 12 hereof);
(b) default in the payment of the principal of, or premium, if any,
on the Notes when due at maturity, upon redemption or otherwise, including
failure by the Company to purchase the Notes when required under Section
5.07 hereof (whether or not prohibited by Article 12 hereof), or to
deliver Class A Common Stock upon the conversion of the Notes when
required under Section 4.02 hereof;
(c) failure by the Company for 60 days after notice to comply with
any of its other agreements in this Indenture or the Notes;
(d) 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 results in the acceleration of
such Indebtedness prior to its express maturity and, in each case, the
amount of any such Indebtedness, together with the amount of any other
such Indebtedness or the maturity of which has been so accelerated,
aggregates $15.0 million or more;
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(e) failure by the Company or any of its Subsidiaries to pay final
judgments not subject to appeal aggregating in excess of $15.0 million
(net of applicable insurance coverage which is acknowledged in writing by
the insurer), which judgments are not paid, vacated, discharged or stayed
for a period of 60 days;
(f) the Company or any of its Significant Subsidiaries or any group
of Subsidiaries that, taken as a whole, would constitute a Significant
Subsidiary:
(i) commences a voluntary case under any Bankruptcy Law,
(ii) consents to the entry of an order for relief against it
in an involuntary case under any Bankruptcy Law,
(iii) consents to the appointment of a custodian of it or for
all or substantially all of its property,
(iv) makes a general assignment for the benefit of its
creditors, or
(v) generally is not paying its debts as they become due; and
(g) a court of competent jurisdiction enters an order or decree
under any Bankruptcy Law that:
(i) is for relief against the Company or any of its
Significant Subsidiaries or any group of Subsidiaries that, taken as
a whole, would constitute a Significant Subsidiary,
(ii) appoints a custodian of the Company or any of its
Significant Subsidiaries or any group of Subsidiaries that, taken as
a whole, would constitute a Significant Subsidiary, or for all or
substantially all of the property of the Company or any of its
Significant Subsidiaries or any group of Subsidiaries that, taken as
a whole, would constitute a Significant Subsidiary, or
(iii) orders the liquidation of the Company or any of its
Significant Subsidiaries or any group of Subsidiaries that, taken as
a whole, would constitute a Significant Subsidiary,
and the order or decree remains unstayed and in effect for 60 consecutive
days.
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Section 7.02 Acceleration.
If any Event of Default occurs and is continuing, the Trustee or the
Holders of at least 25% in aggregate principal amount of the then outstanding
Notes may declare all the Notes to be due and payable immediately.
Notwithstanding the foregoing, if an Event of Default specified in clause (f) or
(g) of Section 7.01 hereof occurs with respect to the Company or any Significant
Subsidiary, all outstanding Notes shall be due and payable immediately without
further action or notice. The Holders of a majority in aggregate principal
amount of the then outstanding Notes by written notice to the Trustee may on
behalf of all of the Holders rescind an acceleration and its consequences if the
rescission would not conflict with any judgment or decree and if all existing
Events of Default (except nonpayment of principal, interest or premium that has
become due solely because of the acceleration) have been cured or waived.
Section 7.03 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, and interest on the Notes or to enforce the performance of any provision of
the Notes or this Indenture.
The Trustee may maintain a proceeding even if it does not possess
any of the Notes or does not produce any of them in the proceeding. 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 7.04 Waiver of Past Defaults.
Holders of not less than a majority in aggregate principal amount of
the then outstanding Notes (or, with respect to a provision of this Indenture
that may only be amended by the Holders of not less than 50% in aggregate
principal amount of the then outstanding Notes, the Holders of not less than 50%
in aggregate principal amount of the then outstanding Notes) by written notice
to the Trustee may on behalf of the Holders of all of the Notes waive an
existing Default or Event of Default and its consequences hereunder, except a
continuing Default or Event of Default in the payment of the principal of,
premium or interest on, the Notes (including in connection with an offer to
purchase). 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.
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Section 7.05 Control by Majority.
Holders of Notes may not enforce this Indenture or the Notes except
as provided herein. Holders of a majority in principal amount of the then
outstanding 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 law or this Indenture or that the Trustee
determines may be unduly prejudicial to the rights of other Holders of Notes or
that may involve the Trustee in personal liability.
Section 7.06 Limitation on Suits.
A Holder of a Note may pursue a remedy with respect to this
Indenture or the Notes only if:
(a) the Holder of a Note gives to the Trustee written notice of a
continuing Event of Default;
(b) the Holders of at least 25% in principal amount of the then
outstanding Notes make a written request to the Trustee to pursue the remedy;
(c) such Holder of a Note or Holders of Notes offer and, if
requested, provide to the Trustee indemnity satisfactory to the Trustee against
any loss, liability or expense;
(d) 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; and
(e) during such 60-day period the Holders of a majority in principal
amount of the then outstanding Notes do not give the Trustee a direction
inconsistent with the request.
A Holder of a Note may not use this Indenture to prejudice the
rights of another Holder of a Note or to obtain a preference or priority over
another Holder of a Note.
Section 7.07 Rights of Holders of Notes to Receive Payment.
Notwithstanding any other provision of this Indenture, the right of
any Holder of a Note to receive payment of principal and interest on the Note,
on or after the respective due dates expressed in the Note (including in
connection with an offer to purchase), 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 such Holder.
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Section 7.08 Collection Suit by Trustee.
If an Event of Default specified in Section 7.01(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, and interest remaining unpaid on the 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 7.09 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, disburse ments and advances of 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 7.09 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,
disburse ments and advances of to make such payments to
the Trustee, and in the event that the Trustee shall consent to the making of
such payments directly to the Holders, to pay to the Trustee any amount due to
it for the reasonable compensation, expenses, disbursements and advances of the
Trustee, its agents and counsel, and any other amounts due the Trustee under
Section 8.07 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 8.07 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 that the Holders may be
entitled to receive in such proceeding whether in liquidation or under any plan
of reorganization or arrangement or otherwise. Nothing herein contained shall be
deemed to authorize the Trustee to authorize or consent to or accept or adopt on
behalf of any Holder any plan of reorganization, arrangement, adjustment or
composition affecting the Notes or the rights of any Holder, or to authorize the
Trustee to vote in respect of the claim of any Holder in any such proceeding.
Section 7.10 Priorities.
If the Trustee collects any money pursuant to this Article 7, it
shall pay out the money in the following order:
First: to the Trustee, its agents and counsel for amounts due under
Section 8.07 hereof, including payment of all compensation, expense and
liabilities
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incurred, and all advances made, by the Trustee and the costs and expenses of
collection;
Second: to Holders of Notes for amounts due and unpaid on the Notes
for principal and interest, ratably, without preference or priority of any kind,
according to the amounts due and payable on the Notes for principal and
interest, respectively, 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 payment
to Holders of Notes pursuant to this Section 7.10.
Section 7.11 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 cost 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 7.11 does not apply to a suit by the Trustee, a suit by a Holder of
a Note pursuant to Section 7.07 hereof, or a suit by Holders of more than 10% in
principal amount of the then outstanding Notes.
ARTICLE 8.
TRUSTEE
Section 8.01 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 use the same degree of care and skill in its exercise, as a
prudent man would exercise or use under the circumstances in the conduct of his
own affairs.
(b) Except during the occurrence and 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
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(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 similar
documents) or opinions furnished to the Trustee and conforming to the
requirements of this Indenture. However, the Trustee shall examine the
certificates (or similar documents) and opinions to determine whether or
not they conform to the requirements of this Indenture (but need not
confirm or investigate the accuracy of mathematical calculations or other
facts stated therein or otherwise verify the contents thereto).
(c) The Trustee may not be relieved from liabilities for its own
grossly negligent action, its own grossly 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 8.01;
(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 grossly 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 7.05 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), (c) and (e) of this Section 8.01.
(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, unless such Holder shall have offered to the Trustee
security and indemnity satisfactory to it against any loss, liability or expense
including reasonable attorneys' fees that might be incurred by it in compliance
with such request or direction.
(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.
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Section 8.02 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 any such document. The
Trustee shall receive and retain financial reports and statements of the Company
as provided herein, but it shall have no duty to review or analyze such reports
or statements to determine compliance with covenants or other obligations of the
Company.
(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 of its selection 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 such attorney or
agent appointed with due care.
(d) The Trustee shall not be liable for any action it takes or omits
to take in good faith that it believes to be authorized or within the 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 offered to the Trustee
reasonable indemnity against the costs, expenses and liabilities that might be
incurred by it in compliance with such request or direction.
(g) Prior to the occurrence of an Event of Default hereunder and
after the curing of all Events of Default which may have occurred, the Trustee
shall not be bound to make any investigation into the facts or matters stated in
any resolution, certificate, statement, instrument, opinion, report, notice,
request, order, approval, bond or other paper or document unless requested in
writing to do so by the Holders representing more than 25% in aggregate
principal amount of Notes then outstanding; provided, that if the payment within
a reasonable time to the Trustee of the costs, expenses or liabilities likely to
be incurred by it in the making of such investigation is, in the opinion of the
Trustee, not reasonably assured to the Trustee by the Note afforded to it by the
terms of this Indenture, the Trustee may require
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indemnity reasonably satisfactory to it against such cost, expense or liability
as a condition to so proceeding.
Section 8.03 Individual Rights of Trustee.
The Trustee in its individual or any other capacity may become the
owner or pledgee of Notes and may otherwise deal with the Company 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 SEC 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 8.10 and 8.11 hereof.
Section 8.04 Trustee's Disclaimer.
The Trustee shall not be responsible for and makes no representation
as to the validity or adequacy of this Indenture or the Notes, it shall not be
accountable for the Company's use of the proceeds from the Notes 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 Notes or
any other document in connection with the sale of the Notes or pursuant to this
Indenture other than its certificate of authentication.
Section 8.05 Notice of Defaults.
(a) The Trustee shall not be deemed to have notice of any Default or
Event of Default unless a Responsible Officer of the Trustee has actual
knowledge thereof or unless written notice of any event which is in fact such a
default is received by the Trustee at the Corporate Trust Office of the Trustee,
and such notice references the Notes and this Indenture.
(b) If a Default or Event of Default occurs and is continuing and if
it is known to the Trustee in accordance with the provisions of paragraph (a) of
this Section 8.05, the Trustee shall mail to Holders of 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 Notes.
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Section 8.06 Reports by Trustee to Holders of the Notes.
Within 60 days after each May 15th following the date of this
Indenture, and for so long as Notes remain outstanding, the Trustee shall mail
to the Holders of the Notes a brief report dated as of such reporting date that
complies with TIA ss. 313(a) (but if no event described in TIA ss. 313(a) has
occurred within the twelve months preceding the reporting date, no report need
be transmitted). The Trustee also shall comply with TIA ss. 313(b)(2). The
Trustee shall also transmit by mail all reports as required by TIA ss. 313(c).
A copy of each report at the time of its mailing to the Holders of
Notes shall be mailed to the Company and filed with the SEC and each stock
exchange on which the Notes are listed in accordance with TIA ss. 313(d). The
Company shall promptly notify the Trustee when the Notes are listed on any stock
exchange.
Section 8.07 Compensation and Indemnity.
The Company shall pay to the Trustee from time to time such
compensation for its acceptance of this Indenture and services hereunder as the
parties shall agree from time to time. 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 and hold it harmless 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, including the costs and expenses of enforcing this Indenture against
the Company (including this Section 8.07) and defending itself against any claim
(whether asserted by the Company or any Holder or any other person) or liability
in connection with the exercise or performance of any of its powers or duties
hereunder, except to the extent any such loss, liability or expense may be
attributable to its gross negligence or bad faith. 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 may have separate counsel and the Company
shall pay the reasonable fees and expenses of such counsel. The Company need not
pay for any settlement made without its consent, which consent shall not be
unreasonably withheld or delayed.
The obligations of the Company under this Section 8.07 shall survive
the satisfaction and discharge of this Indenture or the resignation or removal
of the Trustee.
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To secure the Company's payment obligations in this Section, the
Trustee shall have a Lien prior to the Notes on all money or property held or
collected by the Trustee, except that held in trust to pay principal and
interest on particular 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 7.01(f) or (g) 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.
The Trustee shall comply with the provisions of TIA ss. 313(b)(2) to
the extent applicable.
Section 8.08 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 8.08.
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 Notes of a
majority in principal amount of the then outstanding 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 8.10 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 Trustee in such event being referred to
herein as the retiring Trustee), the Company shall promptly appoint a successor
Trustee. Within one year after the successor Trustee takes office, the Holders
of a majority in princi pal amount of the then outstanding 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
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Holders of Notes of at least 10% in principal amount of the then outstanding
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 Note who
has been a Holder of a Note for at least six months, fails to comply with
Section 8.10 hereof, such Holder of a Note may petition any court of competent
jurisdiction for the removal of the Trustee and the appointment of a successor
Trustee.
A successor Trustee shall deliver a written acceptance of its
appointment to the retiring Trustee and to the Company. 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 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 8.07 hereof. Notwithstanding replacement of the Trustee pursuant
to this Section 8.08, the Company's obligations under Section 8.07 hereof shall
continue for the benefit of the retiring Trustee.
Section 8.09 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 8.10 Eligibility; Disqualification.
There shall at all times be a Trustee (or in the case of a banking
corporation included in a bank holding company system, the related bank holding
company) hereunder that is a corporation organized and doing business under the
laws of the United States of America or of any state thereof that is authorized
under such laws to exercise corporate trustee power, that is subject to
supervision or examination by federal or state authorities and that has a
combined capital and surplus of at least $100.0 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 ss. 310(a)(1), (2) and (5). The Trustee is subject to TIA
ss. 310(b).
Section 8.11 Preferential Collection of Claims Against Company.
The Trustee is subject to TIA ss. 311(a), excluding any creditor
relationship listed in TIA ss. 311(b). A Trustee who has resigned or been
removed shall be subject to TIA ss. 311(a) to the extent indicated therein.
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Section 8.12 Co-Trustee.
It is the purpose of this Indenture that there shall be no violation
of any law of any jurisdiction denying or restricting the right of certain
banking corporations or associations to transact business as trustee as
contemplated herein in such jurisdiction. The following provisions of this
Section 8.12 are included in the event that it is necessary that the Trustee
appoint an additional institution as a separate Trustee or Co-Trustee.
In the event of the incapacity or lack of authority of the Trustee,
by reason of any present or future law of any jurisdiction, to exercise any of
the rights, powers and trusts herein granted to the Trustee or to take any other
action which may be necessary or desirable in connection therewith, each and
every remedy, power, right, claim, demand, cause of action, immunity, estate,
title, interest and lien expressed or intended by this Indenture to be exercised
by or vested in or conveyed to the Trustee with respect thereto shall be
exercisable by and vest in such separate Trustee or Co-Trustee but only to the
extent necessary to enable the separate Trustee or Co-Trustee to exercise such
rights, powers and trusts, and every covenant and obligation necessary to the
exercise thereof shall run to and be enforceable by such separate Trustee or
Co-Trustee.
Should any deed, conveyance or instrument in writing from the
Company be required by the separate Trustee or Co-Trustee so appointed by the
Trustee in order to more fully and certainly vest in and confirm to him or it
such properties, rights, powers, trusts, duties and obligations, any and all
such deeds, conveyances and instruments shall, on request, be executed,
acknowledged and delivered by the Company. In case any separate Trustee or
Co-Trustee or a successor to either, shall die, become incapable of acting,
resign or be removed, all the estates, properties, rights, powers, trusts,
duties and obligations of such separate Trustee or Co-Trustee, so far as
permitted by law, shall vest in and be exercised by the Trustee until the
appointment of a new Trustee or successor to such separate Trustee or
Co-Trustee.
ARTICLE 9.
LEGAL DEFEASANCE AND COVENANT DEFEASANCE
Section 9.01 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, at any time, elect to
have either Section 9.02 or 9.03 hereof applied to all outstanding Notes upon
compliance with the conditions set forth below in this Article 9.
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Section 9.02 Legal Defeasance and Discharge.
Upon the Company's exercise under Section 9.01 hereof of the option
applicable to this Section 9.02, the Company shall, subject to the satisfaction
of the conditions set forth in Section 9.04 hereof, be deemed to have been
discharged from its obligations with respect to all outstanding Notes on the
date the conditions set forth below are satisfied (hereinafter, "Legal
Defeasance"). For this purpose, Legal Defeasance means that the Company shall be
deemed to have paid and discharged the entire Indebtedness represented by the
outstanding Notes, which shall thereafter be deemed to be "outstanding" only for
the purposes of Section 9.05 hereof and the other Sections of this Indenture
referred to in (a) and (b) below, and to have satisfied all of its obligations
under such Notes and this Indenture (and the Trustee, on demand of and at the
expense of the Company, shall execute proper instruments delivered to it by the
Company acknowledging the same), except for the following provisions which shall
survive until otherwise terminated or discharged hereunder: (a) the rights of
Holders of outstanding Notes to receive payments in respect of the principal of,
premium, if any, and interest on such Notes when such payments are due from the
trust referred to below; (b) the Company's obligations with respect to the Notes
concerning issuing temporary Notes, registration of Notes, mutilated, destroyed,
lost or stolen Notes and the maintenance of an office or agency for payment and
money for Note payments held in trust; (c) the rights, powers, trusts, duties
and immunities of the Trustee, and the Company's obligations in connection
therewith; (d) the Legal Defeasance provisions of this Indenture; and (e) the
obligations of the Company under Article 4 which shall not terminate until the
payment at the redemption date specified in Article 3 or the Stated Maturity of
the Notes. Subject to compliance with this Article 9, the Company may exercise
its option under this Section 9.02 notwithstanding the prior exercise of its
option under Section 9.03 hereof.
Section 9.03 Covenant Defeasance.
Upon the Company's exercise under Section 9.01 hereof of the option
applicable to this Section 9.03, the Company shall, subject to the satisfaction
of the conditions set forth in Section 9.04 hereof, be released from its
obligations under the covenants contained in Sections 5.02, 5.07 and Article 6
herein with respect to the outstanding Notes on and after the date the
conditions set forth in Section 9.04 are satisfied (hereinafter, "Covenant
Defeasance"), and the 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 Notes shall not be deemed outstanding for accounting
purposes); provided, that the foregoing shall not relieve the Company of its
obligations under Article 4 which shall not terminate until the payment at the
redemption date specified in Article 3 or the Stated Maturity of the Notes. For
this purpose, Covenant Defeasance means that, with respect to the outstanding
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
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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 7.01 hereof, but,
except as specified above, the remainder of this Indenture and such Notes shall
be unaffected thereby. In addition, upon the Company's exercise under Section
9.01 hereof of the option applicable to this Section 9.03, subject to the
satisfaction of the conditions set forth in Section 9.04 hereof, Sections
7.01(c) through 7.01(f) hereof shall not constitute Events of Default.
Section 9.04 Conditions to Legal or Covenant Defeasance.
The following shall be the conditions to the application of either
Section 9.02 or 9.03 hereof to the outstanding Notes:
In order to exercise either Legal Defeasance or Covenant Defeasance:
(a) the Company must irrevocably deposit, or cause to be deposited,
with the Trustee, in trust, for the benefit of the Holders of the Notes, cash in
U.S. dollars, non-callable Government Securities, or a combination thereof, in
such amounts as will be sufficient, in the opinion of a nationally recognized
firm of independent public accountants, to pay the principal of, premium, if
any, and interest on the outstanding Notes on the stated maturity thereof or on
the applicable redemption date, as the case may be, and the Company must specify
whether the Notes are being defeased to maturity or to a particular redemption
date;
(b) in the case of Legal Defeasance, the Company must deliver to the
Trustee and the Holders an Opinion of Counsel in the United States reasonably
acceptable to the Trustee confirming that, since the Issue Date, the Company has
received from, or there has been published by, the Internal Revenue Service a
ruling, or there has been a change in the applicable United States 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 Notes will
not recognize income, gain or loss for United States federal income tax purposes
as a result of such Legal Defeasance, and will be subject to United States
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 must deliver to
the Trustee and the Initial Purchaser an Opinion of Counsel in the United States
reasonably acceptable to the Trustee confirming that the Holders of the
outstanding Notes will not recognize income, gain or loss for United States
federal income tax purposes as a result of such Covenant Defeasance, and such
Holders will be subject to United States 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;
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(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 will 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 must deliver to the Trustee an Officers' Certificate
stating that the deposit was not made by the Company with the intent of
preferring the Holders of the Notes over other creditors of the Company, or with
the intent of defeating, hindering, delaying or defrauding creditors of the
Company or others;
(g) the Company must deliver to the Trustee an Officers' Certificate
and an Opinion of Counsel in the United States reasonably acceptable to the
Trustee, each stating that the conditions precedent provided for or relating to
Legal Defeasance or Covenant Defeasance, as applicable, in the case of the
Officers' Certificate, in clauses (a) through (f) and, in the case of the
Opinion of Counsel, in clauses (b) and (c) of this paragraph, have been complied
with.
Section 9.05 Deposited Money and Government Securities to be Held in
Trust; Other Miscellaneous Provisions.
Subject to Section 9.06 hereof, all money and non-callable
Government Securities (including the proceeds thereof) deposited with the
Trustee (or other qualifying trustee, collectively, and solely for purposes of
this Section 9.05, the "Trustee") pursuant to Section 9.04 hereof in respect of
the outstanding Notes shall be held in trust and applied by the Trustee, in
accordance with the provisions of such Notes and this Indenture, to the payment,
either directly or through any Paying Agent (including the Company acting as
Paying Agent) as the Trustee may determine, to the Holders of such Notes of all
sums due and to become due thereon in respect of principal, premium, if any, and
interest, but such money need not be segregated from other funds except to the
extent required by law.
The Company shall pay and indemnify the Trustee against any tax, fee
or other charge imposed on or assessed against the cash or non-callable
Government Securities deposited pursuant to Section 9.04 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 Notes.
Anything in this Article 9 to the contrary notwithstanding, the
Trustee shall deliver or pay to the Company from time to time upon the request
of the
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Company any money or non-callable Government Securities held by it as provided
in Section 9.04 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
9.04(a) hereto, are in excess of the amount thereof that would then be required
to be deposited to effect an equivalent Legal Defeasance or Covenant Defeasance.
Section 9.06 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, if
any, and interest on any Note and remaining unclaimed for two years after such
principal, premium, if any, and interest has become due and payable shall be
paid to the Company on its request or (if then held by the Company) shall be
discharged from such trust; and the Holder of such Note shall thereafter, as an
unsecured 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.
Section 9.07 Reinstatement.
If the Trustee or Paying Agent is unable to apply any United States
dollars or noncallable Government Securities in accordance with Section 9.02 or
9.03 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 Notes
shall be revived and reinstated as though no deposit had occurred pursuant to
Section 9.02 or 9.03 hereof until such time as the Trustee or Paying Agent is
permitted to apply all such money in accordance with Section 9.02 or 9.03
hereof, as the case may be; provided, however, that, if the Company makes any
payment of principal of or interest on any Note following the reinstatement of
its obligations, the Company shall be subrogated to the rights of the Holders of
such Notes to receive such payment from the money held by the Trustee or Paying
Agent.
Section 9.08 Survival.
The Trustee's rights under this Article 9 shall survive termination
of this Indenture.
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ARTICLE 10.
AMENDMENT, SUPPLEMENT AND WAIVER
Section 10.01 Without Consent of Holders of Notes.
Notwithstanding Section 10.02 hereof, the Company and the Trustee
may amend or supplement this Indenture or the Notes without the consent of any
Holder of a Note:
(a) to cure any ambiguity, omission, defect or inconsistency;
(b) to provide for uncertificated Notes in addition to or in place
of certificated Notes or to alter the provisions of Article 2 hereof (including
the related definitions) in a manner that does not adversely affect any Holder;
(c) to provide for the assumption of the Company obligations to the
Holders of the Notes by a successor to the Company pursuant to Article 6 hereof;
(d) to make any change that would provide any additional rights or
benefits to the Holders of the Notes or that does not adversely affect the
rights hereunder of any Holder of the Note;
(e) to comply with requirements of the SEC in order to effect or
maintain the qualification of this Indenture under the TIA;
(f) to add to the covenants of the Company for the benefit of the
Holders or to surrender any right or power herein conferred upon the Company; or
(g) to effect any change to the transfer and exchange restrictions
and Note delivery procedures contained in Article 2 in order to conform with
changes in any applicable law or Applicable Procedures.
Upon the request of the Company accompanied by a resolution of its
Board of Directors authorizing the execution of any such amended or supplemental
indenture, and upon receipt by the Trustee of the documents described in Section
8.02 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
Indenture and to make any further appropriate agreements and stipulations that
may be therein contained, but the Trustee shall not be obligated to enter into
such amended or supplemental indenture that affects its own rights, duties or
immunities under this Indenture or otherwise.
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Section 10.02 With Consent of Holders of Notes.
Except as provided below in this Section 10.02, the Company and the
Trustee, may amend or supplement this Indenture and the Notes with the consent
of the Holders of a majority in aggregate principal amount of the then
outstanding Notes voting as a single class (including consents obtained in
connection with a tender offer or exchange offer for, or purchase of, the
Notes), and, subject to Sections 7.04 and 7.07 hereof, any existing Default or
Event of Default (other than a Default or Event of Default in the payment of the
principal of, premium, if any, or interest on the Notes, except a payment
default resulting from an acceleration that has been rescinded) or compliance
with any provision of this Indenture or the Notes may be waived with the consent
of the Holders of a majority in aggregate principal amount of the then
outstanding Notes voting as a single class (including consents obtained in
connection with a tender offer or exchange offer for, or purchase of, the
Notes).
Notwithstanding the foregoing, without the consent of Holders of a
majority in aggregate principal amount of the then outstanding Notes voting as a
single class, the Company and the Trustee may not: (i) modify the provisions
(including the defined terms used therein) of Section 5.07 hereof in a manner
adverse to the Holders or (ii) release or modify any Lien granted to the Holders
of the Notes.
Upon the request of the Company accompanied by a resolution of its
Board of Directors 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 Notes as aforesaid, and upon receipt by
the Trustee of the documents described in Section 8.02 hereof, the Trustee shall
join with the Company in the execution of such amended or supplemental indenture
unless such amended or supplemental indenture directly 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 Notes
under this Section 10.02 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 10.02
becomes effective, the Company shall mail to the Holders of 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 the provisions of this Section
10.02 and Sections 7.04 and 7.07 hereof, the Holders of a majority in aggregate
principal amount of the Notes then outstanding voting as a single class may
waive compliance in a particular instance by the Company with any provision of
this Indenture or the Notes. However, without
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the consent of each Holder affected, an amendment or waiver under this Section
10.02 may not (with respect to any Notes held by a non-consenting Holder):
(a) change the Stated Maturity on any Note, or reduce the principal
thereof or the rate (or extend the time for payment) of interest thereon or any
premium payable upon the redemption at the option of the Company thereof, or
change the place of payment where, or the coin or currency in which, any Note or
any premium or the interest thereon is payable, or impair the right to institute
suit for the enforcement of any such payment on or after the Stated Maturity
thereof (or, in the case of redemption at the option of the Company, on or after
the redemption date), or reduce the Change of Control Payment after the Change
of Control has occurred;
(b) alter the provisions (including the defined terms used herein)
regarding the right of the Company to redeem the Notes as a right, or at the
option, of the Company in a manner adverse to the Holders;
(c) reduce the percentage in principal amount of Notes outstanding
whose Holders must consent to an amendment, supplement or waiver provided for in
this Indenture; or
(d) modify any of the waiver provisions, except to increase any
required percentage or to provide that certain other provisions of this
Indenture cannot be modified or waived without the consent of the Holder of each
outstanding Note affected thereby.
Section 10.03 Compliance with Trust Indenture Act.
Every amendment or supplement to this Indenture or the Notes shall
be set forth in an amended or supplemental indenture that complies with the TIA
as then in effect.
Section 10.04 Revocation and Effect of Consents.
Until an amendment, supplement or waiver becomes effective, a
consent to it by a Holder of a Note is a continuing consent by the Holder of a
Note and every subsequent Holder of a Note or portion of a Note that evidences
the same debt as the consenting Holder's Note, even if notation of the consent
is not made on any Note. However, any such Holder of a Note or subsequent Holder
of a Note may revoke the consent as to its 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. An amendment or waiver shall
become effective upon receipt by the Trustee of the requisite number of written
consents under Section 10.01 or 10.02 as applicable.
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76
The Company may, but shall not be obligated to, fix a record date
for the purpose of determining the Holders of Notes entitled to give their
consent or take any other action described above or required or permitted to be
taken pursuant to this Indenture. If a record date is fixed, then
notwithstanding the immediately preceding paragraph, those Persons who held
Notes at such record date (or their duly desig nated proxies), and only those
Persons, shall be entitled to give such consent or to revoke any consent
previously given or to take any such action, whether or not such Persons
continue to be Holders after such record date.
Section 10.05 Notation on or Exchange of Notes.
The Trustee may place an appropriate notation about an amendment,
supplement or waiver on any Note thereafter authenticated. The Company in
exchange for all Notes may issue and the Trustee shall, upon receipt of an
Authentication Order, authenticate new Notes that reflect the amendment,
supplement or waiver.
Failure to make the appropriate notation or issue a new Note shall
not affect the validity and effect of such amendment, supplement or waiver.
Section 10.06 Trustee to Sign Amendments, Etc.
Trustee shall sign any amended or supplemental indenture authorized
pursuant to this Article 10 if the amendment or supplement does not adversely
affect the rights, duties, liabilities or immunities of the Trustee and all
other conditions to the execution and delivery of such amendment or supplement
set forth in this Article 10 are fulfilled. The Company may not sign an
amendment or supplemental indenture until the Board of Directors approves it. In
executing any amended or supplemental indenture, the Trustee shall be entitled
to receive and (subject to Section 8.01 hereof) shall be fully protected in
relying upon an Officer's Certificate and an Opinion of Counsel stating that the
execution of such amended or supplement al indenture is authorized or permitted
by this Indenture and that such amendment is the legal, valid and binding
obligation of the Company, enforceable against it in accordance with its terms,
subject to customary exceptions, and complies with the provisions hereof
(including Section 10.03).
ARTICLE 11.
SATISFACTION AND DISCHARGE
Section 11.01 Satisfaction and Discharge of Indenture.
This Indenture shall be discharged and will cease to be of further
effect as to all Notes issued hereunder, when either:
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77
(a) all such Notes theretofore authenticated and delivered (except
lost, stolen or destroyed Notes which have been replaced or paid and Notes for
whose payment money has theretofore been deposited in trust and thereafter
repaid to the Company) have been delivered to the Trustee for cancellation; or
(b)(i) all such Notes not theretofore delivered to such Trustee
for cancellation have become due and payable by reason of
the making of a notice of redemption, repurchase or
otherwise or will become due and payable within one year
and the Company has irrevocably deposited or caused to be
deposited with such Trustee as trust funds in trust an
amount of money sufficient to pay and discharge the entire
Indebtedness on such Notes not theretofore delivered to the
Trustee for cancellation for principal and accrued interest
to the date of maturity, redemption or repurchase;
(ii) no Default or Event of Default with respect to this
Indenture or the Notes shall have occurred and be
continuing on the date of such deposit or shall occur as a
result of such deposit and such deposit will not result in
a breach or violation or constitute a default under, any
other instrument to which the Company is a party or by
which the Company is bound;
(iii) the Company has paid or caused to be paid all sums payable
by it under this Indenture; and
(iv) the Company has delivered irrevocable written instructions
to the Trustee under this Indenture to apply the deposited
money toward the payment of such Notes at maturity or the
redemption date, as the case may be.
In addition, the Company must deliver an Officers' Certificate and
an Opinion of Counsel to the Trustee stating that all conditions precedent to
satisfaction and discharge have been satisfied.
Section 11.02 Application of Trust Money.
All money deposited with the Trustee pursuant to Section 11.01
hereof shall be held in trust and applied by it, in accordance with the
provisions of the Notes and this Indenture, to the payment, either directly or
through any Paying Agent (including the Company acting as Paying Agent) as the
Trustee may determine, to Persons entitled thereto, of the principal, premium,
if any, and interest for whose payment such money has been deposited with the
Trustee.
If the Trustee or Paying Agent is unable to apply any money or
Government Securities in accordance with Section 11.01 hereof by reason of any
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78
legal proceeding or by reason of any order or judgment of any court or
governmental authority enjoining, restraining or otherwise prohibiting such
application, the Company's obligations under this Indenture and the Notes shall
be revived and reinstated as though such deposit had occurred pursuant to
Section 11.01 hereof; provided that if the Company has made any payment of
principal of, premium, if any, or interest on any Notes because of the
reinstatement of its obligations, the Company shall be subrogated to the rights
of the Holders of such Notes to receive such payment from the money or
Government Securities held by the Trustee or Paying Agent.
ARTICLE 12.
SUBORDINATION
Section 12.01 Notes Subordinated to Senior Indebtedness.
The Company covenants and agrees, and each Holder of Notes issued
hereunder by its acceptance thereof likewise covenants and agrees, that all
Notes shall be issued subject to the provisions of this Article 12, and each
person holding any Note, whether upon original issue or upon transfer or
assignment thereof, accepts and agrees to be bound by such provisions.
The payment of all amounts on account of all Notes issued hereunder
shall, to the extent and in the manner hereinafter set forth, be subordinated
and subject in right of payment to the prior payment in full of all Senior
Indebtedness, whether outstanding at the date of this Indenture or thereafter
created, assumed or guaranteed.
Section 12.02 Notes Subordinated to Prior Payment of All Senior
Indebtedness on Dissolution, Liquidation, Reorganization, Etc., of the Company.
Upon the payment or distribution of the assets of the Company of any
kind or character, whether in cash, property or securities (including any
collateral at any time securing the Notes), to creditors upon any dissolution,
winding-up, liquidation or reorganization of the Company (whether voluntary or
involuntary, or in bankruptcy, insolvency, reorganization, liquidation,
receivership proceedings, or upon an assignment for the benefit of creditors, or
any other marshaling of the assets and liabilities of the Company, or
otherwise), then in such event:
(a) all Senior Indebtedness and the reasonable fees and expenses of
the Trustee shall first be paid in full, in cash, before any payment is
made on account of the Notes, whether by way of the payment of principal
of or interest on the indebtedness evidenced by the Notes, a repurchase,
redemption or other acquisition of the Notes or otherwise (collectively,
"pay the Notes");
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(b) any payment or distribution of assets of the Company of any kind
or character, whether in cash, property or securities (other than
securities of the Company as reorganized or readjusted, or securities of
the Company or any other Person provided for by a plan of reorganization
or readjustment, junior, or the payment of which is otherwise subordinate,
at least to the extent provided in this Article 12, with respect to the
Notes, to the payment of all Senior Indebtedness), to which the Holders or
the Trustee on behalf of the Holders would be entitled except for the
provisions of this Article 12, including any such payment or distribution
which may be payable or deliverable by reason of the payment of another
debt of the Company being subordinated to the payment of the Notes, shall
be paid or delivered by any debtor, custodian or other person making such
payment or distribution, directly to the holders of the Senior
Indebtedness or their representative or representatives, or to the trustee
or trustees under any indenture pursuant to which any instruments
evidencing any of such Senior Indebtedness have been issued, ratably
according to the aggregate amounts remaining unpaid on account of the
Senior Indebtedness held or represented by each, for application to
payment of all Senior Indebtedness remaining unpaid, to the extent
necessary to pay all Senior Indebtedness in full after giving effect to
any concurrent payment or distribution to or for the benefit of the
holders of such Senior Indebtedness; and
(c) in the event that, notwithstanding the foregoing provisions of
this Section 12.02, any payment or distribution of assets of the Company
of any kind or character, whether in cash, property or securities (other
than securities of the Company as reorganized or readjusted, or securities
of the Company or any other Person provided for by a plan of
reorganization or readjustment, junior, or the payment of which is
otherwise subordinate, at least to the extent provided for in this Article
12, with respect to the Notes, to the payment of all Senior Indebtedness),
shall be received by the Trustee or the Holders before all Senior
Indebtedness is paid in full, such payment or distribution (subject to the
provisions of Sections 12.06 and 12.07) shall be held in trust for the
benefit of, and shall be immediately paid or delivered by the Trustee or
such Holders, as the case may be, to, the Holders of Senior Indebtedness
remaining unpaid or unprovided for, or their representative or
representatives, or to the trustee or trustees under any indenture
pursuant to which any instruments evidencing any of such Senior
Indebtedness have been issued, ratably according to the aggregate amounts
remaining unpaid on account of the Senior Indebtedness held or represented
by each, for application to the payment of all Senior Indebtedness
remaining unpaid, to the extent necessary to pay all Senior Indebtedness
in full after giving effect to any concurrent payment or distribution to
or for the benefit of the holders of such Senior Indebtedness.
The Company shall give prompt written notice to the Trustee of any
dissolution, winding-up, liquidation or reorganization of the Company.
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Upon any distribution of assets of the Company referred to in this
Article 12, the Trustee, subject to the provisions of Sections 8.01 and 8.02,
and the Holders shall be entitled to rely conclusively upon any order or decree
by any court of competent jurisdiction in which such dissolution, winding-up,
liquidation or reorganization proceeding is pending, or a certificate of the
liquidating trustee or agent or other person making any distribution to the
Trustee or to the Holders, for the purpose of ascertaining the persons entitled
to participate in such distribution, the holders of the Senior Indebtedness and
other indebtedness of the Company, the amount thereof or payable thereon, the
amount or amounts paid or distributed thereon and all other facts pertinent
thereto or to this Article 12.
Section 12.03 Holders to Be Subrogated to Right of Holders of Senior
Indebtedness.
Subject to the prior payment in full of all Senior Indebtedness then
due, the Holders shall be subrogated to the rights of the holders of Senior
Indebtedness to receive payments or distributions of assets of the Company
applicable to the Senior Indebtedness until the principal of and interest on the
Notes shall be paid in full, and, for purposes of such subrogation, no payments
or distributions to the holders of Senior Indebtedness of assets, whether in
cash, property or securities, distributable to the holders of Senior
Indebtedness under the provisions hereof to which the Holders would be entitled
except for the provisions of this Article 12, and no payment pursuant to the
provisions of this Article 12 to the holders of Senior Indebtedness by the
Holders shall, as among the Company, its creditors other than the holders of
Senior Indebtedness, and the Holders, be deemed to be a payment by the Company
to or on account of Senior Indebtedness, it being understood that the provisions
of this Article 12 are, and are intended, solely for the purpose of defining the
relative rights of the Holders, on the one hand, and the holders of Senior
Indebtedness, on the other hand.
Section 12.04 Obligations of the Company Unconditional.
Nothing contained in this Article 12 or elsewhere in this Indenture
or in any Note is intended to or shall impair, as among the Company, its
creditors other than the holders of Senior Indebtedness, and the Holders, the
obligation of the Company, which is absolute and unconditional, to pay to the
Holders the principal of and interest on the Notes, as and when the same shall
become due and payable in accordance with the terms of the Notes, or to affect
the relative rights of the Holders and other creditors of the Company other than
the holders of Senior Indebtedness, nor shall anything herein or therein prevent
the Trustee or any Holder from exercising all remedies otherwise permitted by
applicable law upon the happening of an Event of Default under this Indenture,
subject to the provisions of Article 7, and the rights, if any, under this
Article 12 of the holders of Senior Indebtedness to receive assets, whether in
cash, property or securities, of the Company otherwise payable or deliverable to
the Trustee or such Holder upon the exercise of any such remedy.
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81
Section 12.05 Company Not to Make Payment With Respect to Notes in
Certain Circumstances.
(a) Upon the happening of a default in payment (whether at maturity
or at a date fixed for prepayment or by acceleration or otherwise) of the
principal of, interest on or other amount due in respect of any Senior
Indebtedness, as such default is defined under or in respect of such Senior
Indebtedness or in any agreement pursuant to which such Senior Indebtedness has
been incurred, then, unless and until the amount of such Senior Indebtedness
then due shall have been paid in full or provision made therefor in a manner
satisfactory to the holders of such Senior Indebtedness, or such default shall
have been cured or waived or shall have ceased to exist, the Company shall not
pay the Notes.
(b) Upon the happening of an event of default with respect to any
Senior Indebtedness (other than under circumstances when the terms of subsection
(a) of this Section 12.05 are applicable), as such event of default is defined
under or in respect of such Senior Indebtedness or in any agreement pursuant to
which such Senior Indebtedness has been incurred, permitting the holders thereof
to immediately accelerate the maturity thereof, and upon written notice thereof
given to the Company and the Trustee by any one or more holders of such Senior
Indebtedness or their representative or representatives or to the trustee or
trustees under any indenture pursuant to which any instruments evidencing any of
such Senior Indebtedness have been issued (a "Default Notice"), then, unless and
until such event of default shall have been cured or waived in writing by the
holders of such Senior Indebtedness or shall have ceased to exist, the Company
shall not pay the Notes; provided, however, that this subsection (b) shall not
prevent the making of any such payment (which is not otherwise prohibited by
subsection (a) of this Section 12.05) for more than 180 days after the Default
Notice shall have been given unless the Senior Indebtedness in respect of which
such event of default exists has been declared due and payable in its entirety,
in which case no such payment may be made until such acceleration has been
waived, rescinded or annulled, or such Senior Indebtedness shall have been paid
in full, or payment thereof shall be duly provided for in cash or in any other
manner satisfactory to the holders of such Senior Indebtedness. Notwithstanding
the foregoing, not more than one Default Notice shall be given with respect to
the same issue of Senior Indebtedness within a period of 360 consecutive days,
and no event of default which existed or was continuing on the date of any
Default Notice and was known to the holders of such issue of Senior Indebtedness
shall be made the basis for the giving of a subsequent Default Notice by the
holders of such issue of Senior Indebtedness.
(c) In the event that, notwithstanding the foregoing provisions of
this Section 12.05, the Company shall pay the Notes and such payment shall be
received by the Trustee, any Holder or any Paying Agent (or, if the Company is
acting as its own Paying Agent, money for any such payment shall be segregated
and held in trust), after the happening of a default under any Senior
Indebtedness of the type specified in subsections (a) and (b) of this Section
12.05, then, unless and until
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the amount of such Senior Indebtedness then due shall have been paid in full, or
provision made therefor or such default shall have been cured or waived or shall
have ceased to exist, such payment (subject, in each case, to the provisions of
Sections 12.06 and 12.07 and the proviso contained in subsection (b) of this
Section 12.05) shall be held in trust for the benefit of, and shall be
immediately paid over to, the holders of Senior Indebtedness or their
representative or representatives or the trustee or trustees under any indenture
under which any instruments evidencing any of the Senior Indebtedness may have
been issued ratably according to the aggregate amounts remaining unpaid on
account of the Senior Indebtedness held or represented by each, for application
to the payment of all Senior Indebtedness remaining unpaid to the extent
necessary to pay all Senior Indebtedness in accordance with its terms, after
giving effect to any concurrent payment or distribution to or for the benefit of
the holders of Senior Indebtedness.
Section 12.06 Notice to Trustee.
The Company shall give prompt written notice to the Trustee of any
fact known to the Company which would prohibit the making of any payment to or
by the Trustee in respect of the Notes. Notwithstanding the provisions of this
Article 12 or any other provision of this Indenture, the Trustee shall not at
any time be charged with knowledge of the existence of any facts which would
prohibit the making of any payment to or by the Trustee, unless and until the
Trustee shall have received written notice thereof from the Company or from the
holder or holders of Senior Indebtedness or from their representative or
representatives or from the trustee or trustees under any indenture pursuant to
which any instruments evidencing any of such Senior Indebtedness have been
issued; and, prior to the receipt of any such written notice, the Trustee,
subject to the provisions of Sections 8.01 and 8.02, shall be entitled to assume
conclusively that such facts do not exist.
The Trustee shall be entitled to rely conclusively on the delivery
to it of a written notice by a person representing himself or herself to be a
holder of Senior Indebtedness (or a representative of such holder or the trustee
under any indenture pursuant to which any instruments evidencing any of such
Senior Indebtedness have been issued) to establish that such notice has been
given by a holder of Senior Indebtedness or a representative of any such holder.
In the event that the Trustee determines in good faith that further evidence is
required with respect to the right of any person as a holder of Senior
Indebtedness to participate in any payment or distribution pursuant to this
Article 12, the Trustee may request such person to furnish evidence to the
reasonable satisfaction of the Trustee as to the amount of Senior Indebtedness
held by such person, the extent to which such person is entitled to participate
in such payment or distribution and any other facts pertinent to the rights of
each person under this Article 12, and, if such evidence is not furnished, the
Trustee may defer any payment to such person pending judicial determination as
to the right of such person to receive such payment.
Section 12.07 Application by Trustee of Money Deposited With It.
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Money deposited in trust with the Trustee pursuant to Section 10.01
and not in violation of this Article 12 shall be for the sole benefit of Holders
and shall thereafter not be subject to the subordination provisions of this
Article 12, otherwise, any deposit of money by the Company with the Trustee or
any Paying Agent (whether or not in trust) for the payment of the principal of
or interest on any Notes shall be subject to the provisions of Sections 12.01,
12.02, 12.03 and 12.05; except that, if two Business Days prior to the date on
which by the terms of this Indenture any such money may become payable for any
purpose (including, without limitation, the payment of either the principal of
or interest on any Note) the Trustee shall not have received with respect to
such money the notice provided for in Section 12.06, then the Trustee or any
Paying Agent shall have full power and authority to receive such money and to
apply such money to the purpose for which it was received, and shall not be
affected by any notice to the contrary which may be received by it on or after
such date. This Section 12.07 shall be construed solely for the benefit of the
Trustee and the Paying Agent and shall not otherwise affect the rights that
holders of Senior Indebtedness may have to recover any such payments from the
Holders in accordance with the provisions of this Article 12.
Section 12.08 Subordination Rights Not Impaired by Acts or Omissions
of Company or Holders of Senior Indebtedness.
No right of any present or future holders of any Senior Indebtedness
to enforce subordination, as herein provided, shall at any time in any way be
prejudiced or impaired by any act or failure to act on the part of the Company
or by any act or failure to act, in good faith, by any such holder, or by any
noncompliance by the Company with the terms, provisions and covenants of this
Indenture, regardless of any knowledge thereof which any such holder may have or
be otherwise charged with. The holders of any Senior Indebtedness may extend,
renew, modify or amend the terms of such Senior Indebtedness or any Note
therefor and release, sell or exchange such Note and otherwise deal freely with
the Company, all without affecting the liabilities and obligations of the
parties to this Indenture or the Holders. No provision in any supplemental
indenture which affects the superior position of the holders of the Senior
Indebtedness shall be effective against the holders of the Senior Indebtedness
unless the holders of such Senior Indebtedness (required pursuant to the terms
of such Senior Indebtedness to give such consent) have consented thereto.
Section 12.09 Trustee to Effectuate Subordination.
Each Holder of a Note by its acceptance thereof authorizes and
directs the Trustee on its behalf to take such action as may be necessary or
appropriate to effectuate the subordination provided in this Article 12 and
appoints the Trustee its attorney-in-fact for any and all such purposes.
Section 12.10 Right of Trustee to Hold Senior Indebtedness.
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The Trustee, in its individual capacity, shall be entitled to all of
the rights set forth in this Article 12 in respect of any Senior Indebtedness at
any time held by it to the same extent as any other holder of Senior
Indebtedness, and nothing in this Indenture shall be construed to deprive the
Trustee of any of its rights as such holder.
Nothing in this Article shall apply to claims of, or payments to,
the Trustee under or pursuant to Section 8.07.
Section 12.11 Article Not to Prevent Events of Default.
The failure to make a payment on account of the principal of or
interest on the Notes by reason of any provision in this Article 12 shall not be
construed as preventing the occurrence of an Event of Default under Section
7.01.
Section 12.12 No Fiduciary Duty Created to Holders of Senior
Indebtedness.
Notwithstanding any other provision in this Article 12, the Trustee
shall not be deemed to owe any fiduciary duty to the holders of Senior
Indebtedness by virtue of the provisions of this Article 12.
Section 12.13 Article Applicable to Paying Agents.
In case at any time any Paying Agent other than the Trustee shall
have been appointed by the Company and be then acting hereunder, the term
"Trustee" as used in this Article 12 shall in such case (unless the context
shall otherwise require) be construed as extending to and including such Paying
Agent within its meaning as fully for all intents and purposes as if such Paying
Agent were named in this Article 12 in addition to or in place of the Trustee;
provided, however, that Sections 12.06, 12.10 and 12.12 shall not apply to the
Company if it acts as Paying Agent.
ARTICLE 13.
MISCELLANEOUS
Section 13.01 Trust Indenture Act Controls.
If any provision of this Indenture limits, qualifies or conflicts
with the duties imposed by TIA ss. 318(c), the imposed duties shall control.
Section 13.02 Notices.
Any notice or communication by the Company or the Trustee to the
others is duly given if in writing and delivered in Person or mailed by first
class mail
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(registered or certified, return receipt requested), telecopier or overnight air
courier guaranteeing next day delivery, to the others' address:
If to the Company:
Metromedia Fiber Network, Inc.
One North Lexington Avenue
White Plains, NY 10601
Attention: Chief Financial Officer
With a copy to:
Metromedia Company
One Meadowlands Plaza
East Rutherford, NJ 07073-2137
Attention: General Counsel
and a copy to:
Paul, Weiss, Rifkind, Wharton & Garrison
1285 Avenue of the Americas
New York, New York 10019
Attention: Douglas A. Cifu, Esq.
If to the Trustee:
U.S. Bank Trust National Association
180 East Fifth Street
Suite 200
St. Paul, Minnesota 55101
Attention: Corporate Trust Administration
and a copy to:
U.S. Bank Trust National Association
100 Wall Street, 20th Floor
New York, New York 10005
Attention: Corporate Trust Administration
The Company or the Trustee, by notice to the others may designate
additional or different addresses for subsequent notices or communications.
All notices and communications (other than those sent to Holders)
shall be deemed to have been duly given: at the time delivered by hand, if
personally delivered, five Business Days after being deposited in the mail,
postage prepaid, if mailed; when receipt acknowledged by the sender's
telecopier, if telecopied; and the
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86
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 shall be mailed by first
class mail, certified or registered, return receipt requested, or by overnight
air courier guaranteeing next day delivery 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 ss. 313 (c), to the extent required by the TIA.
Failure to mail a notice or communication to a Holder or any defect in it shall
not affect its sufficiency with respect to other Holders.
If a notice or communication is mailed in the manner provided above
within the time prescribed, it is duly given, whether or not the addressee
receives it, except that any notice or communication to the Trustee shall be
deemed to have been duly given to the Trustee when received at the Corporate
Trust Office of the Trustee.
If the Company mails a notice or communication to Holders, it shall
mail a copy to the Trustee and each Agent at the same time.
Section 13.03 Communication by Holders of Notes with Other Holders
of Notes.
Holders may communicate pursuant to TIA ss. 312(b) with other
Holders with respect to their rights under this Indenture or the Notes. The
Company, the Trustee, the Registrar and anyone else shall have the protection of
TIA ss. 312(c).
Section 13.04 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, except with respect to the initial
authentication of Notes on the date of 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 13.05 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 13.05 hereof) stating that, in the opinion of such counsel, all such
conditions precedent and covenants have been satisfied.
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Section 13.05 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 ss. 314(a)(4)) shall comply with the provisions of TIA
ss. 314(e) and 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 or she has
or they have 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.
Section 13.06 Rules by Trustee and Agents.
The Trustee may make reasonable rules for action by or at a meeting
of Holders. The Registrar, Paying Agent or Conversion Agent may make reasonable
rules and set reasonable requirements for its functions.
Section 13.07 No Personal Liability of Directors, Officers,
Employees and Shareholders.
No past, present or future director, officer, employee,
incorporator, agent or shareholder of the Company, as such, shall have any
liability for any obligations of the Company under the Notes, this Indenture or
for any claim based on, in respect of, or by reason of, such obligations or
their creation. Each Holder by accepting a Note waives and releases all such
liability. The waiver and release are part of the consideration for issuance of
the Notes.
Section 13.08 Governing Law.
THIS INDENTURE AND THE NOTES SHALL BE GOVERNED BY, AND CONSTRUED IN
ACCORDANCE WITH, THE LAWS OF THE STATE OF NEW YORK.
<PAGE>
88
Section 13.09 Consent to Jurisdiction and Service.
To the fullest extent permitted by applicable law, the Company
hereby irrevocably submits to the jurisdiction of any Federal or State court
located in the Borough of Manhattan in The City of New York, New York in any
suit, action or proceeding based on or arising out of or relating to this
Agreement or any Notes or Exchange Notes, and irrevocably agree that all claims
in respect of such suit or proceeding may be determined in any such court. The
Company irrevocably waives, to the fullest extent permitted by law, any
objection which they may have to the laying of the venue of any such suit,
action or proceeding brought in such a court and any claim that any suit, action
or proceeding brought in such a court has been brought in an inconvenient forum.
The Company agrees that final judgment in any such suit, action or proceeding
brought in such a court shall be conclusive and binding upon the Company and may
be enforced in the courts of any jurisdiction to which the Company is subject by
a suit upon such judgment, provided that service of process is effected upon the
Company in the manner specified herein or as otherwise permitted by law. To the
extent that the Company has or hereafter may acquire any immunity from
jurisdiction of any court or from any legal process (whether through service of
now, attachment prior to judgment, attachment in aid of execution, executor or
otherwise) with respect to itself or its property, the Company hereby
irrevocably waives such immunity in respect of their respective obligations
under this Agreement, to the extent permitted by law.
Section 13.10 No Adverse Interpretation of Other Agreements.
This Indenture may not be used to interpret any other indenture,
loan or debt agreement of the Company or its Subsidiaries or of any other
Person. Any such indenture, loan or debt agreement may not be used to interpret
this Indenture.
Section 13.11 Successors.
All agreements of the Company in this Indenture and the Notes shall
bind its successors. All agreements of the Trustee in this Indenture shall bind
its successors.
Section 13.12 Severability.
In case any provision in this Indenture or in the Notes shall be
invalid, illegal or unenforceable, the validity, legality and enforceability of
the remaining provisions shall not in any way be affected or impaired thereby.
Section 13.13 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.
<PAGE>
89
Section 13.14 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.
[Indenture signature page(s) follow]
<PAGE>
90
[Indenture signature page]
Dated as of [ ] [ ], [[1999]]
METROMEDIA FIBER NETWORK, INC.
By:_____________________________________
Name:
Title:
U.S. BANK TRUST NATIONAL ASSOCIATION
as Trustee
By:_____________________________________
Name:
Title:
<PAGE>
EXHIBIT 10.3
EQUITY REGISTRATION RIGHTS AGREEMENT
This Equity Registration Rights Agreement, dated as of ______ __,
1999, is entered into by and between METROMEDIA FIBER NETWORK, INC., a Delaware
corporation ("Company"), and BELL ATLANTIC INVESTMENTS, INC., a Delaware
corporation ("Purchaser").
W I T N E S S E T H
WHEREAS, Company and Purchaser have entered into a certain
Securities Purchase Agreement, dated as of October 7, 1999 (the "Purchase
Agreement"), pursuant to which Company has agreed to issue and sell to
Purchaser, and Purchaser has agreed to purchase from Company, shares of Class A
common stock of Company, par value $0.01 per share ("Class A Common Stock"); and
a subsidiary of Company and an Affiliate of Purchaser have entered into that
certain Fiber Optic Private Network Agreement, dated October 7, 1999, pursuant
to which certain of Purchaser's Affiliate shall lease fiber on Company's fiber
optic network;
WHEREAS, concurrently herewith Company, Purchaser and certain other
stockholders of Company are entering into a stockholders agreement (the
"Stockholders Agreement"); and
WHEREAS, in order to induce Purchaser to enter into the Purchase
Agreement and to purchase such Class A Common Stock, Company has agreed to
provide registration rights with respect thereto.
NOW, THEREFORE, in consideration of the premises and the covenants
hereinafter contained, it is agreed as follows:
1. Definitions. Unless otherwise defined herein, terms defined in
the Purchase Agreement are used herein as therein defined, and the following
shall have (unless otherwise provided elsewhere in this Agreement) the following
respective meanings (such meanings being equally applicable to both the singular
and plural form of the terms defined):
"Affiliate" shall mean, with respect to any Person, any other Person
directly or indirectly controlling or controlled by, or under direct or indirect
common control with, such Person.
"Agreement" shall mean this Equity Registration Rights Agreement,
including all amendments, modifications and supplements and any exhibits or
schedules to any of the foregoing, and shall refer to the Equity Registration
Rights Agreement as the same may be in effect at the time such reference becomes
operative.
"Blackout Period" shall have the meaning assigned to such term in
Section 5 hereof.
"Business Day" shall mean any day that is not a Saturday, a Sunday
or a day on which commercial banks are required or permitted by law to be closed
in the City
<PAGE>
of New York in the State of New York.
"Class A Common Stock" shall have the meaning assigned to such term
in the recitals hereof.
"Demand Registration" shall have the meaning assigned to such term
in Section 2(a) hereof.
"Demand Registration Statement" shall have the meaning assigned to
such term in Section 2(a) hereof.
"Derivative Securities" shall have the meaning assigned to such term
in Section 4 hereof.
"Holder" shall mean Purchaser and any transferee of Purchaser to
whom Registrable Securities are permitted to be transferred pursuant to the
Stockholders Agreement (other than pursuant to a Public Resale (as defined in
the Stockholders Agreement)) and in accordance therewith and who continues to be
entitled to the rights of a Holder hereunder.
"Indemnified Party" shall have the meaning assigned to such term in
Section 8(d) hereof.
"Indemnifying Party" shall have the meaning assigned to such term in
Section 8(d) hereof.
"Maximum Number of Securities" shall have the meaning assigned to
such term in Section 2(b) hereof.
"NASD" shall mean the National Association of Securities Dealers,
Inc., or any successor entity thereof.
"Notes Registration Rights Agreement" shall mean that certain Notes
Registration Rights Agreement, dated as of the date hereof, between Company and
Purchaser, relating to, among other things, registration rights with respect to
the Convertible Notes (as defined in the Purchase Agreement) purchased by
Purchaser pursuant to the Purchase Agreement.
"Participating Demand Holders" shall have the meaning assigned to
such term in Section 2(a) hereof.
"Participating Piggy-Back Holders" shall have the meaning assigned
to such term in Section 3(b) hereof.
"Person" shall mean any individual, corporation, partnership, joint
venture, firm, trust, unincorporated organization, government or any agency or
political subdivision thereof or other entity.
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<PAGE>
"Piggy-Back Registration" shall have the meaning assigned to such
term in Section 3(a) hereof.
"Piggy-Back Registration Statement" shall have the meaning assigned
to such term in Section 3(a) hereof.
"Purchase Agreement" shall have the meaning assigned to such term in
the recitals hereof.
"Registrable Securities" shall mean (a) the shares of Class A Common
Stock held by a Holder and (b) any Securities issuable or issued or distributed
in respect of any of the Class A Common Stock identified in clause (a) by way of
stock dividend or stock split or in connection with a combination of shares,
recapitalization, reorganization, merger, consolidation or otherwise. For
purposes of this Agreement, (i) Registrable Securities shall cease to be
Registrable Securities when a Registration Statement covering such Registrable
Securities has been declared effective under the Securities Act by the SEC and
such Registrable Securities have been disposed of pursuant to such effective
Registration Statement and (ii) the Registrable Securities of a Holder shall not
be deemed to be Registrable Securities at any time when the entire amount of
such Registrable Securities proposed to be sold by such Holder in a single sale
are or, in the opinion of counsel satisfactory to Company and such Holder, each
in their reasonable judgment, may be, so distributed to the public pursuant to
Rule 144 (or any successor provision then in effect) under the Securities Act or
any such Registrable Securities have been sold in a sale made pursuant to Rule
144 of the Securities Act.
"Registration Statement" shall mean the Demand Registration
Statement, the Piggy-Back Registration Statement and/or the Shelf Registration
Statement, as the case may be.
"Securities" shall have the meaning assigned to such term in Section
2(a)(1) of the Securities Act.
"Securities Act" shall mean the Securities Act of 1933, as amended,
and all rules and regulations promulgated thereunder.
"SEC" shall mean the Securities and Exchange Commission, or any
successor thereto.
"Shelf Registration" shall have the meaning assigned to such term in
Section 4 hereof.
"Shelf Registration Statement" shall have the meaning assigned to
such term in Section 4 hereof.
"Stockholders Agreement" shall have the meaning assigned to such
term in the recitals hereof.
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<PAGE>
2. Demand Registration.
(a) At any time from and after 180 days following the date
hereof and subject to Section 2(c) hereof, after receipt of a written request
from a Holder requesting that Company effect a registration (a "Demand
Registration") under the Securities Act covering all or part of the Registrable
Securities which specifies the intended method or methods of disposition
thereof, Company shall promptly notify all Holders in writing of the receipt of
such request and each such Holder, in lieu of exercising its rights under
Section 3 hereof may elect (by written notice sent to Company within ten (10)
Business Days from the date of such Holder's receipt of the aforementioned
Company's notice) to have all or part of such Holder's Registrable Securities
included in such registration thereof pursuant to this Section 2, and such
Holder shall specify in such notice the number of Registrable Securities that
such Holder elects to include in such registration. Thereupon Company shall, as
expeditiously as is possible, file with the SEC and use its reasonable best
efforts to cause to be declared effective, a registration statement (a "Demand
Registration Statement") relating to all shares of Registrable Securities which
Company has been so requested to register by such Holders ("Participating Demand
Holders") for sale, to the extent required to permit the disposition (in
accordance with the intended method or methods thereof, as aforesaid) of the
Registrable Securities so registered, provided; however, that the aggregate
value of the Registrable Securities requested to be registered (i) be at least
$100,000,000, based on the closing trading price of the Class A Common Stock on
the date the demand to file such Demand Registration Statement is made or (ii)
include all Registrable Securities which remain outstanding at such time.
(b) If the majority of the Holders in a Demand Registration
relating to a public offering so request that the offering be underwritten with
a managing underwriter selected in the manner set forth in Section 12 below and
such managing underwriter of such Demand Registration advises Company in writing
that, in its opinion, the number of Securities to be included in such offering
is greater than the total number of Securities which can be sold therein without
having a material adverse effect on the distribution of such Securities or
otherwise having a material adverse effect on the marketability thereof (the
"Maximum Number of Securities"), then Company shall include in such Demand
Registration the Registrable Securities that the Participating Demand Holders
have requested to be registered thereunder only to the extent the number of such
Registrable Securities does not exceed the Maximum Number of Securities. If such
amount exceeds the Maximum Number of Securities, the number of Registrable
Securities included in such Demand Registration shall be allocated among all the
Participating Demand Holders on a pro rata basis. If the amount of such
Registrable Securities does not exceed the Maximum Number of Securities, Company
may include in such Registration any other Securities of Company and other
Securities held by other security holders of Company, on a pro rata basis if
necessary, in an amount which together with the Registrable Securities included
in such Demand Registration shall not exceed the Maximum Number of Securities.
(c) Holders shall be entitled to four (4) registrations of
Registrable Securities pursuant to this Section 2. Each Shelf Registration
pursuant to
4
<PAGE>
Section 4 hereof shall be deemed one registration pursuant hereto.
(d) Notwithstanding anything to the contrary contained herein,
Company shall not be required to prepare and file (i) more than two (2) Demand
Registration Statements under this Agreement and the Notes Registration Rights
Agreement in any twelve-month period, or (ii) any Demand Registration Statement
within 90 days following the date of effectiveness of any Registration Statement
(other than a Shelf Registration Statement) or any registration statement
effective under the Notes Registration Rights Agreement.
3. Piggy-Back Registration.
(a) If Company at any time after 180 days from the date hereof
proposes to file on its behalf and/or on behalf of any holder of its Securities
a registration statement under the Securities Act on any form (other than a
registration statement on Form S-4 or S-8 or any successor form for Securities
to be offered in a transaction of the type referred to in Rule 145 under the
Securities Act or to employees of Company pursuant to any employee benefit plan,
respectively) for the registration of Securities (a "Piggy-Back Registration"),
it will give written notice to all Holders at least 20 days before the initial
filing with the SEC of such piggy-back registration statement (a "PiggyBack
Registration Statement") which notice shall set forth the intended method of
disposition of the Securities proposed to be registered by Company. The notice
shall offer to include in such filing the aggregate number of shares of
Registrable Securities as such Holders may request.
(b) Each Holder desiring to have Registrable Securities
registered under this Section 3 ("Participating Piggy-Back Holders") shall
advise Company in writing within ten (10) days after the date of receipt of such
offer from Company, setting forth the amount of such Registrable Securities for
which registration is requested. Company shall thereupon include in such filing
the number or amount of Registrable Securities for which registration is so
requested, subject to paragraph (c) below, and shall use its reasonable best
efforts to effect registration of such Registrable Securities under the
Securities Act.
(c) If the Piggy-Back Registration relates to an underwritten
public offering and the managing underwriter of such proposed public offering
advises in writing that, in its opinion, the amount of Registrable Securities
requested to be included in the Piggy-Back Registration in addition to the
Securities being registered by Company would be greater than the Maximum Number
of Securities, then:
(i) in the event Company initiated the Piggy-Back Registration,
Company shall include in such Piggy-Back Registration first, the
Securities Company proposes to register and second, the Securities of all
other selling security holders, including the Participating Piggy-Back
Holders, to be included in such Piggy-Back Registration in an amount which
together with the Securities Company proposes to register, shall not
exceed the Maximum Number of Securities, such amount to be allocated among
such selling security holders on
5
<PAGE>
a pro rata basis;
(ii) in the event any holder of Securities of Company initiated the
Piggy-Back Registration, Company shall include in such Piggy-Back
Registration first, the Securities such security holder proposes to
register and second, the Securities of any other selling security holders,
in an amount which together with the Securities the first selling security
holder proposes to register, shall not exceed the Maximum Number of
Securities, such amount to be allocated among such selling security
holders on a pro rata basis;
(d) Company will not hereafter enter into any agreement which
is inconsistent with the rights of priority provided in paragraph (c) above.
4. Shelf Registration. In the event that Purchaser or one of its
affiliates issues Securities (the "Derivative Securities") that by their terms
are convertible into or exchangeable for Registrable Securities and which will
be issued in reliance on Regulation S and/or Rule 144A under the Securities Act
and in accordance with Section 2.2 of the Stockholders Agreement, upon the
written request of Purchaser, as promptly as practicable, but in any event no
later than 30 days after receipt of such request, Company shall file with the
SEC and thereafter use its reasonable best efforts to cause to be declared
effective as promptly as practicable, but no later than 90 days after receipt of
such request, a registration statement (the "Shelf Registration Statement") on
an appropriate form under the Securities Act relating to the conversion or
exchange of the Derivative Securities from time to time in accordance with the
methods and distribution set forth in the Shelf Registration Statement and Rule
415 under the Securities Act (hereafter, the "Shelf Registration"). Company
shall use its reasonable best efforts to keep the Shelf Registration Statement
continuously effective in order to permit the prospectus included therein to be
lawfully delivered to holders of the Derivative Securities for a period of time
until such time as all the Derivative Securities have been converted or
exchanged pursuant thereto.
5. Blackout Periods. Company shall have the right to delay the
filing or effectiveness of a Registration Statement required pursuant to
Sections 2, 3 or 4 hereof during no more than two (2) periods aggregating to not
more than 90 days in any twelve-month period (a "Blackout Period") in the event
that (i) Company would, in accordance with the advice of its counsel, be
required to disclose in the prospectus information not otherwise then required
by law to be publicly disclosed or (ii) in the judgment of Company's Board of
Directors, there is a reasonable likelihood that such disclosure, or any other
action to be taken in connection with the prospectus, would materially and
adversely affect or interfere with any financing, acquisition, merger,
disposition of assets (not in the ordinary course of business), corporate
reorganization or other similar transaction involving Company; provided,
however, that Company shall delay during such Blackout Period the filing or
effectiveness of any registration statement required pursuant to the
registration rights of the holders of any Securities of Company. Company shall
promptly give the Holders written notice of such determination containing a
general statement of the reasons for such postponement and an approximation of
the anticipated delay; and provided further, however, that the implementation of
any Blackout Period
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<PAGE>
shall be done in good faith, taking into account Purchaser's limited rights to
transfer Securities of Company under the Stockholders Agreement, and not for the
purpose or intention of impeding such rights.
6. Registration Procedures. If Company is required by the provisions
of Section 2, 3 or 4 to use its reasonable best efforts to effect the
registration of any of its Securities under the Securities Act, Company will, as
expeditiously as possible:
(a) prepare and file with the SEC a Registration Statement
with respect to such Securities and use its reasonable best efforts to cause
such Registration Statement to become and remain effective for a period of time
required for the disposition of such Securities by the holders thereof but not
to exceed 180 days (except with respect to the Shelf Registration Statement).
Company shall not be deemed to have used its reasonable best efforts to keep a
Registration Statement effective during the applicable period if it voluntarily
takes any action that would result in the Holders of such Registrable Securities
(or with respect to the Shelf Registration, the holders of the Derivative
Securities) not being able to sell such Registrable Securities (or convert or
exchange such Derivative Securities) during that period, unless such action is
required under applicable law;
(b) prepare and file with the SEC such amendments and
supplements to such Registration Statement and the prospectus used in connection
therewith as may be necessary to keep such Registration Statement effective and
to comply with the provisions of the Securities Act with respect to the sale or
other disposition of all Securities covered by such Registration Statement until
the earlier of such time as all of such Securities have been disposed of in a
public offering or (except with respect to the Shelf Registration Statement) the
expiration of 180 days;
(c) furnish to such selling security holders such number of
copies of the applicable Registration Statement and each such amendment and
supplement thereto, and of a summary prospectus or other prospectus, including a
preliminary prospectus, in conformity with the requirements of the Securities
Act, and such other documents, as such selling security holders may reasonably
request;
(d) use its reasonable best efforts to register or qualify the
Securities covered by such Registration Statement under such other Securities or
blue sky laws of such jurisdictions within the United States and Puerto Rico as
each Holder of such Securities shall reasonably request (provided, however, that
Company shall not be obligated to qualify as a foreign corporation to do
business under the laws of any jurisdiction in which it is not then qualified or
to file any general consent to service or process), and do such other reasonable
acts and things as may be required of it to enable such Holder to consummate the
disposition in such jurisdiction of the Securities covered by such Registration
Statement;
(e) furnish, at the request of any Holder requesting
registration of Registrable Securities, on the date that such shares of
Registrable Securities are delivered to the underwriters for sale pursuant to
such registration or, if such Registrable
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<PAGE>
Securities are not being sold through underwriters, on the date that the
Registration Statement with respect to such shares of Registrable Securities
becomes effective, (1) an opinion, dated such date, of the independent counsel
representing Company for the purposes of such registration, addressed to the
underwriters, if any, in customary form and covering matters of the type
customarily covered in such legal opinions; and (2) a comfort letter dated such
date, from the independent certified public accountants of Company, addressed to
the underwriters, in a customary form and covering matters of the type
customarily covered by such comfort letters and as the underwriters shall
reasonably request. Such opinion of counsel shall additionally cover such other
legal matters with respect to the registration in respect of which such opinion
is being given as such underwriters may reasonably request;
(f) enter into customary agreements (including an underwriting
agreement in customary form) and take such other actions as are reasonably
required in order to expedite or facilitate the disposition of such Registrable
Securities;
(g) otherwise use its reasonable best efforts to comply with
all applicable rules and regulations of the SEC, and make earnings statements
satisfying the provisions of Section 11(a) of the Securities Act generally
available to the Holders no later than 45 days after the end of any twelve-month
period (or 90 days, if such period is a fiscal year) (i) commencing at the end
of any fiscal quarter in which Registrable Securities are sold to underwriters
in an underwritten public offering, or (ii) if not sold to underwriters in such
an offering, beginning with the first month of Company's first fiscal quarter
commencing after the effective date of the Registration Statement, which
statements shall cover said twelve-month periods;
(h) use its reasonable best efforts to cause all such
Registrable Securities to be listed on each securities exchange or quotation
system on which similar securities issued by Company are listed or traded;
(i) give written notice to Holders:
(i) when such Registration Statement or any amendment thereto has
been filed with the SEC and when such Registration Statement or any
post-effective amendment thereto has become effective;
(ii) of any request by the SEC for amendments or supplements to such
Registration Statement or the prospectus included therein or for
additional information;
(iii) of the issuance by the SEC of any stop order suspending the
effectiveness of such Registration Statement or the initiation of any
proceedings for that purpose;
(iv) of the receipt by Company or its legal counsel of any
notification with respect to the suspension of the qualification of the
Class A Common Stock for sale in any jurisdiction or the initiation or
threatening of any
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<PAGE>
proceeding for such purpose; and
(v) of the happening of any event that requires Company to make
changes in such Registration Statement or the prospectus in order to make
the statements therein not misleading (which notice shall be accompanied
by an instruction to suspend the use of the prospectus until the requisite
changes have been made);
(j) use its reasonable best efforts to prevent the issuance or
obtain the withdrawal of any order suspending the effectiveness of such
Registration Statement at the earliest possible time;
(k) furnish to each Holder, without charge, at least one copy
of such Registration Statement and any post-effective amendment thereto,
including financial statements and schedules, and, if the Holder so requests in
writing, all exhibits (including those, if any, incorporated by reference);
(l) upon the occurrence of any event contemplated by Section
6(h)(v) above, promptly prepare a post-effective amendment to such Registration
Statement or a supplement to the related prospectus or file any other required
document so that, as thereafter delivered to Holders, the prospectus will not
contain an untrue statement of a material fact or omit to state any material
fact necessary to make the statements therein, in light of the circumstances
under which they were made, not misleading. If Company notifies the Holders in
accordance with Section 6(h)(v) above to suspend the use of the prospectus until
the requisite changes to the prospectus have been made, then the Holders shall
suspend use of such prospectus, and the period of effectiveness of such
Registration Statement provided for above shall be extended by the number of
days from and including the date of the giving of such notice to the date
Holders shall have received such amended or supplemented prospectus pursuant to
this Section 6(l);
(m) (i) make reasonably available for inspection by a single
representative of the Holders, any underwriter participating in any disposition
pursuant to such Registration Statement and any attorney, accountant or other
agent retained by such representative or any such underwriter all relevant
financial and other records, pertinent corporate documents and properties of
Company and (ii) cause Company's officers, directors and employees to supply all
relevant information reasonably requested by such representative or any such
underwriter, attorney, accountant or agent in connection with the registration;
provided that the foregoing inspection and information gathering shall be
coordinated on behalf of the Purchaser by Purchaser and on behalf of the other
parties, by one counsel designated by and on behalf of such other parties; and
(n) in connection with any underwritten offering, make
appropriate officers of Company available to the selling security holders for
meetings with prospective purchasers of the Registrable Securities and prepare
and present to potential investors customary "road show" material in a manner
consistent with other new issuances of Securities similar to the Registrable
Securities, in connection with any
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<PAGE>
proposed sale of the Registrable Securities in an aggregate offering of at least
$100,000,000.
It shall be a condition precedent to the obligation of Company to
take any action pursuant to this Agreement in respect of the Securities which
are to be registered at the request of any Holder that such Holder shall furnish
to Company such information regarding the Securities held by such Holder and the
intended method of disposition thereof as Company shall reasonably request and
as shall be required in connection with the action taken by Company.
7. Expenses. All expenses incurred in complying with the provisions
of this Agreement, including, without limitation, all registration and filing
fees (including all expenses incident to filing with the NASD), printing
expenses, fees and disbursements of counsel for Company, the reasonable fees and
expenses of a single counsel for the selling security holders (selected by those
holding a majority of the shares being registered), expenses of any special
audits incident to or required by any such registration and expenses of
complying with the Securities or blue sky laws of any jurisdiction pursuant to
Section 6(d), shall be paid by Company, except that:
(a) all such expenses in connection with any amendment or
supplement to the Registration Statement or prospectus filed more than 180 days
after the effective date of such Registration Statement because any Holder has
not effected the disposition of the Securities requested to be registered shall
be paid by such Holder; and
(b) Company shall not be liable for any fees, discounts or
commissions to any underwriter or any fees or disbursements of counsel for any
underwriter in respect of the Securities sold by such Holder.
8. Indemnification and Contribution.
(a) In the event of any registration of any Registrable
Securities under the Securities Act pursuant to this Agreement, Company shall
indemnify and hold harmless the Holder of such Registrable Securities, such
Holder's directors and officers, and each other person (including each
underwriter) to the extent permitted by law who participated in the offering of
such Registrable Securities and each other person, if any, who controls such
Holder or such participating person within the meaning of the Securities Act,
against any losses, claims, damages or liabilities, joint or several, to which
such Holder or any such director or officer or participating person or
controlling person may become subject under the Securities Act or any other
statute or at common law, insofar as such losses, claims, damages or liabilities
(or actions in respect thereof) arise out of or are based upon (i) any alleged
untrue statement of any material fact contained, on the effective date thereof,
in any Registration Statement under which such Securities were registered under
the Securities Act, any preliminary prospectus or final prospectus contained
therein, or any amendment or supplement thereto, or (ii) any alleged omission to
state therein a material fact required to be stated therein or necessary to make
the statements therein not misleading, and shall reimburse such Holder or such
director, officer or participating person or controlling person for any legal or
any other expenses
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reasonably incurred by such Holder or such director, officer or participating
person or controlling person in connection with investigating or defending any
such loss, claim, damage, liability or action; provided that the foregoing
indemnity with respect to any preliminary prospectus shall not inure to the
benefit of any indemnified party from whom the person asserting such losses,
claims, damages, liabilities, expenses and judgments purchased securities if
such untrue statement or omission or alleged untrue statement or omission made
in such preliminary prospectus is eliminated or remedied in the prospectus and a
copy of the prospectus shall not have been furnished to such person in a timely
manner, unless such prospectus was not furnished because Company failed to
provide the indemnified party with sufficient copies of such corrected
prospectus within the time period required; provided, further that Company shall
not be liable in any case to the extent such losses, claims, damages or
liabilities arise out of or are based upon any untrue statement or actual or
alleged omission made in such Registration Statement, preliminary prospectus,
prospectus or amendment or supplement, in reliance upon and in conformity with
written information furnished to Company by such Holder or such Holder's
directors or officers specifically for use therein, or (in the case of any
underwritten offering) so furnished for such purpose by any underwriter.
(b) Each Holder, by acceptance hereof, agrees to indemnify and
hold harmless Company, its directors and officers and each other person, if any,
who controls Company within the meaning of the Securities Act against any
losses, claims, damages or liabilities, joint or several, to which Company or
any such director or officer or any such person may become subject under the
Securities Act or any other statute or at common law, insofar as such losses,
claims, damages or liabilities (or actions in respect thereof) arise out of or
are based upon information in writing provided to Company by such Holder
specifically for use in the following documents and contained, on the effective
date thereof, in any Registration Statement under which Securities were
registered under the Securities Act at the request of such Holder, any
preliminary prospectus or final prospectus contained therein, or any amendment
or supplement thereto. Notwithstanding the provisions of this paragraph (b) or
paragraph (c) below, no Holder shall be required to indemnify any person
pursuant to this Section 8 or to contribute pursuant to paragraph (c) below in
an amount in excess of the amount of the aggregate net proceeds received by such
Holder in connection with any such registration under the Securities Act.
(c) If the indemnification provided for in this Section 8 from
the indemnifying party is unavailable to an indemnified party hereunder in
respect of any losses, claims, damages, liabilities or expenses referred to
therein, then the indemnifying party, in lieu of indemnifying such indemnified
party, shall contribute to the amount paid or payable by such indemnified party
as a result of such losses, claims, damages, liabilities or expenses in such
proportion as is appropriate to reflect the relative fault of the indemnifying
party and indemnified parties in connection with the actions which resulted in
such losses, claims, damages, liabilities or expenses, as well as any other
relevant equitable considerations. The relative fault of such indemnifying party
and indemnified parties shall be determined by reference to, among other things,
whether any action in question, including any untrue or alleged untrue statement
of a material fact or omission or alleged omission to state a material fact, has
been made by, or relates to
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information supplied by, such indemnifying party or indemnified parties, and the
parties' relative intent, knowledge, access to information and opportunity to
correct or prevent such action. The amount paid or payable by a party as a
result of the losses, claims, damages, liabilities and expenses referred to
above shall be deemed to include any legal or other fees or expenses reasonably
incurred by such party in connection with any investigation or proceeding. If
the allocation provided in this paragraph (c) is not permitted by applicable
law, the parties shall contribute based upon the relevant benefits received by
the Company and the Holders from the sale of Securities.
The parties hereto agree that it would not be just and equitable if
contribution pursuant to this Section 8(c) were determined by pro rata
allocation or by any other method of allocation which does not take account of
the equitable considerations referred to in the immediately preceding paragraph.
No Person guilty of fraudulent misrepresentation (within the meaning of Section
11(f) of the Securities Act) shall be entitled to contribution from any Person
who was not guilty of such fraudulent misrepresentation.
(d) Any person entitled to indemnification hereunder (the
"Indemnified Party") agrees to give prompt written notice to the indemnifying
party (the "Indemnifying Party") after the receipt by the Indemnified Party of
any written notice of the commencement of any action, suit, proceeding or
investigation or threat thereof made in writing for which the Indemnified Party
intends to claim indemnification or contribution pursuant to this Agreement;
provided, that the failure so to notify the Indemnified Party shall not relieve
the Indemnifying Party of any liability that it may have to the Indemnifying
Party hereunder unless such failure is materially prejudicial to the
Indemnifying Party. If notice of commencement of any such action is given to the
Indemnifying Party as above provided, the Indemnifying Party shall be entitled
to participate in and, to the extent it may wish, to assume the defense of such
action at its own expense, with counsel chosen by it and reasonably satisfactory
to such Indemnified Party. The Indemnified Party shall have the right to employ
separate counsel in any such action and participate in the defense thereof, but
the fees and expenses of such counsel shall be paid by the Indemnified Party
unless (i) the Indemnifying Party agrees to pay the same, (ii) the Indemnifying
Party fails to assume the defense of such action, or (iii) the named parties to
any such action (including any impleaded parties) have been advised by such
counsel that either (A) representation of such Indemnified Party and the
Indemnifying Party by the same counsel would be inappropriate under applicable
standards of professional conduct or (B) there are one or more legal defenses
available to it which are substantially different from or additional to those
available to the Indemnifying Party. No Indemnifying Party shall be liable for
any settlement entered into without its written consent, which consent shall not
be unreasonably withheld.
(e) The agreements contained in this Section 8 shall survive
the transfer of the Registered Securities by any Holder and sale of all the
Registrable Securities pursuant to any registration statement and shall remain
in full force and effect, regardless of any investigation made by or on behalf
of any Holder or such director, officer or participating or controlling person.
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9. Certain Additional Limitations on Registration Rights.
Notwithstanding the other provisions of this Agreement, Company shall not be
obligated to register the Registrable Securities of any Holder (i) if, in the
opinion of counsel to Company reasonably satisfactory to the Holder and its
counsel (or, if the Holder has engaged an investment banking firm, to such
investment banking firm and its counsel), the sale or other disposition of such
Holder's Registrable Securities, in the manner proposed by such Holder (or by
such investment banking firm), may be effected without registering such
Registrable Securities under the Securities Act, (ii) such Holder or any
underwriter of such Registrable Securities shall fail to furnish to Company
necessary information in respect of the distribution of such Registrable
Securities, or (iii) if such registration involves an underwritten offering,
such Registrable Securities are not included in such underwritten offering on
the same terms and conditions as shall be applicable to the other Securities
being sold through underwriters in the registration or such Holder fails to
enter into an underwriting agreement in customary form with the underwriter or
underwriters selected for such underwritten offering. In addition, each Holder
agrees not to effect any public sale or distribution of any Registrable
Securities or of any securities convertible into or exchangeable or exercisable
for such Registrable Securities, including a sale pursuant to Rule 144 under the
Securities Act and to enter into a customary lock-up agreement with the managing
underwriter for an offering, during the 90-day period beginning on the effective
date of any Demand Registration Statement (initiated by such Holder) or
Piggy-Back Registration Statement or other underwritten offering (initiated by
the Company) (except as part of such registration), if and to the extent
requested by the managing underwriter for such offering.
10. Limitations on Registration of Other Securities; Representation.
From and after the date of this Agreement, except for the Notes Registration
Rights Agreement, Company shall not, without the prior written consent of a
majority in interest of the Holders, enter into any agreement with any holder or
prospective holder of any Securities of Company giving such Holder or
prospective holder any registration rights the terms of which are as or more
favorable taken as a whole than the registration rights granted to the Holders
hereunder unless Company shall also give such rights to the Holders hereunder.
11. No Inconsistent Agreements. Company will not hereafter enter
into any agreement with respect to its Securities which is inconsistent in any
material respects with the rights granted to the Holders in this Agreement.
12. Selection of Managing Underwriters. The managing underwriter or
underwriters for any offering of Registrable Securities to be registered
pursuant to Sections 2 or 3 hereto shall be selected by Holders of a majority of
the shares being so registered and shall be acceptable to Company.
13. Miscellaneous.
(a) Remedies. Each Holder, in addition to being entitled to
exercise all rights granted by law, including recovery of damages, will be
entitled to specific performance of its rights under this Agreement. Company
agrees that monetary
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damages would not be adequate compensation for any loss incurred by reason of a
breach by it of the provisions of this Agreement and hereby agrees to waive the
defense in any action for specific performance that a remedy at law would be
adequate. In any action or proceeding brought to enforce any provision of this
Agreement or where any provision hereof is validly asserted as a defense, the
successful party shall be entitled to recover reasonable attorneys' fees in
addition to any other available remedy.
(b) Amendments and Waivers. Except as otherwise provided
herein, the provisions of this Agreement may not be amended, modified or
supplemented, and waivers or consents to departure from the provisions hereof
may not be given unless Company has obtained the written consent of a majority
in interest of the Holders.
(c) Notice Generally. Any notice, demand, request, consent,
approval, declaration, delivery or other communication hereunder to be made
pursuant to the provisions of this Agreement shall be sufficiently given or made
if in writing and either delivered in person with receipt acknowledged or sent
by overnight courier mail, return receipt requested, postage prepaid, or by
telecopy and confirmed by telecopy answerback, addressed as follows:
(i) If to any Holder, at its last known address appearing on the
books of Company maintained for such purpose.
(ii) If to Company, at
c/o Metromedia Company
One Meadowlands Plaza
East Rutherford, New Jersey 07073
Attention: General Counsel
Telecopy Number: (201) 531-2803
with a copy to:
Paul, Weiss, Rifkind, Wharton & Garrison
1285 Avenue of the Americas
New York, New York 10019-6064
Attention: Douglas A. Cifu
Telecopy Number: (212) 757-3990
or at such other address as may be substituted by notice given as herein
provided.
The giving of any notice required hereunder may be waived in writing by
the party entitled to receive such notice. Every notice, demand, request,
consent, approval, declaration, delivery or other communication hereunder shall
be deemed to have been duly given or served on the date on which personally
delivered, with receipt acknowledged, telecopied and confirmed by telecopy
answerback or three (3) Business
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Days after the same shall have been sent by overnight courier.
(d) Successors and Assigns. This Agreement shall inure to the
benefit of and be binding upon the successors and assigns of each of the parties
hereto including any person to whom Registrable Securities are transferred in
accordance with the Stockholders Agreement.
(e) Headings. The headings in this Agreement are for
convenience of reference only and shall not limit or otherwise affect the
meaning hereof.
(f) Governing Law; Jurisdiction. This Agreement shall be
governed by, construed and enforced in accordance with the laws of the State of
New York without giving effect to the conflict of laws provisions thereof. Each
of the parties hereby submits to personal jurisdiction and waives any objection
as to venue in the County of New York, State of New York. Service of process on
the parties in any action arising out of or relating to this Agreement shall be
effective if mailed to the parties in accordance with Section 13(c) hereof. The
parties hereto waive all right to trial by jury in any action or proceeding to
enforce or defend any rights hereunder.
(g) Severability. Wherever possible, each provision of this
Agreement shall be interpreted in such manner as to be effective and valid under
applicable law, but if any provision of this Agreement shall be prohibited by or
invalid under applicable law, such provision shall be ineffective to the extent
of such prohibition or invalidity, without invalidating the remainder of such
provision or the remaining provisions of this Agreement.
(h) Entire Agreement. This Agreement represents the complete
agreement and understanding of the parties hereto in respect of the subject
matter contained herein. This Agreement supersedes all prior agreements and
understandings between the parties with respect to the subject matter hereof.
[Signature appears on next page]
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IN WITNESS WHEREOF, the parties hereto have executed this Agreement
as of the date first above written.
METROMEDIA FIBER NETWORK, INC.
By:_________________________________
Name:
Title:
BELL ATLANTIC INVESTMENTS, INC.
By:_________________________________
Name:
Title:
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<PAGE>
EXHIBIT 10.4
NOTES REGISTRATION RIGHTS AGREEMENT
This Notes Registration Rights Agreement, dated as of ______ __,
1999, is entered into by and between METROMEDIA FIBER NETWORK, INC., a Delaware
corporation ("Company"), and BELL ATLANTIC INVESTMENTS, INC., a Delaware
corporation ("Purchaser").
W I T N E S S E T H
WHEREAS, Company and Purchaser have entered into a certain
Securities Purchase Agreement, dated as of October 7, 1999 (the "Purchase
Agreement"), pursuant to which Company has agreed to issue and sell to
Purchaser, and Purchaser has agreed to purchase from Company, shares of Class A
common stock of Company, par value $0.01 per share ("Class A Common Stock"), and
up to $975,281,364 principal amount of Company's 6.15% Convertible Subordinated
Notes due [2009] (the "Convertible Notes"), which are convertible into shares of
Class A Common Stock;
WHEREAS, in connection with consummation of the transactions
contemplated by the Purchase Agreement, Company agreed to enter into an
Indenture, dated as of the date hereof (the "Indenture"), relating to the
Convertible Notes, and a subsidiary of Company and an Affiliate of Purchaser
have entered into that certain Fiber Optic Private Network Agreement, dated
October 7, 1999, pursuant to which certain of Purchaser's Affiliates shall lease
fiber on Company's fiber optic network; and
WHEREAS, in order to induce Purchaser to purchase the Convertible
Notes contemplated by the Purchase Agreement and to enter into the Indenture,
Company has agreed to provide registration rights with respect thereto.
NOW, THEREFORE, in consideration of the premises and the covenants
hereinafter contained, it is agreed as follows:
1. Definitions. Unless otherwise defined herein, terms defined in
the Purchase Agreement are used herein as therein defined, and the following
shall have (unless otherwise provided elsewhere in this Agreement) the following
respective meanings (such meanings being equally applicable to both the singular
and plural form of the terms defined):
"Affiliate" shall mean, with respect to any Person, any other Person
directly or indirectly controlling or controlled by, or under direct or indirect
common control with, such Person.
"Agreement" shall mean this Notes Registration Rights Agreement,
including all amendments, modifications and supplements and any exhibits or
schedules to any of the foregoing, and shall refer to this Notes Registration
Rights Agreement as the same may be in effect at the time such reference becomes
operative.
"Blackout Period" shall have the meaning assigned to such term in
Section 5 hereof.
<PAGE>
"Business Day" shall mean any day that is not a Saturday, a Sunday
or a day on which commercial banks are required or permitted by law to be closed
in the City of New York in the State of New York.
"Class A Common Stock" shall have the meaning assigned to such term
in the recitals hereof.
"Convertible Notes" shall have the meaning assigned to such term in
the recitals hereof.
"Demand Registration" shall have the meaning assigned to such term
in Section 2(a) hereof.
"Demand Registration Statement" shall have the meaning assigned to
such term in Section 2(a) hereof.
"Equity Registration Rights Agreement" shall mean that certain
Equity Registration Rights Agreement, dated as of the date hereof, between
Company and Purchaser, relating to, among other things, registration rights with
respect to the shares of Class A Common Stock purchased by Purchaser pursuant to
the Purchase Agreement.
"Holder" shall mean Purchaser and any transferee of Purchaser to
whom Registrable Securities are permitted to be transferred pursuant to the
Stockholders Agreement (other than pursuant to a Public Resale (as defined in
the Stockholders Agreement)) and in accordance therewith and who continues to be
entitled to the rights of a Holder hereunder.
"Indemnified Party" shall have the meaning assigned to such term in
Section 8(d) hereof.
"Indemnifying Party" shall have the meaning assigned to such term in
Section 8(d) hereof.
"Indenture" shall have the meaning assigned to such term in the
recitals hereto.
"Maximum Number of Securities" shall have the meaning assigned to
such term in Section 2(b) hereof.
"NASD" shall mean the National Association of Securities Dealers,
Inc., or any successor entity thereof.
"Participating Demand Holders" shall have the meaning assigned to
such term in Section 2(a) hereof.
"Participating Piggy-Back Holders" shall have the meaning assigned
to such term in Section 3(b) hereof.
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"Person" shall mean any individual, corporation, partnership, joint
venture, firm, trust, unincorporated organization, government or any agency or
political subdivision thereof or other entity.
"Piggy-Back Registration" shall have the meaning assigned to such
term in Section 3(a) hereof.
"Piggy-Back Registration Statement" shall have the meaning assigned
to such term in Section 3(a) hereof.
"Purchase Agreement" shall have the meaning assigned to such term in
the recitals hereof.
"Registrable Securities" shall mean (a) each Convertible Note held
by a Holder, (b) any shares of Class A Common Stock issued upon conversion of
any Convertible Note (the "Underlying Shares"), and (c) any Securities issuable
or issued or distributed in respect of any of the Class A Common Stock
identified in clause (b) by way of stock dividend or stock split or in
connection with a combination of shares, recapitalization, reorganization,
merger, consolidation or otherwise, or as otherwise contemplated by the
Indenture. For purposes of this Agreement, (i) Registrable Securities shall
cease to be Registrable Securities when a Registration Statement covering such
Registrable Securities has been declared effective under the Securities Act by
the SEC and such Registrable Securities have been disposed of pursuant to such
effective Registration Statement and (ii) the Registrable Securities of a Holder
shall not be deemed to be Registrable Securities at any time when the entire
amount of such Registrable Securities proposed to be sold by such Holder in a
single sale are or, in the opinion of counsel satisfactory to Company and such
Holder, each in their reasonable judgment, may be, so distributed to the public
pursuant to Rule 144 (or any successor provision then in effect) under the
Securities Act or any such Registrable Securities have been sold in a sale made
pursuant to Rule 144 of the Securities Act.
"Registration Statement" shall mean the Demand Registration
Statement, the Piggy-Back Registration Statement and/or the Shelf Registration
Statement, as the case may be.
"Securities" shall have the meaning assigned to such term in Section
2(a)(1) of the Securities Act.
"Securities Act" shall mean the Securities Act of 1933, as amended,
and all rules and regulations promulgated thereunder.
"SEC" shall mean the Securities and Exchange Commission, or any
successor thereto.
"Shelf Registration" shall have the meaning assigned to such term in
Section 4 hereof.
"Shelf Registration Statement" shall have the meaning assigned to
such
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term in Section 4 hereof.
"Stockholders Agreement" shall mean the Stockholders Agreement,
dated the date hereof, by and among Company and, Purchaser and the other
stockholders of Company listed on Schedule I thereto.
"Underlying Shares" shall have the meaning assigned to such term
under the definition of Registrable Securities.
2. Demand Registration.
(a) At any time from and after 180 days following the date
hereof and subject to Section 2(c) hereof, after receipt of a written request
from a Holder requesting that Company effect a registration (a "Demand
Registration") under the Securities Act covering all or part of the Registrable
Securities which specifies the intended method or methods of disposition
thereof, Company shall promptly notify all Holders in writing of the receipt of
such request and each such Holder, in lieu of exercising its rights under
Section 3 hereof may elect (by written notice sent to Company within ten (10)
Business Days from the date of such Holder's receipt of the aforementioned
Company's notice) to have all or part of such Holder's Registrable Securities
included in such registration thereof pursuant to this Section 2, and such
Holder shall specify in such notice the number of Registrable Securities that
such Holder elects to include in such registration. Thereupon Company shall, as
expeditiously as is possible, file with the SEC and use its reasonable best
efforts to cause to be declared effective, a registration statement (a "Demand
Registration Statement") relating to all shares of Registrable Securities which
Company has been so requested to register by such Holders ("Participating Demand
Holders") for sale, to the extent required to permit the disposition (in
accordance with the intended method or methods thereof, as aforesaid) of the
Registrable Securities so registered, provided; however, that the aggregate
value of the Registrable Securities requested to be registered be at least
$100,000,000 or include all Registrable Securities which remain outstanding at
such time. With respect to any Registrable Securities that are Convertible
Notes, the value of such Convertible Notes shall be based on the aggregate
principal amount of the Convertible Notes to be so registered. With respect to
any Registrable Securities that are Class A Common Stock, the value of such
Class A Common Stock shall be based on the closing trading price of the Class A
Common Stock on the date the demand to file such Demand Registration Statement
is made.
(b) If the majority of the Holders in a Demand Registration
relating to a public offering so request that the offering shall be underwritten
with a managing underwriter selected in the manner set forth in Section 12 below
and such managing underwriter of such Demand Registration advises Company in
writing that, in its opinion, the number of Securities to be included in such
offering is greater than the total number or amount of Securities which can be
sold therein without having a material adverse effect on the distribution of
such Securities or otherwise having a material adverse effect on the
marketability thereof (the "Maximum Number of Securities"), then Company shall
include in such Demand Registration the Registrable Securities that
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<PAGE>
the Participating Demand Holders have requested to be registered thereunder only
to the extent the number of such Registrable Securities does not exceed the
Maximum Number of Securities. If such amount exceeds the Maximum Number of
Securities, the number of Registrable Securities included in such Demand
Registration shall be allocated among all the Participating Demand Holders on a
pro rata basis. If the amount of such Registrable Securities does not exceed the
Maximum Number of Securities, Company may include in such Registration any other
Securities of Company and other Securities held by other security holders of
Company, on a pro rata basis if necessary, in an amount which together with the
Registrable Securities included in such Demand Registration shall not exceed the
Maximum Number of Securities.
(c) Holders shall be entitled to four (4) registrations of
Registrable Securities pursuant to this Section 2. Each Shelf Registration
pursuant to Section 4 hereof shall be deemed one (1) Demand Registration
pursuant hereto. A Shelf Registration for the Underlying Shares that is
requested as part of a Demand Registration for the Notes, shall not constitute,
or be deemed to be, a separate Demand Registration under this Section 2.
(d) Notwithstanding anything to the contrary contained herein,
Company shall not be required to prepare and file (i) more than two (2) Demand
Registration Statements under this Agreement and the Equity Registration Rights
Agreement in any twelve-month period, or (ii) any Demand Registration Statement
within 90 days following the date of effectiveness of any Registration Statement
(other than a Shelf Registration Statement) or any registration statement
effective under the Equity Registration Rights Agreement.
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3. Piggy-Back Registration.
(a) If Company at any time after 180 days from the date hereof
proposes to file on its behalf and/or on behalf of any holder of its Securities
a registration statement under the Securities Act on any form (other than a
registration statement on Form S-4 or S-8 or any successor form for Securities
to be offered in a transaction of the type referred to in Rule 145 under the
Securities Act or to employees of Company pursuant to any employee benefit plan,
respectively) for the registration of Securities (a "Piggy-Back Registration"),
it will give written notice to all Holders at least 20 days before the initial
filing with the SEC of such piggy-back registration statement (a "PiggyBack
Registration Statement") which notice shall set forth the intended method of
disposition of the Securities proposed to be registered by Company. The notice
shall offer to include in such filing the aggregate number of shares of
Registrable Securities as such Holders may request.
(b) Each Holder desiring to have Registrable Securities
registered under this Section 3 ("Participating Piggy-Back Holders") shall
advise Company in writing within ten (10) days after the date of receipt of such
offer from Company, setting forth the amount of such Registrable Securities for
which registration is requested. Company shall thereupon include in such filing
the number or amount of Registrable Securities for which registration is so
requested, subject to paragraph (c) below, and shall use its reasonable best
efforts to effect registration of such Registrable Securities under the
Securities Act.
(c) If the Piggy-Back Registration relates to an underwritten
public offering and the managing underwriter of such proposed public offering
advises in writing that, in its opinion, the amount of Registrable Securities
requested to be included in the Piggy-Back Registration in addition to the
Securities being registered by Company would be greater than the Maximum Number
of Securities, then:
(i) in the event Company initiated the Piggy-Back Registration,
Company shall include in such Piggy-Back Registration first, the
Securities Company proposes to register and second, the Securities of all
other selling security holders, including the Participating Piggy-Back
Holders, to be included in such Piggy-Back Registration in an amount which
together with the Securities Company proposes to register, shall not
exceed the Maximum Number of Securities, such amount to be allocated among
such selling security holders on a pro rata basis;
(ii) in the event any holder of Securities of Company initiated the
Piggy-Back Registration, Company shall include in such Piggy-Back
Registration first, the Securities such security holder proposes to
register and second, the Securities of any other selling security holders,
in an amount which together with the Securities the first selling security
holder proposes to register, shall not exceed the Maximum Number of
Securities, such amount to be allocated among such selling security
holders on a pro rata basis;
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(d) Company will not hereafter enter into any agreement which
is inconsistent with the rights of priority provided in paragraph (c) above.
4. Shelf Registration. Upon the written request of Holder, as
promptly as practicable, but in any event no later than 30 days (excluding any
days which occur during a permitted Blackout Period under Section 5 below) after
receipt of such request, Company shall file with the SEC and thereafter use its
reasonable best efforts to cause to be declared effective as promptly as
practicable, but no later than 90 days (excluding any days which occur during a
permitted Blackout Period under Section 5 below) after receipt of such request,
a registration statement (the "Shelf Registration Statement") on an appropriate
form under the Securities Act relating to any or all of the Registrable
Securities in accordance with the methods and distribution set forth in the
Shelf Registration Statement and Rule 415 under the Securities Act (hereafter,
the "Shelf Registration"). A Shelf Registration relating to any or all of the
Underlying Shares may be made in connection with a (i) Demand Registration of
Convertible Notes under Section 2 above, in which case it will not constitute,
or be deemed to be, a separate Demand Registration, or (ii) a Rule 144A/Reg S
Transaction (as such term is defined in Section 2.2(b) of the Stockholders
Agreement) with respect to the Convertible Notes, in which case, such Shelf
Registration shall constitute and be deemed to be a Demand Registration, but the
provisions applicable to such registration shall be governed by this Section 4
and not Section 2 above. Company shall use its reasonable best efforts to keep
the Shelf Registration Statement continuously effective in order to permit the
prospectus included therein to be lawfully delivered to Holders for a period of
time ending the earlier of (a) such time as all the Registrable Securities have
been disposed pursuant thereto, and (b) the date on which Company receives an
opinion of outside counsel, satisfactory to Company and the Holders, to the
effect that in their reasonable judgment, all the Registrable Securities may be
distributed to the public pursuant to Rule 144 (or any successor provision then
in effect) under the Securities Act.
5. Blackout Periods. Company shall have the right to delay the
filing or effectiveness of a Registration Statement required pursuant to
Sections 2, 3 or 4 hereof during no more than two (2) periods aggregating to not
more than 90 days in any twelve-month period (a "Blackout Period") in the event
that (i) Company would, in accordance with the advice of its counsel, be
required to disclose in the prospectus information not otherwise then required
by law to be publicly disclosed or (ii) in the judgment of Company's Board of
Directors, there is a reasonable likelihood that such disclosure, or any other
action to be taken in connection with the prospectus, would materially and
adversely affect or interfere with any financing, acquisition, merger,
disposition of assets (not in the ordinary course of business), corporate
reorganization or other similar transaction involving Company; provided,
however, that Company shall delay during such Blackout Period the filing or
effectiveness of any registration statement required pursuant to the
registration rights of the holders of any Securities of Company. Company shall
promptly give the Holders written notice of such determination containing a
general statement of the reasons for such postponement and an approximation of
the anticipated delay; and provided further, however, that the implementation of
any Blackout Period shall be done in good faith, taking into account Purchaser's
limited rights to transfer Securities of Company under the Stockholders
Agreement, and not for the purpose or
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intention of impeding such rights.
6. Registration Procedures. If Company is required by the provisions
of Section 2, 3 or 4 to use its reasonable best efforts to effect the
registration of any of its Securities under the Securities Act, Company will, as
expeditiously as possible:
(a) prepare and file with the SEC a Registration Statement
with respect to such Securities and use its reasonable best efforts to cause
such Registration Statement to become and remain effective for a period of time
required for the disposition of such Securities by the holders thereof but not
to exceed 180 days (except with respect to the Shelf Registration Statement).
Company shall not be deemed to have used its reasonable best efforts to keep a
Registration Statement effective during the applicable period if it voluntarily
takes any action that would result in the Holders of such Registrable Securities
not being able to sell such Registrable Securities during that period, unless
such action is required under applicable law;
(b) prepare and file with the SEC such amendments and
supplements to such Registration Statement and the prospectus used in connection
therewith as may be necessary to keep such Registration Statement effective and
to comply with the provisions of the Securities Act with respect to the sale or
other disposition of all Securities covered by such Registration Statement until
the earlier of such time as all of such Securities have been disposed of in a
public offering or (except with respect to the Shelf Registration Statement) the
expiration of 180 days;
(c) furnish to such selling security holders such number of
copies of the applicable Registration Statement and each such amendment and
supplement thereto, and of a summary prospectus or other prospectus, including a
preliminary prospectus, in conformity with the requirements of the Securities
Act, and such other documents, as such selling security holders may reasonably
request;
(d) use its reasonable best efforts to register or qualify the
Securities covered by such Registration Statement under such other Securities or
blue sky laws of such jurisdictions within the United States and Puerto Rico as
each Holder of such Securities shall reasonably request (provided, however, that
Company shall not be obligated to qualify as a foreign corporation to do
business under the laws of any jurisdiction in which it is not then qualified or
to file any general consent to service or process), and do such other reasonable
acts and things as may be required of it to enable such Holder to consummate the
disposition in such jurisdiction of the Securities covered by such Registration
Statement;
(e) furnish, at the request of any Holder requesting
registration of Registrable Securities, on the date that such shares of
Registrable Securities are delivered to the underwriters for sale pursuant to
such registration or, if such Registrable Securities are not being sold through
underwriters, on the date that the Registration Statement with respect to such
shares of Registrable Securities becomes effective, (1) an opinion, dated such
date, of the independent counsel representing Company for the purposes of such
registration, addressed to the underwriters, if any, in customary form
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and covering matters of the type customarily covered in such legal opinions; and
(2) a comfort letter dated such date, from the independent certified public
accountants of Company, addressed to the underwriters, in a customary form and
covering matters of the type customarily covered by such comfort letters and as
the underwriters shall reasonably request. Such opinion of counsel shall
additionally cover such other legal matters with respect to the registration in
respect of which such opinion is being given as such underwriters may reasonably
request;
(f) enter into customary agreements (including an underwriting
agreement in customary form) and take such other actions as are reasonably
required in order to expedite or facilitate the disposition of such Registrable
Securities;
(g) otherwise use its reasonable best efforts to comply with
all applicable rules and regulations of the SEC, and make earnings statements
satisfying the provisions of Section 11(a) of the Securities Act generally
available to the Holders no later than 45 days after the end of any twelve-month
period (or 90 days, if such period is a fiscal year) (i) commencing at the end
of any fiscal quarter in which Registrable Securities are sold to underwriters
in an underwritten public offering, or (ii) if not sold to underwriters in such
an offering, beginning with the first month of Company's first fiscal quarter
commencing after the effective date of the Registration Statement, which
statements shall cover said twelve-month periods;
(h) use its reasonable best efforts to cause all such
Registrable Securities to be listed on each securities exchange or quotation
system on which similar securities issued by Company are listed or traded;
(i) give written notice to Holders:
(i) when such Registration Statement or any amendment thereto has
been filed with the SEC and when such Registration Statement or any
post-effective amendment thereto has become effective;
(ii) of any request by the SEC for amendments or supplements to such
Registration Statement or the prospectus included therein or for
additional information;
(iii) of the issuance by the SEC of any stop order suspending the
effectiveness of such Registration Statement or the initiation of any
proceedings for that purpose;
(iv) of the receipt by Company or its legal counsel of any
notification with respect to the suspension of the qualification of the
Class A Common Stock for sale in any jurisdiction or the initiation or
threatening of any proceeding for such purpose; and
(v) of the happening of any event that requires Company to make
changes in such Registration Statement or the prospectus in order to make
the statements therein not misleading (which notice shall be accompanied
by an
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instruction to suspend the use of the prospectus until the requisite
changes have been made);
(j) use its reasonable best efforts to prevent the issuance or
obtain the withdrawal of any order suspending the effectiveness of such
Registration Statement at the earliest possible time;
(k) furnish to each Holder, without charge, at least one copy
of such Registration Statement and any post-effective amendment thereto,
including financial statements and schedules, and, if the Holder so requests in
writing, all exhibits (including those, if any, incorporated by reference);
(l) upon the occurrence of any event contemplated by Section
6(h)(v) above, promptly prepare a post-effective amendment to such Registration
Statement or a supplement to the related prospectus or file any other required
document so that, as thereafter delivered to Holders, the prospectus will not
contain an untrue statement of a material fact or omit to state any material
fact necessary to make the statements therein, in light of the circumstances
under which they were made, not misleading. If Company notifies the Holders in
accordance with Section 6(h)(v) above to suspend the use of the prospectus until
the requisite changes to the prospectus have been made, then the Holders shall
suspend use of such prospectus, and the period of effectiveness of such
Registration Statement provided for above shall be extended by the number of
days from and including the date of the giving of such notice to the date
Holders shall have received such amended or supplemented prospectus pursuant to
this Section 6(l);
(m) (i) make reasonably available for inspection by a single
representative of the Holders, any underwriter participating in any disposition
pursuant to such Registration Statement and any attorney, accountant or other
agent retained by such representative or any such underwriter all relevant
financial and other records, pertinent corporate documents and properties of
Company and (ii) cause Company's officers, directors and employees to supply all
relevant information reasonably requested by such representative or any such
underwriter, attorney, accountant or agent in connection with the registration;
provided that the foregoing inspection and information gathering shall be
coordinated on behalf of the Purchaser by Purchaser and on behalf of the other
parties, by one counsel designated by and on behalf of such other parties; and
(n) in connection with any underwritten offering, make
appropriate officers of Company available to the selling security holders for
meetings with prospective purchasers of the Registrable Securities and prepare
and present to potential investors customary "road show" material in a manner
consistent with other new issuances of Securities similar to the Registrable
Securities, in connection with any proposed sale of the Registrable Securities
in an aggregate offering of at least $100,000,000.
It shall be a condition precedent to the obligation of Company to
take any action pursuant to this Agreement in respect of the Securities which
are to be registered
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at the request of any Holder that such Holder shall furnish to Company such
information regarding the Securities held by such Holder and the intended method
of disposition thereof as Company shall reasonably request and as shall be
required in connection with the action taken by Company.
7. Expenses. All expenses incurred in complying with the provisions
of this Agreement, including, without limitation, all registration and filing
fees (including all expenses incident to filing with the NASD), printing
expenses, fees and disbursements of counsel for Company, the reasonable fees and
expenses of a single counsel for the selling security holders (selected by those
holding a majority of the securities being registered determined based upon the
value thereof), expenses of any special audits incident to or required by any
such registration and expenses of complying with the Securities or blue sky laws
of any jurisdiction pursuant to Section 6(d), shall be paid by Company, except
that:
(a) all such expenses in connection with any amendment or
supplement to the Registration Statement or prospectus filed more than 180 days
after the effective date of such Registration Statement because any Holder has
not effected the disposition of the Securities requested to be registered shall
be paid by such Holder; and
(b) Company shall not be liable for any fees, discounts or
commissions to any underwriter or any fees or disbursements of counsel for any
underwriter in respect of the Securities sold by such Holder.
8. Indemnification and Contribution.
(a) In the event of any registration of any Registrable
Securities under the Securities Act pursuant to this Agreement, Company shall
indemnify and hold harmless the Holder of such Registrable Securities, such
Holder's directors and officers, and each other person (including each
underwriter) to the extent permitted by law who participated in the offering of
such Registrable Securities and each other person, if any, who controls such
Holder or such participating person within the meaning of the Securities Act,
against any losses, claims, damages or liabilities, joint or several, to which
such Holder or any such director or officer or participating person or
controlling person may become subject under the Securities Act or any other
statute or at common law, insofar as such losses, claims, damages or liabilities
(or actions in respect thereof) arise out of or are based upon (i) any alleged
untrue statement of any material fact contained, on the effective date thereof,
in any Registration Statement under which such Securities were registered under
the Securities Act, any preliminary prospectus or final prospectus contained
therein, or any amendment or supplement thereto, or (ii) any alleged omission to
state therein a material fact required to be stated therein or necessary to make
the statements therein not misleading, and shall reimburse such Holder or such
director, officer or participating person or controlling person for any legal or
any other expenses reasonably incurred by such Holder or such director, officer
or participating person or controlling person in connection with investigating
or defending any such loss, claim, damage, liability or action; provided that
the foregoing indemnity with respect to any preliminary prospectus shall not
inure to the benefit of any indemnified party from whom
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the person asserting such losses, claims, damages, liabilities, expenses and
judgments purchased securities if such untrue statement or omission or alleged
untrue statement or omission made in such preliminary prospectus is eliminated
or remedied in the prospectus and a copy of the prospectus shall not have been
furnished to such person in a timely manner, unless such prospectus was not
furnished because Company failed to provide the indemnified party with
sufficient copies of such corrected prospectus within the time period required;
provided, further that Company shall not be liable in any case to the extent
such losses, claims, damages or liabilities arise out of or are based upon any
untrue statement or actual or alleged omission made in such Registration
Statement, preliminary prospectus, prospectus or amendment or supplement, in
reliance upon and in conformity with written information furnished to Company by
such Holder or such Holder's directors or officers specifically for use therein,
or (in the case of any underwritten offering) so furnished for such purpose by
any underwriter.
(b) Each Holder, by acceptance hereof, agrees to indemnify and
hold harmless Company, its directors and officers and each other person, if any,
who controls Company within the meaning of the Securities Act against any
losses, claims, damages or liabilities, joint or several, to which Company or
any such director or officer or any such person may become subject under the
Securities Act or any other statute or at common law, insofar as such losses,
claims, damages or liabilities (or actions in respect thereof) arise out of or
are based upon information in writing provided to Company by such Holder
specifically for use in the following documents and contained, on the effective
date thereof, in any Registration Statement under which Securities were
registered under the Securities Act at the request of such Holder, any
preliminary prospectus or final prospectus contained therein, or any amendment
or supplement thereto. Notwithstanding the provisions of this paragraph (b) or
paragraph (c) below, no Holder shall be required to indemnify any person
pursuant to this Section 8 or to contribute pursuant to paragraph (c) below in
an amount in excess of the amount of the aggregate net proceeds received by such
Holder in connection with any such registration under the Securities Act.
(c) If the indemnification provided for in this Section 8 from
the indemnifying party is unavailable to an indemnified party hereunder in
respect of any losses, claims, damages, liabilities or expenses referred to
therein, then the indemnifying party, in lieu of indemnifying such indemnified
party, shall contribute to the amount paid or payable by such indemnified party
as a result of such losses, claims, damages, liabilities or expenses in such
proportion as is appropriate to reflect the relative fault of the indemnifying
party and indemnified parties in connection with the actions which resulted in
such losses, claims, damages, liabilities or expenses, as well as any other
relevant equitable considerations. The relative fault of such indemnifying party
and indemnified parties shall be determined by reference to, among other things,
whether any action in question, including any untrue or alleged untrue statement
of a material fact or omission or alleged omission to state a material fact, has
been made by, or relates to information supplied by, such indemnifying party or
indemnified parties, and the parties' relative intent, knowledge, access to
information and opportunity to correct or prevent such action. The amount paid
or payable by a party as a result of the losses, claims, damages, liabilities
and expenses referred to above shall be deemed to include any legal
12
<PAGE>
or other fees or expenses reasonably incurred by such party in connection with
any investigation or proceeding. If the allocation provided in this paragraph
(c) is not permitted by applicable law, the parties shall contribute based upon
the relevant benefits received by the Company and the Holders from the sale of
Securities.
The parties hereto agree that it would not be just and equitable if
contribution pursuant to this Section 8(c) were determined by pro rata
allocation or by any other method of allocation which does not take account of
the equitable considerations referred to in the immediately preceding paragraph.
No Person guilty of fraudulent misrepresentation (within the meaning of Section
11(f) of the Securities Act) shall be entitled to contribution from any Person
who was not guilty of such fraudulent misrepresentation.
(d) Any person entitled to indemnification hereunder (the
"Indemnified Party") agrees to give prompt written notice to the indemnifying
party (the "Indemnifying Party") after the receipt by the Indemnified Party of
any written notice of the commencement of any action, suit, proceeding or
investigation or threat thereof made in writing for which the Indemnified Party
intends to claim indemnification or contribution pursuant to this Agreement;
provided, that the failure so to notify the Indemnifying Party shall not relieve
the Indemnifying Party of any liability that it may have to the Indemnifying
Party hereunder unless such failure is materially prejudicial to the
Indemnifying Party. If notice of commencement of any such action is given to the
Indemnifying Party as above provided, the Indemnifying Party shall be entitled
to participate in and, to the extent it may wish, to assume the defense of such
action at its own expense, with counsel chosen by it and reasonably satisfactory
to such Indemnified Party. The Indemnified Party shall have the right to employ
separate counsel in any such action and participate in the defense thereof, but
the fees and expenses of such counsel shall be paid by the Indemnified Party
unless (i) the Indemnifying Party agrees to pay the same, (ii) the Indemnifying
Party fails to assume the defense of such action, (iii) the named parties to any
such action (including any impleaded parties) have been advised by such counsel
that either (A) representation of such Indemnified Party and the Indemnifying
Party by the same counsel would be inappropriate under applicable standards of
professional conduct or (B) there are one or more legal defenses available to it
which are substantially different from or additional to those available to the
Indemnifying Party. No Indemnifying Party shall be liable for any settlement
entered into without its written consent, which consent shall not be
unreasonably withheld.
(e) The agreements contained in this Section 8 shall survive
the transfer of the Registered Securities by any Holder and sale of all the
Registrable Securities pursuant to any registration statement and shall remain
in full force and effect, regardless of any investigation made by or on behalf
of any Holder or such director, officer or participating or controlling person.
9. Certain Additional Limitations on Registration Rights.
Notwithstanding the other provisions of this Agreement, Company shall not be
obligated to register the Registrable Securities of any Holder (i) if, in the
opinion of counsel to Company reasonably satisfactory to the Holder and its
counsel (or, if the Holder has
13
<PAGE>
engaged an investment banking firm, to such investment banking firm and its
counsel), the sale or other disposition of such Holder's Registrable Securities,
in the manner proposed by such Holder (or by such investment banking firm), may
be effected without registering such Registrable Securities under the Securities
Act, (ii) such Holder or any underwriter of such Registrable Securities shall
fail to furnish to Company necessary information in respect of the distribution
of such Registrable Securities, or (iii) if such registration involves an
underwritten offering, such Registrable Securities are not included in such
underwritten offering on the same terms and conditions as shall be applicable to
the other Securities being sold through underwriters in the registration or such
Holder fails to enter into an underwriting agreement in customary form with the
underwriter or underwriters selected for such underwritten offering. In
addition, each Holder agrees not to effect any public sale or distribution of
any Registrable Securities or of any securities convertible into or exchangeable
or exercisable for such Registrable Securities, including a sale pursuant to
Rule 144 under the Securities Act and to enter into a customary lock-up
agreement with the managing underwriter for an offering, during the 90-day
period beginning on the effective date of any Demand Registration Statement
(initiated by such Holder) or Piggy-Back Registration Statement or other
underwritten offering (initiated by the Company) (except as part of such
registration), if and to the extent requested by the managing underwriter for
such offering.
10. Limitations on Registration of Other Securities; Representation.
From and after the date of this Agreement, except for the Equity Registration
Rights Agreement, Company shall not, without the prior written consent of a
majority in interest of the Holders, enter into any agreement with any holder or
prospective holder of any Securities of Company giving such Holder or
prospective holder any registration rights the terms of which are as or more
favorable taken as a whole than the registration rights granted to the Holders
hereunder unless Company shall also give such rights to the Holders hereunder.
11. No Inconsistent Agreements. Company will not hereafter enter
into any agreement with respect to its Securities which is inconsistent in any
material respects with the rights granted to the Holders in this Agreement.
12. Selection of Managing Underwriters. The managing underwriter or
underwriters for any offering of Registrable Securities to be registered
pursuant to Sections 2 or 3 hereto shall be selected by Holders of a majority of
the securities being so registered and shall be acceptable to Company.
13. Miscellaneous.
(a) Remedies. Each Holder, in addition to being entitled to
exercise all rights granted by law, including recovery of damages, will be
entitled to specific performance of its rights under this Agreement. Company
agrees that monetary damages would not be adequate compensation for any loss
incurred by reason of a breach by it of the provisions of this Agreement and
hereby agrees to waive the defense in any action for specific performance that a
remedy at law would be adequate. In any action or proceeding brought to enforce
any provision of this Agreement or where any provision
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<PAGE>
hereof is validly asserted as a defense, the successful party shall be entitled
to recover reasonable attorneys' fees in addition to any other available remedy.
(b) Amendments and Waivers. Except as otherwise provided
herein, the provisions of this Agreement may not be amended, modified or
supplemented, and waivers or consents to departure from the provisions hereof
may not be given unless Company has obtained the written consent of a majority
in interest of the Holders.
(c) Notice Generally. Any notice, demand, request, consent,
approval, declaration, delivery or other communication hereunder to be made
pursuant to the provisions of this Agreement shall be sufficiently given or made
if in writing and either delivered in person with receipt acknowledged or sent
by overnight courier mail, return receipt requested, postage prepaid, or by
telecopy and confirmed by telecopy answerback, addressed as follows:
(i) If to any Holder, at its last known address appearing on the
books of Company maintained for such purpose.
(ii) If to Company, at
c/o Metromedia Company
One Meadowlands Plaza
East Rutherford, New Jersey 07073
Attention: General Counsel
Telecopy Number: (201) 531-2803
with a copy to:
Paul, Weiss, Rifkind, Wharton & Garrison
1285 Avenue of the Americas
New York, New York 10019-6064
Attention: Douglas A. Cifu
Telecopy Number: (212) 757-3990
or at such other address as may be substituted by notice given as herein
provided.
The giving of any notice required hereunder may be waived in writing by
the party entitled to receive such notice. Every notice, demand, request,
consent, approval, declaration, delivery or other communication hereunder shall
be deemed to have been duly given or served on the date on which personally
delivered, with receipt acknowledged, telecopied and confirmed by telecopy
answerback or three (3) Business Days after the same shall have been sent by
overnight courier.
(d) Successors and Assigns. This Agreement shall inure to the
benefit of and be binding upon the successors and assigns of each of the parties
hereto including any person to whom Registrable Securities are transferred in
accordance with the Stockholders Agreement.
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(e) Headings. The headings in this Agreement are for
convenience of reference only and shall not limit or otherwise affect the
meaning hereof.
(f) Governing Law; Jurisdiction. This Agreement shall be
governed by, construed and enforced in accordance with the laws of the State of
New York without giving effect to the conflict of laws provisions thereof. Each
of the parties hereby submits to personal jurisdiction and waives any objection
as to venue in the County of New York, State of New York. Service of process on
the parties in any action arising out of or relating to this Agreement shall be
effective if mailed to the parties in accordance with Section 13(c) hereof. The
parties hereto waive all right to trial by jury in any action or proceeding to
enforce or defend any rights hereunder.
(g) Severability. Wherever possible, each provision of this
Agreement shall be interpreted in such manner as to be effective and valid under
applicable law, but if any provision of this Agreement shall be prohibited by or
invalid under applicable law, such provision shall be ineffective to the extent
of such prohibition or invalidity, without invalidating the remainder of such
provision or the remaining provisions of this Agreement.
(h) Entire Agreement. This Agreement represents the complete
agreement and understanding of the parties hereto in respect of the subject
matter contained herein. This Agreement supersedes all prior agreements and
understandings between the parties with respect to the subject matter hereof.
[Signatures appear on next page.]
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<PAGE>
IN WITNESS WHEREOF, the parties hereto have executed this Agreement
as of the date first above written.
METROMEDIA FIBER NETWORK, INC.
By:_____________________________________
Name:
Title:
BELL ATLANTIC INVESTMENTS, INC.
By:_____________________________________
Name:
Title:
17
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EXHIBIT 10.5
================================================================================
STOCKHOLDERS AGREEMENT
by and among
METROMEDIA FIBER NETWORK, INC.,
BELL ATLANTIC INVESTMENTS, INC.
and
THE STOCKHOLDERS LISTED ON SCHEDULE I HERETO
Dated as of ___________ __, ____
================================================================================
<PAGE>
TABLE OF CONTENTS
Page
----
ARTICLE I DEFINITIONS.......................................................1
Section 1.1 Certain Definitions..........................................1
Section 1.2 Other References.............................................4
ARTICLE II COVENANTS OF THE PURCHASER........................................5
Section 2.1 Purchase Restrictions........................................5
Section 2.2 Sale Restrictions............................................6
Section 2.3 Other Standstill Restrictions...............................11
ARTICLE III ADDITIONAL PROVISIONS............................................15
Section 3.1 Additional Shares...........................................15
Section 3.2 Tag-Along Rights............................................15
Section 3.3 Directors...................................................19
Section 3.4 Rule 144....................................................19
ARTICLE IV MISCELLANEOUS....................................................19
Section 4.1 Specific Performance........................................19
Section 4.2 Entire Agreement............................................19
Section 4.3 Amendment...................................................20
Section 4.4 Term........................................................20
Section 4.5 Severability................................................20
Section 4.6 Notices.....................................................20
Section 4.7 Governing Law...............................................21
Section 4.8 Successors and Assigns......................................22
Section 4.9 No Recourse.................................................22
Section 4.10 Counterparts...............................................22
Schedule I -- Stockholders
i
<PAGE>
STOCKHOLDERS AGREEMENT
STOCKHOLDERS AGREEMENT, dated as of ________ __, ____ (this
"Agreement"), by and among Metromedia Fiber Network, Inc., a Delaware
corporation (the "Company"), and Bell Atlantic Investments, Inc., a Delaware
corporation (the "Purchaser"), and for purposes of Sections 3.2 and Section 3.3
and Article 4 only, the stockholders of the Company listed on Schedule I hereto
(each a "Stockholder" and collectively, the "Stockholders").
WHEREAS, pursuant to a Securities Purchase Agreement, dated as of
October 7, 1999 (the "Securities Purchase Agreement"), between the Company and
the Purchaser, the Purchaser has agreed to purchase up to 25,558,109 shares (the
"Shares") of the Company's Class A Common Stock, par value $.01 per share (the
"Class A Common Stock"), and has agreed to acquire up to $975,281,364 aggregate
principal amount of 6.15% Convertible Subordinated Notes (the "Notes") that are
convertible, subject to certain conditions, into shares of Class A Common Stock;
and
WHEREAS, as a condition to the willingness of the Company to enter
into the Securities Purchase Agreement, the Company has required that the
Purchaser enter into, and the Purchaser has agreed to enter into, this Agreement
with respect to the Shares and the Notes.
NOW, THEREFORE, in consideration of the foregoing and the mutual
covenants and agreements contained herein, and intending to be legally bound
hereby, the parties hereto hereby agree as follows:
ARTICLE I
DEFINITIONS
Section 1.1 Certain Definitions. As used in this Agreement:
(a) The term "Acquisition Proposal" shall mean a bona fide
written proposal received by the Company from any Person or Group that
contemplates a transaction which, if effected, would constitute a Change of
Control of the Company.
(b) The term "Affiliate" shall have the meaning given such
term in Rule 12b-2 under the Exchange Act.
(c) The terms "Beneficial Ownership" and "Beneficial Owner"
shall have the meanings given such terms in Section 13(d)(3) of the Exchange Act
and the rules and regulations promulgated thereunder, and for purposes of
<PAGE>
2
determining Beneficial Ownership for purposes of Sections 2.1 and 4.4 only, the
Notes shall be deemed immediately convertible into shares of Class A Common
Stock.
(d) The term "Board of Directors" shall mean the Company's
Board of Directors.
(e) The term "Change of Control" shall mean the occurrence of
any of the following: (i) any Person or Group, other than a Permitted Holder, is
or becomes the Beneficial Owner, directly or indirectly, of 35% or more of the
Voting Stock (measured by voting power rather than number of shares) (for the
purposes of this clause, such other Person shall be deemed to Beneficially Own
any voting stock of a specified corporation held by a parent corporation if such
other person beneficially owns, directly or indirectly, more than 35% of the
voting stock (measured by voting power rather than by number of shares) of such
parent corporation and the Permitted Holders beneficially own, directly or
indirectly, in the aggregate a lesser percentage of voting stock (measured by
voting power rather than by number of shares) of such parent corporation and do
not have the right or ability by voting power, contract or otherwise to elect or
designate for election a majority of the board of directors of such parent
corporation), (ii) during any period of two consecutive years, Continuing
Directors cease for any reason to constitute a majority of the Board of
Directors of the Company, (iii) the Company consolidates or merges with or into
any other Person, or any Person consolidates with, or merges with or into, the
Company, other than a consolidation or merger (a) of the Company into a wholly
owned subsidiary of the Company or (b) pursuant to a transaction in which the
outstanding Voting Stock of the Company is changed into or exchanged for cash,
securities or other property with the effect that the beneficial owners of the
outstanding Voting Stock immediately prior to such transaction, beneficially
own, directly or indirectly, at least a majority of the voting stock (measured
by voting power rather than number of shares) of the surviving corporation
immediately following such transaction, (iv) the sale, 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 to any person other than a wholly
owned subsidiary of the Company or a Permitted Holder or a person more than 50%
of the voting stock (measured by voting power rather than by number of shares)
of which is owned, directly or indirectly, following such transaction or
transactions by the Permitted Holders; provided, however, that sales, transfers,
conveyances or other dispositions in the ordinary course of business of capacity
on fiber optic or cable systems owned, controlled or operated by the Company or
any of its subsidiaries or of telecommunications capacity or transmission
rights, rights of way or conduit acquired by the Company or any subsidiaries for
use in the business of the Company or any of its subsidiaries, including,
without limitation, for sale, lease, transfer, conveyance or other disposition
to any customer of the Company or any subsidiaries shall not be
<PAGE>
3
deemed a disposition of assets for purposes of this clause (iv) , or (v) the
adoption of a plan relating to the total liquidation of the Company.
(f) The term "Class B Common Stock" shall mean the Company's
Class B Common Stock, par value $.01 per share.
(g) The term "Common Stock" shall mean collectively the shares
of Class A Common Stock and the shares of Class B Common Stock determined as a
single class assuming that all outstanding shares of Class B Common Stock had
been converted into shares of Class A Common Stock on the determination date.
(h) The term "Continuing Directors" shall mean individuals who
at the beginning of the period of determination constituted the Board of
Directors, together with any new directors whose election by Board of Directors
or whose nomination for election by the shareholders of the Company was approved
by a vote of a majority of the Board of Directors then still in office who were
either directors at the beginning of such period or whose election or nomination
for election was previously so approved or is the designee of any one of the
Permitted Holders or any combination thereof or was nominated or elected by any
such Permitted Holder(s) or any of their designees.
(i) The term "Equity Registration Rights Agreement" shall mean
the Equity Registration Rights Agreement dated as of the date hereof between the
Purchaser and the Company, as the same may be amended from time to time.
(j) The term "Exchange Act" shall mean the Securities Exchange
Act of 1934, as amended or any successor act thereto, and the rules and
regulations promulgated thereunder from time to time.
(k) The term "Form 13F Filer" shall mean any Person required
under Section 13(f) of the Exchange Act to file a Form 13F or that would be a
Person that would satisfy the requirements under Rule 13d-1(b)(1)(i) and
(ii)(A-F, H or I) under the Exchange Act with respect to the acquisition of
securities of the Company, including as a result of a Transfer of Shares or
Notes from the Purchaser and such Person's permitted transferees.
(l) The term "Governmental Entity" shall mean any nation or
government, any state, local or other political subdivision thereof, any court,
arbitrator, official, agency, department or other Person exercising executive,
legislative, judicial, regulatory or administrative functions of or pertaining
to government, or any federal, state or local governmental or regulatory agency,
authority, commission or instrumentality.
<PAGE>
4
(m) The term "Group" shall have the meaning given such term in
Section 13(d)(3) of the Exchange Act and the rules and regulations promulgated
thereunder.
(n) The term "Notes Registration Rights Agreement" shall mean
the Notes Registration Rights Agreement dated as of the date hereof between the
Purchaser and Company, as the same may be amended from time to time.
(o) The term "Permitted Holder" shall mean Metromedia Company,
its general partners and their respective Related Persons and Persons that would
constitute a Class B Permitted Holder, each as defined in the Company's Amended
and Restated Certificate of Incorporation as in effect on the date hereof.
(p) The term "Person" shall mean any individual, sole
proprietorship, partnership, limited liability company, joint venture, trust,
unincorporated organization, association, corporation, institution, public
benefit corporation, entity or government (whether foreign, federal, state,
county, city, municipal or otherwise, including any instrumentality, division,
agency, body or department thereof).
(q) The term "Securities Act" shall mean the Securities Act of
1933, as amended or any successor act thereto, and the rules and regulations
promulgated thereunder from time to time.
(r) The term "Voting Stock" shall mean (i) the Class A Common
Stock, the Class B Common Stock and any other securities issued by the Company
having the ordinary power to vote in the election of directors of the Company
(other than securities having such power only upon the happening of a
contingency), and (ii) the common stock and any other securities issued by any
successor to the Company pursuant to a merger, consolidation or reorganization
having the ordinary power to vote in the election of directors of such successor
company (other than securities having such power only upon the happening of a
contingency).
(s) The term "Transfer" shall have the meaning given such term
under Section 2.2(a) hereof.
Section 1.2 Other References. As used herein, any references to
specified numbers (but not percentages) of Shares, Class A Common Stock, Class B
Common Stock or Common Stock shall be deemed to be references to such number of
Shares, Class A Common Stock, Class B Common Stock or Common Stock as may be
adjusted in the event of any change in the capital stock of the Company by
reason of stock dividends, split-ups, reverse split-ups, mergers,
recapitalizations, subdivisions, conversions, exchanges of shares or the like
occurring after the date of this Agreement.
<PAGE>
5
ARTICLE II
COVENANTS OF THE PURCHASER
Section 2.1 Purchase Restrictions. (a) Other than the purchase of
the Shares and the Notes pursuant to the Securities Purchase Agreement, the
Purchaser shall not, and shall cause its Affiliates or any Group including the
Purchaser or any of its Affiliates not to acquire shares of Class A Common Stock
or any other Voting Stock, which when combined with shares of Class A Common
Stock and Notes then owned by the Purchaser and its Affiliates would result in
the Purchaser Beneficially Owning more than 22% of the shares of the Common
Stock then issued and outstanding (the "Standstill Cap"), except for any such
purchases by the Purchaser approved by the Board of Directors or otherwise
permitted hereunder; provided, however, that (i) if the Company or any
Stockholder Transfers to any Person or Group shares of Class A Common Stock such
that as a result of such Transfer, such Person or Group would Beneficially Own
22% or more of the shares of Common Stock then issued and outstanding and such
Person or Group is subject to an agreement with the Company restricting or
prohibiting the acquisition of Beneficial Ownership of additional shares of
Class A Common Stock similar to the provisions of this Section 2.1 and with
provisions similar to those contained in Section 2.3 hereof, the Standstill Cap
will be increased to that maximum percentage of shares of Voting Stock the
Beneficial Ownership of which such other Person or Group is permitted to acquire
pursuant to such agreement to the extent it exceeds the Standstill Cap and the
provisions of this Agreement will be deemed modified so they are no less
favorable taken as a whole than those set forth in such agreement with such
other Person or Group, or (ii) if the Company or any Stockholder Transfers to
any Person or Group shares of Class A Common Stock such that as a result of such
Transfer, such Person or Group would Beneficially Own 22% or more of the shares
of the Common Stock then issued and outstanding and such Person or Group is not
subject to an agreement with the Company restricting or prohibiting the
acquisition of Beneficial Ownership of additional shares of Class A Common Stock
similar to the provisions of this Section 2.1 and with provisions similar to
those contained in Section 2.3 hereof, the Standstill Cap and this Agreement
will be terminated automatically without the requirement that any Person takes
any additional action.
(b) Nothing in this Section 2.1 shall require the Purchaser or
its Affiliates to transfer any Shares or Notes if the aggregate percentage
ownership of the Purchaser and its Affiliates is increased as a result of a
reduction in the number of outstanding shares of Common Stock resulting from an
action taken solely by the Company or its Affiliates (including, specifically,
Metromedia Company) including, without limitation, by reason of any
reclassification, recapitalization, stock split, reverse stock split,
combination or exchange of shares, redemption, repurchase or cancellation of
shares or any other similar transaction.
<PAGE>
6
(c) In the event that the Company shall adopt a stockholder
rights or other preferred rights or "poison pill" plan with provisions that are
triggered by the acquisition of Beneficial Ownership (or any similar concept) of
a specified percentage of the Common Stock (a "Trigger Percentage"), the Company
agrees that, for purposes of determining application of the stockholder rights
plan to the Purchaser, the plan will be deemed to refer to "22%" in all cases
where it in fact refers to any Trigger Percentage that is below 22%.
Section 2.2 Sale Restrictions. (a) The Purchaser shall not, and
shall not cause or permit its Affiliates or any Group, including the Purchaser
or any of its Affiliates to, directly or indirectly, offer, sell, transfer,
assign, exchange, grant an option to purchase, hedge, short sell, encumber,
pledge, hypothecate or otherwise dispose of the Beneficial Ownership of Shares
or any Notes, whether in one or more transactions (any such act or series of
acts, a "Transfer"), except as permitted by this Agreement and otherwise in
compliance with all applicable requirements of law, which any such noncompliance
would have an adverse effect or impact on the Company. In addition, except for
Transfers pursuant to a Public Resale (as defined below) or sales to a Form 13F
Filer, Purchaser may not Transfer any Shares or Notes if immediately after
giving effect to such Transfer the transferee and its Affiliates or any Group
would Beneficially Own 5% or more of the outstanding shares of Common Stock,
unless prior to or simultaneously with any such Transfer, such transferee agrees
in writing to be bound by the terms and conditions of this Agreement. To the
extent any Transfer permitted hereunder requires the approval of the Company or
its Board of Directors, the Company and/or its Board of Directors shall not
unreasonably delay delivering such consent.
(b) The Purchaser shall not, and shall not cause or permit its
Affiliates or any Group including the Purchaser or any of its Affiliates to
Transfer, directly or indirectly, any Shares or any Notes, other than in one or
more of the following transactions: (i) a Transfer of Shares or Notes any time
after ________, 2000(1/) pursuant to (A) a bona fide secondary offering of
Shares or Notes registered under the Securities Act effectuated through the
exercise by the Purchaser or its permitted transferee of its registration rights
as contemplated by Section 2, 3 or 4 of the Equity Registration Rights Agreement
or by Section 2, 3 or 4 of the Notes Registration Rights Agreement, (B) a
purchase agreement with a placement agent or group of placement agents covering
the Shares, Notes or any Derivative Securities (as defined in the Equity
Registration Rights Agreement) that contemplates the immediate resale of
securities by such placement agent pursuant to the resale exemption provided by
Rule 144A promulgated under the Securities Act solely to Qualified Institutional
Buyers (as defined in the Securities Act) and other permitted purchasers under
Rule 144A or to "off-shore purchasers" in a Transfer permitted by Regulation S
promulgated under the Securities Act (any such transaction, a "Rule 144A/ Reg S
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(1/) Six month anniversary of the First Closing Date.
<PAGE>
7
Transaction"), or (C) bona fide "brokers transactions" as permitted by or as
otherwise permitted by the exemption from registration of the resale of the
Shares under the Securities Act provided by Rule 144 promulgated thereunder;
provided that in the case of each of clauses (A) through (C), no Person or Group
other than a Form 13F Filer, to the Purchaser's knowledge (and the Purchaser
shall require any underwriter or placement agent for such Transfer to agree to
use its reasonable efforts to so ensure), would Beneficially Own in excess of 5%
of the Common Stock then issued and outstanding immediately after giving effect
to such Transfer (a Transfer made pursuant to this clause (i) referred to as a
"Public Resale") and any such Transfer also complies with the limitations
specified in Section 2.2(d) below; and (ii) any other Transfer which has been
approved by the Board of Directors.
(c) From and after ________, 2000(2/) until __________,
2001,(3/) the Purchaser shall not, and shall not cause or permit its Affiliates
or any Group including the Purchaser or any of its Affiliates to Transfer,
directly or indirectly, any Shares or any Notes to any Person that, to the
knowledge of the Purchaser, would result, immediately after giving effect to
such Transfer, in such Person Beneficially Owning more than 5% of the shares of
Common Stock then issued and outstanding, except (i) a Transfer approved by the
Board of Directors, (ii) a Transfer constituting a Public Resale, or (iii) a
Transfer to any Person that is, and immediately after giving effect to such
Transfer, would be a Form 13F Filer.
(d) In addition to the foregoing restrictions, from and after
________, 2000(4/) until ________, 2001,(5/) the Purchaser shall not, and shall
not cause or permit its Affiliates or any Group including the Purchaser or any
of its Affiliates to Transfer, directly or indirectly, any Shares or any Notes
(including any Derivative Securities) that would otherwise be permitted by this
Section 2.2(b) or (c) if, immediately after giving effect to such Transfer, the
Purchaser and its Affiliates would no longer Beneficially Own and own as of
record at least 50% of the number of the Shares and 50% of the aggregate
principal amount of the Notes that were originally acquired by the Purchaser
pursuant to the Securities Purchase Agreement; provided, however, that the
limitations contained in this Section 2.2(d) shall not apply to Transfers by the
Purchaser exercising its Tag-Along Right (as defined below) as provided in and
in accordance with Section 3.2.
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(2/) First anniversary of the First Closing Date.
(3/) Second anniversary of the First Closing Date.
(4/) Six month anniversary of the First Closing Date.
(5/) 18 month anniversary of the First Closing Date.
<PAGE>
8
(e) From and after ________, 2001,(6/) if the Purchaser has
received a bona fide offer to buy all or any portion of its Shares or Notes from
any Person (a "Third Party Offeror") and desires to accept such offer (in each
case, a "Third Party Offer"), the Purchaser shall send a written notice (an
"Offering Notice") to the Company, which shall state (A) the number and/or
principal amount of Shares and/or Notes proposed to be transferred to the
Third-Party Offeror (the "Offered Securities"), (B) the proposed purchase price
per Share and/or per Note to be paid by the Third Party Offeror (the "Offer
Price"), (C) the name of the Third Party Offeror, and (D) the proposed closing
date for the Third Party Offer (the "Third Party Closing Date") which date shall
not be sooner than 30 days from the date an Offering Notice is received (as
determined under Section 4.6 hereof) by the Company. The Offering Notice shall
also state any other material terms and conditions of the Third Party Offer and
shall include copies of the contemplated definitive agreements (to the extent
available and, if not available, drafts thereof that are the most recent
versions thereof) for the Third Party Offer and all writings between the Third
Party Offeror and the Purchaser that would be reasonably necessary for Purchaser
to establish the terms and conditions of the Third Party Offer. For
clarification purposes, it is understood and agreed that the provisions of this
Section 2.2(e) shall not apply to a Transfer by Purchaser that constitutes a
Public Resale.
(i) The Offering Notice shall not be effective unless
and until all of the following conditions are met: (A) the Offering Notice shall
be accompanied by a certificate of the Purchaser to the Company stating that the
Third Party Offer has been approved by the boards of directors (or the
equivalent if the Third Party Offeror is not a corporation) of the Third Party
Offeror (if required by such Third Party Offeror and solely to the Purchaser's
knowledge based on representations and warranties of the Third Party Offeror),
and that Purchaser has made the Third Party Offeror aware of the rights of the
Company contained in this Section 2.2(e), and that if as a result of such
Transfer of Offered Securities the Third Party Offeror would, immediately after
giving effect to such Transfer (except if the Third-Party Offeror would be a
Form 13F Filer immediately after giving effect to such Transfer), Beneficially
Own 5% or more of the Company's then issued and outstanding shares of Common
Stock, such Person will be obligated to become a party to this Agreement and
agree in writing to be bound by the terms and conditions hereof to the same
extent and in the same manner as the Purchaser; (B) the Offer Price shall be
payable wholly in cash; and (C) the Third Party Offeror shall have furnished
evidence satisfactory to the Company in its reasonable judgment as to the
financial ability or resources of such Third Party Offeror to consummate the
proposed purchase.
(ii) For a period of 30 days after the receipt (as
determined under Section 4.6 hereof) of the Offering Notice pursuant to
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(6/) Second anniversary of the First Closing Date.
<PAGE>
9
Section 2.2(e)(i) (the "Option Period"): (A) the Company or its designees shall
have the right to purchase all of the Offered Securities at a purchase price
equal to the Offer Price and upon the terms and conditions of the Third Party
Offer; or (B) if the Company and its designees do not elect to purchase all of
the Offered Securities pursuant to clause (A) of this Section 2.2(e)(ii), the
Purchaser shall have the right to sell, to the Third Party Offeror upon the
terms and conditions set forth in the Third Party Offer, that number of Shares
and/or Notes specified in the Offering Notice.
(iii) The option of the Company or its designees under
Section 2.2(e)(ii)(A) shall be exercisable by delivering written notice of the
exercise thereof, which shall be irrevocable, prior to the expiration of the
Option Period, to the Purchaser. Such notice shall state that the Company or its
designees desires to purchase the Offered Securities pursuant to Section
2.2(e)(ii)(A). The failure of the Company to deliver such written notice prior
to the expiration of the Option Period to the Purchaser shall be deemed to be a
waiver of its rights under Section 2.2(e)(ii)(A). The tender of such notice
shall constitute agreement by the Company to purchase from the Purchaser the
Offered Securities at the Offer Price and on the terms and conditions set forth
in the Offering Notice and shall include evidence satisfactory to Purchaser in
its reasonable judgment as to Company's or its designee's financial ability or
resources to consummate the proposed purchase, which agreement can be made
subject to financing only to the same extent that the Third Party Offer is so
subject.
(iv) The closing of the purchase of Offered Securities
subscribed to by the Company or its designees under Section 2.2(e)(ii)(A) shall
be held at the principal office of the Company at 10:00 a.m., local time, on the
Third Party Closing Date or at such other time and place as the parties to the
transaction may agree; provided that the Third Party Closing Date shall be
extended to a later date not to exceed 60 days after such Third Party Closing
Date if the Transfer has not been consummated by the Third Party Closing Date as
a result solely of a failure to obtain a required consent or approval of any
Governmental Entity and the parties are using reasonable commercial efforts to
obtain such required consent or approval; provided, further, that such 60-day
period shall be extended until such required regulatory consents or approvals
are obtained if the delay in obtaining such required regulatory consents and
approvals is solely as a result of the failure of the Company to cooperate in a
commercially reasonable manner with the Purchaser in obtaining the required
regulatory consents and approvals for such Transfer. At such closing, the
Purchaser shall deliver to the Company or its designees certificates
representing the Offered Securities, duly endorsed with a signature guarantee
for transfer and accompanied by all requisite transfer taxes, if any, and such
Offered Securities shall be free and clear of any liens, claims, options,
charges, encumbrances or rights ("Liens") (other than those arising hereunder),
and the Purchaser shall so represent and warrant, and shall further represent
and warrant that it is the beneficial and record owner of such Offered
Securities. The Company or its designees shall, at such closing, deliver to the
Purchaser payment in full in immediately available funds for
<PAGE>
10
the Offered Securities purchased by it. At such closing, all of the parties to
the transaction shall execute such additional documents as are otherwise
necessary or appropriate.
(v) Unless the Company or its designees elect to
purchase all of the Offered Securities pursuant to Section 2.2(e)(ii)(A), the
Purchaser may sell such portions of its Shares and/or Notes as can be sold under
Section 2.2(e)(ii)(B) to the Third Party Offeror on the terms and conditions of
the Third Party Offer; provided, however, that such sale is bona fide and made
prior to or on the Third Party Closing Date or such later date not to exceed 60
days after such Third Party Closing Date as the Purchaser and the Third Party
Offeror may agree if the Transfer has not been consummated by the Third Party
Closing Date as a result solely of a failure to obtain consent or approval of
any Governmental Entity and the parties are using reasonable commercial efforts
to obtain such consent or approval; provided, further, that such 60-day period
shall be extended until the required regulatory consents or approvals are
obtained if the delay in obtaining such required regulatory consents and
approvals is solely a result of the failure of the Company to cooperate in a
commercially reasonable manner with the Purchaser in obtaining such required
regulatory consents and approvals. If such sale is not consummated prior to or
on the Third Party Closing Date for any reason, except as the same may be
extended as provided above, then the restrictions provided for in this Section
2.2(e) shall again become effective, and no Transfer of such Offered Securities
may be made thereafter (other than to an Affiliate or pursuant to a Transfer
that constitutes a Public Resale) by the Purchaser without again offering the
same to the Company in accordance with this Section 2.2(e). The Company shall
take such actions as the Purchaser reasonably requests, at the Purchaser's sole
cost and expense, to facilitate the Transfer of the Offered Securities to the
Third Party Offeror pursuant to the Third Party Offer.
(f) Subject to Section 2.1(a), nothing in this Agreement shall
prevent or restrict the Purchaser from Transferring any Shares or Notes to any
direct or indirect majority-owned subsidiary of Bell Atlantic Corporation to
whose board of directors or comparable governing body Bell Atlantic Corporation
appointed a majority of the members, provided, that, any such transferee shall
agree in writing to be bound hereby and no such Transfer shall act as a novation
of the Purchaser's obligations hereunder unless the consolidated net worth, as
determined in accordance with U.S. generally accepted accounting principles, of
the transferee prior to and after giving effect to such Transfer equals $2
billion and the transferee provides reasonably satisfactory evidence of such
consolidated net worth.
(g) In the event (i) the Company elects to redeem outstanding
Notes pursuant to the provisions of Section 3.07 of the Indenture dated as of
the date hereof (the "Indenture") between the Company and U.S. Bank Trust
National Association prior to the occurrence of the Regulatory Relief Date (as
defined in the Indenture), (ii) the Regulatory Relief Date has occurred and the
Purchaser
<PAGE>
11
desires to convert outstanding Notes but it may not so convert such Notes due to
the provisions of Section 4.01 of the Indenture related to the Franchise
Agreements (as defined in the Indenture), or (iii) the Company takes any of the
actions referred to in Section 2.1(b) and, as a result, the Purchaser would
Beneficially Own in excess of 10% of the shares of then issued and outstanding
Common Stock, then notwithstanding the provisions of this Agreement, the
Purchaser may (x) irrevocably Transfer without otherwise complying with the
provisions of this Agreement such Notes, in the case of clauses (i) and (ii), or
such shares of Common Stock in excess of such 10% threshold in the case of
clause (iii) above, to a liquidating trust so that after giving effect to such
Transfer, (1) in the case of clauses (i) and (ii), it no longer Beneficially
Owns or owns of record following such Transfer (though Purchaser shall remain
entitled to the net proceeds of such liquidating trust) such Notes, and
immediately convert such Notes as provided in Section 4.01 of the Indenture, or,
(2) in the case of clause (iii), Transfer without otherwise complying with the
provisions of this Agreement such shares of Common Stock to a liquidating trust
so it Beneficially Owns less than 10% of the then issued and outstanding shares
of Common Stock, (y) cause such trust to simultaneously, or at such other time
as provided in the trust agreement or similar governing documents for such
trust, convert all such Notes into shares of Class A Common Stock in accordance
with Article 4 of the Indenture and/or (z) cause such trust to Transfer such
Notes, shares of Class A Common Stock obtained upon conversion of Notes or
shares of Class A Common Stock Transferred to such trust in the case of clause
(iii) in a Public Resale and distribute the proceeds of such Transfer to the
Purchaser, all as provided in the trust agreement or similar governing documents
for such trust. The Company shall take such actions as the Purchaser reasonably
requests, at the Purchaser's sole cost and expense, to facilitate the Transfer
of the Notes or shares of Class A Common Stock to the liquidating trust pursuant
to this Section 2.2(g). Nothing set forth herein shall be deemed to amend or
modify the provisions of Article 4 of the Indenture.
(h) The Company shall cause its transfer agent to issue
certificates for shares of Class A Common Stock transferred by Purchaser or any
of its permitted transferees in accordance with this Section 2.2 that do not
contain the second legend specified in Section 2.3(b) of the Securities Purchase
Agreement, as directed by the Purchaser or any such permitted transferee, unless
the transferee continues to be bound by the terms of this Agreement.
Section 2.3 Other Standstill Restrictions. (a) The Purchaser
covenants to and agrees with the Company that, except as it may be specifically
permitted by this Agreement, or as contemplated by the Securities Purchase
Agreement or the Indenture, it will not, and will cause each of its Affiliates
not to, directly or indirectly, unless it is expressly invited to do so by the
Company or any of its authorized representatives or advisors:
(i) in any way acquire or agree to acquire Beneficial
Ownership of any securities or any direct or indirect rights or options to
<PAGE>
12
acquire Beneficial Ownership of any securities of the Company in violation
of Section 2.1 of this Agreement;
(ii) make any public announcement with respect to, or
submit to the Company or any of its directors, officers, representatives,
employees, attorneys, advisers, agents or Affiliates (whether publicly or
otherwise) any proposal for, the acquisition of Voting Stock with respect
to any merger, consolidation, business combination or Acquisition Proposal
involving the Company or its Affiliates, or for or with respect to any
purchase of a substantial portion of the assets of the Company or its
Affiliates, whether or not any parties other than the Purchaser and its
Affiliates are involved and whether or not such proposal might require the
making of a public announcement by the Company;
(iii) make, or in any way participate in, any
"solicitation" of "proxies" to vote any Voting Stock or become a
"participant" in any "election contest" (as such terms are defined or used
in Regulation 14A under the Exchange Act, as such Regulation is currently
in effect);
(iv) propose any matter for submission to a vote of
stockholders of the Company;
(v) form, join or in any way participate in a Group with
respect to any Voting Stock of the Company;
(vi) grant any proxy with respect to any Voting Stock to
any Person not approved by the Company;
(vii) deposit any Voting Stock in a voting trust or
subject any Voting Stock to any arrangement or agreement with respect to
the voting of such Voting Stock or other agreement having similar effect,
except as provided in Section 2.2(g);
(viii) take any action which would be reasonably likely
to require the Company to make a public announcement regarding any of the
matters specified in this Section 2.3(a)(i)-(xii);
(ix) enter into any negotiations, arrangements or
understandings with any third party with respect to any of the foregoing,
or any discussions designed to advise, assist or encourage any third party
in connection with any of the foregoing;
(x) disclose publicly any intention, plan or arrangement
inconsistent with the foregoing;
<PAGE>
13
(xi) otherwise act, alone or in concert with others, to
seek to control or influence the management, Board of Directors or
policies of the Company (except as a result of the good faith actions
taken by any person that serves on the Board of Directors, solely in such
person's capacity as a director); or
(xii) request the Company (or any of its officers,
directors, representatives, employees, attorneys, advisors, agents or
Affiliates) to waive, amend or modify any provisions of Section
2.3(a)(i)-(xi).
(b) The Purchaser will not be in breach of this Section 2.3 if
it or any of its Affiliates (or either of their authorized representatives or
advisors) (i) seek permission to privately and confidentially present a proposal
to the Company to allow the Purchaser and/or its Affiliates to take any action
described in Section 2.3(a) above which is presented in a manner reasonably
formulated based on the advice of counsel so as not to require public disclosure
by the Company of such presentation or proposal, but if the Company refuses to
grant permission to present the proposal, neither the Purchaser nor its
Affiliates shall take further action in connection therewith except as otherwise
permitted by this Section 2.3, or (ii) present or propose commercial
relationships in the ordinary course of business, including those similar to
those contemplated by the Fiber Optic Private Network Agreement, dated October
7, 1999, by and between Bell Atlantic Global Networks, Inc. and Metromedia Fiber
Network Services, Inc.
(c) Notwithstanding any provision of Section 2.1, 2.2 and
2.3(a) to the contrary, in the event that (i) the Company and any Person or
Group enter into a definitive agreement for an Acquisition Proposal, (ii) a bona
fide tender or exchange offer, or a bona fide proxy or consent solicitation
subject to Section 14 of the Exchange Act to elect or remove at least a majority
of directors of the Company, by any Person or Group (other than the Company)
which would result, if consummated in accordance with its terms, in a Change of
Control is, in either case, announced and it is either (A) approved or
recommended by the Board of Directors or (B) within 10 days of the receipt of
such offer by the Company (or such longer time as is then permitted by the
appropriate regulations under the Exchange Act) of such tender or exchange offer
or proxy or consent solicitation, the Board of Directors has not publicly
rejected the offer or has taken no position on such offer, or, in the case of
any such proxy or consent solicitation, publicly opposed or taken no position
with respect to such proxy or consent solicitation, (iii) the occurrence of a
Change of Control of the Company, or (iv) the Company and any Person enter into
a definitive agreement providing for a transaction or series of related
transactions that results in the Transfer by the Company of all or substantially
all of its assets, this Agreement shall not prohibit (x) the Purchaser or any of
its Affiliates (unless acting in concert with such Person) from, notwithstanding
the provisions of Section 2.1, (I) making and consummating either a competing
Acquisition Proposal or a tender or exchange offer pursuant to which the
Purchaser or its Affiliates would acquire at least the same
<PAGE>
14
percentage (calculated by voting power) of Company's outstanding Voting Stock as
would be acquired in such non-Purchaser Acquisition Proposal or such
non-Purchaser tender or exchange offer, (II) commencing a competing proxy or
consent solicitation to elect or remove at least a majority of the directors of
the Company, or (III) taking any of the actions prohibited by Section 2.3(a) of
this Agreement (a "Purchaser Response"), or (y) the Transfer by the Purchaser of
its Shares and Notes to any Person without complying with the restrictions set
forth in Section 2.2 or 2.3 of this Agreement. The Purchaser agrees that any
Purchaser Response (including amendments thereto) will provide for consideration
that is no less favorable, taken as a whole, to the Company's stockholders than
that being offer pursuant to such non- Purchaser Acquisition Proposal or such
non-Purchaser tender or exchange offer (taking into account the form of
consideration and the number of shares to be acquired pursuant to such Purchaser
Response). In the event that the transactions contemplated by clauses (i), (ii),
(iii) or (iv) of this Section 2.3(c) shall have been terminated or abandoned
after the bona fide commencement of the Purchaser Response, the Purchaser shall
have the ability, subject to the requirements of the preceding sentence, to
amend or modify its response, and to consummate the transaction contemplated by
the Purchaser Response or such amendment or modification, so long as the
Purchaser shall not have terminated or abandoned its initial response other than
as a result of such amendment or modification. In the event that the
transactions contemplated by clauses (i), (ii), (iii) or (iv) of this Section
2.3(c) shall have been terminated or abandoned prior to the bona fide
commencement of the Purchaser Response, or, if not so terminated or abandoned,
in the event thereafter that such transactions and those contemplated by such
Purchaser Response shall have been terminated or abandoned, all of the
restrictions contained in Sections 2.1, 2.2 and 2.3 shall again be applicable.
(d) Nothing contained within this Section 2.3 shall prevent
the Purchaser or any of its Affiliates from (i) enforcing its rights under this
Agreement, the Securities Purchase Agreement, the Equity Registration Rights
Agreement, the Notes Registration Rights Agreement, the Indenture or the Notes,
the Fiber Optic Private Network Agreement or any other commercial arrangement or
other agreement entered into by the Company or any of its Affiliates and the
Purchaser or any of its Affiliates after the date hereof, or (ii) discussing
with the Company or any of its Affiliates any possible amendments or
modifications with respect to any of the foregoing referred to in clause (i) of
this Section 2.3(d).
(e) Notwithstanding anything herein to the contrary, (i) the
provisions of this Section 2.3 shall automatically terminate if the Company or a
majority of its Board of Directors publicly announces that the Company is "for
sale" or makes any public announcement to the same effect unless and until such
time as the Company issues a contrary public statement, and (ii) the Company, in
its sole and absolute discretion, may waive the provisions of this Section 2.3
as it deems necessary, advisable or appropriate.
<PAGE>
15
(f) Notwithstanding the first proviso to Section 4.01 of the
Indenture, if the Purchaser and any permitted transferee desires to convert any
of the Notes and as a result it would become an "affiliate" for purposes of and
under either of the Franchise Agreements (as defined in the Indenture), the
Company shall consent to any such conversion and instruct the Trustee under the
Indenture to cause such conversion accordingly if, in connection with a demand
for conversion, the Purchaser or any such permitted transferee provides a
satisfactory indemnification to the Company and its subsidiaries against any
additional expenses, fees, taxes or other amounts that would be payable by the
Company or any of its Subsidiaries to any Governmental Entity as a result of the
fact that the Purchaser or any such permitted transferee would be deemed an
"affiliate", in the reasonable opinion of the Company after consultation with
outside counsel, for purposes of any of the Franchise Agreements solely as a
result of such conversion.
ARTICLE III
ADDITIONAL PROVISIONS
Section 3.1 Additional Shares. If, after the date hereof, the
Purchaser acquires Beneficial Ownership of any shares of Class A Common Stock or
acquires any Notes (any such securities shall be referred to herein as
"Additional Securities"), including, without limitation, upon exercise or
conversion of any derivative security or through any stock dividend or stock
split, the provisions of this Agreement applicable to the Shares or Notes shall
be applicable to such Additional Securities as if such Additional Securities had
been outstanding as of the date hereof. The provisions of the immediately
preceding sentence shall be effective with respect to Additional Securities
without action by any Person immediately upon the acquisition by the Purchaser
of record or Beneficial Ownership of such Additional Securities.
Section 3.2 Tag-Along Rights. (a) In the event at any time after the
Stockholders, collectively, Transfer at least an aggregate of 20% of the shares
of Common Stock owned by them as of the date of the Securities Purchase
Agreement and prior to the earliest to occur of (i) the date the Purchaser and
its Affiliates are no longer bound by the provisions of Section 2.1 or (ii) the
date the Purchaser and its Affiliates no longer Beneficially Own in excess of 5%
of the then outstanding shares of Common Stock for a period of 90 consecutive
days, any Stockholder (each a "Selling Stockholder") proposes to Transfer any
shares of Common Stock as of the date hereof owned by such Stockholder to a
non-Affiliated third party, the Selling Stockholder(s) shall have the
obligation, and the Purchaser shall have the right (the "Tag-Along Right"), to
require the proposed transferee (the "Transferee") to purchase (the "Tag-Along
Transfer") from the Purchaser or any of its Affiliates a number of shares of
Class A Common Stock up to or equal to the product (rounded up to the nearest
integer) of (i) the quotient determined by dividing the number of
<PAGE>
16
shares of the Class A Common Stock held by the Purchaser and its Affiliates by
the aggregate number of shares of Common Stock owned by the Selling
Stockholder(s) and the Purchaser and its Affiliates (calculated with respect to
the Purchaser to include any shares of Class A Common Stock that may be received
upon conversion of outstanding Notes, only if such Notes may then be immediately
converted in accordance with their terms prior to or upon such Transfer and the
Purchaser irrevocably notifies the Company that it intends to convert Notes
prior to or concurrently with the Tag-Along Transfer and Transfer the shares of
Class A Common Stock into which they convert to the Transferee of part of the
exercise of its Tag-Along Right and it subsequently converts such Notes, in
which case only such shares of Class A Common Stock obtained upon conversion of
Notes prior to or concurrently with the Tag-Along Transfer shall be included for
purposes of calculating the number of shares owned by the Purchaser and its
Affiliates), and (ii) the number of shares of the Common Stock proposed to be
transferred in the contemplated sale, and at the same price per share and upon
the same terms and conditions offered to the Selling Stockholder(s). The number
of shares of Common Stock to be sold by the Selling Stockholders in such
Tag-Along Transfer shall be reduced by the number of shares of Common Stock that
the Purchaser elects to require the Transferee to purchase in such Tag-Along
Transfer pursuant to the Purchaser's right contained in the preceding sentence.
By way of example only, if Stockholders intend to sell 1,000 shares
of Common Stock to a third party, and at such time such Stockholders own 75,000
shares of Class A Common Stock and the Purchaser owns 20,000 shares of Class A
Common Stock and has notified the Company that it intends to convert Notes to
obtain an additional 5,000 shares of Class A Common Stock (although it has Notes
convertible into more shares of Class A Common Stock) and sell such shares in
connection with the exercise of its Tag-Along Right, then the Purchaser, if it
gives irrevocable notice of such conversion and intention to sell, shall be
entitled to Transfer 250 shares of Class A Common Stock exercising its Tag-Along
Right in such sale (calculated by solving for: (25,000 / (25,000 + 75,000)) x
1,000) and the Selling Stockholder shall be entitled to Transfer the remaining
750 shares of Class A Common Stock in such tag-along sale.
(b) The provisions of Section 3.2(a) shall not apply to any
Transfer by any Stockholder in connection with a Transfer that is (i) an
underwritten offering of securities registered under the Securities Act, (ii) a
sale of securities (including Derivative Securities) that constitutes a Rule
144A/Reg S Transaction, (iii) exempt from registration under the Securities Act
as a result of the applicability of Rule 144 promulgated thereunder; provided
that, from (I) the First Closing Date to ______, 2000,(7/) the Stockholders may
not, directly or indirectly, Transfer any shares of Common Stock pursuant to
this Section 3.2(b), if after giving effect to such
- --------
(7/) Six months from First Closing Date.
<PAGE>
17
Transfer, the Stockholders would collectively no longer Beneficially Own at
least 80% of the number of shares of Common Stock owned by them on the date of
the Securities Purchase Agreement and (II) from _________, 2000(8/) to
_________, 2001,(9/) the Stockholders may not, directly or indirectly, Transfer
any shares of Common Stock pursuant to this Section 3.2(b), if after giving
effect to such Transfer, the Stockholders would collectively no longer
Beneficially Own a number of shares of Common Stock equal to the difference
between (x) 60% of the number of shares of Common Stock owned by them on the
date of the Securities Purchase Agreement minus (y) the shares of Common Stock
Transferred pursuant to clause (I) of this Section 3.2(b).
(c) The Selling Stockholder(s) shall give written notice (the
"Tag-Along Notice") to the Purchaser of each proposed Transfer giving rise to
the Tag-Along Right which shall state (i) the maximum number of shares of Class
A Common Stock proposed to be Transferred, (ii) the proposed purchase price per
share of Class A Common Stock, (iii) the name of the transferee, and (iv) the
proposed closing date for the Transfer, which date shall be no sooner than 30
days from the date the Tag-Along Notice is received (as determined under Section
4.6 hereof) by the Purchaser. The Tag-Along Notice shall also state any other
material terms and conditions of the proposed Transfer, and shall include copies
of the contemplated definitive agreements for the offer (to the extent available
and, if not available, drafts thereof that are the most recent versions thereof)
and all writings between the Selling Stockholder(s) and the transferee necessary
to establish the terms and conditions of the offer. The Tag-Along Notice shall
not be effective unless and until (A) the Tag- Along Notice shall be accompanied
with a certificate of the Selling Stockholder(s) to the Purchaser stating that
the offer has been approved by the board of directors (or the equivalent if the
offeror is not a corporation) of the offeror (if required by such offeror and
solely to the Selling Stockholder's knowledge based on representations and
warranties of the offeror), and that such Selling Stockholder(s) have made the
offeror aware of the rights of the Purchaser contained in, and that any Transfer
by the Selling Stockholders is subject to this, Section 3.2(b), (B) the
consideration to be received by the Purchaser in the Tag-Along Transfer consists
entirely of cash and/or securities of a Person, which securities are registered
under the Exchange Act and are traded on the New York Stock Exchange, the
American Stock Exchange, The Nasdaq National Market or any successor or
equivalent securities exchange, and (C) the offeror shall furnish evidence
satisfactory to the Purchaser in its reasonable judgment as to the financial
ability or resources of such offeror to consummate the proposed purchase if it
is a cash offer.
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(8/) Six month anniversary of First Closing Date.
(9/) 18 month anniversary of First Closing Date.
<PAGE>
18
(d) The Tag-Along Right provided by this Section 3.2 must be
exercised by the Purchaser within the 30-day period following the receipt (as
determined under Section 4.6 hereof) of the Tag-Along Notice by delivery prior
to the end of such 30-day period of a written notice (the "Acceptance Notice")
to the Selling Stockholder(s) stating the Purchaser's desire to exercise its
Tag-Along Right under this Section 3.2 and specifying the number of shares of
Class A Common Stock it desires to sell. The tender of the Acceptance Notice by
the Purchaser shall constitute agreement by the Purchaser to sell in connection
with the Tag-Along Transfer the amount of securities specified and at the price
specified in the Acceptance Notice and otherwise on the terms and conditions set
forth in the notice provided by the Selling Stockholder to the Purchaser.
Failure to deliver the Acceptance Notice within 30 days after delivery of the
Tag-Along Notice shall be deemed a determination by the Purchaser not to
exercise its Tag-Along Right and a waiver of such right. If the sale
contemplated by the Tag-Along Notice is not consummated on the same terms and
conditions as those contained in the Tag-Along Notice for any reason, then the
restrictions provided for herein shall again become effective, and the Selling
Stockholders may not Transfer any shares of Class A Common Stock without
complying with the provisions of this Section 3.2.
(e) The closing of the purchase by the Transferee of the
shares of Class A Common Stock owned by the Purchaser shall be held (i) at the
principal office of the Company on the same day as the closing of the sale from
the Selling Stockholder(s) to the Transferee, or (ii) at such other time and
place as the parties to the applicable transaction may agree; provided that the
date of such closing shall be extended to a later date not to exceed 60 days
after such date of such closing if such closing has not been consummated by such
date of closing as a result solely of a failure to obtain a required consent or
approval of any Governmental Entity and the parties are using reasonable
commercial efforts to obtain such required consent or approval; provided,
further, that such closing shall be extended until such required regulatory
consents and approvals are obtained if the delay in obtaining such required
regulatory consents and approvals is a result of the failure of the Company to
cooperate in a commercially reasonable manner with the Purchaser in obtaining
such required consents and approvals. At such closing, the Selling
Stockholder(s) and the Purchaser shall each deliver certificates representing
the shares of Class A Common Stock being sold, duly authenticated by another
officer of the corporation, for transfer and accompanied by all requisite
transfer taxes, if any, and such shares of Class A Common Stock shall be free
and clear of any Liens other than those arising hereunder. The Purchaser shall
further represent and warrant that it Beneficially Owns such shares of Class A
Common Stock, that it or its designee is the record holder of such shares and
that the delivery of such shares shall convey good and marketable title to such
shares. At such closing, the Transferee shall deliver payment in full in
immediately available funds for the Class A Common Stock purchased by such
Transferee.
<PAGE>
19
(f) From the date hereof until this Agreement is no longer in
effect, the Stockholders will not amend, modify or supplement in any manner or
grant any consent under the letter dated the date of the Securities Purchase
Agreement among the Stockholders and Stephen Garafalo without the Purchaser's
prior consent, which will not be unreasonably withheld, delayed or conditioned.
Section 3.3 Directors. Each Stockholder agrees that in the event the
Purchaser elects to select one or two nominees to the Board of Directors
pursuant to Section 5.2 of the Securities Purchase Agreement, dated as of
October 7, 1999, between the Purchaser and the Company, and so notifies the
Stockholders each year at least 30 days prior to the election held to elect
directors, the Stockholders shall either (i) take all action to nominate and
cause the election of one such person as a Class B Director (as defined in the
Company's Amended Certificate of Incorporation as in effect on the date hereof)
for as long as such Stockholders are entitled to nominate and vote as a separate
class for the election of Class B Directors to the Board of Directors or (ii) if
he or it does not own any shares of Class B Common Stock, vote his or its shares
of Class A Common Stock in favor of any Purchaser nominee to the Board of
Directors nominated pursuant to the Securities Purchase Agreement.
Section 3.4 Rule 144. The Company covenants that it shall file any
reports required to be filed by it under the Exchange Act; and that it shall
take such further action as may be reasonably necessary (including providing any
information necessary to comply with Rule 144 under the Securities Act), all to
the extent required from time to time to enable the Purchaser and its Affiliates
to Transfer Shares or Notes (including the shares of Class A Common Stock
underlying the Notes) without registration under the Securities Act within the
limitation of the exemptions provided by (a) Rule 144 under the Securities Act,
as such rules may be amended from time to time, or (b) any similar rules or
regulations hereafter adopted by the Securities and Exchange Commission. The
Company shall, upon the request of the Purchaser and its Affiliates, deliver to
such Purchaser and its Affiliates a written statement as to whether it has
complied with such requirements.
ARTICLE IV
MISCELLANEOUS
Section 4.1 Specific Performance. The parties hereto agree that
irreparable damage would occur in the event any provision of this Agreement was
not performed in accordance with the terms hereof and that the parties shall be
entitled to specific performance of the terms hereof, in addition to any other
remedy at law or in equity. It is accordingly agreed that the parties shall be
entitled to an injunction or injunctions to prevent or cure breaches of the
provisions of this Agreement and to enforce specifically the terms and
provisions of this Agreement.
<PAGE>
20
Section 4.2 Entire Agreement. This Agreement, the Securities
Purchase Agreement, the Equity Registration Rights Agreement and Notes
Registration Rights Agreement and the Indenture constitute the entire agreement
between Company and the Purchaser with respect to the subject matter hereof and
supersedes all prior agreements and understandings, both written and oral,
between Company and the Purchaser with respect to the subject matter hereof.
Section 4.3 Amendment. This Agreement may not be amended except by
an instrument in writing signed by the Company and the Purchaser, except that
any amendment to the provisions of Sections 3.2 and 3.3 shall require the
consent of the Stockholders.
Section 4.4 Term. Except as otherwise expressly provided herein,
this Agreement shall terminate on the earliest to occur of (i) the 90th
consecutive day on which the Purchaser does not Beneficially Own 5% or more of
the then issued and outstanding shares of Common Stock, (ii) 30 days following
delivery of a notice to the Stockholders of a material breach by any Stockholder
of the provisions of Section 3.2 or 3.3 of this Agreement, if such breach has
not been cured during such period or (iii) the tenth anniversary of the date
hereof.
Section 4.5 Severability. If any term or other provision of this
Agreement is invalid, illegal or incapable of being enforced by any rule or law,
or public policy, all other conditions and provisions of this Agreement shall
nevertheless remain in full force and effect so long as the economic or legal
substance of this Agreement is not affected in any manner materially adverse to
any party. Upon such determination that any term or other provision is invalid,
illegal or incapable of being enforced, the parties hereby shall negotiate in
good faith to modify this Agreement so as to effect the original intent of the
parties as closely as possible to the fullest extent permitted by applicable law
in a mutually acceptable manner in order that the terms of this Agreement remain
as originally contemplated.
Section 4.6 Notices. All notices and other communications given or
made pursuant hereto shall be in writing and shall be deemed to have been duly
given or made and shall be effective (a) upon receipt if delivered personally,
(b) upon receipt of a transmission confirmation if sent by facsimile (with a
confirming copy sent by overnight courier), and (c) on the next business day if
sent by Federal Express, United Parcel Service, Express Mail or other reputable
overnight courier to the parties at the following addresses (or at such other
address for a party as shall be specified by notice):
If to the Purchaser, to:
Bell Atlantic Investments, Inc.
1095 Avenue of the Americas
30th Floor
<PAGE>
21
New York, New York 10036
Attn: President
Telecopy Number: (212) 597-2790
with a copy to:
Associate General Counsel - Mergers & Acquisitions
Bell Atlantic Corporation
1095 Avenue of the Americas
New York, New York 10036
Fax: (212) 764-2739
and
Frederick S. Green, Esq.
Weil, Gotshal & Manges LLP
767 Fifth Avenue
New York, NY 10153
Fax: (212) 310-8007
If to the Company, to:
Arnold L. Wadler, Esq.
Metromedia Fiber Networks, Inc.
c/o Metromedia Company
One Meadowlands Plaza
East Rutherford, NJ 07073-2137
Fax: (201) 531-2803
with a copy to:
Douglas A. Cifu, Esq.
Paul, Weiss, Rifkind, Wharton & Garrison
1285 Avenue of the Americas
New York, NY 10019
Fax: (212) 757-3990
If to the Stockholders, to:
c/o Metromedia Company
One Meadowlands Plaza
East Rutherford, NJ 07073-2137
Fax: (201) 531-2803
Section 4.7 Governing Law. The corporate law of the State of
Delaware shall govern all issues concerning the relative rights of the Company
and its
<PAGE>
22
stockholders and the duties and responsibilities of the Company's directors to
the Company and its stockholders. All other questions concerning the
construction, validity and interpretation of this Agreement shall be governed by
and construed in accordance with the laws of the State of New York applicable to
agreements made and to be performed entirely within such state, without giving
effect to any choice of law or conflict of law provisions.
Section 4.8 Successors and Assigns. This Agreement shall be binding
upon and inure to the benefit of the parties and their successors and legal
representatives; provided, however, that this Agreement shall not be binding
upon any transferee of Shares or Notes which receives his, her or its Shares or
Notes pursuant to a Public Resale or, in the case of a Transfer that is not a
Public Resale, only unless otherwise required by Section 2.2(a) hereof. No party
to this Agreement shall be permitted to assign this Agreement; provided, that,
the Purchaser may assign its rights under this Agreement to any Person of the
type described in Section 2.2(f) of this Agreement that agrees in writing to be
bound by the terms of this Agreement.
Section 4.9 No Recourse. Except for the provisions of Sections 3.2
and 3.3, no recourse under this Agreement shall be had against any "controlling
person" (within the meaning of Section 20 of the Exchange Act) of any party or
the stockholders, directors, officers, employees, agents and Affiliates of such
party of such controlling persons, whether by the enforcement or any assessment
or by any legal or equitable proceeding, or by virtue of any regulation, it
being expressly agreed and acknowledged that no personal liability whatsoever
shall attach to, be imposed on or otherwise incurred by any such controlling
person, stockholder, director, officer, employee, agent or Affiliate, as such,
for any obligation or such party under this Agreement or for any claim based on,
in respect of, or by reason of such obligations or their creation.
Section 4.10 Counterparts. This Agreement may be executed in one or
more counterparts, each of which shall be an original and all of which, when
taken together, shall constitute one and the same instrument.
[Signatures appear on the following page.]
<PAGE>
23
IN WITNESS WHEREOF, each of the Purchaser and Company have caused
this Agreement to be duly executed on the date hereof.
METROMEDIA FIBER NETWORK, INC.
By:_____________________________________
Name:
Title:
BELL ATLANTIC INVESTMENTS, INC.
By:_____________________________________
Name:
Title:
Accepted and agreed to for purposes of Sections 3.2, 3.3 and Article 4 only:
METROMEDIA COMPANY
By:______________________________
Name:
Title:
_________________________________
John W. Kluge
_________________________________
Stuart Subotnick
<PAGE>
EXHIBIT 99.1
FOR IMMEDIATE RELEASE Contact:
October 7, 1999 Bell Atlantic
John Johnson
617-743-3677
[email protected]
Metromedia Fiber Network
Ellen Strahs Fader
212-606-4389
[email protected]
Bell Atlantic and Metromedia Fiber Network
Announce Strategic Agreements
Bell Atlantic to Acquire $550 Million of Metromedia Fiber Network's
Fiber Optic Infrastructure and Invest $1.7 Billion in Company
Metromedia Fiber Network Announces Enhanced Network Build Out
NEW YORK-- Bell Atlantic (NYSE:BEL) and Metromedia Fiber Network, Inc.
(NASDAQ:MFNX) today announced a strategic agreement that will speed the
deployment of both Bell Atlantic's data services and Metromedia Fiber Network's
build out plan of its fiber optic infrastructure.
Metromedia Fiber Network (MFN) is an international provider of dedicated
fiber optic networks in major metropolitan markets.
Under an agreement valued at $550 million, MFN will provide dark fiber
infrastructure to Bell Atlantic for a twenty-year period at industry-leading
prices. The agreement will provide Bell Atlantic low-cost access to MFN's
networks in 50 major U.S. metropolitan markets and multiple cities
internationally via MFN's fiber optic infrastructure. Dark fiber is unlit fiber
optic strands that provide virtually unlimited bandwidth for the transmission of
data, voice, video and multi-media communications services.
In addition, Bell Atlantic will invest about $700 million to purchase
approximately 9.9 percent of the equity of MFN through the purchase of newly
issued shares at $28 per share.
Also, as part of the transaction, Bell Atlantic will buy approximately
$975 million in debt securities convertible into common stock at a conversion
price of $34 per share, increasing Bell Atlantic's potential equity investment
in MFN to about 19 percent of the company. MFN will use this new cash infusion
to accelerate the build out of its nationwide dark fiber infrastructure as well
as to enter new markets in the U.S. and internationally.
<PAGE>
"This relationship extends our data network and advances our strategy to
be a nationwide and global provider of leading-edge communications services,"
said Larry Babbio, president and chief operating officer of Bell Atlantic. " It
also complements the reach of the GTE national backbone network and our new
wireless venture with Vodafone. As a result, the combined Bell Atlantic/GTE will
have the capability to better serve its largest existing business customers on
both a regional and national basis."
Howard Finkelstein, president of MFN, said, "We're very pleased that we
have broadened our relationship with Bell Atlantic. This agreement accelerates
the global expansion of our end-to-end pure photonic infrastructure, enabling us
to meet the sophisticated high bandwidth needs of our diverse carrier and
enterprise customer base. In addition, Bell Atlantic not only becomes a premier
customer, but an important anchor tenant."
MFN's recent acquisition of AboveNet also provides additional potential
benefits to Bell Atlantic. AboveNet is a leading provider of high performance
Internet connectivity solutions that include more than 270 peering
relationships, proprietary technology and Internet infrastructure that enables
highly enhanced levels of service in the delivery of mission-critical Internet
applications.
MFN has already announced planned networks covering 25 U.S. markets and
multiple international cities. In connection with this agreement, MFN is
announcing its intention to enter a total of 50 domestic markets and additional
international cities. The transaction also gives Bell Atlantic access to more
than 7,000 planned route miles in the United States and Europe.
"The MFN facilities will enhance the merged Bell Atlantic/GTE
infrastructure and provide our existing large business customers the high
bandwidth services they require regionally and nationally," said Joe Farina,
president and chief executive officer of Bell Atlantic Data Solutions Group.
"This agreement also provides us with the flexibility to deploy capacity where
needed to meet our customers' needs."
The commercial agreement with MFN is consistent with Bell Atlantic's
previously announced plans to build an in-region asynchronous transfer
mode-based long distance network. Bell Atlantic's Data Solutions Group has
already leased dark fiber from MFN in the New York area as part of the network
build out. Other Bell Atlantic business units also will benefit from this
agreement, including Bell Atlantic Mobile.
Completion of this transaction is subject to the expiration of the
Hart-Scott-Rodino waiting period and certain state regulatory and other
approvals.
About Bell Atlantic
Bell Atlantic is at the forefront of the new communications and information
industry. With 43 million telephone access lines and nine million wireless
customers worldwide, Bell Atlantic companies are premier providers of advanced
wireline voice and data services,
<PAGE>
market leaders in wireless services and the world's largest publishers of
directory information. Bell Atlantic companies are also among the world's
largest investors in high-growth global communications markets, with operations
and investments in 23 countries.
About Bell Atlantic Data Solutions Group
Bell Atlantic Data Solutions Group (DSG) www.ba-dsg.com is dedicated to
providing globally integrated network solutions that seamlessly connect
businesses with their customers, partners and employees. DSG provides all
aspects of data networking from the management and operation of customer
networks and network integration, to network transport and advanced IP services
such as intranets and extranets, virtual private networks, web hosting,
multimedia services as well as call center solutions.
About Metromedia Fiber Network
Metromedia Fiber Network is building metropolitan fiber optic infrastructure in
the local loop in strategic Tier One markets, enabling technologically
sophisticated organizations to implement the latest data, video, internet and
multimedia applications. By offering virtually unlimited, unmetered bandwidth at
a fixed cost, Metromedia Fiber Network is eliminating the bandwidth barrier and
redefining the way broadband capacity is sold. For more information about
Metromedia Fiber Network, please visit the company's Web site at www.mmfn.com.
This news release contains certain forward-looking statements that involve risks
and uncertainties. Factors that could cause or contribute to such risks and
uncertainties include, but are not limited to, general economic and business
conditions, competition, changes in technology and methods of marketing, and
various other factors beyond the Company's control. This also includes such
factors as described from time to time in the SEC reports filed by Metromedia
Fiber Network, including the most recently filed Forms 10-K, 10-Q and S-4.
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