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
November 17, 1999
---------------------------------
(Date of earliest event reported)
METROMEDIA FIBER NETWORK, INC.
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(Exact name of Registrant as specified in its charter)
Delaware 000-23269 11-3168327
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(State of Incorporation) (Commission File No.) (IRS Employer
Identification No.)
One North Lexington Avenue,
White Plains, New York 10601
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(Address of principal executive offices, including zip code)
(914) 421-6700
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(Registrant's telephone number, including area code)
Not Applicable
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(Former name or former address, if changed since last report)
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Item 5. Other events.
On November 17, 1999, the Registrant completed its public
underwritten registered offerings of $750 million of its 10% Senior Notes due
2009 and (euro)250 million of its 10% Senior Notes due 2009. The material terms
of the notes are set forth in the indenture between the Registrant and The Bank
of New York, as trustee, which is attached as Exhibit 4.1 to this Current Report
on Form 8-K. In addition, the underwriting agreement relating to the issuance
and sale of the notes is attached as Exhibit 1.1 to this Report. The notes will
mature on December 15, 2009. Interest on the notes will accrue at 10% per annum.
Interest will be payable semi-annually in arrears on June 15 and December 15 of
each year, commencing on June 15, 2000. The notes will be general unsecured
obligations of the Registrant, will rank equal in right of payment with the
Registrant's other existing and future senior unsecured indebtedness and will be
effectively subordinated to the Registrant's existing and future secured
indebtedness to the extent of the assets that secure such indebtedness and to
the Registrant's subsidiaries, existing or future indebtedness, whether or not
secured. The notes will be redeemable on or after December 15, 2004, at the
Registrant's option, in whole or in part, at the prices set forth in the
indenture, together with accrued and unpaid interest, if any, to the redemption
date. In addition, at any time prior to December 15, 2002, the Registrant will
be permitted to redeem up to 35% of the original aggregate principal amount of
each of the Dollar notes and the Euro notes, determined separately, at a
redemption price equal to 110% of the principal amount, in the case of the
Dollar notes redeemed, and 110% of the principal amount, in the case of the Euro
notes redeemed, in each case plus accrued and unpaid interest, if any, through
the date of redemption; provided that at least 65% of the original aggregate
principal amount of each of the Dollar notes and the Euro notes, determined
separately, originally issued pursuant to the indenture remains outstanding
after the redemption and the Registrant uses the net cash proceeds of any public
equity offerings resulting in gross proceeds of at least $100 million. The
indenture contains standard events of default, including defaults in the payment
of principal, premium and interest on the notes, defaults in the compliance with
covenants contained in the indenture, cross-defaults on more than $15 million of
other indebtedness of the Registrant, failure to pay more than $15 million of
judgements and certain events of bankruptcy or insolvency with respect to the
Registrant or its subsidiaries.
Concurrently with the notes offering, certain of the Registrant's
stockholders sold 4,895,000 shares of the Registrant's class A common stock in
an underwritten public offering on November 17, 1999, at $39.4375 per share. The
underwriting agreement relating to this sale of class A common stock is attached
as
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Exhibit 1.2 to this Report. On November 19, 1999, the underwriters for that
offering exercised the over-allotment option granted to them under that
underwriting agreement and accordingly the stockholders sold 734,250 additional
shares of class A common stock. The Registrant did not receive any proceeds from
these sales.
In addition, on November 17, 1999, DECS Trust VI completed its
registered offering of 10,000,000 DECS. DECS Trust VI, which is a closed-end
management investment company and not affiliated with the Registrant, entered
into prepaid forward contracts with certain of the Registrant's stockholders
pursuant to which holders of the DECS may receive cash and/or shares of the
Registrant's class A common stock on or about November 15, 2002. The DECS were
issued at $ 39.4375 per DECS. On November 19, 1999, the underwriters for that
offering exercised the over-allotment option granted to them under the
underwriting agreement relating to the DECS transactions and accordingly DECS
Trust VI sold 1,500,000 additional DECS. The Registrant did not receive any
proceeds from these transactions.
The notes, the shares of class A common stock sold in the secondary
offering by certain of the Registrant's stockholders and the shares of class A
common stock to be delivered to the DECS holders pursuant to the terms of the
DECS have been registered under the Registrant's universal shelf registration
statement on Form S-3 (Registration No.333-89087).
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Item 7. Financial Statements and Exhibits
(a) Financial Statements, Pro Forma Financial Information and Exhibits.
Not applicable.
(b) Pro forma financial statements.
Not applicable.
(c) Exhibits
Exhibit number Description of Exhibit
(Referred to Item 601
of Regulation S-K)
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1.1 Underwriting Agreement, dated as of
November 12, 1999, by and among the
Registrant and Salomon Smith Barney
Inc., Chase Securities Inc., Deutsche
Bank Securities Inc., Donaldson,
Lufkin & Jenrette Securities
Corporation, Goldman, Sachs & Co. and
Morgan Stanley & Co. Incorporated, as
representatives of the underwriters.
1.2 Underwriting Agreement, dated as of
November 12, 1999, by and among the
Registrant, certain selling
stockholders of the Registrant and
Salomon Smith Barney Inc., Credit
Suisse First Boston Corporation,
Deutsche Bank Securities Inc.,
Donaldson, Lufkin & Jenrette
Securities Corporation, Goldman,
Sachs & Co. and Merrill Lynch,
Pierce, Fenner & Smith Incorporated,
as representatives for the
underwriters.
4.1 Indenture, dated as of November 17,
1999, by and between the Registrant
and The Bank of New York, as trustee.
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SIGNATURES
Pursuant to the requirements of the Securities Exchange Act of 1934,
the registrant has duly caused this report to be signed on its behalf by the
undersigned hereunto duly authorized.
METROMEDIA FIBER NETWORK, INC.
By: /s/ Gerard Benedetto
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Name: Gerard Benedetto
Title: Chief Financial Officer
Date: November 24, 1999
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EXHIBIT INDEX
Exhibit number Description of Exhibit
(Referred to Item 601
of Regulation S-K)
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1.1 -- Underwriting Agreement, dated as of
November 12, 1999, by and among
Metromedia Fiber Network, Inc. and
Salomon Smith Barney Inc., Chase
Securities Inc., Deutsche Bank
Securities Inc., Donaldson, Lufkin &
Jenrette Securities Corporation,
Goldman, Sachs & Co. and Morgan
Stanley & Co. Incorporated, as
representatives of the underwriters.
1.2 -- Underwriting Agreement, dated as of
November 12, 1999, by and among
Metromedia Fiber Network, Inc.,
certain selling stockholders of
Metromedia Fiber Network, Inc. and
Salomon Smith Barney Inc., Credit
Suisse First Boston Corporation,
Deutsche Bank Securities Inc.,
Donaldson, Lufkin & Jenrette
Securities Corporation, Goldman,
Sachs & Co. and Merrill Lynch,
Pierce, Fenner & Smith Incorporated,
as representatives for the
underwriters.
4.1 -- Indenture, dated as of November 17,
1999, by and between Metromedia Fiber
Network, Inc. and The Bank of New
York, as trustee.
Exhibit 1.1
Metromedia Fiber Network, Inc.
$750,000,000 10% Senior Notes Due 2009
(euro)250,000,000 10% Senior Notes Due 2009
Underwriting Agreement
New York, New York
November 12, 1999
SALOMON SMITH BARNEY INC.
CHASE SECURITIES INC.
DEUTSCHE BANK SECURITIES INC.
DONALDSON, LUFKIN & JENRETTE SECURITIES CORPORATION
GOLDMAN, SACHS & CO.
MORGAN STANLEY & CO. INCORPORATED
As Representatives of the several Underwriters,
c/o Salomon Smith Barney Inc.
388 Greenwich Street
New York, New York 10013
Ladies and Gentlemen:
Metromedia Fiber Network, Inc., a Delaware corporation (the
"Company"), proposes to sell to the underwriters named in Schedule II hereto
(the "Underwriters"), for whom Salomon Smith Barney Inc., Chase Securities Inc.,
Deutsche Bank Securities Inc., Donaldson, Lufkin & Jenrette Securities
Corporation, Goldman, Sachs & Co. and Morgan Stanley & Co. Incorporated (the
"Representatives") are acting as representatives, an aggregate of $750,000,000
principal amount of its 10% Senior Notes due 2009 (the "U.S. Securities") and an
aggregate of (euro)250,000,000 principal amount of its 10% Senior Notes due 2009
(the "International Securities" and together with the U.S. Securities, the
"Securities"). The Securities are to be issued under an indenture (the
"Indenture") to be entered into between the Company and The Bank of New York, as
trustee (the "Trustee"). To the extent there are no additional Underwriters
listed on Schedule II other than you, the term Representatives as used herein
shall mean you, as Underwriters, and
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the terms Representatives and Underwriters shall mean either the singular or
plural as the context requires. Any reference herein to the Registration
Statement, the Basic Prospectus, any Preliminary Final Prospectus or the Final
Prospectus shall be deemed to refer to and include the documents incorporated or
deemed to be incorporated by reference therein pursuant to Item 12 of Form S-3
which were filed under the Exchange Act on or before the Effective Date of the
Registration Statement or the issue date of the Basic Prospectus, any
Preliminary Final Prospectus or the Final Prospectus, as the case may be (the
"Incorporated Documents"); and any reference herein to the terms "amend",
"amendment" or "supplement" with respect to the Registration Statement, the
Basic Prospectus, any Preliminary Final Prospectus or the Final Prospectus shall
be deemed to refer to and include the filing of any document under the Exchange
Act after the Effective Date of the Registration Statement or the issue date of
the Basic Prospectus, any Preliminary Final Prospectus or the Final Prospectus,
as the case may be, deemed to be incorporated therein by reference. Certain
terms used herein are defined in Section 17 hereof.
1. Representations and Warranties. The Company represents and warrants to,
and agrees with, each Underwriter as set forth below in this Section 1.
(a) The Company meets the requirements for use of Form S-3 under the
Act and has prepared and filed with the Commission a Registration
Statement (file number 333-89087) on Form S-3, including a Basic
Prospectus, for registration under the Act of the offering and sale of the
Securities. The Company may have filed one or more amendments thereto,
including a Preliminary Final Prospectus, each of which has previously
been furnished to you. The Company will next file with the Commission one
of the following: (1) after the Effective Date of such Registration
Statement, a final prospectus supplement relating to the Securities in
accordance with Rules 430A and 424(b), (2) prior to the Effective Date of
such Registration Statement, an amendment to such Registration Statement
(including the form of final prospectus supplement) or (3) a final
prospectus in accordance with Rules 415 and 424(b). In the case of clause
(1), the Company has included in such Registration Statement, as amended
at the Effective Date, all information (other than Rule 430A Information)
required by the Act and the rules thereunder to be included in such
Registration Statement and the Final Prospectus. As filed, such final
prospectus supplement or such amendment and form of final prospectus
supplement shall contain all Rule 430A Information, together with all
other such required information, and, except to the extent the
Representatives shall agree in writing to a modification, shall be in all
substantive respects in the form furnished to you prior to the Execution
Time or, to the extent not completed at the Execution Time, shall contain
only such specific additional information and other changes (beyond that
contained in the Basic Prospectus and any Preliminary Final Prospectus) as
the Company has advised you, prior to the Execution Time, will be
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included or made therein. The Registration Statement, at the Execution
Time, meets the requirements set forth in Rule 415(a)(1)(x).
(b) On the Effective Date, the Registration Statement did or will,
and when the Final Prospectus is first filed (if required) in accordance
with Rule 424(b) and on the Closing Date (as defined herein), the Final
Prospectus (and any supplement thereto) will, comply in all material
respects with the applicable requirements of the Act, the Exchange Act and
the Trust Indenture Act and the respective rules thereunder; on the
Execution Time, the Registration Statement, as supplemented by any
prospectus supplement filed pursuant to Rule 424(b), did not or will not
contain any 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; on the Effective
Date and on the Closing Date the Indenture did or will comply in all
material respects with the applicable requirements of the Trust Indenture
Act and the rules thereunder; and, on the Effective Date, the Final
Prospectus, if not filed pursuant to Rule 424(b), will not, and on the
date of any filing pursuant to Rule 424(b) and on the Closing Date, the
Final Prospectus (together with any supplement thereto) will not, include
any untrue statement of a material fact or omit to state a material fact
necessary in order to make the statements therein, in the light of the
circumstances under which they were made, not misleading; provided,
however, that the Company makes no representations or warranties as to (i)
that part of the Registration Statement which shall constitute the
Statement of Eligibility and Qualification (Form T-1) under the Trust
Indenture Act of the Trustee or (ii) the information contained in or
omitted from the Registration Statement or the Final Prospectus (or any
amendment or supplement thereto) in reliance upon and in conformity with
information furnished in writing to the Company by or on behalf of any
Underwriter through the Representatives specifically for inclusion
therein, it being understood and agreed that the only such information is
that described as such in Section 8(b) of this Agreement.
(c) The Incorporated Documents heretofore filed, when they were
filed (or, if any amendment with respect to any such document was filed,
when such amendment was filed), conformed in all material respects with
the requirements of the Exchange Act and the rules and regulations
thereunder, any further Incorporated Documents so filed will, when they
are filed, conform in all material respects with the requirements of the
Exchange Act and the rules and regulations thereunder; no such document
when it was filed (or, if an amendment with respect to any such document
was filed, when such amendment was filed), contained an untrue statement
of a material fact or omitted to state a material fact necessary to make
the statements therein, in light of the circumstances under which they
were made, not misleading; and no such further document, when it is filed,
will contain an untrue statement of
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a material fact or will omit to state a material fact required to be
stated therein or necessary in order to make the statements therein not
misleading.
(d) Each of the Company and its subsidiaries has been duly
incorporated and is validly existing as a corporation or limited liability
company in good standing under the laws of the jurisdiction in which it is
chartered or organized with full corporate power and authority to own or
lease, as the case may be, and to operate its properties and conduct its
business as described in the Final Prospectus (as then amended or
supplemented), and is duly qualified to do business as a foreign
corporation or limited liability company and is in good standing under the
laws of each jurisdiction which requires such qualification, except where
the failure to be so qualified would not have, singly or in the aggregate,
a material adverse effect on the condition (financial or otherwise),
prospects, earnings, business or properties of the Company and its
subsidiaries, taken as a whole, whether or not arising from transactions
in the ordinary course of business.
(e) All the outstanding shares of capital stock of each subsidiary
that is a corporation have been duly and validly authorized and issued and
are fully paid and nonassessable, and, except as otherwise set forth in
the Final Prospectus, all outstanding shares of capital stock of the
subsidiaries are owned by the Company either directly or through wholly
owned subsidiaries free and clear of any perfected security interest and,
to the knowledge of the Company, any other security interests, claims,
liens or encumbrances.
(f) The Company's authorized capitalization is as set forth in the
Final Prospectus under the heading "Capitalization".
(g) There is no franchise, contract or other document of a character
required to be described in the Registration Statement or Final
Prospectus, or to be filed as an exhibit thereto, which is not described
or filed as required. The statements in the Final Prospectus under the
headings "Certain United States Federal Income Tax Considerations",
"Business--Regulation," "Business-Franchise, License and Related
Agreements," "Business-Regulation of International Operations,"
"Description of the Notes" and "Business--Legal Proceedings" fairly
summarize the matters therein described in all material respects.
(h) This Agreement has been duly authorized, executed and delivered
by the Company; the Indenture has been duly authorized by the Company and,
assuming due authorization, execution and delivery thereof by the Trustee,
when executed and delivered by the Company, will constitute a legal,
valid, binding instrument enforceable against the Company in accordance
with its terms (subject to applicable bankruptcy, reorganization,
insolvency, moratorium, fraudulent conveyance or other laws affecting
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creditors' rights generally from time to time in effect and to general
principles of equity); the Securities have been duly and validly
authorized by the Company, and, when executed, issued and authenticated in
accordance with the provisions of the Indenture and delivered to and paid
for in full by the Underwriters, will have been duly executed and
delivered by the Company and will constitute the legal, valid and binding
obligations of the Company entitled to the benefits of the Indenture
(subject to applicable bankruptcy, insolvency, moratorium, fraudulent
conveyance or other laws affecting creditors' rights generally from time
to time in effect and to general principles of equity).
(i) The Company is not, and after giving effect to the offering and
sale of the Securities and the application of the proceeds thereof as
described in the Final Prospectus, will not be, an "investment company"
required to be registered under the Investment Company Act of 1940, as
amended, without taking account of any exemption arising out of the number
of holders of the Company's securities.
(j) No consent, approval, authorization, filing with or order of any
court or governmental agency or body is required in connection with the
transactions contemplated herein or in the Indenture, except such as will
be obtained under the Act and the Trust Indenture Act in connection with
the registration of the Securities, and such as may be required under the
blue sky laws of any jurisdiction in connection with the purchase and
distribution of the Securities by the Underwriters in the manner
contemplated herein or in the Final Prospectus.
(k) None of the execution and delivery of the Indenture, this
Agreement, the issue and sale of the Securities, the consummation of any
of the transactions contemplated herein or therein or the fulfillment of
the terms hereof or thereof, will conflict with, result in a breach or
violation or imposition of any lien, charge or encumbrance upon any
property or assets of the Company or any of its subsidiaries, pursuant to
(i) the charter or by-laws of the Company or any of its subsidiaries; (ii)
the terms of any indenture, contract, lease, mortgage, deed of trust, note
agreement, loan agreement or other agreement, obligation, condition,
covenant or instrument to which the Company or any of its subsidiaries is
a party or bound or to which its or their property is subject; or (iii)
any statute, law, rule, regulation, judgment, order or decree applicable
to the Company or any of its subsidiaries of any court, regulatory body,
administrative agency, governmental body, arbitrator or other authority
having jurisdiction over the Company or any of its subsidiaries or any of
its or their properties, except in the case of clauses (ii) and (iii), as
could not be reasonably expected to have, singly or in the aggregate, a
material adverse effect on the condition (financial or otherwise),
prospects, earnings, business or properties of the Company and its
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subsidiaries, taken as a whole, whether or not arising from transactions
in the ordinary course of business.
(l) The Securities conform as to legal matters to the description
thereof contained in the Final Prospectus.
(m) The consolidated historical financial statements of the Company
and its consolidated subsidiaries included in the Final Prospectus present
fairly in all material respects the financial condition, results of
operations and cash flows of the Company as of the dates and for the
periods indicated and have been prepared in conformity with generally
accepted accounting principles applied on a consistent basis throughout
the periods involved (except as otherwise noted therein). The selected
financial data set forth under the caption "Selected Consolidated
Financial Data" in the Final Prospectus fairly present, on the basis
stated in the Final Prospectus, the information included therein.
(n) The pro forma financial statements included in the Final
Prospectus include assumptions that provide a reasonable basis for
presenting the significant effects directly attributable to the
transactions and events described therein, the related pro forma
adjustments give appropriate effect to those assumptions, and the pro
forma adjustments reflect the proper application of those adjustments to
the historical financial statement amounts in the pro forma financial
statements included in the Final Prospectus. The pro forma financial
statements included in the Final Prospectus comply as to form in all
material respects with the applicable accounting requirements of
Regulation S-X under the Act and the pro forma adjustments have been
properly applied to the historical amounts in the compilation of those
statements.
(o) No action, suit or proceeding by or before any court or
governmental agency, authority or body or any arbitrator involving the
Company or any of its subsidiaries or its or their property is pending or,
to the best knowledge of the Company, threatened that (i) could reasonably
be expected to have a material adverse effect on the performance of this
Agreement, the Indenture, or the consummation of any of the transactions
contemplated hereby or thereby; or (ii) could reasonably be expected to
have a material adverse effect on the condition (financial or otherwise),
prospects, earnings, business or properties of the Company and its
subsidiaries, taken as a whole, whether or not arising from transactions
in the ordinary course of business, except as set forth in or contemplated
in the Final Prospectus (exclusive of any amendment or supplement
thereto).
(p) Except as described in the Final Prospectus, each of the Company
and each of its subsidiaries owns, licenses, leases or has obtained
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rights-of-way for all such properties as are necessary to the conduct of
its operations as presently conducted. The Company and each of its
subsidiaries has good and marketable title, free and clear of all liens or
encumbrances, to all property and assets described in the Final Prospectus
as being owned by it on the date hereof and such properties and assets are
in good repair and suitable for use as so described except as set forth in
the Final Prospectus. All leases to which the Company or its subsidiaries
are a party are valid and binding (subject to applicable bankruptcy,
reorganization, insolvency, moratorium, fraudulent conveyance or other
laws affecting creditors' rights generally from time to time in effect and
to general principles of equity) and no default has occurred or is
continuing thereunder which could have, singly or in the aggregate, a
material adverse effect on the condition (financial or otherwise),
prospects, earnings, business or properties of the Company and its
subsidiaries, taken as a whole, whether or not arising from transactions
in the ordinary course of business, and the Company and each subsidiary
enjoy peaceful and undisturbed possession under all such leases to which
any of them is a party as lessee with such exceptions as do not interfere
materially with the use made by the Company or such subsidiary.
(q) Neither the Company nor any subsidiary is in violation or
default of (i) any provision of its charter or bylaws; (ii) the terms of
any indenture, contract, lease, mortgage, deed of trust, note agreement,
loan agreement or other agreement, obligation, condition, covenant or
instrument to which it is a party or bound or to which its property is
subject; or (iii) any statute, law, rule, regulation, judgment, order or
decree applicable to the Company or any of its subsidiaries of any court,
regulatory body, administrative agency, governmental body, arbitrator or
other authority having jurisdiction over the Company or such subsidiary or
any of its properties, as applicable, except in the case of clauses (ii)
and (iii) as could not be reasonably expected to have, singly or in the
aggregate, a material adverse effect on the condition (financial or
otherwise), prospects, earnings, business or properties of the Company and
its subsidiaries, taken as a whole, whether or not arising from
transactions in the ordinary course of business.
(r) Each of (i) Deloitte & Touche LLP, (ii) Ernst & Young LLP, and
(iii) PriceWaterhouseCoopers LLP, each of whom have audited certain
financial statements of the Company and its consolidated subsidiaries or
its acquired entities, as the case may be, and delivered their report with
respect to the audited consolidated financial statements included and/or
incorporated by reference in the Final Prospectus are independent public
accountants with respect to the Company within the meaning of the Act and
the applicable published rules and regulations thereunder.
(s) The Company and each subsidiary has filed all foreign, federal,
state and local tax returns that are required to be filed or has
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requested extensions thereof except in any case in which the failure so to
file would not have, singly or in the aggregate, a material adverse effect
on the condition (financial or otherwise), prospects, earnings, business
or properties of the Company and its subsidiaries, taken as a whole,
whether or not arising from transactions in the ordinary course of
business, and has paid all taxes required to be paid by it and any other
assessment, fine or penalty levied against it, to the extent that any of
the foregoing is due and payable, except for any such assessment, fine or
penalty that is currently being contested in good faith or as would not
have, singly or in the aggregate, a material adverse effect on the
condition (financial or otherwise), prospects, earnings, business or
properties of the Company and its subsidiaries, taken as a whole, whether
or not arising from transactions in the ordinary course of business.
(t) No labor problem or dispute with the employees of the Company or
any of its subsidiaries exists or is threatened or imminent that could
have, singly or in the aggregate, a material adverse effect on the
condition (financial or otherwise), prospects, earnings, business or
properties of the Company and its subsidiaries, taken as a whole, whether
or not arising from transactions in the ordinary course of business.
(u) There are no transfer taxes or other similar fees or charges
under Federal law or the laws of any state, or any political subdivision
thereof, required to be paid in connection with the execution and delivery
of this Agreement or the issuance by the Company or sale by the Company of
the Securities.
(v) The Company and each of its subsidiaries are insured by insurers
of recognized financial responsibility against such losses and risks and
in such amounts as are prudent and customary in the businesses in which
they are engaged; all policies of insurance and fidelity or surety bonds
insuring the Company or any of its subsidiaries or their respective
businesses, assets, employees, officers and directors are in full force
and effect; the Company and its subsidiaries are in compliance with the
terms of such policies and instruments in all material respects; and there
are no claims by the Company or any of its subsidiaries under any such
policy or instrument as to which any insurance company is denying
liability or defending under a reservation of rights clause; neither the
Company nor any such subsidiary has been refused any insurance coverage
sought or applied for; and neither the Company nor any such subsidiary has
any reason to believe that it will not be able to renew its existing
insurance coverage as and when such coverage expires or to obtain similar
coverage from similar insurers as may be necessary to continue its
business at a cost that would not have, singly or in the aggregate, a
material adverse effect on the condition (financial or otherwise),
prospects, earnings, business or properties of the Company and
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its subsidiaries, taken as a whole, whether or not arising from
transactions in the ordinary course of business.
(w) Except as described in the Final Prospectus, no subsidiary of
the Company is currently prohibited, directly or indirectly, from paying
any dividends to the Company, from making any other distribution on such
subsidiary's capital stock, from repaying to the Company any loans or
advances to such subsidiary from the Company or from transferring any of
such subsidiary's property or assets to the Company or any other
subsidiary of the Company.
(x) Except as described in the Final Prospectus, the Company and its
subsidiaries (i) possess the certificates, authorizations, approvals,
franchises, licenses, rights-of-way and permits issued by the appropriate
federal, state, local or foreign regulatory authorities necessary to
conduct their respective businesses as presently conducted, (ii) are not
in violation of any such certificates, authorizations, approvals,
franchises, licenses, rights-of-way and permits, except where such
violation would not have a material adverse effect on the condition
(financial or otherwise), prospects, earnings, business or properties of
the Company and its subsidiaries, taken as a whole, whether or not arising
from transactions in the ordinary course of business and (iii) have not
received any notice of proceedings relating to the revocation or
modification of any such certificate, authorization, approval, franchise,
license, right-of-way or permit which, singly or in the aggregate, if the
subject of an unfavorable decision, ruling or finding, would have a
material adverse effect on the condition (financial or otherwise),
prospects, earnings, business or properties of the Company and its
subsidiaries, taken as a whole, whether or not arising from transactions
in the ordinary course of business.
(y) The Company and its subsidiaries possess or have applied for the
patents, patent rights, licenses, inventions, copyrights, know-how
(including trade secrets and other unpatented and/or unpatentable
proprietary or confidential information, systems or procedures),
trademarks, service marks and trade names (collectively, "Intellectual
Property") presently employed by them in connection with the businesses
now operated by them, and neither the Company nor any of the Subsidiaries
has received any notice of infringement of or conflict with asserted
rights of others with respect to the foregoing except as could not have,
singly or in the aggregate, a material adverse effect on the condition
(financial or otherwise), prospects, earnings, business or properties of
the Company and its subsidiaries, taken as a whole, whether or not arising
from transactions in the ordinary course of business. To the Company's
knowledge, the use of such Intellectual Property in connection with the
business and operations of the Company and its subsidiaries does not
infringe on the rights of any person.
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(z) The Company and each of its subsidiaries maintain a system of
internal accounting controls sufficient to provide reasonable assurance
that (i) transactions are executed in accordance with management's general
or specific authorizations; (ii) transactions are recorded as necessary to
permit preparation of financial statements in conformity with generally
accepted accounting principles and to maintain asset accountability; (iii)
access to assets is permitted only in accordance with management's general
or specific authorization; and (iv) the recorded accountability for assets
is compared with the existing assets at reasonable intervals and
appropriate action is taken with respect to any differences.
(aa) The Company and its subsidiaries are (i) in compliance with any
and all applicable foreign, federal, state and local laws and regulations
relating to the protection of human health and safety, the environment or
hazardous or toxic substances or wastes, pollutants or contaminants
("Environmental Laws"); (ii) have received and are in compliance with all
permits, licenses or other approvals required of them under applicable
Environmental Laws to conduct their respective businesses as described in
the Final Prospectus; and (iii) have not received notice of any actual or
potential liability for the investigation or remediation of any disposal
or release of hazardous or toxic substances or wastes, pollutants or
contaminants, except where such non-compliance with Environmental Laws,
failure to receive required permits, licenses or other approvals, or
liability would not, individually or in the aggregate, have a material
adverse effect on the condition (financial or otherwise), prospects,
earnings, business or properties of the Company and its subsidiaries,
taken as a whole, whether or not arising from transactions in the ordinary
course of business; neither the Company nor any of the subsidiaries has
been notified that it has been named as a "potentially responsible party"
under the Comprehensive Environmental Response, Compensation, and
Liability Act of 1980, as amended.
(bb) Except as described in the Final Prospectus, the Company and
its subsidiaries are implementing a comprehensive, detailed program to
analyze and address the risk that the computer hardware and software used
by them may be unable to recognize and properly execute date-sensitive
functions involving certain dates prior to and any dates after December
31, 1999 (the "Year 2000 Problem"), and reasonably believe that such risk
will be remedied on a timely basis without material expense and will not
have a material adverse effect upon the financial condition and results of
operations of the Company and its subsidiaries, taken as a whole.
(cc) Each of the Company and its subsidiaries has fulfilled its
obligations, if any, under the minimum funding standards of Section 302 of
the United States Employee Retirement Income Security Act of 1974, as
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amended ("ERISA"), and the regulations and published interpretations
thereunder with respect to each "plan" (as defined in Section 3(3) of
ERISA and such regulations and published interpretations) in which
employees of the Company and its subsidiaries are eligible to participate
and each such plan is in compliance in all material respects with the
presently applicable provisions of ERISA and such regulations and
published interpretations; the Company and its subsidiaries have not
incurred any unpaid liability to the Pension Benefit Guaranty Corporation
(other than for the payment of premiums in the ordinary course) or to any
such plan under Title IV of ERISA.
(dd) The subsidiaries listed on Schedule III attached hereto are the
only significant subsidiaries of the Company as defined in Rule 1-02 of
Regulation S-X (individually, a "Subsidiary" and collectively, the
"Subsidiaries").
(ee) None of the transactions contemplated by this Agreement
(including, without limitation, the use of the proceeds from the sale of
the Securities) will violate or result in a violation of Section 7 of the
Exchange Act, or any regulation promulgated thereunder, including, without
limitation, Regulations T, U and X of the Board of Governors of the
Federal Reserve System.
(ff) Neither the Company nor any of the subsidiaries is a "holding
company" or a "subsidiary company" of a holding company, or an "affiliate"
thereof required to be registered under the Public Utility Holding Company
Act of 1935, as amended.
(gg) Neither the Company nor any of its subsidiaries nor, to the
Company's knowledge, any employee or agent of the Company or any
subsidiary has made any payment of funds of the Company or any subsidiary
or received or retained any funds in violation of any provision of the
Foreign Corrupt Practices Act of 1977, as amended.
(hh) No "nationally recognized statistical rating organization" as
such term is defined for purposes of Rule 436(g)(2) under the Act has
indicated to the Company that it is considering (i) the downgrading,
suspension or withdrawal of, or any review for a possible change that does
not indicate the direction of the possible change in, any rating assigned
to the Company or any securities of the Company or (ii) any change in the
outlook for any rating of the Company or any securities of the Company.
(ii) No relationship, direct or indirect, exists between or among
the Company or any of its subsidiaries on the one hand, and the directors,
officers, stockholders, customers or suppliers of the Company or any of
its
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subsidiaries on the other hand, which is required by the Act to be
described in the Final Prospectus which is not so described.
(jj) The Company has not taken, directly or indirectly, any action
designed to cause or which has constituted or which might reasonably be
expected to cause or result, under the Exchange Act or otherwise, in the
stabilization or manipulation of the price of any security of the Company
to facilitate the sale or resale of the Securities.
(kk) Except as may have been waived, no holders of securities of the
Company have rights to the registration of such securities under the
Registration Statement.
Any certificate signed by any officer of the Company and delivered to the
Representatives or counsel for the Underwriters in connection with the offering
of the Securities shall be deemed a representation and warranty by the Company,
as to matters covered thereby, to each Underwriter.
2. Purchase and Sale. Subject to the terms and conditions and in reliance
upon the representations and warranties herein set forth, the Company agrees to
sell to each Underwriter, and each Underwriter agrees, severally and not
jointly, to purchase from the Company, at a purchase price of (a) 96.576% of the
principal amount thereof in the case of the U.S. Securities and (b) 96.576% of
the principal amount thereof in the case of the International Securities, in
each case, plus accrued interest, if any, from the Closing Date, the principal
amount of the Securities set forth opposite such Underwriter's name in Schedule
II hereto.
3. Delivery and Payment. Delivery of and payment for the Securities shall
be made on November 17, 1999 at 9:00 A.M., New York City time, at the offices of
Paul, Weiss, Rifkind, Wharton & Garrison, 1285 Avenue of the Americas, New York,
New York 10019 or at such time on such later date not more than three Business
Days after the foregoing date as the Representatives shall designate, which date
and time may be postponed by agreement between the Representatives and the
Company or as provided in Section 9 hereof (such date and time of delivery and
payment for the Securities being herein called the "Closing Date"). Delivery of
the Securities shall be made to the Representatives for the respective accounts
of the several Underwriters against payment by the several Underwriters through
the Representatives of the purchase price thereof to or upon the order of the
Company by wire transfer payable in same-day funds to the account specified by
the Company. The Company shall not be obligated to deliver any of the
Securities, except upon payment for all of the Securities to be purchased as
provided herein. Delivery of the U.S. Securities shall be made through the
facilities of The Depository Trust Company unless the Representatives shall
otherwise instruct, and delivery of the International Securities shall be made
through the facilities of a common depository for Morgan Guarantee Trust Company
of New York as operator of the Euroclear
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System ("Euroclear") and Cedelbank ("Cedel") unless the Representatives shall
otherwise instruct.
4. Offering by Underwriters. It is understood that the several
Underwriters propose to offer the Securities for sale to the public as set forth
in the Final Prospectus. Each of the Underwriters represents and agrees that (i)
it has not offered or sold and will not offer or sell any Securities to persons
in the United Kingdom except to persons whose ordinary activities involve them
in acquiring, holding, managing or disposing of investments (as principal or
agent) for the purposes of their businesses or otherwise in circumstances which
have not resulted and will not result in an offer to the public in the United
Kingdom within the meaning of the Public Offers of Securities Regulations 1995,
(b) it has complied, and will comply, with all applicable provisions of the
Financial Services Act of 1986 of Great Britain with respect to anything done by
it in relation to the Securities in, from or otherwise involving the United
Kingdom, and (c) it has only issued or passed on and will only issue or pass on
in the United Kingdom any document received by it in connection with the
issuance of the Securities to a person who is of a kind described in Article
11(3) of the Financial Services Act 1986 (Investment Advertisements)
(Exemptions) Order 1996 of Great Britain or is a person to whom the document may
otherwise lawfully be issued or passed on.
5. Agreements. The Company agrees with the several Underwriters that:
(a) The Company will use its best efforts to cause the Registration
Statement, if not effective at the Execution Time, and any amendment
thereof, to become effective. Prior to the termination of the offering of
the Securities, the Company will not file any amendment of the
Registration Statement or supplement (including the Final Prospectus or
any Preliminary Final Prospectus) to the Basic Prospectus or any Rule
462(b) Registration Statement unless the Company has furnished you a copy
for your review prior to filing and will not file any such proposed
amendment or supplement without the prior consent of the Representatives,
which consent shall not be unreasonably withheld, conditioned or delayed.
Subject to the foregoing sentence, if the Registration Statement has
become or becomes effective pursuant to Rule 430A, or filing of the Final
Prospectus is otherwise required under Rule 424(b), the Company will cause
the Final Prospectus, properly completed, and any supplement thereto to be
filed with the Commission pursuant to the applicable paragraph of Rule
424(b) within the time period prescribed and will provide evidence
satisfactory to the Representatives of such timely filing. If necessary
for the sale of the Securities, the Company will cause the Rule 462(b)
Registration Statement, completed in compliance with the Act and the
applicable rules and regulations thereunder, to be filed with the
Commission pursuant to Rule 462(b) and will provide evidence satisfactory
to the Representatives of such filing. The Company will
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promptly advise the Representatives (1) when the Registration Statement,
if not effective at the Execution Time, shall have become effective, (2)
when the Final Prospectus, and any supplement thereto, shall have been
filed (if required) with the Commission pursuant to Rule 424(b) or when
any Rule 462(b) Registration Statement shall have been filed with the
Commission, (3) when, prior to termination of the offering of the
Securities, any amendment to the Registration Statement shall have been
filed or become effective, (4) of any request by the Commission or its
staff for any amendment of the Registration Statement, or any Rule 462(b)
Registration Statement, or for any supplement to the Final Prospectus or
for any additional information, (5) of the issuance by the Commission of
any stop order suspending the effectiveness of the Registration Statement
or the institution or threatening of any proceeding for that purpose and
(6) of the receipt by the Company of any notification with respect to the
suspension of the qualification of the Securities for sale in any
jurisdiction or the institution or threatening of any proceeding for such
purpose. The Company will use its best efforts to prevent the issuance of
any such stop order or the suspension of any such qualification and, if
issued, to obtain as soon as possible the withdrawal thereof. Prior to the
completion of the sale of the Securities by the Underwriters, the Company
will not file any document under the Exchange Act that is incorporated by
reference in the Registration Statement unless, prior to such proposed
filing, the Company has furnished the Representatives with a copy of such
document for their review and the Representatives have not reasonably
objected to the filing of such document within a reasonable period of
time. The Company will promptly advise the Representatives when any
document filed under the Exchange Act that is incorporated by reference in
the Registration Statement shall have been filed with the Commission.
(b) If, at any time when a prospectus relating to the Securities is
required to be delivered under the Act, any event occurs as a result of
which the Final Prospectus as then amended or supplemented would include
any untrue statement of a material fact or omit to state any material fact
necessary to make the statements therein, in the light of the
circumstances under which they were made, not misleading, or if it should
be necessary to amend the Registration Statement or supplement the Final
Prospectus to comply with the Act or the Exchange Act or the respective
rules thereunder, the Company promptly will (1) notify the Representatives
of such event, (2) prepare and file with the Commission, subject to the
second sentence of paragraph (a) of this Section 5, an amendment or
supplement which will correct such statement or omission or effect such
compliance and (3) supply any supplemented Final Prospectus to you in such
quantities as you may reasonably request.
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<PAGE>
(c) In accordance with the requirements of the Exchange Act and the
Act applicable to the Company, the Company will make generally available
to its security holders and to the Representatives an earnings statement
or statements of the Company and its subsidiaries which will satisfy the
provisions of Section 11(a) of the Act and Rule 158 under the Act.
(d) The Company will furnish to the Representatives and counsel for
the Underwriters, without charge, signed copies of the Registration
Statement (including exhibits thereto) which is filed in connection with
the sale of the Securities, and to each other Underwriter a copy of the
Registration Statement (without exhibits thereto) which is filed in
connection with the sale of the Securities, and, so long as delivery of a
prospectus by an Underwriter or dealer may be required by the Act, as many
copies of each Preliminary Final Prospectus and the Final Prospectus and
any supplement thereto as the Representatives may reasonably request. The
Company will pay the expenses of printing or other production of all
documents relating to the offering.
(e) The Company will arrange, if necessary, for the qualification of
the Securities for sale under the laws of such jurisdictions as the
Representatives may designate, will maintain such qualifications in effect
so long as required for the distribution of the Securities and will pay
any fee of the National Association of Securities Dealers, Inc., in
connection with its review of the offering; provided that in no event
shall the Company be obligated to qualify to do business in any
jurisdiction where it is not now so qualified or to take any action that
would subject it to service of process in suits, other than those arising
out of the offering or sale of the Securities, in any jurisdiction where
it is not now so subject. The Company will promptly advise the
Representatives of the receipt by the Company of any notification with
respect to the suspension of the qualification of the Securities for sale
in any jurisdiction or the initiation or threatening of any proceeding for
such purpose. The Company shall use its best efforts to prevent the
issuance of any order suspending the qualification or exemption of the
Securities under any state securities or Blue Sky laws, and, if at any
time any state securities commission or any other regulatory authority
shall issue an order suspending the qualification or exemption of the
Securities under any state securities or Blue Sky laws, the Company shall
use every reasonable effort to obtain the withdrawal or lifting of such
order at the earliest possible time.
(f) The Company will not for a period of 180 days following the
Execution Time, without the prior written consent of Salomon Smith Barney
Inc., offer, sell or contract to sell, grant any other option to purchase
or otherwise dispose of (or enter into any transaction which is designed
to, or might reasonably be expected to, result in the disposition (whether
by actual disposition or effective economic disposition due to cash
settlement or
15
<PAGE>
otherwise) by the Company or any Affiliate of the Company or any person in
privity with the Company or any Affiliate of the Company), directly or
indirectly, any debt securities issued or guaranteed by the Company (other
than the Securities) except the Company may offer, sell, contract to sell,
pledge, or otherwise dispose of convertible subordinated notes to Bell
Atlantic Investments, Inc. ("Bell Atlantic") pursuant to a securities
purchase agreement dated October 7, 1999 between the Company and Bell
Atlantic.
(g) The Company will cooperate with the Representatives and use its
best efforts to permit the Securities to be eligible for clearance and
settlement through The Depository Trust Company (in the case of the U.S.
Securities) or Euroclear/Cedel (in the case of the International
Securities), as the case may be.
(h) The Company will not take, directly or indirectly, any action
designed to or which has constituted or which might reasonably be expected
to cause or result, under the Exchange Act or otherwise, in stabilization
or manipulation of the price of any security of the Company to facilitate
the sale or resale of the Securities.
(i) The Company will not, for so long as the Securities are
outstanding, be or become, or be or become owned by, an open-end
investment company, unit investment trust or face-amount certificate
company that is or is required to be registered under Section 8 of the
Investment Company Act, and will not be or become, or be or become owned
by, a closed-end investment company required to be registered, but not
registered thereunder.
(j) The Company will apply the net proceeds from the sale of the
Securities as set forth in the Final Prospectus under the heading "Use of
Proceeds."
(k) The Company agrees to pay the costs and expenses relating to the
following matters: (i) the preparation of the Indenture, the issuance of
the Securities and the fees of the Trustee; (ii) the preparation, printing
or reproduction of the Registration Statement, the Preliminary Final
Prospectus and the Final Prospectus and each amendment or supplement to
any of them; (iii) the printing (or reproduction) and delivery (including
postage, air freight charges and charges for counting and packaging) of
such copies of the Registration Statement, the Preliminary Final
Prospectus and the Final Prospectus, and all amendments or supplements to
any of them, as may, in each case, be reasonably requested for use in
connection with the offering and sale of the Securities; (iv) the
preparation, printing, authentication, issuance and delivery of
certificates for the Securities, including any stamp or transfer taxes in
connection with the original issuance and sale of the
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Securities; (v) the printing (or reproduction) and delivery of this
Agreement, any blue sky memorandum and all other agreements or documents
printed (or reproduced) and delivered in connection with the offering of
the Securities; (vi) any registration or qualification of the Securities
for offer and sale under the securities or blue sky laws of the several
states (including filing fees and the reasonable fees and expenses of one
counsel for the Underwriters relating to such registration and
qualification); (vii) listing the Securities on the Luxembourg Stock
Exchange (the "Exchange"); (viii) the transportation and other expenses
incurred by or on behalf of Company representatives in connection with
presentations to prospective purchasers of the Securities; (ix) the fees
and expenses of the Company's accountants and the fees and expenses of
counsel (including local and special counsel) for the Company; and (x) all
other costs and expenses incident to the performance by the Company of its
obligations hereunder; provided, however, that, except as otherwise
provided for herein, the Underwriters shall pay their own costs and
expenses, including the fees of their counsel and any advertising expenses
connected with any offers they may make.
(l) The Company agrees to do and perform all things required to be
done and performed by it under this Agreement that are within its control
on or prior to or after the Closing Date, as applicable, and to use its
best efforts to satisfy all conditions precedent on its part to the
delivery of the Securities.
(m) The Company confirms that it has caused to be made an
application for the Securities to be listed on the Exchange. In connection
with such application, the Company agrees to furnish from time to time any
and all documents, instruments, information and undertakings and publish
all advertisements or other material that may be necessary in order to
effect and maintain such listing and to use its reasonable best efforts to
maintain such listing so long as any of the Securities are outstanding (as
defined in the Indenture); provided that if at any time the Company shall
determine that it can no longer reasonably comply with the requirements
for listing of the Securities on the Exchange and if maintenance of such
listing becomes onerous, it will use its reasonable best efforts to obtain
and thereafter to maintain a listing of Securities on such other stock
exchange in a financial center as you may reasonably request and as the
Trustee may approve.
6. Conditions to the Obligations of the Underwriters. The obligations of
the Underwriters to purchase the Securities shall be subject to the accuracy of
the representations and warranties on the part of the Company contained herein
as of the Execution Time and the Closing Date, to the accuracy of the statements
of the Company made in any certificates pursuant to the provisions hereof, to
the performance by the Company of its obligations hereunder and to the following
additional conditions:
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(a) If the Registration Statement has not become effective prior to
the Execution Time, unless the Representatives agree in writing to a later
time, the Registration Statement will become effective not later than (i)
6:00 PM New York City time, on the date of determination of the public
offering price, if such determination occurred at or prior to 3:00 PM New
York City time on such date or (ii) 9:30 AM on the Business Day following
the day on which the public offering price was determined, if such
determination occurred after 3:00 PM New York City time on such date; if
filing of the Final Prospectus, or any supplement thereto, is required
pursuant to Rule 424(b), the Final Prospectus, and any such supplement,
will be filed in the manner and within the time period required by Rule
424(b); and no stop order suspending the effectiveness of the Registration
Statement shall have been issued and no proceedings for that purpose shall
have been instituted or threatened.
(b) The Company shall have requested and caused Arnold L. Wadler,
General Counsel of the Company, to furnish to the Representatives his
opinion, dated the Closing Date and addressed to the Representatives, to
the effect that:
i. each of the Company's Subsidiaries has been duly
incorporated and is validly existing as a corporation in good standing
under the laws of the jurisdiction in which it is chartered or organized,
with full corporate power and authority to own or lease, as the case may
be, and to operate, its properties and conduct its business as described
in the Final Prospectus;
ii. all the outstanding shares of capital stock of the Company
and each Subsidiary have been duly and validly authorized and issued and
are fully paid and nonassessable, and, except as otherwise set forth in
the Final Prospectus, all outstanding shares of capital stock of the
Subsidiaries are owned by the Company either directly or through wholly
owned subsidiaries free and clear of any security interest and, to the
knowledge of such counsel, after due inquiry, any other security
interests, claims, liens or encumbrances;
iii. the Company's authorized capitalization is as set forth
in the Final Prospectus under the heading "Capitalization";
iv. to the knowledge of such counsel, without conducting a
docket search, there is no pending or threatened action, suit or
proceeding by or before any court or governmental agency, authority or
body or any arbitrator involving the Company or any of its subsidiaries or
its or their property that is not adequately disclosed in the Final
Prospectus, except in
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each case for such proceedings that, if the subject of an unfavorable
decision, ruling or finding would not, singly or in the aggregate, result
in a material adverse change in the condition (financial or otherwise),
prospects, earnings, business or properties of the Company and its
subsidiaries, taken as a whole; and the statements in the Final Prospectus
under the heading "Business--Legal Proceedings" fairly summarize the
matters therein described;
v. neither the execution and delivery of the Indenture, this
Agreement, the issue and sale of the Securities, nor the consummation of
any other of the transactions herein or therein contemplated, nor the
fulfillment of the terms hereof or thereof, will conflict with, result in
a breach or violation of, or imposition of any lien, charge or encumbrance
upon, any property or asset of the Company or its subsidiaries pursuant to
(i) the charter or by-laws of the Company's subsidiaries, or (ii) the
terms of any indenture, contract, lease, mortgage, deed of trust, note
agreement, loan agreement or other agreement, obligation, condition,
covenant or instrument to which the Company or any of its subsidiaries is
a party or bound or to which its respective property is subject which is
known to such counsel;
vi. the statements in the Final Prospectus under the captions
"Risk Factors - The Heavy Regulation of the Telecommunications Industry
May Limit the Development of Our Networks and Affect Our Competitive
Position" and "Business-Regulation" to the extent that they discuss U.S.
federal, state, and local telecommunications statutes and regulations or
legal or governmental proceedings of the FCC and state and local
governments with respect to telecommunications regulatory matters, fairly
summarize the matters referred to therein in all material respects;
vii. neither the execution and delivery of this Agreement by
the Company nor the performance by the Company of its obligations under
this Agreement will violate the Communications Act or the State
Telecommunications Laws; and
viii. to the knowledge of such counsel and except such as
would not have a material adverse effect on the Company's or any
subsidiary's ability to conduct their respective businesses as they are
presently conducted, (A) the Company and its subsidiaries have in effect
all the U.S. federal and state telecommunications regulatory licenses,
permits, authorizations, consents, and approvals (hereinafter, "Licenses")
required to conduct their respective businesses as presently conducted;
(B) all such Licenses have been validly issued and are in full force and
effect; (C) no determination has been made by the FCC or any State
Regulatory Agency that the Company or any subsidiaries is in violation of
any such Licenses, and no proceeding is pending before any such agency in
which any such violation
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<PAGE>
has been alleged; and (D) no proceedings by the FCC or any State
Regulatory Agency to revoke or restrict any such Licenses are pending or
threatened. "Validly issued" as used in this paragraph means that the
Licenses have been issued through the means of regular agency procedures
applied in conformity with the applicable governing statute and prior
agency practice and there is no legal basis under the applicable governing
statute to conclude that the Company or any subsidiary cannot hold one or
more of the Licenses as a matter of law. "Full force and effect" as used
in this paragraph means (i) the orders issuing the Licenses have become
effective under the applicable governing statute, (ii) the Licenses
contain no conditions, (iii) all conditions precedent set forth in the
Licenses have been satisfied, and (iv) no stay of effectiveness has been
issued.
(c) The Company shall have requested and caused Paul, Weiss,
Rifkind, Wharton & Garrison, counsel for the Company, to furnish to the
Representatives its opinion, dated the Closing Date and addressed to the
Representatives, to the effect that:
i. the Company and each of the Subsidiaries incorporated (in
the case of a corporation) or organized (in the case of any other entity)
under the laws of the States of Delaware or New York has been duly
incorporated and is validly existing as a corporation in good standing
under the laws of the State of Delaware or is a subsisting corporation in
good standing under the laws of the State of New York, as applicable, with
full corporate power and authority to own or lease, as the case may be,
and to operate its properties and conduct its business as described in the
Final Prospectus;
ii. such counsel has been advised orally by the staff of the
Commission that the Registration Statement has become effective under the
Act; any required filing of the Basic Prospectus, any Preliminary Final
Prospectus and the Final Prospectus, and any supplements thereto, has been
made pursuant to Rule 424(b); to the knowledge of such counsel, no stop
order suspending the effectiveness of the Registration Statement has been
issued, no proceedings for that purpose have been instituted or threatened
by the Commission, and assuming that the statements made and/or
incorporated in the Registration Statement and the Final Prospectus are
complete and correct except those made under the caption "Description of
the Notes" insofar as they relate to provisions of documents therein
described, the Registration Statement and the Final Prospectus, as of
their respective effective or issue dates, appear on their face to be
appropriately responsive in all material respects to the applicable
requirements of the Act and the rules and regulations of the Commission
under the Act, except for the financial statements, and other financial
and statistical information which are
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contained or incorporated by reference therein or omitted therefrom and
the Form T-1, as to which such counsel need express no opinion;
iii. this Agreement has been duly authorized, executed and
delivered by the Company;
iv. the Indenture has been duly qualified under the Trust
Indenture Act and has been duly authorized, executed and delivered by the
Company, and, assuming due authorization, execution and delivery thereof
by the Trustee, constitutes a legal, valid and binding instrument
enforceable against the Company in accordance with its terms (subject to
applicable bankruptcy, reorganization, insolvency, moratorium, fraudulent
conveyance or other laws affecting creditors' rights generally from time
to time in effect and to general principles of equity, regardless of
whether enforceability is considered in a proceeding in equity or at law);
the Securities have been duly and validly authorized by the Company, and,
when duly executed, issued and authenticated in accordance with the
provisions of the Indenture and delivered to and paid for in full by the
Underwriters under this Agreement, will constitute legal, valid and
binding obligations of the Company entitled to the benefits of the
Indenture (subject to applicable bankruptcy, reorganization, insolvency,
moratorium, fraudulent conveyance or other laws affecting creditors'
rights generally from time to time in effect and to general principles of
equity, regardless or whether enforceability is considered in a proceeding
in equity or at law); and the statements set forth under the heading
"Description of the Notes", insofar as such statements purport to
summarize certain provisions of the Securities and the Indenture, provide
a fair summary of such provisions;
v. to the extent that they constitute a summary of U.S.
federal law and regulations, the statements in the Final Prospectus under
the heading "Certain United States Federal Income Tax Considerations"
fairly summarize the matters therein described in all material respects;
vi. the Company is not and, after giving effect to the
offering and sale of the Securities and the application of the proceeds
thereof as described in the Final Prospectus, will not be required to
register as an "investment company" under the Investment Company Act;
vii. no consent, approval, authorization, filing with or order
of any court or governmental agency or body under the Federal laws of the
United States or the laws of the State of New York or under the General
Corporation Law of the State of Delaware is required in connection with
the due authorization, execution and delivery of this Agreement or the due
execution, delivery or performance of the Indenture by the Company, or for
the offering, issuance, sale or delivery of the Securities, except such as
will
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be obtained, taken or made or such, as may be required under the blue sky
or securities laws of any state or foreign jurisdiction or the NASD (as to
which such counsel need not express any opinion) or such other approvals
(specified in such opinion) as have been obtained (provided that such
counsel need not express any opinion with respect to any consent,
approval, authorization under the Communications Act of 1934, as amended,
or any published rules, regulations or policies of the Federal
Communications Commission (the "FCC") thereunder); and
viii. neither the execution and delivery of the Indenture,
this Agreement, the issue and sale of the Securities, nor the consummation
of any other of the transactions herein or therein contemplated, nor the
fulfillment of the terms hereof or thereof, will conflict with, result in
a breach or violation of, or imposition of any lien, charge or encumbrance
upon any property or asset of the Company or its subsidiaries pursuant to,
(i) the charter or by-laws of the Company; or (ii) any statute, law, rule
or regulation of the Federal government of the United States (excluding
the FCC) or the State of New York or under the General Corporation Law of
the State of Delaware, or to such counsel's knowledge, any judgment, order
or decree applicable to the Company or any of its subsidiaries of any
court, regulatory body, administrative agency, governmental body,
arbitrator or other authority having jurisdiction over the Company, any of
its subsidiaries or any of their respective properties which is known to
such counsel except as described in the Final Prospectus or for such
violations as could not be reasonably expected to have, singly or in the
aggregate, a material adverse effect on the condition (financial or
otherwise), prospects, earnings, business or properties of the Company and
its subsidiaries, taken as a whole.
In addition, such counsel shall state that it has participated in
conferences with officers and other representatives of the Company,
representatives of the independent accountants of the Company, the Underwriters
and counsel for the Underwriters at which the contents of the Registration
Statement and the Final Prospectus and related matters were discussed and,
although such counsel is not passing upon, and does not assume any
responsibility for, the accuracy, completeness or fairness of the statements
contained in the Registration Statement and the Final Prospectus (or any
amendments or supplements thereto) and has made no independent investigation or
verification thereof, and such counsel has not participated in the preparation
of the Incorporated Documents, on the basis of the foregoing, no facts have come
to the attention of such counsel that have led such counsel to believe that the
Registration Statement, at the Effective Time, and the Final Prospectus, at the
Execution Time and on the Closing Date, contained or contains any untrue
statement of a material fact or omitted or omits to state any material fact
necessary to make the statements therein, in the light of the circumstances
under which they were made, not misleading (in each case, other than the
financial statements, schedules and other financial and statistical information
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which are contained or incorporated by reference therein or omitted therefrom
and the Form T-1, as to which such counsel need express no opinion).
In rendering such opinion, such counsel may rely (A) as to matters
involving the application of laws of any jurisdiction other than the State of
New York, the Federal laws of the United States or the General Corporation Law
of the State of Delaware, to the extent they deem proper and specified in such
opinion, upon the opinion of other counsel of good standing whom they believe to
be reliable and who are reasonably satisfactory to counsel for the Underwriters;
and (B) as to matters of fact, to the extent they deem proper, on certificates
of responsible officers of the Company and public officials. References to the
Registration Statement and the Prospectus in this Section 6(c) include any
amendment or supplement thereto at the Closing Date.
(d) The Company shall have furnished to the Representatives the
opinion of Baker & McKenzie, special regulatory counsel for the Company,
dated the Closing Date, to the effect that:
i. to the extent they constitute a summary of the regulatory
matters referred to therein, the statements in the Registration Statement
and the Final Prospectus under the caption "Business--Regulation of
International Operations" fairly summarize the matters referred to
therein;
ii. no licenses under telecommunications legislation in
England and Wales including the Telecommunications Act 1984, the Wireless
Telegraphy Act 1949 or the Wireless Telegraphy Act 1998 other than the
Licenses are required by the Company, ION LLC, ION or Racal to carry on
the ION Business in the United Kingdom;
iii. no licenses under telecommunications legislation in
England and Wales including the Telecommunications Act 1984, the Wireless
Telegraphy Act 1949 or the Wireless Telegraphy Act 1998, other than the
Licenses that are currently required by the Company in relation to the
Company's telecommunications business as presently conducted in the United
Kingdom; and
iv. no German telecommunications licenses, other than the
class 3 license obtained by Metromedia Fiber Network GmbH, are currently
required by the Company in relation to the European Network, the German
Network, or the Company's telecommunications business as presently
conducted in Germany.
In rendering such opinion, such counsel may state that they express
no opinion as to the laws of any jurisdiction other than Germany or the United
Kingdom or the regulations of the European Union.
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(e) The Representatives shall have received from Skadden, Arps,
Slate, Meagher & Flom LLP, counsel for the Underwriters, such opinion or
opinions, dated the Closing Date and addressed to the Representatives,
with respect to the issuance and sale of the Securities, the Indenture,
the Registration Statement, the Final Prospectus (together with any
supplement thereto) and other related matters as the Representatives may
reasonably require, and the Company shall have furnished to such counsel
such documents as they reasonably request for the purpose of enabling them
to pass upon such matters.
(f) The Company shall have furnished to the Representatives a
certificate of the Company, signed by the Chairman of the Board of
Directors or the President and the principal financial or accounting
officer of the Company, dated the Closing Date, to the effect that the
signers of such certificate have carefully examined the Registration
Statement, the Final Prospectus, any supplements to the Final Prospectus
and this Agreement and that:
i. the representations and warranties of the Company in this
Agreement are true and correct in all material respects on and as of the
Closing Date with the same effect as if made on the Closing Date, and the
Company has complied with all the agreements and satisfied all the
conditions on its part to be performed or satisfied hereunder at or prior
to the Closing Date;
ii. no stop order suspending the effectiveness of the
Registration Statement has been issued and no proceedings for that purpose
have been instituted or, to the Company's knowledge, threatened; and
iii. since the date of the most recent financial statements
included or incorporated by reference in the Final Prospectus (exclusive
of any amendment or supplement thereto), there has been no material
adverse change in the condition (financial or otherwise), prospects,
earnings, business or properties of the Company and its subsidiaries,
taken as a whole, whether or not arising from transactions in the ordinary
course of business, except as set forth in or contemplated in the Final
Prospectus (exclusive of any amendment or supplement thereto).
(g) At the Execution Time and at the Closing Date, the Company shall
have requested and caused Ernst & Young LLP to furnish to the
Representatives letters, dated respectively as of the Execution Time and
as of the Closing Date, in form and substance satisfactory to the
Representatives, confirming that they are independent accountants within
the meaning of the Act and the Exchange Act and the applicable rules and
regulations
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thereunder, that they have performed a review of the unaudited interim
financial information of the Company for the nine month period ended
September 30, 1999 and as at September 30, 1999 and stating in effect
that:
i. in their opinion the audited financial statements and
financial statement schedules included or incorporated in the Registration
Statement and the Final Prospectus and reported on by them comply as to
form in all material respects with the applicable accounting requirements
of the Exchange Act and the related published rules and regulations
thereunder;
ii. on the basis of a reading of the latest unaudited
financial statements made available by the Company and its subsidiaries;
their limited review in accordance with standards established under
Statement on Auditing Standards No. 71, of the unaudited interim financial
information for the nine month period ended September 30, 1999, and as at
September 30, 1999; carrying out certain specified procedures (but not an
examination in accordance with generally accepted auditing standards)
which would not necessarily reveal matters of significance with respect to
the comments set forth in such letter; a reading of the minutes of the
meetings of the stockholders, directors and committees of the Company and
the Subsidiaries; and inquiries of certain officials of the Company who
have responsibility for financial and accounting matters of the Company
and its subsidiaries as to transactions and events subsequent to December
31, 1998, nothing came to their attention which caused them to believe
that:
(1) any unaudited financial statements included or
incorporated in the Registration Statement and the Final Prospectus
do not comply in form in all material respects with applicable
accounting requirements and with the published rules and regulations
of the Commission with respect to financial statements included or
incorporated in quarterly reports on Form 10-Q under the Exchange
Act; or that said unaudited financial statements are not in
conformity with generally accepted accounting principles applied on
a basis substantially consistent with that of the audited financial
statements included or incorporated in the Registration Statement
and the Final Prospectus;
(2) with respect to the period subsequent to September 30,
1999, there were any changes, at a specified date not more than
three days prior to the date of the letter, in the capital stock,
increase in long-term debt of the Company and its subsidiaries or
stockholders' equity of the Company as compared with the amounts
shown on the September 30, 1999 consolidated balance sheet included
in the Final Prospectus, or for the period from October 1, 1999 to
such specified date there were any decreases, as compared with the
corresponding
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period in the preceding year in revenues of the Company and its
subsidiaries, except in all instances for changes or decreases set
forth in such letter, in which case the letter shall be accompanied
by an explanation by the Company as to the significance thereof
unless said explanation is not deemed necessary by the
Representatives; or
(3) the information included under the headings "Selected
Consolidated Financial Data" and "Management-Executive Compensation"
is not in conformity with the disclosure requirements of Regulation
S-K;
iii. they have performed certain other specified procedures as
a result of which they determined that certain information of an
accounting, financial or statistical nature (which is limited to
accounting, financial or statistical information derived from the general
accounting records of the Company and its subsidiaries) set forth in the
Final Prospectus, including the information set forth under the captions
"Risk Factors", "Use of Proceeds", "Capitalization", "Selected
Consolidated Financial Data", "Management's Discussion and Analysis of
Financial Condition and Results of Operations", "Business", "Management",
and "Certain Relationships and Related Transactions" in the Final
Prospectus, the information included or incorporated in Items 1, 2, 6, 7
and 11 of the Company's Annual Report on Form 10-K incorporated in the
Final Prospectus and the information included in the "Management's
Discussion and Analysis of Financial Condition and Results of Operations"
included or incorporated in the Company's Quarterly Reports on Form 10-Q,
incorporated in the Final Prospectus agrees with the accounting records of
the Company and its subsidiaries, excluding any questions of legal
interpretation; and
iv. on the basis of a reading of the unaudited pro forma
financial statements included or incorporated by reference in the
Registration Statement and the Final Prospectus (the "pro forma financial
statements"); carrying out certain specified procedures; inquiries of
certain officials of the Company and AboveNet Communications, Inc. who
have responsibility for financial and accounting matters; and proving the
arithmetic accuracy of the application of the pro forma adjustments to the
historical amounts in the pro forma financial statements, nothing came to
their attention which caused them to believe that the pro forma financial
statements do not comply as to form in all material respects with the
applicable accounting requirements of Rule 11-02 of Regulation S-X or that
the pro forma adjustments have not been properly applied to the historical
amounts in the compilation of such statements.
(h) [Intentionally Omitted]
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(i) At the Execution Time and at the Closing Date, Deloitte & Touche
LLP shall have furnished to the Representatives letters, dated
respectively as of the Execution Time and as of the Closing Date, in form
and substance satisfactory to the Representatives, confirming that they
are independent accountants within the meaning of the Act and the
applicable rules and regulations thereunder, and stating in effect that:
i. in their opinion the audited financial statements and
financial statement schedules included in the Registration Statement and
the Final Prospectus and reported on by them comply in form in all
material respects with the applicable accounting requirements of the Act
and the related published rules and regulations; and
ii. they have performed certain other specified procedures as
a result of which they determined that certain information of an
accounting, financial or statistical nature (which is limited to
accounting, financial or statistical information derived from the general
accounting records of the Company and its subsidiaries) set forth in the
Registration Statement and the Final Prospectus agrees with the accounting
records of the Company and its subsidiaries, excluding any questions of
legal interpretation.
References to the Final Prospectus in this paragraph (i) include any
supplement thereto at the date of the letter.
(j) At the Execution Time and at the Closing Date,
PricewaterhouseCoopers LLP shall have furnished to the Representatives a
letter or letters, dated respectively as of the Execution Time and as of
the Closing Date, in form and substance satisfactory to the
Representatives, confirming that they are independent accountants within
the meaning of the Act and the applicable rules and regulations
thereunder, and stating in effect that:
i. in their opinion the audited financial statements and
financial statement schedules included in the Registration Statement and
the Final Prospectus and reported on by them comply in form in all
material respects with the accounting requirements of the Act and the
related published rules and regulations; and
ii. they have performed certain other specified procedures as
a result of which they determined that certain information of an
accounting, financial or statistical nature (which is limited to
accounting, financial or statistical information derived from the general
accounting records of the Company and its subsidiaries) set forth in the
Registration Statement and the Final Prospectus agrees with the accounting
records of the Company and its subsidiaries, excluding any questions of
legal interpretation.
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<PAGE>
References to the Final Prospectus in this paragraph (j) include any
supplement thereto at the date of the letter.
(k) Subsequent to the Execution Time or, if earlier, the dates as of
which information is given in the Registration Statement (exclusive of any
amendment thereof) and the Final Prospectus (exclusive of any amendment or
supplement thereto), there shall not have been (i) any change or decrease
specified in the letter or letters referred to in paragraph (g) of this
Section 6 or (ii) any change, or any development involving a prospective
change, in or affecting the condition (financial or otherwise), prospects,
earnings, business or properties of the Company and its subsidiaries,
taken as a whole, whether or not arising from transactions in the ordinary
course of business, except as set forth in or contemplated in the Final
Prospectus (exclusive of any amendment or supplement thereto) the effect
of which, in any case referred to in clause (i) or (ii) above, is, in the
sole judgment of the Representatives, so material and adverse as to make
it impractical or inadvisable to market the Securities as contemplated by
the Registration Statement (exclusive of any amendment thereof) and the
Final Prospectus (exclusive of any amendment or supplement thereto).
(l) Subsequent to the Execution Time, there shall not have been any
decrease in the rating of any of the Company's debt securities, including
the Securities, by any "nationally recognized statistical rating
organization" (as defined for purposes of Rule 436(g) under the Act) or
any notice given of any intended or potential decrease in any such rating
or of a possible change in any such rating that does not indicate the
direction of the possible change.
(m) No stop order suspending the effectiveness of the Registration
Statement shall have been issued and no proceedings for that purpose shall
have been taken or, to the knowledge of the Company, shall be contemplated
by the Commission at or prior to the Closing Date; (ii) there shall not
have been any change in the capital stock of the Company nor any material
increase in the short-term or long-term debt of the Company (other than in
the ordinary course of business) from that set forth or contemplated in
the Registration Statement or the Final Prospectus (or any amendment or
supplement thereto); (iii) there shall not have been, since the respective
dates as of which information is given in the Registration Statement and
the Final Prospectus (or any amendment or supplement thereto), except as
may otherwise be stated in the Registration Statement and Final Prospectus
(or any amendment or supplement thereto), any material adverse change in
the condition (financial or other), business, prospects, properties, net
worth or results of operations of the Company and the Subsidiaries taken
as a whole; (iv) the Company and the Subsidiaries shall not have any
liabilities or obligations, direct or contingent (whether or not in the
ordinary course of
28
<PAGE>
business), that are material to the Company and the Subsidiaries, taken as
a whole, other than those reflected in the Registration Statement or the
Final Prospectus (or any amendment or supplement thereto); and (v) all the
representations and warranties of the Company contained in this Agreement
shall be true and correct on and as of the date hereof and on and as of
the Closing Date as if made on and as of the Closing Date and you shall
have received a certificate, dated the Closing Date and signed by the
chief executive officer and the chief financial officer of the Company (or
such other officers as are acceptable to you), to the effect set forth in
this Section 6(f) hereof.
(n) The Company shall not have failed at or prior to the Closing
Date to have performed or complied with any of its agreements herein
contained and required to be performed or complied with by it hereunder at
or prior to the Closing Date.
(o) Prior to the Closing Date, the Company shall have furnished to
the Representatives such further information, certificates and documents
as the Representatives may reasonably request.
(p) If any of the conditions specified in this Section 6 shall not
have been fulfilled in all material respects when and as provided in this
Agreement, or if any of the opinions and certificates mentioned above or
elsewhere in this Agreement shall not be in all material respects
reasonably satisfactory in form and substance to the Representatives and
counsel for the Underwriters, this Agreement and all obligations of the
Underwriters hereunder may be cancelled at, or at any time prior to, the
Closing Date by the Representatives. Notice of such cancellation shall be
given to the Company in writing or by telephone or facsimile confirmed in
writing.
(q) The documents required to be delivered by this Section 6 will be
delivered at the office of Paul, Weiss, Rifkind, Wharton & Garrison,
counsel for the Company, at 1285 Avenue of the Americas, New York, New
York 10019, on the Closing Date.
(r) Prior to the Closing Date the Company shall have applied to list
the Securities on the Luxembourg Stock Exchange.
7. Reimbursement of Underwriters' Expenses. If the sale of the Securities
provided for herein is not consummated because any condition to the obligations
of the Underwriters set forth in Section 6 hereof is not satisfied, because of
any termination pursuant to Section 10 hereof or because of any refusal,
inability or failure on the part of the Company to perform any agreement herein
or comply with any provision hereof other than by reason of a default by any of
the Underwriters, the Company will reimburse the Underwriters severally through
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Salomon Smith Barney Inc. on demand for all out-of-pocket expenses (including
reasonable fees and disbursements of one counsel) that shall have been incurred
by them in connection with the proposed purchase and sale of the Securities.
8. Indemnification and Contribution. (a) The Company agrees to indemnify
and hold harmless each Underwriter, the directors, officers, employees and
agents of each Underwriter and each person who controls any Underwriter within
the meaning of either the Act or the Exchange Act against any and all losses,
claims, damages or liabilities, joint or several, to which they or any of them
may become subject under the Act, the Exchange Act or other Federal or state
statutory law or regulation, at common law or otherwise, insofar as such losses,
claims, damages or liabilities (or actions in respect thereof) arise out of or
are based upon any untrue statement or alleged untrue statement of a material
fact contained in the registration statement for the registration of the
Securities as originally filed or in any amendment thereof, or in the Basic
Prospectus, any Preliminary Final Prospectus or the Final Prospectus, or in any
amendment thereof or supplement thereto, or arise out of or are based upon the
omission or alleged omission to state therein a material fact required to be
stated therein or necessary to make the statements therein, in the light of the
circumstances under which they were made, not misleading, and agrees to
reimburse each such indemnified party, as incurred, for any legal or other
expenses reasonably incurred by them in connection with investigating or
defending any such loss, claim, damage, liability or action; provided, however,
that (i) the Company will not be liable in any such case to the extent that any
such loss, claim, damage or liability arises out of or is based upon any such
untrue statement or alleged untrue statement or omission or alleged omission
made therein in reliance upon and in conformity with written information
furnished to the Company by or on behalf of any Underwriter through the
Representatives specifically for inclusion therein and (ii) with respect to any
untrue statement or alleged untrue statement of, or omission or alleged omission
to state, a material fact made in any Preliminary Final Prospectus, the
indemnity agreement contained in this Section 8(a) shall not inure to the
benefit of any Underwriter (or any of the directors, officers, employees and
agents of such Underwriter or any controlling person of such Underwriter) from
whom the person asserting any such loss, claim, damage or liability purchased
the Securities concerned, to the extent that any such loss, claim, damage or
liability of such Underwriter occurs under the circumstances where it shall have
been determined by a court of competent jurisdiction (or appropriate arbitral
proceeding) by final and nonappealable judgment that (w) the Company had
previously furnished copies of the Final Prospectus to the Underwriters, (x)
delivery of the Final Prospectus was required by the Act or under this Agreement
to be made to such person, (y) the untrue statement or omission of a material
fact contained in the Preliminary Final Prospectus was corrected in the Final
Prospectus and (z) there was not sent or given to such person, at or prior to
the written confirmation of the sale of such Securities to such person, a copy
of the Final Prospectus. This indemnity agreement will be in addition to any
liability which the Company may otherwise have.
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<PAGE>
(b) Each Underwriter severally and not jointly agrees to indemnify
and hold harmless the Company, each of its directors, each of its officers
who signs the Registration Statement, and each person who controls the
Company within the meaning of either the Act or the Exchange Act, to the
same extent as the foregoing indemnity from the Company to each
Underwriter, but only with reference to written information relating to
such Underwriter furnished to the Company by or on behalf of such
Underwriter through the Representatives specifically for inclusion in the
documents referred to in the foregoing indemnity. This indemnity agreement
will be in addition to any liability which any Underwriter may otherwise
have. The Company acknowledges that the statements set forth in the last
paragraph of the cover page regarding delivery of the Securities, the
first paragraph on page S-3 related to stabilization, syndicate covering
transactions and penalty bids and, under the heading "Underwriting" or
"Plan of Distribution", (i) the list of Underwriters and their respective
participation in the sale of the Securities, (ii) the sentences related to
concessions and reallowances and (iii) the paragraph related to
stabilization, syndicate covering transactions and penalty bids in any
Preliminary Final Prospectus and the Final Prospectus constitute the only
information furnished in writing by or on behalf of the several
Underwriters for inclusion in any Preliminary Final Prospectus or the
Final Prospectus.
(c) Promptly after receipt by an indemnified party under this
Section 8 of notice of the commencement of any action, such indemnified
party will, if a claim in respect thereof is to be made against the
indemnifying party under this Section 8, notify the indemnifying party in
writing of the commencement thereof; but the failure so to notify the
indemnifying party (i) will not relieve it from liability under paragraph
(a) or (b) above unless and to the extent it did not otherwise learn of
such action and such failure results in the forfeiture by the indemnifying
party of substantial rights and defenses as determined by a court of
competent jurisdiction; and (ii) will not, in any event, relieve the
indemnifying party from any obligations to any indemnified party other
than the indemnification obligation provided in paragraph (a) or (b)
above. The indemnifying party shall be entitled to assume the defense of
such action and appoint counsel of the indemnifying party's choice at the
indemnifying party's expense to represent the indemnified party in any
action for which indemnification is sought (in which case the indemnifying
party shall not thereafter be responsible for the fees and expenses of any
separate counsel retained by the indemnified party or parties except as
set forth below); provided, however, that such counsel shall be reasonably
satisfactory to the indemnified party. Notwithstanding the indemnifying
party's election to assume the defense of such action or appoint counsel
to represent the indemnified party in an action, the indemnified party
shall have the right to employ separate counsel (including local counsel),
and
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<PAGE>
the indemnifying party shall bear the reasonable fees, costs and expenses
of such separate counsel if (i) the use of counsel chosen by the
indemnifying party to represent the indemnified party would present such
counsel with a conflict of interest, which has not been waived; (ii) the
actual or potential defendants in, or targets of, any such action include
both the indemnified party and the indemnifying party and the indemnified
party shall have been reasonably advised by such counsel that there are
legal defenses available to it and/or other indemnified parties which are
different from or additional to those available to the indemnifying party;
(iii) the indemnifying party shall not have assumed the defense of the
action or employed counsel reasonably satisfactory to the indemnified
party to represent the indemnified party within a reasonable time after
notice of the institution of such action; or (iv) the indemnifying party
shall authorize the indemnified party to employ separate counsel at the
expense of the indemnifying party. In any such case, the indemnifying
party shall not, in connection with any one action or separate but
substantially similar related actions in the same jurisdiction arising out
of the same general allegations or circumstances, be liable for the fees
and expenses of more than one separate firm of attorneys (in addition to
any local counsel) for all indemnified parties. An indemnifying party will
not, without the prior written consent of the indemnified parties, settle
or compromise or consent to the entry of any judgment with respect to any
pending or threatened claim, action, suit or proceeding in respect of
which indemnification or contribution may be sought hereunder (whether or
not the indemnified parties are actual or potential parties to such claim
or action) unless such settlement, compromise or consent includes an
unconditional release of each indemnified party from all liability arising
out of such claim, action, suit or proceeding.
(d) In the event that the indemnity provided in paragraph (a) or (b)
of this Section 8 is unavailable to or insufficient to hold harmless an
indemnified party for any reason, the Company and the Underwriters
severally agree to contribute to the aggregate losses, claims, damages and
liabilities (including legal or other expenses reasonably incurred in
connection with investigating or defending same) (collectively "Losses")
to which the Company and one or more of the Underwriters may be subject in
such proportion as is appropriate to reflect the relative benefits
received by the Company on the one hand and by the Underwriters on the
other from the offering of the Securities; provided, however, that in no
case shall any Underwriter (except as may be provided in any agreement
among Underwriters relating to the offering of the Securities) be
responsible for any amount in excess of the underwriting discount or
commission applicable to the Securities purchased by such Underwriter
hereunder. If the allocation provided by the immediately preceding
sentence is unavailable for any reason, the Company and the Underwriters
severally shall contribute in such proportion as is appropriate to reflect
not only such relative benefits but also
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the relative fault of the Company on the one hand and of the Underwriters
on the other in connection with the statements or omissions or alleged
statements or omissions which resulted in such Losses, as well as any
other relevant equitable considerations. Benefits received by the Company
shall be deemed to be equal to the total net proceeds from the offering
(before deducting expenses) received by it, and benefits received by the
Underwriters shall be deemed to be equal to the total underwriting
discounts and commissions, in each case as set forth on the cover page of
the Final Prospectus. Relative fault shall be determined by reference to,
among other things, whether any untrue or any alleged untrue statement of
a material fact or the omission or alleged omission to state a material
fact relates to information provided by the Company on the one hand or the
Underwriters on the other, the intent of the parties and their relative
knowledge, access to information and opportunity to correct or prevent
such untrue statement or omission or alleged untrue statement or omission.
The Company and the Underwriters agree that it would not be just and
equitable if contribution were determined by pro rata allocation or any
other method of allocation which does not take account of the equitable
considerations referred to above. Notwithstanding the provisions of this
paragraph (d), no person guilty of fraudulent misrepresentation (within
the meaning of Section 11(f) of the Act) shall be entitled to contribution
from any person who was not guilty of such fraudulent misrepresentation.
For purposes of this Section 8, each person who controls an Underwriter
within the meaning of either the Act or the Exchange Act and each
director, officer, employee and agent of an Underwriter shall have the
same rights to contribution as such Underwriter, and each person who
controls the Company within the meaning of either the Act or the Exchange
Act and each officer of the Company who shall have signed the Registration
Statement and each director of the Company shall have the same rights to
contribution as the Company, subject in each case to the applicable terms
and conditions of this paragraph (d).
9. Default by an Underwriter. If any one or more Underwriters shall fail
to purchase and pay for any of the Securities agreed to be purchased by such
Underwriter or Underwriters hereunder and such failure to purchase shall
constitute a default in the performance of its or their obligations under this
Agreement, the remaining Underwriters shall be obligated severally to take up
and pay for (in the respective proportions which the principal amount of
Securities set forth opposite their names in Schedule II hereto bears to the
aggregate principal amount of Securities set forth opposite the names of all the
remaining Underwriters) the Securities which the defaulting Underwriter or
Underwriters agreed but failed to purchase; provided, however, that in the event
that the aggregate principal amount of Securities which the defaulting
Underwriter or Underwriters agreed but failed to purchase shall exceed 10% of
the aggregate principal amount of Securities set forth in Schedule II hereto,
the remaining Underwriters shall have the right to (i) make arrangements for the
purchase of the Securities which such defaulting Underwriter or
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<PAGE>
Underwriters agreed but failed to purchase by other persons satisfactory to the
Company and the non-defaulting Underwriters, and/or (ii) purchase all, but shall
not be under any obligation to purchase any, of the Securities, and if such
nondefaulting Underwriters do not make such arrangements and/or purchase all the
Securities, this Agreement will terminate without liability to any nondefaulting
Underwriter or the Company. In the event of a default by any Underwriter as set
forth in this Section 9, the Closing Date shall be postponed for such period,
not exceeding five Business Days, as the Representatives shall determine in
order that the required changes in the Registration Statement and the Final
Prospectus or in any other documents or arrangements may be effected. Nothing
contained in this Agreement shall relieve any defaulting Underwriter of its
liability, if any, to the Company or any nondefaulting Underwriter for damages
occasioned by its default hereunder.
10. Termination. This Agreement shall be subject to termination in the
absolute discretion of the Representatives, by notice given to the Company prior
to delivery of and payment for the Securities, if at any time prior to such time
(i) trading in the Company's Common Stock shall have been suspended by the
Commission or the NASDAQ National Market or trading in securities generally on
the New York Stock Exchange or the NASDAQ National Market shall have been
suspended or limited or minimum prices shall have been established on such
exchange or the NASDAQ National Market; (ii) a banking moratorium shall have
been declared either by Federal or New York State authorities; or (iii) there
shall have occurred any outbreak or escalation of hostilities, declaration by
the United States of a national emergency or war, or other calamity or crisis
the effect of which on financial markets is such as to make it, in the sole
judgment of the Representatives, impractical or inadvisable to proceed with the
offering or delivery of the Securities as contemplated by the Final Prospectus
(exclusive of any amendment or supplement thereto).
11. Representations and Indemnities to Survive. The respective agreements,
representations, warranties, indemnities and other statements of the Company or
its officers and of the Underwriters set forth in or made pursuant to this
Agreement will remain in full force and effect, regardless of any investigation
made by or on behalf of any Underwriter or the Company or any of the officers,
directors, employees, agents or controlling persons referred to in Section 8
hereof, and will survive delivery of and payment for the Securities. The
provisions of Sections 7 and 8 hereof shall survive the termination or
cancellation of this Agreement.
12. Notices. All communications hereunder will be in writing and effective
only on receipt, and, if sent to the Representatives, will be mailed, delivered
or telefaxed to Salomon Smith Barney Inc. General Counsel (fax no.: (212)
816-7912) and confirmed to the General Counsel, Salomon Smith Barney Inc., at
388 Greenwich Street, New York, New York, 10013, Attention: General Counsel; or,
if sent to the Company, will be mailed, delivered or telefaxed to Metromedia
Fiber Network Services, Inc. c/o Metromedia Fiber Network, Inc., One North
34
<PAGE>
Lexington Avenue, White Plains, New York 10601, Attention: Chief Financial
Officer (fax no.: (914) 421-6777) and confirmed to it at Metromedia Company, One
Meadowlands Plaza, East Rutherford, New Jersey 07073-2137, Attention: General
Counsel (fax no.: (201) 531-2803) and 215 East 67th Street, New York, New York
10021, Attention: Executive Vice President (fax no.: (212) 606-4337).
13. Successors. This Agreement will inure to the benefit of and be binding
upon the parties hereto and their respective successors and the officers and
directors and controlling persons referred to in Section 8 hereof, and, except
as expressly set forth in Section 5(h) or Section 8 hereof, no other person will
have any right or obligation hereunder.
14. Applicable Law. This Agreement will be governed by and construed in
accordance with the laws of the State of New York applicable to contracts made
and to be performed within the State of New York.
15. Counterparts. This Agreement may be executed in one or more
counterparts, each of which shall constitute an original and all of which
together shall constitute one and the same instrument.
16. Headings. The section headings used herein are for convenience only
and shall not affect the construction hereof.
17. Definitions. The terms which follow, when used in this Agreement,
shall have the meanings indicated.
"Act" shall mean the Securities Act of 1933, as amended and the rules and
regulations of the Commission promulgated thereunder.
"Basic Prospectus" shall mean the prospectus referred to in paragraph 1(a)
above contained in the Registration Statement at the Effective Date including
any Preliminary Final Prospectus.
"Business Day" shall mean any day other than a Saturday, a Sunday or a
legal holiday or a day on which banking institutions or trust companies are
authorized or obligated by law to close in New York City.
"Commission" shall mean the Securities and Exchange Commission.
"Communications Act" shall mean the Communications Act of 1934, as amended
(including amendments made by the Telecommunications Act of 1996), 47 U.S.C.
section 151 and the rules and regulations of the FCC.
"Effective Date" shall mean each date and time that the Registration
Statement, any post-effective amendment or amendments thereto and any Rule
462(b) Registration Statement became or become effective.
35
<PAGE>
"Exchange Act" shall mean the Securities Exchange Act of 1934, as amended,
and the rules and regulations of the Commission promulgated thereunder.
"Execution Time" shall mean the date and time that this Agreement is
executed and delivered by the parties hereto.
"Final Prospectus" shall mean the prospectus supplement relating to the
Securities that was first filed pursuant to Rule 424(b) after the Execution
Time, together with the Basic Prospectus.
"Preliminary Final Prospectus" shall mean any preliminary prospectus
supplement to the Basic Prospectus which describes the Securities and the
offering thereof and is used prior to filing of the Final Prospectus, together
with the Basic Prospectus.
"Registration Statement" shall mean the registration statement referred to
in paragraph 1(a) above, including exhibits and financial statements, as amended
at the Execution Time (or, if not effective at the Execution Time, in the form
in which it shall become effective) and, in the event any post-effective
amendment thereto or any Rule 462(b) Registration Statement becomes effective
prior to the Closing Date, shall also mean such registration statement as so
amended or such Rule 462(b) Registration Statement, as the case may be. Such
term shall include any Rule 430A Information deemed to be included therein at
the Effective Date as provided by Rule 430A.
"Rule 415", "Rule 424", "Rule 430A" and "Rule 462" refer to such rules
under the Act.
"Rule 430A Information" shall mean information with respect to the
Securities and the offering thereof permitted to be omitted from the
Registration Statement when it becomes effective pursuant to Rule 430A.
"Rule 462(b) Registration Statement" shall mean a registration statement
and any amendments thereto filed pursuant to Rule 462(b) relating to the
offering covered by the registration statement referred to in Section 1(a)
hereof.
"State Telecommunications Laws" shall mean the comparable state statutes
of all states in which the Company and/or its subsidiaries is certified to
provide services.
"Trust Indenture Act" shall mean the Trust Indenture Act of 1939, as
amended and the rules and regulations of the Commission promulgated thereunder.
36
<PAGE>
If the foregoing is in accordance with your understanding of our
agreement, please sign and return to us the enclosed duplicate hereof, whereupon
this Agreement and your acceptance shall represent a binding agreement among the
Company and the several Underwriters.
Very truly yours,
METROMEDIA FIBER NETWORK, INC.,
By: /s/ Gerard Benedetto
------------------------------------
Name: Gerard Benedetto
Title: Chief Financial Officer
and Senior Vice President
[Underwriting Agreement-Notes]
<PAGE>
The foregoing Agreement is
hereby confirmed and accepted
as of the date specified in
Schedule I hereto.
Salomon Smith Barney Inc.
Chase Securities Inc.
Deutsche Bank Securities Inc.
Donaldson, Lufkin & Jenrette Securities Corporation
Goldman, Sachs & Co.
Morgan Stanley & Co. Incorporated
By: SALOMON SMITH BARNEY INC.
By: /s/ Robert Doherty
-------------------------
Name: Robert Doherty
Title: Director
For themselves and the other
several Underwriters, if any,
named in Schedule II to the
foregoing Agreement.
[Underwriting Agreement-Notes]
<PAGE>
SCHEDULE I
Underwriting Agreement dated: November 12, 1999
1
<PAGE>
SCHEDULE II
Principal Amount Principal Amount
of U. S. Securities of International Securities
Underwriters to be Purchased to be Purchased
- ------------ ------------------- ---------------------------
Salomon Smith Barney Inc. $375,000,000 (euro)125,000,000
Chase Securities Inc. 93,750,000 31,250,000
Deutsche Bank Securities Inc. 75,000,000 25,000,000
Donaldson, Lufkin & Jenrette
Securities Corporation 93,750,000 31,250,000
Goldman, Sachs & Co. 75,000,000 25,000,000
Morgan Stanley & Co.
Incorporated 37,500,000 12,500,000
------------ -----------------
Total $750,000,000 (euro)250,000,000
2
<PAGE>
SCHEDULE III
SUBSIDIARY
1. Metromedia Fiber Network NYC, Inc.
2. Metromedia Fiber Network Services, Inc.
3. AboveNet Communications Inc.
4. Metromedia Fiber Network International, Inc.
3
EXHIBIT 1.2
Metromedia Fiber Network, Inc.
Class A Common Stock
(par value $.01 per share)
Underwriting Agreement
New York, New York
November 12, 1999
SALOMON SMITH BARNEY INC.
CREDIT SUISSE FIRST BOSTON CORPORATION
DEUTSCHE BANK SECURITIES INC.
DONALDSON, LUFKIN & JENRETTE
SECURITIES CORPORATION
GOLDMAN, SACHS & CO.
MERRILL LYNCH, PIERCE, FENNER & SMITH
INCORPORATED
As Representatives of the several Underwriters,
c/o Salomon Smith Barney Inc.
388 Greenwich Street
New York, New York 10013
Ladies and Gentlemen:
Certain stockholders of Metromedia Fiber Network, Inc., a Delaware
corporation (the "Company"), named in Schedule I hereto (the "Selling
Stockholders") severally propose to sell to the underwriters named in Schedule
II hereto (the "Underwriters"), for whom Salomon Smith Barney Inc., Credit
Suisse First Boston Corporation, Deutsche Bank Securities Inc., Donaldson,
Lufkin & Jenrette Securities Corporation, Goldman, Sachs & Co. and Merrill
Lynch, Pierce, Fenner & Smith Incorporated (the "Representatives") are acting as
representatives, 4,895,000 shares of Class A Common Stock, par value $.01 per
share, of the Company (the "Underwritten Securities"). The Selling Stockholders
named in Schedule I hereto also propose to grant to the Underwriters an option
to purchase up to 734,250 additional
<PAGE>
shares of Common Stock to cover over-allotments (the "Option Securities," and
together with the Underwritten Securities, the "Securities"). To the extent
there are no additional Underwriters listed on Schedule II other than you, the
term Representatives as used herein shall mean you, as Underwriters, and the
terms Representatives and Underwriters shall mean either the singular or plural
as the context requires. In addition, to the extent that there is not more than
one Selling Stockholder named in Schedule I, the term Selling Stockholder shall
mean either the singular or plural. The use of the neuter in this Agreement
shall include the feminine and masculine wherever appropriate. Any reference
herein to the Registration Statement, the Basic Prospectus, any Preliminary
Final Prospectus or the Final Prospectus shall be deemed to refer to and include
the documents incorporated or deemed to be incorporated by reference therein
pursuant to Item 12 of Form S-3 which were filed under the Exchange Act on or
before the Effective Date of the Registration Statement or the issue date of the
Basic Prospectus, any Preliminary Final Prospectus or the Final Prospectus, as
the case may be (the "Incorporated Documents"); and any reference herein to the
terms "amend", "amendment" or "supplement" with respect to the Registration
Statement, the Basic Prospectus, any Preliminary Final Prospectus or the Final
Prospectus shall be deemed to refer to and include the filing of any document
under the Exchange Act after the Effective Date of the Registration Statement or
the issue date of the Basic Prospectus, any Preliminary Final Prospectus or the
Final Prospectus, as the case may be, deemed to be incorporated therein by
reference. Certain terms used herein are defined in Section 17 hereof.
1. Representations and Warranties. (i) The Company represents and warrants
to, and agrees with, each Underwriter as set forth below in this Section 1.
(a) The Company meets the requirements for use of Form S-3 under the
Act and has prepared and filed with the Commission a Registration
Statement (File No. 333-89087) on Form S-3, including a Basic Prospectus,
for registration under the Act of the offering and sale of the Securities.
The Company may have filed one or more amendments thereto, including a
Preliminary Final Prospectus, each of which has previously been furnished
to you. The Company will next file with the Commission one of the
following: (1) after the Effective Date of such Registration Statement, a
final prospectus supplement relating to the Securities in accordance with
Rules 430A and 424(b), (2) prior to the Effective Date of such
Registration Statement, an amendment to such Registration Statement
(including the form of final prospectus supplement) or (3) a final
prospectus in accordance with Rules 415 and 424(b). In the case of clause
(1), the Company has included in such Registration Statement, as amended
at the Effective Date, all information (other than Rule 430A Information)
required by the Act and the rules there under to be included in such
Registration Statement and the Final Prospectus. As filed, such final
prospectus supplement or such amendment and form of
2
<PAGE>
final prospectus supplement shall contain all Rule 430A Information,
together with all other such required information, and, except to the
extent the Representatives shall agree in writing to a modification,
shall be in all substantive respects in the form furnished to you prior to
the Execution Time or, to the extent not completed at the Execution Time,
shall contain only such specific additional information and other changes
(beyond that contained in the Basic Prospectus and any Preliminary Final
Prospectus) as the Company has advised you, prior to the Execution Time,
will be included or made therein. The Registration Statement, at the
Execution Time, meets the requirements set forth in Rule 415(a)(1)(x).
(b) On the Effective Date, the Registration Statement did or will,
and when the Final Prospectus is first filed (if required) in accordance
with Rule 424(b) and on the Closing Date (as defined herein), the Final
Prospectus (and any supplement thereto) will, comply in all material
respects with the applicable requirements of the Act, the Exchange Act and
the respective rules thereunder; on the Execution Time, the Registration
Statement, as supplemented by any prospectus supplement filed pursuant to
Rule 424(b), did not or will not contain any 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; on the Effective Date, the Final Prospectus, if not
filed pursuant to Rule 424(b), will not, and on the date of any filing
pursuant to Rule 424(b) and on the Closing Date, the Final Prospectus
(together with any supplement thereto) will not, include any untrue
statement of a material fact or omit to state a material fact necessary in
order to make the statements therein, in the light of the circumstances
under which they were made, not misleading; provided, however, that the
Company and the Selling Stockholders make no representations or warranties
as to the information contained in or omitted from the Registration
Statement or the Final Prospectus (or any amendment or supplement thereto)
in reliance upon and in conformity with information furnished in writing
to the Company by or on behalf of any Underwriter through the
Representatives specifically for inclusion therein, it being understood
and agreed that the only such information is that described as such in
Section 8(b) of this Agreement.
(c) The Incorporated Documents heretofore filed, when they were
filed (or, if any amendment with respect to any such document was filed,
when such amendment was filed), conformed in all material respects with
the requirements of the Exchange Act and the rules and regulations
thereunder, any further Incorporated Documents so filed will, when they
are filed, conform in all material respects with the requirements of the
Exchange Act and the rules and regulations thereunder; no such document
when it was filed (or, if an amendment with respect to any such document
was filed, when such
3
<PAGE>
amendment was filed), contained an untrue statement of a material fact or
omitted to state a material fact necessary to make the statements therein,
in light of the circumstances under which they were made, not misleading;
and no such further document, when it is filed, will contain an untrue
statement of a material fact or will omit to state a material fact
required to be stated therein or necessary in order to make the statements
therein not misleading.
(d) Each of the Company and its subsidiaries has been duly
incorporated and is validly existing as a corporation or limited liability
company in good standing under the laws of the jurisdiction in which it is
chartered or organized with full corporate power and authority to own or
lease, as the case may be, and to operate its properties and conduct its
business as described in the Final Prospectus (as then amended or
supplemented), and is duly qualified to do business as a foreign
corporation or limited liability company and is in good standing under the
laws of each jurisdiction which requires such qualification, except where
the failure to be so qualified would not have, singly or in the aggregate,
a material adverse effect on the condition (financial or otherwise),
prospects, earnings, business or properties of the Company and its
subsidiaries, taken as a whole, whether or not arising from transactions
in the ordinary course of business.
(e) All the outstanding shares of capital stock of each subsidiary
that is a corporation have been duly and validly authorized and issued and
are fully paid and nonassessable, and, except as otherwise set forth in
the Final Prospectus, all outstanding shares of capital stock of the
subsidiaries are owned by the Company either directly or through wholly
owned subsidiaries free and clear of any perfected security interest and,
to the knowledge of the Company, any other security interests, claims,
liens or encumbrances.
(f) The Company's authorized capitalization is as set forth in the
Final Prospectus under the heading "Capitalization".
(g) There is no franchise, contract or other document of a character
required to be described in the Registration Statement or Final
Prospectus, or to be filed as an exhibit thereto, which is not described
or filed as required. The statements in the Final Prospectus under the
headings "Certain United States Federal Income Tax Considerations",
"Business--Regulation," "Business-Franchise, License and Related
Agreements," "Business-Regulation of International Operations,"
"Description of Capital Stock" and "Business--Legal Proceedings" fairly
summarize the matters therein described in all material respects.
4
<PAGE>
(h) This Agreement has been duly authorized, executed and delivered
by the Company; the Securities have been duly and validly authorized by
the Company; the holders of outstanding shares of capital stock of the
Company are not entitled to preemptive or other rights to subscribe for
the Securities; and, except as set forth in the Final Prospectus, no
options, warrants or other rights to purchase, agreements or other
obligations to issue, or rights to convert any obligation into or exchange
any securities for, shares of capital stock of or ownership interests in
the Company are outstanding.
(i) The Company is not, and after giving effect to the offering and
sale of the Securities and the application of the proceeds thereof as
described in the Final Prospectus, will not be, an "investment company"
required to be registered under the Investment Company Act of 1940, as
amended, without taking account of any exemption arising out of the number
of holders of the Company's securities.
(j) No consent, approval, authorization, filing with or order of any
court or governmental agency or body is required in connection with the
transactions contemplated herein, except such as will be obtained under
the Act in connection with the registration of the Securities, and such as
may be required under the blue sky laws of any jurisdiction in connection
with the purchase and distribution of the Securities by the Underwriters
in the manner contemplated herein or in the Final Prospectus.
(k) None of the execution and delivery of this Agreement, the sale
of the Securities, nor the consummation of any of the transactions
contemplated herein or the fulfillment of the terms hereof, will conflict
with, result in a breach or violation or imposition of any lien, charge or
encumbrance upon any property or assets of the Company or any of its
subsidiaries, pursuant to (i) the charter or by-laws of the Company or any
of its subsidiaries; (ii) the terms of any indenture, contract, lease,
mortgage, deed of trust, note agreement, loan agreement or other
agreement, obligation, condition, covenant or instrument to which the
Company or any of its subsidiaries is a party or bound or to which its or
their property is subject; or (iii) any statute, law, rule, regulation,
judgment, order or decree applicable to the Company or any of its
subsidiaries of any court, regulatory body, administrative agency,
governmental body, arbitrator or other authority having jurisdiction over
the Company or any of its subsidiaries or any of its or their properties,
except in the case of clauses (ii) and (iii), as could not be reasonably
expected to have, singly or in the aggregate, a material adverse effect on
the condition (financial or otherwise), prospects, earnings, business or
properties of the Company and its subsidiaries, taken as a whole, whether
or not arising from transactions in the ordinary course of business.
5
<PAGE>
(l) The Securities conform as to legal matters to the description
thereof contained in the Final Prospectus.
(m) The consolidated historical financial statements of the Company
and its consolidated subsidiaries included in the Final Prospectus present
fairly in all material respects the financial condition, results of
operations and cash flows of the Company as of the dates and for the
periods indicated and have been prepared in conformity with generally
accepted accounting principles applied on a consistent basis throughout
the periods involved (except as otherwise noted therein). The selected
financial data set forth under the caption "Selected Consolidated
Financial Data" in the Final Prospectus fairly present, on the basis
stated in the Final Prospectus, the information included therein.
(n) The pro forma financial statements included in the Final
Prospectus include assumptions that provide a reasonable basis for
presenting the significant effects directly attributable to the
transactions and events described therein, the related pro forma
adjustments give appropriate effect to those assumptions, and the pro
forma adjustments reflect the proper application of those adjustments to
the historical financial statement amounts in the pro forma financial
statements included in the Final Prospectus. The pro forma financial
statements included in the Final Prospectus comply as to form in all
material respects with the applicable accounting requirements of
Regulation S-X under the Act and the pro forma adjustments have been
properly applied to the historical amounts in the compilation of those
statements.
(o) No action, suit or proceeding by or before any court or
governmental agency, authority or body or any arbitrator involving the
Company or any of its subsidiaries or its or their property is pending or,
to the best knowledge of the Company, threatened that (i) could reasonably
be expected to have a material adverse effect on the performance of this
Agreement or the consummation of any of the transactions contemplated
hereby; or (ii) could reasonably be expected to have a material adverse
effect on the condition (financial or otherwise), prospects, earnings,
business or properties of the Company and its subsidiaries, taken as a
whole, whether or not arising from transactions in the ordinary course of
business, except as set forth in or contemplated in the Final Prospectus
(exclusive of any amendment or supplement thereto).
(p) Except as described in the Final Prospectus, each of the Company
and each of its subsidiaries owns, licenses, leases or has obtained
6
<PAGE>
rights-of-way for all such properties as are necessary to the conduct of
its operations as presently conducted. The Company and each of its
subsidiaries has good and marketable title, free and clear of all liens or
encumbrances, to all property and assets described in the Final Prospectus
as being owned by it on the date hereof and such properties and assets are
in good repair and suitable for use as so described except as set forth in
the Final Prospectus. All leases to which the Company or its subsidiaries
are a party are valid and binding (subject to applicable bankruptcy,
reorganization, insolvency, moratorium, fraudulent conveyance or other
laws affecting creditors' rights generally from time to time in effect and
to general principles of equity) and no default has occurred or is
continuing thereunder which could have, singly or in the aggregate, a
material adverse effect on the condition (financial or otherwise),
prospects, earnings, business or properties of the Company and its
subsidiaries, taken as a whole, whether or not arising from transactions
in the ordinary course of business, and the Company and each subsidiary
enjoy peaceful and undisturbed possession under all such leases to which
any of them is a party as lessee with such exceptions as do not interfere
materially with the use made by the Company or such subsidiary.
(q) Neither the Company nor any subsidiary is in violation or
default of (i) any provision of its charter or bylaws; (ii) the terms of
any indenture, contract, lease, mortgage, deed of trust, note agreement,
loan agreement or other agreement, obligation, condition, covenant or
instrument to which it is a party or bound or to which its property is
subject; or (iii) any statute, law, rule, regulation, judgment, order or
decree applicable to the Company or any of its subsidiaries of any court,
regulatory body, administrative agency, governmental body, arbitrator or
other authority having jurisdiction over the Company or such subsidiary or
any of its properties, as applicable, except in the case of clauses (ii)
and (iii) as could not be reasonably expected to have, singly or in the
aggregate, a material adverse effect on the condition (financial or
otherwise), prospects, earnings, business or properties of the Company and
its subsidiaries, taken as a whole, whether or not arising from
transactions in the ordinary course of business.
(r) Each of (i) Deloitte & Touche LLP, (ii) Ernst & Young LLP, and
(iii) PriceWaterhouseCoopers LLP, each of whom have audited certain
financial statements of the Company and its consolidated subsidiaries or
its acquired entities, as the case may be, and delivered their report with
respect to the audited consolidated financial statements included and/or
incorporated by reference in the Final Prospectus are independent public
accountants with respect to the Company within the meaning of the Act and
the applicable published rules and regulations thereunder.
7
<PAGE>
(s) The Company and each subsidiary has filed all foreign, federal,
state and local tax returns that are required to be filed or has requested
extensions thereof except in any case in which the failure so to file
would not have, singly or in the aggregate, a material adverse effect on
the condition (financial or otherwise), prospects, earnings, business or
properties of the Company and its subsidiaries, taken as a whole, whether
or not arising from transactions in the ordinary course of business, and
has paid all taxes required to be paid by it and any other assessment,
fine or penalty levied against it, to the extent that any of the foregoing
is due and payable, except for any such assessment, fine or penalty that
is currently being contested in good faith or as would not have, singly or
in the aggregate, a material adverse effect on the condition (financial or
otherwise), prospects, earnings, business or properties of the Company and
its subsidiaries, taken as a whole, whether or not arising from
transactions in the ordinary course of business.
(t) No labor problem or dispute with the employees of the Company or
any of its subsidiaries exists or is threatened or imminent that could
have, singly or in the aggregate, a material adverse effect on the
condition (financial or otherwise), prospects, earnings, business or
properties of the Company and its subsidiaries, taken as a whole, whether
or not arising from transactions in the ordinary course of business.
(u) There are no transfer taxes or other similar fees or charges
under Federal law or the laws of any state, or any political subdivision
thereof, required to be paid in connection with the execution and delivery
of this Agreement or the issuance by the Company or sale by the Company of
the Securities.
(v) The Company and each of its subsidiaries are insured by insurers
of recognized financial responsibility against such losses and risks and
in such amounts as are prudent and customary in the businesses in which
they are engaged; all policies of insurance and fidelity or surety bonds
insuring the Company or any of its subsidiaries or their respective
businesses, assets, employees, officers and directors are in full force
and effect; the Company and its subsidiaries are in compliance with the
terms of such policies and instruments in all material respects; and there
are no claims by the Company or any of its subsidiaries under any such
policy or instrument as to which any insurance company is denying
liability or defending under a reservation of rights clause; neither the
Company nor any such subsidiary has been refused any insurance coverage
sought or applied for; and neither the Company nor any such subsidiary has
any reason to believe that it will not be able to renew its existing
insurance coverage as and when such coverage expires or to obtain similar
coverage from similar insurers as may be neces-
8
<PAGE>
sary to continue its business at a cost that would not have, singly or in
the aggregate, a material adverse effect on the condition (financial or
otherwise), prospects, earnings, business or properties of the Company and
its subsidiaries, taken as a whole, whether or not arising from
transactions in the ordinary course of business.
(w) Except as described in the Final Prospectus, no subsidiary of
the Company is currently prohibited, directly or indirectly, from paying
any dividends to the Company, from making any other distribution on such
subsidiary's capital stock, from repaying to the Company any loans or
advances to such subsidiary from the Company or from transferring any of
such subsidiary's property or assets to the Company or any other
subsidiary of the Company.
(x) Except as described in the Final Prospectus, the Company and its
subsidiaries (i) possess the certificates, authorizations, approvals,
franchises, licenses, rights-of-way and permits issued by the appropriate
federal, state, local or foreign regulatory authorities necessary to
conduct their respective businesses as presently conducted, (ii) are not
in violation of any such certificates, authorizations, approvals,
franchises, licenses, rights-of-way and permits, except where such
violation would not have a material adverse effect on the condition
(financial or otherwise), prospects, earnings, business or properties of
the Company and its subsidiaries, taken as a whole, whether or not arising
from transactions in the ordinary course of business and (iii) have not
received any notice of proceedings relating to the revocation or
modification of any such certificate, authorization, approval, franchise,
license, right-of-way or permit which, singly or in the aggregate, if the
subject of an unfavorable decision, ruling or finding, would have a
material adverse effect on the condition (financial or otherwise),
prospects, earnings, business or properties of the Company and its
subsidiaries, taken as a whole, whether or not arising from transactions
in the ordinary course of business.
(y) The Company and its subsidiaries possess or have applied for the
patents, patent rights, licenses, inventions, copyrights, know-how
(including trade secrets and other unpatented and/or unpatentable
proprietary or confidential information, systems or procedures),
trademarks, service marks and trade names (collectively, "Intellectual
Property") presently employed by them in connection with the businesses
now operated by them, and neither the Company nor any of the Subsidiaries
has received any notice of infringement of or conflict with asserted
rights of others with respect to the foregoing except as could not have,
singly or in the aggregate, a material adverse effect on the condition
(financial or otherwise), prospects, earnings, business or properties of
the Company and its subsidiaries, taken as a whole, whether or
9
<PAGE>
not arising from transactions in the ordinary course of business. To the
Company's knowledge, the use of such Intellectual Property in connection
with the business and operations of the Company and its subsidiaries does
not infringe on the rights of any person.
(z) The Company and each of its subsidiaries maintain a system of
internal accounting controls sufficient to provide reasonable assurance
that (i) transactions are executed in accordance with management's general
or specific authorizations; (ii) transactions are recorded as necessary to
permit preparation of financial statements in conformity with generally
accepted accounting principles and to maintain asset accountability; (iii)
access to assets is permitted only in accordance with management's general
or specific authorization; and (iv) the recorded accountability for assets
is compared with the existing assets at reasonable intervals and
appropriate action is taken with respect to any differences.
(aa) The Company and its subsidiaries are (i) in compliance with any
and all applicable foreign, federal, state and local laws and regulations
relating to the protection of human health and safety, the environment or
hazardous or toxic substances or wastes, pollutants or contaminants
("Environmental Laws"); (ii) have received and are in compliance with all
permits, licenses or other approvals required of them under applicable
Environmental Laws to conduct their respective businesses as described in
the Final Prospectus; and (iii) have not received notice of any actual or
potential liability for the investigation or remediation of any disposal
or release of hazardous or toxic substances or wastes, pollutants or
contaminants, except where such non-compliance with Environmental Laws,
failure to receive required permits, licenses or other approvals, or
liability would not, individually or in the aggregate, have a material
adverse effect on the condition (financial or otherwise), prospects,
earnings, business or properties of the Company and its subsidiaries,
taken as a whole, whether or not arising from transactions in the ordinary
course of business; neither the Company nor any of the subsidiaries has
been notified that it has been named as a "potentially responsible party"
under the Comprehensive Environmental Response, Compensation, and
Liability Act of 1980, as amended.
(bb) Except as described in the Final Prospectus, the Company and
its subsidiaries are implementing a comprehensive, detailed program to
analyze and address the risk that the computer hardware and software used
by them may be unable to recognize and properly execute date-sensitive
functions involving certain dates prior to and any dates after December
31, 1999 (the "Year 2000 Problem"), and reasonably believe that such risk
will be remedied on a timely basis without material expense and will not
have a
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material adverse effect upon the financial condition and results of
operations of the Company and its subsidiaries, taken as a whole.
(cc) Each of the Company and its subsidiaries has fulfilled its
obligations, if any, under the minimum funding standards of Section 302 of
the United States Employee Retirement Income Security Act of 1974, as
amended ("ERISA"), and the regulations and published interpretations
thereunder with respect to each "plan" (as defined in Section 3(3) of
ERISA and such regulations and published interpretations) in which
employees of the Company and its subsidiaries are eligible to participate
and each such plan is in compliance in all material respects with the
presently applicable provisions of ERISA and such regulations and
published interpretations; the Company and its subsidiaries have not
incurred any unpaid liability to the Pension Benefit Guaranty Corporation
(other than for the payment of premiums in the ordinary course) or to any
such plan under Title IV of ERISA.
(dd) The subsidiaries listed on Schedule III attached hereto are the
only significant subsidiaries of the Company as defined in Rule 1-02 of
Regulation S-X (individually, a "Subsidiary" and collectively, the
"Subsidiaries").
(ee) None of the transactions contemplated by this Agreement will
violate or result in a violation of Section 7 of the Exchange Act, or any
regulation promulgated thereunder, including, without limitation,
Regulations T, U and X of the Board of Governors of the Federal Reserve
System.
(ff) Neither the Company nor any of the subsidiaries is a "holding
company" or a "subsidiary company" of a holding company, or an "affiliate"
thereof required to be registered under the Public Utility Holding Company
Act of 1935, as amended.
(gg) Neither the Company nor any of its subsidiaries nor, to the
Company's knowledge, any employee or agent of the Company or any
subsidiary has made any payment of funds of the Company or any subsidiary
or received or retained any funds in violation of any provision of the
Foreign Corrupt Practices Act of 1977, as amended.
(hh) No "nationally recognized statistical rating organization" as
such term is defined for purposes of Rule 436(g)(2) under the Act has
indicated to the Company that it is considering (i) the downgrading,
suspension or withdrawal of, or any review for a possible change that does
not indicate the direction of the possible change in, any rating assigned
to the
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Company or any securities of the Company or (ii) any change in the outlook
for any rating of the Company or any securities of the Company.
(ii) No relationship, direct or indirect, exists between or among
the Company or any of its subsidiaries on the one hand, and the directors,
officers, stockholders, customers or suppliers of the Company or any of
its subsidiaries on the other hand, which is required by the Act to be
described in the Final Prospectus which is not so described.
(jj) The Company has not taken, directly or indirectly, any action
designed to cause or which has constituted or which might reasonably be
expected to cause or result, under the Exchange Act or otherwise, in the
stabilization or manipulation of the price of any security of the Company
to facilitate the sale or resale of the Securities.
(kk) Except as may have been waived, no holders of securities of the
Company have rights to the registration of such securities under the
Registration Statement.
(ll) The securities being sold by the Selling Stockholders are duly
listed, and admitted and authorized for trading, on the NASDAQ National
Market.
Any certificate signed by any officer of the Company and delivered to the
Representatives or counsel for the Underwriters in connection with the offering
of the Securities shall be deemed a representation and warranty by the Company,
as to matters covered thereby, to each Underwriter.
(ii) Each Selling Stockholder severally and not jointly represents and
warrants to, and agrees with, each Underwriter that:
(a) Such Selling Stockholder is, or prior to the Closing will be,
the record and beneficial owner of the Securities to be sold by it
hereunder free and clear of all liens, encumbrances, equities and claims
and has duly indorsed such Securities in blank, and, assuming that each
Underwriter acquires its interest in the Securities it has purchased from
such Selling Stockholder in good faith without notice of any adverse claim
(within the meaning of Section 8-105 of the New York Uniform Commercial
Code ("UCC")), each Underwriter that has purchased such Securities
delivered on the Closing Date to The Depository Trust Company or other
securities intermediary (assuming such are securities intermediaries
within the meaning of Section 8-102(14) of the UCC) by making payment
therefor as provided herein, and that has had such Securities credited by
book entry to the securi-
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ties account or accounts (within the meaning of Section 8-501(a) of the
UCC) of such Underwriter maintained by The Depository Trust Company or
such other securities intermediary will have acquired a security
entitlement (within the meaning of Section 8-102(a)(17) of the UCC) to
such Securities purchased by such Underwriter, and no action based on an
adverse claim (within the meaning of Section 8-102(a)(1) and Section 8-502
of the UCC) may be asserted against such Underwriter with respect to such
Securities.
(b) Such Selling Stockholder has not taken, directly or indirectly,
any action designed to or which has constituted or which might reasonably
be expected to cause or result, under the Exchange Act or otherwise, in
stabilization or manipulation of the price of any security of the Company
to facilitate the sale or resale of the Securities.
(c) Certificates in negotiable form for such Selling Stockholder's
Securities have been or, prior to the Closing, will be placed in custody
(which deposit may occur on the books of the Company's transfer agent
without physical delivery of a certificate), for delivery pursuant to the
terms of this Agreement, under a Custody Agreement and Power of Attorney
duly authorized (if applicable) executed and delivered by such Selling
Stockholder, in the form heretofore furnished to you (the "Custody
Agreement") with ChaseMellon Shareholder Services, L.L.C., as Custodian
(the "Custodian"); the Securities represented by the certificates so held
in custody for each Selling Stockholder are subject to the interests
hereunder of the Underwriters; the arrangements for custody and delivery
of such certificates, made by such Selling Stockholder hereunder and under
the Custody Agreement, are not subject to termination by any acts of such
Selling Stockholder, or by operation of law, whether by the death or
incapacity of such Selling Stockholder or the occurrence of any other
event; and if any such death, incapacity or any other such event shall
occur before the delivery of such Securities hereunder, certificates for
the Securities will be delivered by the Custodian in accordance with the
terms and conditions of this Agreement and the Custody Agreement as if
such death, incapacity or other event had not occurred, regardless of
whether or not the Custodian shall have received notice of such death,
incapacity or other event.
(d) No consent, approval, authorization or order of any court or
governmental agency or body is required for the consummation by such
Selling Stockholder of the transactions contemplated herein, except such
as may have been obtained under the Act and such as may be required under
the blue sky laws of any jurisdiction in connection with the purchase and
distribution of the Securities by the Underwriters and such other
approvals as have been obtained.
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(e) Neither the sale of the Securities being sold by such Selling
Stockholder nor the consummation of any other of the transactions herein
contemplated by such Selling Stockholder or the fulfillment of the terms
hereof by such Selling Stockholder will conflict with, result in a breach
or violation of, or constitute a default under any law or the charter or
by-laws of such Selling Stockholder or the terms of any indenture or other
agreement or instrument to which such Selling Stockholder or any of its
subsidiaries is a party or bound, or any judgment, order or decree
applicable to such Selling Stockholder or any of its subsidiaries of any
court, regulatory body, administrative agency, governmental body or
arbitrator having jurisdiction over such Selling Stockholder or any of its
subsidiaries.
(f) Such Selling Stockholder has no reason to believe that the
representations and warranties of the Company contained in this Section 1
are not true and correct, is familiar with the Registration Statement and
has no knowledge of any material fact, condition or information not
disclosed in the Final Prospectus or any supplement thereto which has
adversely affected or may adversely affect the business of the Company or
any of its subsidiaries; and the sale of Securities by such Selling
Stockholder pursuant hereto is not prompted by any information concerning
the Company or any of its subsidiaries which is not set forth in the Final
Prospectus or any supplement thereto.
(g) In respect of any statements in or omissions from the
Registration Statement or the Final Prospectus or any supplements thereto
made in reliance upon and in conformity with information furnished in
writing to the Company by any Selling Stockholder specifically for use in
connection with the preparation thereof, such Selling Stockholder hereby
makes the same representations and warranties to each Underwriter as the
Company makes to such Underwriter under paragraph (i)(b) of this Section.
Any certificate by any Selling Stockholder or any officer of any Selling
Stockholder and delivered to the Representatives or counsel for the Underwriters
in connection with the offering of the Securities shall be deemed a
representation and warranty by such Selling Stockholder, as to matters covered
thereby, to each Underwriter.
2. Purchase and Sale.
(a) Subject to the terms and conditions and in reliance upon the
representations and warranties herein set forth, the Selling Stockholders
agree, severally and not jointly, to sell to each Underwriter, and each
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<PAGE>
Underwriter agrees, severally and not jointly, to purchase from the
Selling Stockholders, at a purchase price of $37.8575 per share, the
amount of the Underwritten Securities set forth opposite such
Underwriter's name in Schedule II hereto.
(b) Subject to the terms and conditions and in reliance upon the
representations and warranties herein set forth, the Selling Stockholders
named in Schedule I hereby grant an option to the several Underwriters to
purchase, severally and not jointly, up to 734,250 Option Securities at
the same purchase price per share as the Underwriters shall pay for the
Underwritten Securities. Said option may be exercised only to cover
over-allotments in the sale of the Underwritten Securities by the
Underwriters. Said option may be exercised in whole or in part at any time
(but not more than once) on or before the 30th day after the date of the
Final Prospectus upon written or telegraphic notice by the Representatives
to the Company and such Selling Stockholders setting forth the number of
shares of the Option Securities as to which the several Underwriters are
exercising the option and the settlement date. The maximum number of
Option Securities which each Selling Stockholder agrees to sell is set
forth in Schedule I hereto. In the event that the Underwriters exercise
less than their full over-allotment option, the number of Option
Securities to be sold by each Selling Stockholder listed on Schedule I
shall be, as nearly as practicable, in the same proportion as the maximum
number of Option Securities to be sold by each Selling Stockholder and the
number of Option Securities to be sold. The number of Option Securities to
be purchased by each Underwriter shall be the same percentage of the total
number of shares of the Option Securities to be purchased by the several
Underwriters as such Underwriter is purchasing of the Underwritten
Securities, subject to such adjustments as you in your absolute discretion
shall make to eliminate any fractional shares.
3. Delivery and Payment. Delivery of and payment for the Underwritten
Securities and the Option Securities (if the option provided for in Section 2(b)
hereof shall have been exercised on or before the third Business Day prior to
the Closing Date) shall be made at 9:00 A.M., New York City time, on November
17, 1999, or at such time on such later date not more than three Business Days
after the foregoing date as the Representatives shall designate, which date and
time may be postponed by agreement among the Representatives and the Selling
Stockholders or as provided in Section 9 hereof (such date and time of delivery
and payment for the Securities being herein called the "Closing Date"). Delivery
of the Securities shall be made to the Representatives for the respective
accounts of the several Underwriters against payment by the several Underwriters
through the Representatives of the respective aggregate purchase prices of the
Securities being sold by each of the Selling Stockholders to or upon the order
of the Selling Stockholders by wire transfer
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<PAGE>
payable in same-day funds to the account specified by the Company and the
Selling Stockholders. Delivery of the Underwritten Securities and the Option
Securities shall be made through the facilities of The Depository Trust Company
unless the Representatives shall otherwise instruct.
Each Selling Stockholder will pay all applicable state transfer taxes, if
any, involved in the transfer to the several Underwriters of the Securities to
be purchased by them from such Selling Stockholder and the respective
Underwriters will pay any additional stock transfer taxes involved in further
transfers.
If the option provided for in Section 2(b) hereof is exercised after the
third Business Day prior to the Closing Date, the Selling Stockholders named in
Schedule I hereto will deliver the Option Securities (at the expense of the
Company) to the Representatives, at 388 Greenwich Street, New York, New York, on
the date specified by the Representatives (which shall be within three Business
Days after exercise of said option) for the respective accounts of the several
Underwriters, against payment by the several Underwriters through the
Representatives of the purchase price thereof to or upon the order of the
Selling Stockholders named in Schedule I by wire transfer payable in same-day
funds to the accounts specified by the Selling Stockholders named in Schedule I
hereto. If settlement for the Option Securities occurs after the Closing Date,
such Selling Stockholders will deliver to the Representatives on the settlement
date for the Option Securities, and the obligation of the Underwriters to
purchase the Option Securities shall be conditioned upon receipt of,
supplemental opinions, certificates and letters confirming as of such date the
opinions, certificates and letters delivered on the Closing Date pursuant to
Section 6 hereof.
4. Offering by Underwriters. It is understood that the several
Underwriters propose to offer the Securities for sale to the public as set forth
in the Final Prospectus. Each of the Underwriters represents and agrees that (i)
it has not offered or sold and will not offer or sell any Securities to persons
in the United Kingdom except to persons whose ordinary activities involve them
in acquiring, holding, managing or disposing of investments (as principal or
agent) for the purposes of their businesses or otherwise in circumstances which
have not resulted and will not result in an offer to the public in the United
Kingdom within the meaning of the Public Offers of Securities Regulations 1995,
(b) it has complied, and will comply, with all applicable provisions of the
Financial Services Act of 1986 of Great Britain with respect to anything done by
it in relation to the Securities in, from or otherwise involving the United
Kingdom, and (c) it has only issued or passed on and will only issue or pass on
in the United Kingdom any document received by it in connection with the
issuance of the Securities to a person who is of a kind described in Article
11(3) of the Financial Services Act 1986 (Investment Advertisements)
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(Exemptions) Order 1996 of Great Britain or is a person to whom the document may
otherwise lawfully be issued or passed on.
5. Agreements.
(i) The Company agrees with the several Underwriters that:
(a) The Company will use its best efforts to cause the Registration
Statement, if not effective at the Execution Time, and any amendment
thereof, to become effective. Prior to the termination of the offering of
the Securities, the Company will not file any amendment of the
Registration Statement or supplement (including the Final Prospectus or
any Preliminary Final Prospectus) to the Basic Prospectus or any Rule
462(b) Registration Statement unless the Company has furnished you a copy
for your review prior to filing and will not file any such proposed
amendment or supplement without the prior consent of the Representatives,
which consent shall not be unreasonably withheld, conditioned or delayed.
Subject to the foregoing sentence, if the Registration Statement has
become or becomes effective pursuant to Rule 430A, or filing of the Final
Prospectus is otherwise required under Rule 424(b), the Company will cause
the Final Prospectus, properly completed, and any supplement thereto to be
filed with the Commission pursuant to the applicable paragraph of Rule
424(b) within the time period prescribed and will provide evidence
satisfactory to the Representatives of such timely filing. If necessary
for the sale of the Securities, the Company will cause the Rule 462(b)
Registration Statement, completed in compliance with the Act and the
applicable rules and regulations thereunder, to be filed with the
Commission pursuant to Rule 462(b) and will provide evidence satisfactory
to the Representatives of such filing. The Company will promptly advise
the Representatives (1) when the Registration Statement, if not effective
at the Execution Time, shall have become effective, (2) when the Final
Prospectus, and any supplement thereto, shall have been filed (if
required) with the Commission pursuant to Rule 424(b) or when any Rule
462(b) Registration Statement shall have been filed with the Commission,
(3) when, prior to termination of the offering of the Securities, any
amendment to the Registration Statement shall have been filed or become
effective, (4) of any request by the Commission or its staff for any
amendment of the Registration Statement, or any Rule 462(b) Registration
Statement, or for any supplement to the Final Prospectus or for any
additional information, (5) of the issuance by the Commission of any stop
order suspending the effectiveness of the Registration Statement or the
institution or threatening of any proceeding for that purpose and (6) of
the receipt by the Company of any notification with respect to the
suspension of the qualification of the Securities for sale in any
jurisdiction or the institution or
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<PAGE>
threatening of any proceeding for such purpose. The Company will use its
best efforts to prevent the issuance of any such stop order or the
suspension of any such qualification and, if issued, to obtain as soon as
possible the withdrawal thereof. Prior to the completion of the sale of
the Securities by the Underwriters, the Company will not file any document
under the Exchange Act that is incorporated by reference in the
Registration Statement unless, prior to such proposed filing, the Company
has furnished the Representatives with a copy of such document for their
review and the Representatives have not reasonably objected to the filing
of such document within a reasonable period of time. The Company will
promptly advise the Representatives when any document filed under the
Exchange Act that is incorporated by reference in the Registration
Statement shall have been filed with the Commission.
(b) If, at any time when a prospectus relating to the Securities is
required to be delivered under the Act, any event occurs as a result of
which the Final Prospectus as then amended or supplemented would include
any untrue statement of a material fact or omit to state any material fact
necessary to make the statements therein, in the light of the
circumstances under which they were made, not misleading, or if it should
be necessary to amend the Registration Statement or supplement the Final
Prospectus to comply with the Act or the Exchange Act or the respective
rules thereunder, the Company promptly will (1) notify the Representatives
of such event, (2) prepare and file with the Commission, subject to the
second sentence of paragraph (a) of this Section 5, an amendment or
supplement which will correct such statement or omission or effect such
compliance and (3) supply any supplemented Final Prospectus to you in such
quantities as you may reasonably request.
(c) In accordance with the requirements of the Exchange Act and the
Act applicable to the Company, the Company will make generally available
to its security holders and to the Representatives an earnings statement
or statements of the Company and its subsidiaries which will satisfy the
provisions of Section 11(a) of the Act and Rule 158 under the Act.
(d) The Company will furnish to the Representatives and counsel for
the Underwriters, without charge, signed copies of the Registration
Statement (including exhibits thereto) which is filed in connection with
the sale of the Securities, and to each other Underwriter a copy of the
Registration Statement (without exhibits thereto) which is filed in
connection with the sale of the Securities, and, so long as delivery of a
prospectus by an Underwriter or dealer may be required by the Act, as many
copies of each Preliminary Final Prospectus and the Final Prospectus and
any supplement
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<PAGE>
thereto as the Representatives may reasonably request. The Company will
pay the expenses of printing or other production of all documents relating
to the offering.
(e) The Company will arrange, if necessary, for the qualification of
the Securities for sale under the laws of such jurisdictions as the
Representatives may designate, will maintain such qualifications in effect
so long as required for the distribution of the Securities and will pay
any fee of the National Association of Securities Dealers, Inc., in
connection with its review of the offering; provided that in no event
shall the Company be obligated to qualify to do business in any
jurisdiction where it is not now so qualified or to take any action that
would subject it to service of process in suits, other than those arising
out of the offering or sale of the Securities, in any jurisdiction where
it is not now so subject. The Company will promptly advise the
Representatives of the receipt by the Company of any notification with
respect to the suspension of the qualification of the Securities for sale
in any jurisdiction or the initiation or threatening of any proceeding for
such purpose. The Company shall use its best efforts to prevent the
issuance of any order suspending the qualification or exemption of the
Securities under any state securities or Blue Sky laws, and, if at any
time any state securities commission or any other regulatory authority
shall issue an order suspending the qualification or exemption of the
Securities under any state securities or Blue Sky laws, the Company shall
use every reasonable effort to obtain the withdrawal or lifting of such
order at the earliest possible time.
(f) The Company will not, and the stockholders listed on Schedule IV
hereto will not, without the prior written consent of Salomon Smith Barney
Inc., offer, sell, contract to sell, pledge, or otherwise dispose of, (or
enter into any transaction which is designed to, or might reasonably be
expected to, result in the disposition (whether by actual disposition or
effective economic disposition due to cash settlement or otherwise) by the
Company or any affiliate of the Company or any person in privity with the
Company or any affiliate of the Company) directly or indirectly, including
the filing (or participation in the filing) of a registration statement
with the Commission in respect of, or establish or increase a put
equivalent position or liquidate or decrease a call equivalent position
within the meaning of Section 16 of the Exchange Act, any other shares of
Common Stock or any securities convertible into, or exercisable, or
exchangeable for, shares of Common Stock, or publicly announce an
intention to effect any such transaction, for a period of 90 days after
the date of the Underwriting Agreement; provided, however, that the
Company may (1) issue and sell Common Stock pursuant to any employee stock
option plan, stock ownership plan or dividend reinvestment plan of the
Company in effect at the Execution Time; (2) issue
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Common Stock issuable upon the conversion of securities or the exercise of
warrants outstanding at the Execution Time; and (3) issue and sell Common
Stock and convertible subordinated notes to Bell Atlantic Investments Inc.
pursuant to the terms of that certain securities purchase agreement, dated
October 7, 1999; and provided, further that, each of the stockholders
listed on Schedule IV hereto may (1) transfer up to 3,000 shares of Common
Stock as bona fide gifts; (2) transfer shares of Common Stock to an
affiliate, family member, partner or member of such stockholder if such
transferee agrees to become subject to the terms of this Section 5(i)(h);
(3) cause the Company to issue shares of Common Stock and convertible
subordinated notes pursuant to the Securities Purchase Agreement, dated
October 7, 1999, between the Company and Bell Atlantic Investments, Inc.;
(4) if applicable to such stockholder, enter into certain forward purchase
contracts with DECS Trust VI relating to shares of Common Stock; (5) with
respect to Sherman Tuan, sell up to 150,000 shares of Common Stock; and
(6) with respect to David Rand, pledge up to 250,000 shares of Common
Stock to secure margin loans entered into by him.
(g) The Company will not take, directly or indirectly, any action
designed to or which has constituted or which might reasonably be expected
to cause or result, under the Exchange Act or otherwise, in stabilization
or manipulation of the price of any security of the Company to facilitate
the sale or resale of the Securities.
(h) The Company agrees to pay the costs and expenses relating to the
following matters: (i) the preparation, printing or reproduction of the
Registration Statement, the Preliminary Final Prospectus and the Final
Prospectus and each amendment or supplement to any of them; (ii) the
printing (or reproduction) and delivery (including postage, air freight
charges and charges for counting and packaging) of such copies of the
Registration Statement, the Preliminary Final Prospectus and the Final
Prospectus and all amendments or supplements to any of them, as may, in
each case, be reasonably requested for use in connection with the offering
and sale of the Securities; (iii) the preparation, printing,
authentication, issuance and delivery of certificates for the Securities,
including any stamp or transfer taxes in connection with the Securities;
(iv) the printing (or reproduction) and delivery of this Agreement, the
Custody Agreement, any blue sky memorandum and all other agreements or
documents printed (or reproduced) and delivered in connection with the
offering of the Securities; (v) any registration or qualification of the
Securities for offer and sale under the securities or blue sky laws of the
several states (including filing fees and the reasonable fees and expenses
of one counsel for the Underwriters relating to such registration and
qualification); (vi) fees and expenses of the Custodian;
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(vii) the transportation and other expenses incurred by or on behalf of
Company representatives in connection with presentations to prospective
purchasers of the Securities; (viii) the fees and expenses of the
Company's accountants and the fees and expenses of counsel (including
local and special counsel) for the Company; and (ix) all other costs and
expenses incident to the performance by the Company of its obligations
hereunder; provided, however, that, except as otherwise provided for
herein, the Underwriters shall pay their own costs and expenses, including
the fees of their counsel, any advertising expenses connected with any
offers they may make.
(i) The Company agrees to do and perform all things required to be
done and performed by it under this Agreement that are within its control
on or prior to or after the Closing Date, as applicable, and to use its
best efforts to satisfy all conditions precedent on its part to the
delivery of the Securities.
(ii) Each Selling Stockholder agrees with the several Underwriters that;
(a) Such Selling Stockholder will not, without the prior written
consent of Salomon Smith Barney Inc. offer, sell, contract to sell, pledge
or otherwise dispose of, (or enter into any transaction which is designed
to, or might reasonably be expected to, result in the disposition (whether
by actual disposition or effective economic disposition due to cash
settlement or otherwise) by the Company or any affiliate of the Company or
any person in privity with the Company or any affiliate of the Company)
directly or indirectly, or file (or participate in the filing of) a
registration statement with the Commission in respect of, or establish or
increase a put equivalent position or liquidate or decrease a call
equivalent position within the meaning of Section 16 of the Exchange Act
with respect to, any shares of capital stock of the Company or any
securities convertible into or exercisable or exchangeable for such
capital stock, or publicly announce an intention to effect any such
transaction, for a period of 90 days after the date of this Agreement;
provided, that each Selling Stockholder may (1) transfer up to 3,000
shares of Common Stock disposed of as bona fide gifts, (2) transfer shares
of Common Stock to an affiliate, family member, partner or member of such
stockholder if such transferee agrees to become subject to the terms of
this Section 5(i)(h), (3) cause the Company to issue shares of Common
Stock and convertible subordinated notes pursuant to the Securities
Purchase Agreement, dated October 7, 1999, between the Company and Bell
Atlantic Investments, Inc., and (4) if applicable to such stockholder,
enter into certain forward purchase contracts with DECS Trust VI relating
to shares of Common Stock.
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<PAGE>
(b) Such Selling Stockholder will not take any action designed to or
which has constituted or which might reasonably be expected to cause or
result, under the Exchange Act or otherwise, in stabilization or
manipulation of the price of any security of the Company to facilitate the
sale or resale of the Securities.
(c) Such Selling Stockholder will advise you promptly, and if
requested by you, will confirm such advice in writing, so long as delivery
of a prospectus relating to the Securities by an underwriter or dealer may
be required under the Act, of (i) any material change in the Company's
condition (financial or otherwise), prospects, earnings, business or
properties, (ii) any change in information in the Registration Statement
or the Final Prospectus relating to such Selling Stockholder or (iii) any
new material information relating to the Company or relating to any matter
stated in the Final Prospectus which comes to the attention of such
Selling Stockholder.
6. Conditions to the Obligations of the Underwriters. The obligations of
the Underwriters to purchase the Underwritten Securities and the Option
Securities, as the case may be, shall be subject to the accuracy of the
representations and warranties on the part of the Company contained herein as of
the Execution Time, the Closing Date and any settlement date pursuant to Section
3 hereof, to the accuracy of the statements of the Company and the Selling
Stockholders made in any certificates pursuant to the provisions hereof, to the
performance by the Company and the Selling Stockholders of their respective
obligations hereunder and to the following additional conditions:
(a) If the Registration Statement has not become effective prior to
the Execution Time, unless the Representatives agree in writing to a later
time, the Registration Statement will become effective not later than (i)
6:00 PM New York City time, on the date of determination of the public
offering price, if such determination occurred at or prior to 3:00 PM New
York City time on such date or (ii) 9:30 AM on the Business Day following
the day on which the public offering price was determined, if such
determination occurred after 3:00 PM New York City time on such date; if
filing of the Final Prospectus, or any supplement thereto, is required
pursuant to Rule 424(b), the Final Prospectus, and any such supplement,
will be filed in the manner and within the time period required by Rule
424(b); and no stop order suspending the effectiveness of the Registration
Statement shall have been issued and no proceedings for that purpose shall
have been instituted or threatened.
(b) The Company shall have requested and caused Arnold L. Wadler,
General Counsel of the Company, to furnish to the Representatives
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his opinion, dated the Closing Date and addressed to the Representatives,
to the effect that:
i. each of the Company's Subsidiaries has been duly
incorporated and is validly existing as a corporation in good standing
under the laws of the jurisdiction in which it is chartered or organized,
with full corporate power and authority to own or lease, as the case may
be, and to operate, its properties and conduct its business as described
in the Final Prospectus;
ii. all the outstanding shares of capital stock of the Company
and each Subsidiary have been duly and validly authorized and issued and
are fully paid and nonassessable, and, except as otherwise set forth in
the Final Prospectus, all outstanding shares of capital stock of the
Subsidiaries are owned by the Company either directly or through wholly
owned subsidiaries free and clear of any security interest and, to the
knowledge of such counsel, after due inquiry, any other security
interests, claims, liens or encumbrances;
iii. the Company's authorized capitalization is as set forth
in the Final Prospectus under the heading "Capitalization"; the holders of
outstanding shares of capital stock of the Company are not entitled to
preemptive or other rights to subscribe for the Securities; and, to such
counsel's knowledge, except as set forth in the Final Prospectus, no
options, warrants or other rights to purchase, agreements or other
obligations to issue, or rights to convert any obligation into or exchange
any securities for, shares of capital stock of or ownership interests in
the Company are outstanding;
iv. to the knowledge of such counsel, without conducting a
docket search, there is no pending or threatened action, suit or
proceeding by or before any court or governmental agency, authority or
body or any arbitrator involving the Company or any of its subsidiaries or
its or their property that is not adequately disclosed in the Final
Prospectus, except in each case for such proceedings that, if the subject
of an unfavorable decision, ruling or finding would not, singly or in the
aggregate, result in a material adverse change in the condition (financial
or otherwise), prospects, earnings, business or properties of the Company
and its subsidiaries, taken as a whole; and the statements in the Final
Prospectus under the heading "Business--Legal Proceedings" fairly
summarize the matters therein described;
v. neither the execution and delivery of this Agreement, the
sale of the Securities nor the consummation of any other of the
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transactions herein contemplated, nor the fulfillment of the terms hereof,
will conflict with, result in a breach or violation of, or imposition of
any lien, charge or encumbrance upon, any property or asset of the Company
or its subsidiaries pursuant to (i) the charter or by-laws of the
Company's subsidiaries, or (ii) the terms of any indenture, contract,
lease, mortgage, deed of trust, note agreement, loan agreement or other
agreement, obligation, condition, covenant or instrument to which the
Company or any of its subsidiaries is a party or bound or to which its
respective property is subject which is known to such counsel;
vi. the statements in the Final Prospectus under the captions
"Risk Factors - The Heavy Regulation of the Telecommunications Industry
May Limit the Development of Our Networks and Affect Our Competitive
Position" and "Business-Regulation" to the extent that they discuss U.S.
federal, state, and local telecommunications statutes and regulations or
legal or governmental proceedings of the FCC and state and local
governments with respect to telecommunications regulatory matters, fairly
summarize the matters referred to therein in all material respects;
vii. neither the execution and delivery of this Agreement by
the Company nor the performance by the Company of its obligations under
this Agreement will violate the Communications Act or the State
Telecommunications Laws; and
viii. to the knowledge of such counsel and except such as
would not have a material adverse effect on the Company's or any
subsidiary's ability to conduct their respective businesses as they are
presently conducted, (A) the Company and its subsidiaries have in effect
all the U.S. federal and state telecommunications regulatory licenses,
permits, authorizations, consents, and approvals (hereinafter, "Licenses")
required to conduct their respective businesses as presently conducted;
(B) all such Licenses have been validly issued and are in full force and
effect; (C) no determination has been made by the FCC or any State
Regulatory Agency that the Company or any subsidiary is in violation of
any such Licenses, and no proceeding is pending before any such agency in
which any such violation has been alleged; and (D) no proceedings by the
FCC or any State Regulatory Agency to revoke or restrict any such Licenses
are pending or threatened. "Validly issued" as used in this paragraph
means that the Licenses have been issued through the means of regular
agency procedures applied in conformity with the applicable governing
statute and prior agency practice and there is no legal basis under the
applicable governing statute to conclude that the Company or any
subsidiary cannot hold one or more of the Licenses as a matter of law.
"Full force and effect" as used in this paragraph means (i) the
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orders issuing the Licenses have become effective under the applicable
governing statute, (ii) the Licenses contain no conditions, (iii) all
conditions precedent set forth in the Licenses have been satisfied, and
(iv) no stay of effectiveness has been issued.
(c) The Company shall have requested and caused Paul, Weiss,
Rifkind, Wharton & Garrison, counsel for the Company, to furnish to the
Representatives its opinion, dated the Closing Date and addressed to the
Representatives, to the effect that:
i. the Company and each of the Subsidiaries incorporated (in
the case of a corporation) or organized (in the case of any other entity)
under the laws of the States of Delaware or New York has been duly
incorporated and is validly existing as a corporation in good standing
under the laws of the State of Delaware or is a subsisting corporation in
good standing under the laws of the State of New York, as applicable, with
full corporate power and authority to own or lease, as the case may be,
and to operate its properties and conduct its business as described in the
Final Prospectus;
ii. such counsel has been advised orally by the staff of the
Commission that the Registration Statement has become effective under the
Act; any required filing of the Basic Prospectus, any Preliminary Final
Prospectus and the Final Prospectus, and any supplements thereto, has been
made pursuant to Rule 424(b); to the knowledge of such counsel, no stop
order suspending the effectiveness of the Registration Statement has been
issued, no proceedings for that purpose have been instituted or threatened
by the Commission, and assuming that the statements made and/or
incorporated in the Registration Statement and the Final Prospectus are
complete and correct except those made under the caption "Description of
Capital Stock" insofar as they relate to provisions of documents therein
described, the Registration Statement and the Final Prospectus, as of
their respective effective or issue dates, appear on their face to be
appropriately responsive in all material respects to the applicable
requirements of the Act and the rules and regulations of the Commission
under the Act, except for the financial statements, and other financial
and statistical information which are contained or incorporated by
reference therein or omitted therefrom, as to which such counsel need
express no opinion;
iii. this Agreement has been duly authorized, executed and
delivered by the Company;
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iv. the statements set forth under the heading "Description of
Capital Stock", insofar as such statements purport to summarize certain
provisions of the Securities, provide a fair summary of such provisions;
v. to the extent that they constitute a summary of U.S.
federal law and regulations, the statements in the Final Prospectus under
the heading "Certain United States Federal Income Tax Considerations"
fairly summarize the matters therein described in all material respects;
vi. the Company is not and, after giving effect to the
offering and sale of the Securities and the application of the proceeds
thereof as described in the Final Prospectus, will not be required to
register as an "investment company" under the Investment Company Act;
vii. no consent, approval, authorization, filing with or order
of any court or governmental agency or body under the Federal laws of the
United States or the laws of the State of New York or under the General
Corporation Law of the State of Delaware is required in connection with
the due authorization, execution and delivery of this Agreement, or for
the offering, sale or delivery of the Securities, except such as will be
obtained, taken or made or such, as may be required under the blue sky or
securities laws of any state or foreign jurisdiction or the NASD (as to
which such counsel need not express any opinion) or such other approvals
(specified in such opinion) as have been obtained (provided that such
counsel need not express any opinion with respect to any consent,
approval, authorization under the Communications Act of 1934, as amended,
or any published rules, regulations or policies of the Federal
Communications Commission (the "FCC") thereunder); and
viii. neither the execution and delivery of this Agreement,
the sale of the Securities nor the consummation of any other of the
transactions herein contemplated, nor the fulfillment of the terms hereof,
will conflict with, result in a breach or violation of, or imposition of
any lien, charge or encumbrance upon any property or asset of the Company
or its subsidiaries pursuant to, (i) the charter or by-laws of the
Company; or (ii) any statute, law, rule or regulation of the Federal
government of the United States (excluding the FCC) or the State of New
York or under the General Corporation Law of the State of Delaware, or to
such counsel's knowledge, any judgment, order or decree applicable to the
Company or any of its subsidiaries of any court, regulatory body,
administrative agency, governmental body, arbitrator or other authority
having jurisdiction over the
26
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Company, any of its subsidiaries or any of their respective properties
which is known to such counsel except as described in the Final Prospectus
or for such violations as could not be reasonably expected to have, singly
or in the aggregate, a material adverse effect on the condition (financial
or otherwise), prospects, earnings, business or properties of the Company
and its subsidiaries, taken as a whole.
In addition, such counsel shall state that it has participated in
conferences with officers and other representatives of the Company,
representatives of the independent accountants of the Company, the Underwriters
and counsel for the Underwriters at which the contents of the Registration
Statement and the Final Prospectus and related matters were discussed and,
although such counsel is not passing upon, and does not assume any
responsibility for, the accuracy, completeness or fairness of the statements
contained in the Registration Statement and the Final Prospectus (or any
amendments or supplements thereto) and has made no independent investigation or
verification thereof, and such counsel has not participated in the preparation
of the Incorporated Documents, on the basis of the foregoing, no facts have come
to the attention of such counsel that have led such counsel to believe that the
Registration Statement, at the Effective Time, and the Final Prospectus, at the
Execution Time and on the Closing Date, contained or contains any untrue
statement of a material fact or omitted or omits to state any material fact
necessary to make the statements therein, in the light of the circumstances
under which they were made, not misleading (in each case, other than the
financial statements, schedules and other financial and statistical information
which are contained or incorporated by reference therein or omitted therefrom,
as to which such counsel need express no opinion).
In rendering such opinion, such counsel may rely (A) as to matters
involving the application of laws of any jurisdiction other than the State of
New York, the Federal laws of the United States or the General Corporation Law
of the State of Delaware, to the extent they deem proper and specified in such
opinion, upon the opinion of other counsel of good standing whom they believe to
be reliable and who are reasonably satisfactory to counsel for the Underwriters;
and (B) as to matters of fact, to the extent they deem proper, on certificates
of responsible officers of the Company and public officials. References to the
Registration Statement and the Prospectus in this Section 6(c) include any
amendment or supplement thereto at the Closing Date.
(d) The Company shall have furnished to the Representatives the
opinion of Baker & McKenzie, special regulatory counsel for the Company,
dated the Closing Date, to the effect that:
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<PAGE>
i. to the extent they constitute a summary of the regulatory
matters referred to therein, the statements in the Registration Statement
and the Final Prospectus under the caption "Business--Regulation of
International Operations" fairly summarize the matters referred to
therein;
ii. no licenses under telecommunications legislation in
England and Wales including the Telecommunications Act 1984, the Wireless
Telegraphy Act 1949 or the Wireless Telegraphy Act 1998 other than the
Licenses are required by the Company, ION LLC, ION or Racal to carry on
the ION Business in the United Kingdom;
iii. no licenses under telecommunications legislation in
England and Wales including the Telecommunications Act 1984, the Wireless
Telegraphy Act 1949 or the Wireless Telegraphy Act 1998, other than the
Licenses that are currently required by the Company in relation to the
Company's telecommunications business as presently conducted in the United
Kingdom; and
iv. no German telecommunications licenses, other than the
class 3 license obtained by Metromedia Fiber Network GmbH, are currently
required by the Company in relation to the European Network, the German
Network, or the Company's telecommunications business as presently
conducted in Germany.
In rendering such opinion, such counsel may state that they express
no opinion as to the laws of any jurisdiction other than Germany or the United
Kingdom or the regulations of the European Union.
(e) The Selling Stockholders shall have requested and caused Paul,
Weiss, Rifkind, Wharton & Garrison, counsel for the Selling Stockholders,
to have furnished to the Representatives their opinion dated the Closing
Date and addressed to the Representatives, to the effect that:
i. this Agreement, the Custody Agreement and Power of Attorney
have been duly authorized (with respect to any Selling Stockholder which
is not a natural person), executed and delivered by the Selling
Stockholders, the Custody Agreement is valid and binding on the Selling
Stockholders and each Selling Stockholder has full legal right and
authority to sell, transfer and deliver in the manner provided in this
Agreement and the Custody Agreement the Securities being sold by such
Selling Stockholder hereunder;
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<PAGE>
ii. assuming that each Underwriter acquires its interest in
the Securities it has purchased from such Selling Stockholder in good
faith without notice of any adverse claim (within the meaning of Section
8-105 of the UCC), each Underwriter that has purchased such Securities
delivered on the Closing Date to The Depository Trust Company or other
securities intermediary (assuming such are securities intermediaries
within the meaning of Section 8-102(14) of the UCC) by making payment
therefor as provided herein, and that has had such Securities credited by
book entry to the securities account or accounts (within the meaning of
Section 8-501(a) of the UCC) of such Underwriter maintained by The
Depository Trust Company or such other securities intermediary will have
acquired a security entitlement (within the meaning of Section
8-102(a)(17) of the UCC) to such Securities purchased by such Underwriter,
and no action based on an adverse claim (within the meaning of Section
8-102(a)(1) and Section 8-502 of the UCC) may be asserted against such
Underwriter with respect to such Securities;
iii. to such counsel's knowledge, no consent, approval,
authorization or order of any court or governmental agency or body is
required for the consummation by any Selling Stockholder of the
transactions contemplated herein, except such as may have been obtained
under the Act and such as may be required under the blue sky laws of any
jurisdiction in connection with the purchase and distribution of the
Securities by the Underwriters and such other approvals as have been
obtained; and
iv. neither the sale of the Securities being sold by any
Selling Stockholder nor the consummation of any other of the transactions
herein contemplated by any Selling Stockholder or the fulfillment of the
terms hereof by any Selling Stockholder will conflict with, result in a
breach or violation of, or constitute a default under any statute, rule or
regulation known by such counsel to be applicable to such Selling
Stockholder or the charter or By-laws of the Selling Stockholder (with
respect to any Selling Stockholder which is not a natural person) or the
terms of any indenture or other agreement or instrument known to such
counsel and to which the Selling Stockholder is a party or bound, or any
judgment, order or decree known to such counsel to be applicable to the
Selling Stockholder of any court, regulatory body, administrative agency,
governmental body or arbitrator having jurisdiction over the Selling
Stockholder.
(f) The Representatives shall have received from Skadden, Arps,
Slate, Meagher & Flom LLP, counsel for the Underwriters, such opinion or
opinions, dated the Closing Date and addressed to the Representatives,
with respect to the sale of the Securities, the Registration Statement,
the Final Prospectus (together with any supplement thereto) and other
related matters
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<PAGE>
as the Representatives may reasonably require, and the Company shall have
furnished to such counsel such documents as they reasonably request for
the purpose of enabling them to pass upon such matters.
(g) The Company shall have furnished to the Representatives a
certificate of the Company, signed by the Chairman of the Board of
Directors or the President and the principal financial or accounting
officer of the Company, dated the Closing Date, to the effect that the
signers of such certificate have carefully examined the Registration
Statement, the Final Prospectus, any supplements to the Final Prospectus
and this Agreement and that:
i. the representations and warranties of the Company in this
Agreement are true and correct in all material respects on and as of the
Closing Date with the same effect as if made on the Closing Date, and the
Company has complied with all the agreements and satisfied all the
conditions on its part to be performed or satisfied hereunder at or prior
to the Closing Date;
ii. no stop order suspending the effectiveness of the
Registration Statement has been issued and no proceedings for that purpose
have been instituted or, to the Company's knowledge, threatened; and
iii. since the date of the most recent financial statements
included or incorporated by reference in the Final Prospectus (exclusive
of any amendment or supplement thereto), there has been no material
adverse change in the condition (financial or otherwise), prospects,
earnings, business or properties of the Company and its subsidiaries,
taken as a whole, whether or not arising from transactions in the ordinary
course of business, except as set forth in or contemplated in the Final
Prospectus (exclusive of any amendment or supplement thereto).
(h) Each Selling Stockholder shall have furnished to the
Representatives a certificate, signed by such Selling Stockholder, dated
the Closing Date, to the effect that the signers of such certificate have
carefully examined the Registration Statement, the Final Prospectus, any
supplement to the Final Prospectus and this Agreement and that the
representations and warranties of such Selling Stockholder in this
Agreement are true and correct in all material respects on and as of the
Closing Date to the same effect as if made on the Closing Date.
(i) At the Execution Time and at the Closing Date, the Company shall
have requested and caused Ernst & Young LLP to furnish to the
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Representatives letters, dated respectively as of the Execution Time and
as of the Closing Date, in form and substance satisfactory to the
Representatives, confirming that they are independent accountants within
the meaning of the Act and the Exchange Act and the applicable rules and
regulations thereunder, that they have performed a review of the unaudited
interim financial information of the Company for the nine month period
ended September 30, 1999 and as at September 30, 1999 and stating in
effect that:
i. in their opinion the audited financial statements and
financial statement schedules included or incorporated in the Registration
Statement and the Final Prospectus and reported on by them comply as to
form in all material respects with the applicable accounting requirements
of the Exchange Act and the related published rules and regulations
thereunder;
ii. on the basis of a reading of the latest unaudited
financial statements made available by the Company and its subsidiaries;
their limited review in accordance with the standards established under
Statement on Auditing Standards No. 71, of the unaudited interim financial
information for the nine month period ended September 30, 1999, and as at
September 30, 1999; carrying out certain specified procedures (but not an
examination in accordance with generally accepted auditing standards)
which would not necessarily reveal matters of significance with respect to
the comments set forth in such letter; a reading of the minutes of the
meetings of the stockholders, directors and committees of the Company and
the Subsidiaries; and inquiries of certain officials of the Company who
have responsibility for financial and accounting matters of the Company
and its subsidiaries as to transactions and events subsequent to December
31, 1998, nothing came to their attention which caused them to believe
that:
(1) any unaudited financial statements included or
incorporated in the Registration Statement and the Final Prospectus
do not comply in form in all material respects with applicable
accounting requirements and with the published rules and regulations
of the Commission with respect to financial statements included or
incorporated in quarterly reports on Form 10-Q under the Exchange
Act; or that said unaudited financial statements are not in
conformity with generally accepted accounting principles applied on
a basis substantially consistent with that of the audited financial
statements included or incorporated in the Registration Statement
and the Final Prospectus;
(2) with respect to the period subsequent to September 30,
1999, there were any changes, at a specified date not more than
three
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days prior to the date of the letter, in the capital stock, increase
in long-term debt of the Company and its subsidiaries or
stockholders' equity of the Company as compared with the amounts
shown on the September 30, 1999 consolidated balance sheet included
in the Final Prospectus, or for the period from October 1, 1999 to
such specified date there were any decreases, as compared with the
corresponding period in the preceding year in revenues of the
Company and its subsidiaries, except in all instances for changes or
decreases set forth in such letter, in which case the letter shall
be accompanied by an explanation by the Company as to the
significance thereof unless said explanation is not deemed necessary
by the Representatives; or
(3) the information included under the headings "Selected
Consolidated Financial Data" and "Management-Executive Compensation"
is not in conformity with the disclosure requirements of Regulation
S-K;
iii. they have performed certain other specified procedures as
a result of which they determined that certain information of an
accounting, financial or statistical nature (which is limited to
accounting, financial or statistical information derived from the general
accounting records of the Company and its subsidiaries) set forth in the
Final Prospectus, including the information set forth under the captions
"Risk Factors", "Use of Proceeds", "Capitalization", "Selected
Consolidated Financial Data", "Management's Discussion and Analysis of
Financial Condition and Results of Operations", "Business", "Management",
and "Certain Relationships and Related Transactions" in the Final
Prospectus, the information included or incorporated in Items 1, 2, 6, 7
and 11 of the Company's Annual Report on Form 10-K incorporated in the
Final Prospectus and the information included in the "Management's
Discussion and Analysis of Financial Condition and Results of Operations"
included or incorporated in the Company's Quarterly Reports on Form 10-Q,
incorporated in the Final Prospectus agrees with the accounting records of
the Company and its subsidiaries, excluding any questions of legal
interpretation; and
iv. on the basis of a reading of the unaudited pro forma
financial statements included or incorporated by reference in the
Registration Statement and the Final Prospectus (the "pro forma financial
statements"); carrying out certain specified procedures; inquiries of
certain officials of the Company and AboveNet Communications, Inc. who
have responsibility for financial and accounting matters; and proving the
arithmetic accuracy of the application of the pro forma adjustments to the
historical amounts in the pro forma financial statements, nothing came to
their attention which caused
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them to believe that the pro forma financial statements do not comply as
to form in all material respects with the applicable accounting
requirements of Rule 11-02 of Regulation S-X or that the pro forma
adjustments have not been properly applied to the historical amounts in
the compilation of such statements.
(j) [Intentionally Omitted]
(k) At the Execution Time and at the Closing Date, Deloitte & Touche
LLP shall have furnished to the Representatives letters, dated
respectively as of the Execution Time and as of the Closing Date, in form
and substance satisfactory to the Representatives, confirming that they
are independent accountants within the meaning of the Act and the
applicable rules and regulations thereunder, and stating in effect that:
i. in their opinion the audited financial statements and
financial statement schedules included in the Registration Statement and
the Final Prospectus and reported on by them comply in form in all
material respects with the applicable accounting requirements of the Act
and the related published rules and regulations; and
ii. they have performed certain other specified procedures as
a result of which they determined that certain information of an
accounting, financial or statistical nature (which is limited to
accounting, financial or statistical information derived from the general
accounting records of the Company and its subsidiaries) set forth in the
Registration Statement and the Final Prospectus agrees with the accounting
records of the Company and its subsidiaries, excluding any questions of
legal interpretation.
References to the Final Prospectus in this paragraph (k) include any
supplement thereto at the date of the letter.
(l) At the Execution Time and at the Closing Date,
PricewaterhouseCoopers LLP shall have furnished to the Representatives a
letter or letters, dated respectively as of the Execution Time and as of
the Closing Date, in form and substance satisfactory to the
Representatives, confirming that they are independent accountants within
the meaning of the Act and the applicable rules and regulations
thereunder, and stating in effect that:
i. in their opinion the audited financial statements and
financial statement schedules included in the Registration Statement and
the Final Prospectus and reported on by them comply in form in all
material
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respects with the accounting requirements of the Act and the related
published rules and regulations; and
ii. they have performed certain other specified procedures as
a result of which they determined that certain information of an
accounting, financial or statistical nature (which is limited to
accounting, financial or statistical information derived from the general
accounting records of the Company and its subsidiaries) set forth in the
Registration Statement and the Final Prospectus agrees with the accounting
records of the Company and its subsidiaries, excluding any questions of
legal interpretation.
References to the Final Prospectus in this paragraph (l) include any
supplement thereto at the date of the letter.
(m) Subsequent to the Execution Time or, if earlier, the dates as of
which information is given in the Registration Statement (exclusive of any
amendment thereof) and the Final Prospectus (exclusive of any amendment or
supplement thereto), there shall not have been (i) any change or decrease
specified in the letter or letters referred to in paragraph (g) of this
Section 6 or (ii) any change, or any development involving a prospective
change, in or affecting the condition (financial or otherwise), prospects,
earnings, business or properties of the Company and its subsidiaries,
taken as a whole, whether or not arising from transactions in the ordinary
course of business, except as set forth in or contemplated in the Final
Prospectus (exclusive of any amendment or supplement thereto) the effect
of which, in any case referred to in clause (i) or (ii) above, is, in the
sole judgment of the Representatives, so material and adverse as to make
it impractical or inadvisable to market the Securities as contemplated by
the Registration Statement (exclusive of any amendment thereof) and the
Final Prospectus (exclusive of any amendment or supplement thereto).
(n) Subsequent to the Execution Time, there shall not have been any
decrease in the rating of any of the Company's debt securities by any
"nationally recognized statistical rating organization" (as defined for
purposes of Rule 436(g) under the Act) or any notice given of any intended
or potential decrease in any such rating or of a possible change in any
such rating that does not indicate the direction of the possible change.
(o) No stop order suspending the effectiveness of the Registration
Statement shall have been issued and no proceedings for that purpose shall
have been taken or, to the knowledge of the Company, shall be contemplated
by the Commission at or prior to the Closing Date; (ii) there shall not
have been any change in the capital stock of the Company nor any material
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increase in the short-term or long-term debt of the Company (other than in
the ordinary course of business) from that set forth or contemplated in
the Registration Statement or the Final Prospectus (or any amendment or
supplement thereto); (iii) there shall not have been, since the respective
dates as of which information is given in the Registration Statement and
the Final Prospectus (or any amendment or supplement thereto), except as
may otherwise be stated in the Registration Statement and Final Prospectus
(or any amendment or supplement thereto), any material adverse change in
the condition (financial or other), business, prospects, properties, net
worth or results of operations of the Company and the Subsidiaries taken
as a whole; (iv) the Company and the Subsidiaries shall not have any
liabilities or obligations, direct or contingent (whether or not in the
ordinary course of business), that are material to the Company and the
Subsidiaries, taken as a whole, other than those reflected in the
Registration Statement or the Final Prospectus (or any amendment or
supplement thereto); and (v) all the representations and warranties of the
Company contained in this Agreement shall be true and correct on and as of
the date hereof and on and as of the Closing Date as if made on and as of
the Closing Date and you shall have received a certificate, dated the
Closing Date and signed by the chief executive officer and the chief
financial officer of the Company (or such other officers as are acceptable
to you), to the effect set forth in this Section 6(o) hereof.
(p) The Company shall not have failed at or prior to the Closing
Date to have performed or complied with any of its agreements herein
contained and required to be performed or complied with by it hereunder at
or prior to the Closing Date.
(q) At the Execution Time, each stockholder listed on Schedule IV
shall have furnished to the Representatives a letter substantially in the
form of Exhibit A hereto addressed to the Representatives.
(r) Prior to the Closing Date, the Company and Selling Stockholders
shall have furnished to the Representatives such further information,
certificates and documents as the Representatives may reasonably request.
(s) If any of the conditions specified in this Section 6 shall not
have been fulfilled in all material respects when and as provided in this
Agreement, or if any of the opinions and certificates mentioned above or
elsewhere in this Agreement shall not be in all material respects
reasonably satisfactory in form and substance to the Representatives and
counsel for the Underwriters, this Agreement and all obligations of the
Underwriters
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hereunder may be cancelled at, or at any time prior to, the Closing Date
by the Representatives. Notice of such cancellation shall be given to the
Company in writing or by telephone or facsimile confirmed in writing.
(t) The documents required to be delivered by this Section 6 will be
delivered at the office of Paul, Weiss, Rifkind, Wharton & Garrison,
counsel for the Company, 1285 Avenue of the Americas, New York, New York
10019, on the Closing Date.
7. Reimbursement of Underwriters' Expenses. If the sale of the Securities
provided for herein is not consummated because any condition to the obligations
of the Underwriters set forth in Section 6 hereof is not satisfied, because of
any termination pursuant to Section 10 hereof or because of any refusal,
inability or failure on the part of the Company or any Selling Stockholder to
perform any agreement herein or comply with any provision hereof other than by
reason of a default by any of the Underwriters, the Company will reimburse the
Underwriters severally through Salomon Smith Barney Inc. on demand for all
out-of-pocket expenses (including reasonable fees and disbursements of one
counsel) that shall have been incurred by them in connection with the proposed
purchase and sale of the Securities. If the Company is required to make any
payments to the Underwriters under this Section 7 because of any Selling
Stockholder's refusal, inability or failure to satisfy any condition to the
obligations of the Underwriters set forth in Section 6, the Selling Stockholders
pro rata in proportion to the percentage of Securities to be sold by each shall
reimburse the Company on demand for all amounts so paid.
8. Indemnification and Contribution. (a) The Company agrees to indemnify
and hold harmless each Underwriter, the directors, officers, employees and
agents of each Underwriter and each person who controls any Underwriter within
the meaning of either the Act or the Exchange Act against any and all losses,
claims, damages or liabilities, joint or several, to which they or any of them
may become subject under the Act, the Exchange Act or other Federal or state
statutory law or regulation, at common law or otherwise, insofar as such losses,
claims, damages or liabilities (or actions in respect thereof) arise out of or
are based upon any untrue statement or alleged untrue statement of a material
fact contained in the registration statement for the registration of the
Securities as originally filed or in any amendment thereof, or in the Basic
Prospectus, any Preliminary Final Prospectus or the Final Prospectus, or in any
amendment thereof or supplement thereto, or arise out of or are based upon the
omission or alleged omission to state therein a material fact required to be
stated therein or necessary to make the statements therein, in the light of the
circumstances under which they were made, not misleading, and agrees to
reimburse each such indemnified party, as incurred, for any legal or other
expenses reasonably incurred by them in connection with investigating or
defending any such loss, claim, damage, liability or action; provided, however,
that (i) the
36
<PAGE>
Company will not be liable in any such case to the extent that any such loss,
claim, damage or liability arises out of or is based upon any such untrue
statement or alleged untrue statement or omission or alleged omission made
therein in reliance upon and in conformity with written information furnished to
the Company by or on behalf of any Underwriter through the Representatives
specifically for inclusion therein and (ii) with respect to any untrue statement
or alleged untrue statement of, or omission or alleged omission to state, a
material fact made in any Preliminary Final Prospectus, the indemnity agreement
contained in this Section 8(a) shall not inure to the benefit of any Underwriter
(or any of the directors, officers, employees and agents of such Underwriter or
any controlling person of such Underwriter) from whom the person asserting any
such loss, claim, damage or liability purchased the Securities concerned, to the
extent that any such loss, claim, damage or liability of such Underwriter occurs
under the circumstances where it shall have been determined by a court of
competent jurisdiction (or appropriate arbitral proceeding) by final and
nonappealable judgment that (w) the Company had previously furnished copies of
the Final Prospectus to the Underwriters, (x) delivery of the Final Prospectus
was required by the Act or under this Agreement to be made to such person, (y)
the untrue statement or omission of a material fact contained in the Preliminary
Final Prospectus was corrected in the Final Prospectus and (z) there was not
sent or given to such person, at or prior to the written confirmation of the
sale of such Securities to such person, a copy of the Final Prospectus. This
indemnity agreement will be in addition to any liability which the Company may
otherwise have.
(b) Each Selling Stockholder severally and not jointly agrees to
indemnify and hold harmless the Company, each of its directors, each of
its officers, employees, agents and each person who controls the Company
within the meaning of either the Act or the Exchange Act, each
Underwriter, the directors, officers, employees and agents of each
Underwriter and each person who controls the Company or any Underwriter
within the meaning of either the Act or the Exchange Act and each other
Selling Stockholder, if any, to the same extent as the foregoing indemnity
from the Company to each Underwriter, but only with reference to written
information furnished to the Company by or on behalf of such Selling
Stockholder specifically for inclusion in the documents referred to in the
foregoing indemnity. This indemnity agreement will be in addition to any
liability which any Selling Stockholder may otherwise have.
(c) Each Underwriter severally and not jointly agrees to indemnify
and hold harmless the Company, each of its directors, each of its officers
who signs the Registration Statement, and each person who controls the
Company within the meaning of either the Act or the Exchange Act and each
Selling Stockholder, to the same extent as the foregoing indemnity to
37
<PAGE>
each Underwriter, but only with reference to written information relating
to such Underwriter furnished to the Company by or on behalf of such
Underwriter through the Representatives specifically for inclusion in the
documents referred to in the foregoing indemnity. This indemnity agreement
will be in addition to any liability which any Underwriter may otherwise
have. The Company and each Selling Stockholder acknowledge that the
statements set forth in the last paragraph of the cover page regarding
delivery of the Securities, the first paragraph on page S-3 related to
stabilization, syndicate covering transactions and penalty bids and, under
the heading "Underwriting" or "Plan of Distribution", (i) the list of
Underwriters and their respective participation in the sale of the
Securities, (ii) the sentences related to concessions and reallowances and
(iii) the paragraph related to stabilization, syndicate covering
transactions and penalty bids in any Preliminary Final Prospectus and the
Final Prospectus constitute the only information furnished in writing by
or on behalf of the several Underwriters for inclusion in any Preliminary
Final Prospectus or the Final Prospectus.
(d) Promptly after receipt by an indemnified party under this
Section 8 of notice of the commencement of any action, such indemnified
party will, if a claim in respect thereof is to be made against the
indemnifying party under this Section 8, notify the indemnifying party in
writing of the commencement thereof; but the failure so to notify the
indemnifying party (i) will not relieve it from liability under paragraph
(a), (b) or (c) above unless and to the extent it did not otherwise learn
of such action and such failure results in the forfeiture by the
indemnifying party of substantial rights and defenses as determined by a
court of competent jurisdiction and (ii) will not, in any event, relieve
the indemnifying party from any obligations to any indemnified party other
than the indemnification obligation provided in paragraph (a), (b) or (c)
above. The indemnifying party shall be entitled to assume the defense of
such action and appoint counsel of the indemnifying party's choice at the
indemnifying party's expense to represent the indemnified party in any
action for which indemnification is sought (in which case the indemnifying
party shall not thereafter be responsible for the fees and expenses of any
separate counsel retained by the indemnified party or parties except as
set forth below); provided, however, that such counsel shall be reasonably
satisfactory to the indemnified party. Notwithstanding the indemnifying
party's election to assume the defense of such action or appoint counsel
to represent the indemnified party in an action, the indemnified party
shall have the right to employ separate counsel (including local counsel),
and the indemnifying party shall bear the reasonable fees, costs and
expenses of such separate counsel if (i) the use of counsel chosen by the
indemnifying party to represent the indemnified party would present such
counsel with a conflict of interest, which has not been waived; (ii) the
actual or potential
38
<PAGE>
defendants in, or targets of, any such action include both the indemnified
party and the indemnifying party and the indemnified party shall have been
reasonably advised by such counsel that there are legal defenses available
to it and/or other indemnified parties which are different from or
additional to those available to the indemnifying party; (iii) the
indemnifying party shall not have assumed the defense of the action or
employed counsel reasonably satisfactory to the indemnified party to
represent the indemnified party within a reasonable time after notice of
the institution of such action; or (iv) the indemnifying party shall
authorize the indemnified party to employ separate counsel at the expense
of the indemnifying party. In any such case, the indemnifying party shall
not, in connection with any one action or separate but substantially
similar related actions in the same jurisdiction arising out of the same
general allegations or circumstances, be liable for the fees and expenses
of more than one separate firm of attorneys (in addition to any local
counsel) for all indemnified parties. An indemnifying party will not,
without the prior written consent of the indemnified parties, settle or
compromise or consent to the entry of any judgment with respect to any
pending or threatened claim, action, suit or proceeding in respect of
which indemnification or contribution may be sought hereunder (whether or
not the indemnified parties are actual or potential parties to such claim
or action) unless such settlement, compromise or consent includes an
unconditional release of each indemnified party from all liability arising
out of such claim, action, suit or proceeding.
(e) In the event that the indemnity provided in paragraph (a), (b)
or (c) of this Section 8 is unavailable to or insufficient to hold
harmless an indemnified party for any reason, each party liable under
paragraph (a), (b) or (c) above (each, for purposes of this paragraph (e),
an "Indemnifying Party") agrees to contribute to the aggregate losses,
claims, damages and liabilities (including legal or other expenses
reasonably incurred in connection with investigating or defending same)
(collectively "Losses") to which such indemnified party may be subject in
such proportion as is appropriate to reflect the relative benefits
received by the Company and by the Selling Stockholders on the one hand
and by the Underwriters on the other from the offering of the Securities;
provided, however, that in no case shall any Underwriter (except as may be
provided in any agreement among Underwriters relating to the offering of
the Securities) be responsible for any amount in excess of the
underwriting discount or commission applicable to the Securities purchased
by such Underwriter hereunder. If the allocation provided by the
immediately preceding sentence is unavailable for any reason, each
Indemnifying Party shall contribute in such proportion as is appropriate
to reflect not only such relative benefits but also the relative fault of
the Company, of the Selling Stockholders and of the Underwriters in
39
<PAGE>
connection with the statements or omissions or alleged statements or
omissions which resulted in such Losses as well as any other relevant
equitable considerations. Benefits received by the Company and the Selling
Stockholders shall be deemed to be equal to the total net proceeds from
the offering (before deducting expenses) received by it, and benefits
received by the Underwriters shall be deemed to be equal to the total
underwriting discounts and commissions, in each case as set forth on the
cover page of the Final Prospectus. Relative fault shall be determined by
reference to, among other things, whether any untrue or any alleged untrue
statement of a material fact or the omission or alleged omission to state
a material fact relates to information provided by the Company and the
Selling Stockholders on the one hand or the Underwriters on the other, the
intent of the parties and their relative knowledge, access to information
and opportunity to correct or prevent such untrue statement or omission or
alleged untrue statement or omission. The Company, the Selling
Stockholders and the Underwriters agree that it would not be just and
equitable if contribution were determined by pro rata allocation or any
other method of allocation which does not take account of the equitable
considerations referred to above. Notwithstanding the provisions of this
paragraph (e), no person guilty of fraudulent misrepresentation (within
the meaning of Section 11(f) of the Act) shall be entitled to contribution
from any person who was not guilty of such fraudulent misrepresentation.
For purposes of this Section 8, each person who controls an Underwriter
within the meaning of either the Act or the Exchange Act and each
director, officer, employee and agent of an Underwriter shall have the
same rights to contribution as such Underwriter, and each person who
controls the Company within the meaning of either the Act or the Exchange
Act and each officer of the Company who shall have signed the Registration
Statement and each director of the Company shall have the same rights to
contribution as the Company, subject in each case to the applicable terms
and conditions of this paragraph (e).
(f) The liability of each Selling Stockholder under such Selling
Stockholder's representations and warranties contained in Section 1 hereof
and under the indemnity and contribution agreements contained in this
Section 8 shall be limited to an amount equal to the public offering price
of the Securities sold by such Selling Stockholder to the Underwriters
(net of underwriting discounts or commissions, but before deducting
expenses). The Company and the Selling Stockholders may agree, as among
themselves and without limiting the rights of the Underwriters under this
Agreement, as to the respective amounts of such liability for which they
each shall be responsible.
40
<PAGE>
9. Default by an Underwriter. If any one or more Underwriters shall fail
to purchase and pay for any of the Securities agreed to be purchased by such
Underwriter or Underwriters hereunder and such failure to purchase shall
constitute a default in the performance of its or their obligations under this
Agreement, the remaining Underwriters shall be obligated severally to take up
and pay for (in the respective proportions which the amount of Securities set
forth opposite their names in Schedule II hereto bears to the aggregate amount
of Securities set forth opposite the names of all the remaining Underwriters)
the Securities which the defaulting Underwriter or Underwriters agreed but
failed to purchase; provided, however, that in the event that the aggregate
amount of Securities which the defaulting Underwriter or Underwriters agreed but
failed to purchase shall exceed 10% of the aggregate amount of Securities set
forth in Schedule II hereto, the remaining Underwriters shall have the right to
(i) make arrangements for the purchase of the Securities which such defaulting
Underwriter or Underwriters agreed but failed to purchase by other persons
satisfactory to the Selling Stockholder and the non-defaulting Underwriters,
and/or (ii) purchase all, but shall not be under any obligation to purchase any,
of the Securities, and if such nondefaulting Underwriters do not make such
arrangements and/or purchase all the Securities, this Agreement will terminate
without liability to any nondefaulting Underwriter, the Selling Stockholders or
the Company. In the event of a default by any Underwriter as set forth in this
Section 9, the Closing Date shall be postponed for such period, not exceeding
five Business Days, as the Representatives shall determine in order that the
required changes in the Registration Statement and the Final Prospectus or in
any other documents or arrangements may be effected. Nothing contained in this
Agreement shall relieve any defaulting Underwriter of its liability, if any, to
the Company, the Selling Stockholders or any nondefaulting Underwriter for
damages occasioned by its default hereunder.
10. Termination. This Agreement shall be subject to termination in the
absolute discretion of the Representatives, by notice given to the Company prior
to delivery of and payment for the Securities, if at any time prior to such time
(i) trading in the Company's Common Stock shall have been suspended by the
Commission or the NASDAQ National Market or trading in securities generally on
the New York Stock Exchange or the NASDAQ National Market shall have been
suspended or limited or minimum prices shall have been established on such
Exchange or the NASDAQ National Market; (ii) a banking moratorium shall have
been declared either by Federal or New York State authorities; or (iii) there
shall have occurred any outbreak or escalation of hostilities, declaration by
the United States of a national emergency or war, or other calamity or crisis
the effect of which on financial markets is such as to make it, in the sole
judgment of the Representatives, impractical or inadvisable to proceed with the
offering or delivery of the Securities as contemplated by the Final Prospectus
(exclusive of any amendment or supplement thereto).
41
<PAGE>
11. Representations and Indemnities to Survive. The respective agreements,
representations, warranties, indemnities and other statements of the Company or
its officers, of each Selling Stockholder and of the Underwriters set forth in
or made pursuant to this Agreement will remain in full force and effect,
regardless of any investigation made by or on behalf of any Underwriter, any
Selling Stockholder or the Company or any of the officers, directors, employees,
agents or controlling persons referred to in Section 8 hereof, and will survive
delivery of and payment for the Securities. The provisions of Sections 7 and 8
hereof shall survive the termination or cancellation of this Agreement.
12. Notices. All communications hereunder will be in writing and effective
only on receipt, and, if sent to the Representatives, will be mailed, delivered
or telefaxed to Salomon Smith Barney Inc. General Counsel (fax no.: (212)
816-7912) and confirmed to the General Counsel, Salomon Smith Barney Inc., at
388 Greenwich Street, New York, New York, 10013, Attention: General Counsel; or,
if sent to the Company, will be mailed, delivered or telefaxed to Metromedia
Fiber Network Services, Inc. c/o Metromedia Fiber Network, Inc., One North
Lexington Avenue, White Plains, New York 10601, Attention: Chief Financial
Officer (fax no.: (914) 421-6777) and confirmed to it at Metromedia Company, One
Meadowlands Plaza, East Rutherford, New Jersey 07073-2137, Attention: General
Counsel (fax no.: (201) 531-2803) and 215 East 67th Street, New York, New York
10021, Attention: Executive Vice President (fax no.: (212) 606-4337); or if sent
to any Selling Stockholders, will be mailed, delivered or telefaxed and
confirmed to it at the address set forth in Schedule I hereto.
13. Successors. This Agreement will inure to the benefit of and be binding
upon the parties hereto and their respective successors and the officers and
directors and controlling persons referred to in Section 8 hereof, and, except
as expressly set forth in Section 5(h) or Section 8 hereof, no other person will
have any right or obligation hereunder.
14. Applicable Law. This Agreement will be governed by and construed in
accordance with the laws of the State of New York applicable to contracts made
and to be performed within the State of New York.
15. Counterparts. This Agreement may be executed in one or more
counterparts, each of which shall constitute an original and all of which
together shall constitute one and the same instrument.
16. Headings. The section headings used herein are for convenience only
and shall not affect the construction hereof.
42
<PAGE>
17. Definitions. The terms which follow, when used in this Agreement,
shall have the meanings indicated.
"Act" shall mean the Securities Act of 1933, as amended and the rules and
regulations of the Commission promulgated thereunder.
"Basic Prospectus" shall mean the prospectus referred to in paragraph 1(a)
above contained in the Registration Statement at the Effective Date including
any Preliminary Final Prospectus.
"Business Day" shall mean any day other than a Saturday, a Sunday or a
legal holiday or a day on which banking institutions or trust companies are
authorized or obligated by law to close in New York City.
"Commission" shall mean the Securities and Exchange Commission.
"Communications Act" shall mean the Communications Act of 1934, as amended
(including amendments made by the Telecommunications Act of 1996), 47 U.S.C.
section 151 and the rules and regulations of the FCC.
"Effective Date" shall mean each date and time that the Registration
Statement, any post-effective amendment or amendments thereto and any Rule
462(b) Registration Statement became or become effective.
"Exchange Act" shall mean the Securities Exchange Act of 1934, as amended,
and the rules and regulations of the Commission promulgated thereunder.
"Execution Time" shall mean the date and time that this Agreement is
executed and delivered by the parties hereto.
"Final Prospectus" shall mean the prospectus supplement relating to the
Securities that was first filed pursuant to Rule 424(b) after the Execution
Time, together with the Basic Prospectus.
"Preliminary Final Prospectus" shall mean any preliminary prospectus
supplement to the Basic Prospectus which describes the Securities and the
offering thereof and is used prior to filing of the Final Prospectus, together
with the Basic Prospectus.
"Registration Statement" shall mean the registration statement referred to
in paragraph 1(a) above, including exhibits and financial statements, as amended
at the Execution Time (or, if not effective at the Execution Time, in the form
in which it shall become effective) and, in the event any post-effective
amendment thereto or
43
<PAGE>
any Rule 462(b) Registration Statement becomes effective prior to the Closing
Date, shall also mean such registration statement as so amended or such Rule
462(b) Registration Statement, as the case may be. Such term shall include any
Rule 430A Information deemed to be included therein at the Effective Date as
provided by Rule 430A.
"Rule 415", "Rule 424", "Rule 430A" and "Rule 462" refer to such rules
under the Act.
"Rule 430A Information" shall mean information with respect to the
Securities and the offering thereof permitted to be omitted from the
Registration Statement when it becomes effective pursuant to Rule 430A.
"Rule 462(b) Registration Statement" shall mean a registration statement
and any amendments thereto filed pursuant to Rule 462(b) relating to the
offering covered by the registration statement referred to in Section 1(a)
hereof.
"State Telecommunications Laws" shall mean the comparable state statutes
of all states in which the Company and/or its subsidiaries is certified to
provide services.
44
<PAGE>
If the foregoing is in accordance with your understanding of our
agreement, please sign and return to us the enclosed duplicate hereof, whereupon
this Agreement and your acceptance shall represent a binding agreement among the
Company, the Selling Stockholders and the several Underwriters as of the date
written above.
Very truly yours,
METROMEDIA FIBER NETWORK, INC.
By: /s/ Gerard Benedetto
------------------------------------
Name: Gerard Benedetto
Title: Chief Financial Officer and
Senior Vice President
[Underwriting Agreement-Secondary Offering]
<PAGE>
/s/ Stephen A. Garofalo
----------------------------------------
STEPHEN A. GAROFALO
/s/ Howard M. Finkelstein
----------------------------------------
HOWARD M. FINKELSTEIN
/s/ Gerard Benedetto
----------------------------------------
GERARD BENEDETTO
/s/ Silvia Kessel
----------------------------------------
SILVIA KESSEL
/s/ John W. Kluge
----------------------------------------
JOHN W. KLUGE
DR & DESCENDANTS, L.L.C.
By: /s/ William L. Asmuundson
------------------------------------
Name: William L. Asmundson
Title: President & CEO
/s/ Stuart Subotnick
----------------------------------------
STUART SUBOTNICK
/s/ Arnold L. Wadler
----------------------------------------
ARNOLD L. WADLER
[Underwriting Agreement-Secondary Offering]
46
<PAGE>
The foregoing Agreement is hereby confirmed and accepted as of the date written
above.
Salomon Smith Barney Inc.
Credit Suisse First Boston Corporation
Deutsche Bank Securities Inc.
Donaldson Lufkin & Jenrette Securities Corporation
Goldman, Sachs & Co.
Merrill Lynch, Pierce, Fenner & Smith Incorporated
By: Salomon Smith Barney Inc.
By: /s/ Robert Doherty
----------------------------------------
Name: Robert Doherty
Title: Director
For themselves and the other
several Underwriters, if any,
named in Schedule II to the
foregoing Agreement.
[Underwriting Agreement-Secondary Offering]
47
<PAGE>
SCHEDULE I
Selling Stockholders: Number of Underwritten Maximum Number of
Securities to be Sold Option Securities to be Sold
Stephen A. Garofalo 1,156,000 173,400
One North Lexington Ave.
White Plains, NY 10601
Howard M. Finkelstein 2,400,000 360,000
One North Lexington Ave.
White Plains, NY 10601
Gerard Benedetto 235,000 35,250
One North Lexington Ave.
White Plains, NY 10601
Silvia Kessel 96,000 14,400
215 East 67th Street
New York, NY 10021
DR & Descendants, L.L.C. 170,000 25,500
30 Rockefeller Plaza
New York, NY 10112
Stuart Subotnick 575,000 86,250
215 East 67th Street
New York, NY 10021
John Kluge 143,000 21,450
215 East 67th Street
New York, NY 10021
Arnold L. Wadler 120,000 18,000
One Meadowlands Plaza
East Rutherford, NJ 07073
Total ................ 4,895,000 734,250
========= =======
1
<PAGE>
SCHEDULE II
Underwriters Number of Underwritten
------------ Securities to be Purchased
--------------------------
Salomon Smith Barney Inc. 2,447,500
Credit Suisse First Boston Corporation 979,000
Deutsche Bank Securities Inc. 979,000
Donaldson, Lufkin & Jenrette 244,750
Securities Corporation
Goldman, Sachs & Co. 122,375
Merrill Lynch, Pierce, Fenner & Smith 122,375
Incorporated
Total 4,895,000
1
<PAGE>
SCHEDULE III
Subsidiaries of the Company
- ---------------------------
1. Metromedia Fiber Network NYC, Inc.
2. Metromedia Fiber Network Services, Inc.
3. AboveNet Communications Inc.
4. Metromedia Fiber Network International, Inc.
2
<PAGE>
SCHEDULE IV
Stockholders to provide Lock-Up Agreements
- ------------------------------------------
1. Vincent A. Galluccio
2. Nicholas M. Tanzi
3. David Rand
4. Sherman Tuan
5. Metromedia Company
3
<PAGE>
Exhibit A
[Letterhead of officer, director or major stockholder of Corporation]
, 1999
Salomon Smith Barney Inc.
Credit Suisse First Boston Corporation
Deutsche Bank Securities Inc.
Donaldson Lufkin & Jenrette
Securities Corporation
Goldman, Sachs & Co.
Merrill Lynch, Pierce, Fenner & Smith
Incorporated
As Representatives of the several Underwriters,
c/o Salomon Smith Barney Inc.
388 Greenwich Street
New York, New York 10013
Ladies and Gentlemen:
This letter is being delivered to you in connection with the proposed
Underwriting Agreement (the "Underwriting Agreement"), between Metromedia Fiber
Network, Inc., a Delaware corporation (the "Company"), the Selling Stockholders
listed in Schedule I thereto and each of you as representatives of a group of
Underwriters named therein, relating to an underwritten public offering of
Common Stock, $.01 par value (the "Common Stock"), of the Company.
In order to induce you and the other Underwriters to enter into the
Underwriting Agreement, the undersigned will not, without the prior written
consent of Salomon Smith Barney Inc., offer, sell, contract to sell, pledge or
otherwise dispose of, (or enter into any transaction which is designed to, or
might reasonably be expected to, result in the disposition (whether by actual
disposition or effective economic disposition due to cash settlement or
otherwise) by the Company or any affiliate of the Company or any person in
privity with the Company or any affiliate of the Company) directly or
indirectly, including the filing or participation in the filing of) a
registration statement with the Securities and Exchange Commission in respect
of, or establish or increase a put equivalent position or liquidate or decrease
a call equivalent position within the meaning of Section 16 of the Securities
Exchange Act of 1934, as amended, and the rules and regulations of the
Securities and Exchange Commission promulgated thereunder with respect to, any
shares of capital stock of the Company or any securities convertible into, or
exercisable or exchangeable for such capital stock, or publicly announce an
intention to effect any such
4
<PAGE>
transaction, for a period of 90 days after the date of this Agreement; provided,
however, that the undersigned may (i) transfer up to 3,000 shares of Common
Stock as bona fide gifts; (ii) transfer shares of Common Stock to an affiliate,
family member, partner or member of the undersigned if such transferee agrees to
become subject to the terms of this Agreement; (iii) cause the Company to issue
shares of Common Stock and convertible subordinated notes pursuant to the
Securities Purchase Agreement, dated October 7, 1999, between the Company and
Bell Atlantic Investments, Inc.; (iv) if applicable to the undersigned, enter
into certain forward purchase contracts with DECS Trust VI relating to shares of
Common Stock; (v) with respect to Sherman Tuan, sell up to 150,000 shares of
Common Stock; and (vi) with respect to David Rand, pledge up to 250,000 shares
of Common Stock to secure margin loans entered into by him.
5
<PAGE>
If for any reason the Underwriting Agreement shall be terminated prior to
the Closing Date (as defined in the Underwriting Agreement), the agreement set
forth above shall likewise be terminated.
Yours very truly,
By:
------------------------------------
Name:
Title:
6
EXHIBIT 4.1
================================================================================
METROMEDIA FIBER NETWORK, INC.
$750,000,000 10% SENIOR NOTES DUE 2009
(euro)250,000,000 10% SENIOR NOTES DUE 2009
INDENTURE
-----------------------------
Dated as of November 17, 1999
-----------------------------
THE BANK OF NEW YORK
Trustee
================================================================================
<PAGE>
CROSS-REFERENCE TABLE*
Trust Indenture Act Section Indenture Section
310(a)(1)...................................................... 7.10
(a)(2)......................................................... 7.10
(a)(3)......................................................... N.A.
(a)(4)......................................................... N.A.
(a)(5)......................................................... 7.10
(b)............................................................ 7.10
(c)............................................................ N.A.
311(a)......................................................... 7.11
(b)............................................................ 7.11
(i)(c)......................................................... N.A.
312(a)......................................................... 2.05
(b)............................................................ 12.03
(c)............................................................ 12.03
313(a)......................................................... 7.06
(b)(2)......................................................... 7.07
(c)............................................................ 7.06; 12.02
(d)............................................................ 7.06
314(a)......................................................... 4.03; 12.02
(c)(1)......................................................... 12.04
(c)(2)......................................................... 12.04
(c)(3)......................................................... N.A.
(e)............................................................ 12.05
(f)............................................................ N.A.
315(a)......................................................... 7.01
(b)............................................................ 7.05; 12.02
(A)(c)......................................................... 7.01
(d)............................................................ 7.01
(e)............................................................ 6.11
316(a)(last sentence).......................................... 2.09
(a)(1)(A)...................................................... 6.05
(a)(1)(B)...................................................... 6.04
(a)(2)......................................................... N.A.
(b)............................................................ 6.07
(c)............................................................ 9.04
317(a)(1)...................................................... 6.08
(a)(2)......................................................... 6.09
(b)............................................................ 2.04
318(a)......................................................... 12.01
(b)............................................................ N.A.
(c)............................................................ 12.01
N.A. means not applicable
*This Cross-Reference Table is not, for any purposes, part of the Indenture.
<PAGE>
TABLE OF CONTENTS
Page
----
ARTICLE 1. DEFINITIONS AND INCORPORATION BY REFERENCE .........................1
SECTION 1.01 DEFINITIONS............................................1
SECTION 1.02 OTHER DEFINITIONS.....................................19
SECTION 1.03 TRUST INDENTURE ACT DEFINITIONS.......................20
SECTION 1.04 RULES OF CONSTRUCTION.................................20
ARTICLE 2. THE NOTES .........................................................21
SECTION 2.01 FORM AND DATING.......................................21
SECTION 2.02 EXECUTION AND AUTHENTICATION..........................22
SECTION 2.03 REGISTRAR AND PAYING AGENT............................24
SECTION 2.04 PAYING AGENT TO HOLD MONEY IN TRUST...................24
SECTION 2.05 HOLDER LISTS..........................................25
SECTION 2.06 BOOK-ENTRY PROVISIONS FOR GLOBAL NOTES,
CERTIFICATED NOTES ...................................25
SECTION 2.07 TRANSFER AND EXCHANGE.................................26
SECTION 2.08 REPLACEMENT NOTES.....................................32
SECTION 2.09 OUTSTANDING NOTES.....................................32
SECTION 2.10 TREASURY NOTES........................................33
SECTION 2.11 TEMPORARY NOTES.......................................33
SECTION 2.12 CANCELLATION..........................................33
SECTION 2.13 DEFAULTED INTEREST....................................34
SECTION 2.14 CUSIP AND ISIN NUMBERS................................34
ARTICLE 3. REDEMPTION AND PREPAYMENT..........................................35
SECTION 3.01 NOTICES TO TRUSTEE....................................35
SECTION 3.02 SELECTION OF NOTES TO BE REDEEMED.....................35
SECTION 3.03 NOTICE OF REDEMPTION..................................35
SECTION 3.04 EFFECT OF NOTICE OF REDEMPTION........................36
SECTION 3.05 DEPOSIT OF REDEMPTION PRICE...........................36
SECTION 3.06 NOTES REDEEMED IN PART................................37
SECTION 3.07 OPTIONAL REDEMPTION...................................37
SECTION 3.08 MANDATORY REDEMPTION..................................38
SECTION 3.09 OFFER TO PURCHASE BY APPLICATION OF EXCESS PROCEEDS...38
ARTICLE 4. COVENANTS .........................................................40
SECTION 4.01 PAYMENT OF NOTES......................................40
SECTION 4.02 MAINTENANCE OF OFFICE OR AGENCY.......................41
SECTION 4.03 REPORTS...............................................42
SECTION 4.04 COMPLIANCE CERTIFICATE................................42
SECTION 4.05 TAXES.................................................43
SECTION 4.06 STAY, EXTENSION AND USURY LAWS........................43
SECTION 4.07 RESTRICTED PAYMENTS...................................44
SECTION 4.08 DIVIDEND AND OTHER PAYMENT RESTRICTIONS
AFFECTING RESTRICTED SUBSIDIARIES.....................48
SECTION 4.09 INCURRENCE OF INDEBTEDNESS AND ISSUANCE OF
PREFERRED STOCK ......................................49
SECTION 4.10 ASSET SALES...........................................52
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SECTION 4.11 TRANSACTIONS WITH AFFILIATES..........................53
SECTION 4.12 LIENS.................................................55
SECTION 4.13 CORPORATE EXISTENCE...................................55
SECTION 4.14 CHANGE OF CONTROL.....................................55
SECTION 4.15 BUSINESS ACTIVITIES...................................56
SECTION 4.16 PAYMENTS FOR CONSENT..................................57
SECTION 4.17 MONEY FOR PAYMENTS TO BE HELD IN TRUST................57
ARTICLE 5. SUCCESSORS ........................................................58
SECTION 5.01 MERGER, CONSOLIDATION, OR SALE OF ASSETS..............58
SECTION 5.02 SUCCESSOR CORPORATION SUBSTITUTED.....................59
ARTICLE 6. DEFAULTS AND REMEDIES .............................................60
SECTION 6.01 EVENTS OF DEFAULT.....................................60
SECTION 6.02 ACCELERATION..........................................61
SECTION 6.03 OTHER REMEDIES........................................61
SECTION 6.04 WAIVER OF PAST DEFAULTS...............................62
SECTION 6.05 CONTROL BY MAJORITY...................................62
SECTION 6.06 LIMITATION ON SUITS...................................62
SECTION 6.09 TRUSTEE MAY FILE PROOFS OF CLAIM......................63
SECTION 6.10 PRIORITIES............................................64
SECTION 6.11 UNDERTAKING FOR COSTS.................................64
ARTICLE 7. TRUSTEE ...........................................................65
SECTION 7.01 DUTIES OF TRUSTEE.....................................65
SECTION 7.02 RIGHTS OF TRUSTEE.....................................66
SECTION 7.03 INDIVIDUAL RIGHTS OF TRUSTEE..........................67
SECTION 7.04 TRUSTEE'S DISCLAIMER..................................67
SECTION 7.05 NOTICE OF DEFAULTS....................................68
SECTION 7.06 REPORTS BY TRUSTEE TO HOLDERS OF THE NOTES ...........68
SECTION 7.07 COMPENSATION AND INDEMNITY............................68
SECTION 7.08 REPLACEMENT OF TRUSTEE................................69
SECTION 7.09 SUCCESSOR TRUSTEE BY MERGER, ETC......................70
SECTION 7.10 ELIGIBILITY; DISQUALIFICATION.........................71
SECTION 7.11 PREFERENTIAL COLLECTION OF CLAIMS AGAINST COMPANY.....71
SECTION 7.12 MONEY HELD IN TRUST...................................71
ARTICLE 8. LEGAL DEFEASANCE AND COVENANT DEFEASANCE ..........................71
SECTION 8.01 OPTION TO EFFECT LEGAL DEFEASANCE OR COVENANT
DEFEASANCE ...........................................71
SECTION 8.02 LEGAL DEFEASANCE AND DISCHARGE........................71
SECTION 8.03 COVENANT DEFEASANCE...................................72
SECTION 8.04 CONDITIONS TO LEGAL OR COVENANT DEFEASANCE............73
SECTION 8.05 DEPOSITED MONEY AND GOVERNMENT SECURITIES TO BE
HELD IN TRUST; OTHER MISCELLANEOUS PROVISIONS.........74
SECTION 8.06 REPAYMENT TO COMPANY..................................75
SECTION 8.07 REINSTATEMENT.........................................75
SECTION 8.08 SURVIVAL..............................................75
ARTICLE 9. AMENDMENT, SUPPLEMENT AND WAIVER ..................................76
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SECTION 9.01 WITHOUT CONSENT OF HOLDERS OF NOTES...................76
SECTION 9.02 WITH CONSENT OF HOLDERS OF NOTES......................77
SECTION 9.03 COMPLIANCE WITH TRUST INDENTURE ACT...................78
SECTION 9.04 REVOCATION AND EFFECT OF CONSENTS.....................78
SECTION 9.05 NOTATION ON OR EXCHANGE OF NOTES......................79
SECTION 9.06 TRUSTEE TO SIGN AMENDMENTS, ETC.......................79
ARTICLE 10. SATISFACTION AND DISCHARGE .......................................80
SECTION 10.01 SATISFACTION AND DISCHARGE OF INDENTURE ..............81
ARTICLE 11. [INTENTIONALLY OMITTED]..........................................81
ARTICLE 12. MISCELLANEOUS....................................................81
SECTION 12.01 TRUST INDENTURE ACT CONTROLS .........................81
SECTION 12.02 NOTICES ..............................................81
SECTION 12.03 COMMUNICATION BY HOLDERS OF NOTES WITH OTHER
HOLDERS OF NOTES .....................................83
SECTION 12.04 CERTIFICATE AND OPINION AS TO CONDITIONS PRECEDENT ...83
SECTION 12.05 STATEMENTS REQUIRED IN CERTIFICATE OR OPINION ........83
SECTION 12.06 RULES BY TRUSTEE AND AGENTS ..........................84
SECTION 12.07 NO PERSONAL LIABILITY OF DIRECTORS, OFFICERS,
EMPLOYEES AND SHAREHOLDERS............................84
SECTION 12.08 GOVERNING LAW ........................................84
SECTION 12.09 CONSENT TO JURISDICTION AND SERVICE ..................84
SECTION 12.10 NO ADVERSE INTERPRETATION OF OTHER AGREEMENTS ........85
SECTION 12.11 SUCCESSORS ...........................................85
SECTION 12.12 SEVERABILITY .........................................85
SECTION 12.13 COUNTERPART ORIGINALS ................................85
SECTION 12.14 TABLE OF CONTENTS, HEADINGS, ETC .....................85
SECTION 12.15 JUDGMENT CURRENCY ....................................85
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INDENTURE, dated as of November 17, 1999 by and between Metromedia
Fiber Network, Inc., a Delaware corporation (the "Company") and The Bank of New
York, a New York banking corporation, 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 10% Senior
Notes due 2009 denominated in U.S. Dollars (the "Dollar Notes") and the 10%
Senior Notes due 2009 denominated in Euros (the "Euro Notes" and, together with
the Dollar Notes, the "Notes"):
ARTICLE 1.
DEFINITIONS AND INCORPORATION BY REFERENCE
SECTION 1.1 DEFINITIONS.
"Acquired Debt" or "Acquired Preferred Stock" means, with respect to
any specified Person, Indebtedness or Preferred Stock of any other Person
existing at the time such other Person is merged with or into or became a
Subsidiary of such specified Person (including by Designation or Revocation),
provided such Indebtedness or Preferred Stock is not incurred in connection
with, or in contemplation of, such other Person merging with or into or becoming
a Subsidiary of such specified Person.
"Agent Member" means, with respect to any Depositary, any member of,
or participant in, such Depositary.
"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 or co-registrar.
"Agent Member" means, with respect to any Depositary, any member of,
or participant in, such Depositary.
"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, Euroclear or CEDEL Bank that apply to such
transfer or exchange.
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"Asset Sale" means (i) the sale, lease, transfer, conveyance or
other disposition of any assets or rights (including, without limitation, by way
of a sale and leaseback) other than sales of inventory in the ordinary course of
business and other than any sale, lease, transfer, conveyance or other
disposition in the ordinary course of business of capacity on any fiber optic or
cable system owned, controlled or operated by the Company or any Restricted
Subsidiary or of telecommunications capacity, transmission rights, conduit or
rights-of-way acquired by the Company or any Restricted Subsidiary for use in a
Telecommunications Business of the Company or any Restricted Subsidiary
(provided that the sale, lease, transfer, conveyance or other disposition of all
or substantially all of the assets of the Company and its Restricted
Subsidiaries taken as a whole will be governed by the provisions of Section 5.01
hereof and/or Section 4.14 and not by the provisions of Section 4.10 hereof),
and (ii) the issue or sale by the Company or any of its Restricted Subsidiaries
of Equity Interests of any Subsidiary. Notwithstanding the foregoing, the
following items shall not be deemed to be Asset Sales: (i) a transfer of assets
by the Company to a Consolidated Subsidiary or by a Subsidiary to the Company or
to a Consolidated Subsidiary, (ii) an issuance of Equity Interests by a
Subsidiary to the Company or to a Consolidated Subsidiary, (iii) a Restricted
Payment that is permitted by Section 4.07 hereof, (iv) Permitted Investments
made in accordance with clause (a) or (d) of the definition thereof, (v) a
disposition of obsolete or worn out equipment or equipment that is no longer
useful in the conduct of a Telecommunications Business of the Company and its
Restricted Subsidiaries and that is disposed of in the ordinary course of
business, (vi) the surrender or waiver by the Company or any of its Restricted
Subsidiaries of contract rights or the settlement, release or surrender of
contract, tort or other claims of any kind by the Company or any of its
Restricted Subsidiaries or the grant by the Company or any of its Restricted
Subsidiaries of a Lien not prohibited by the Indenture, (vii) the sale of Cash
Equivalents in the ordinary course of business; and (viii) sales, transfers,
assignments and other dispositions of assets (or related assets in related
transactions) in the ordinary course of business with an aggregate fair market
value of less than $1.0 million.
"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 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 Contribution" means any contribution to the equity of the
Company from a direct or indirect parent of the Company for which no
consideration other than the
2
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issuance of common stock with no redemption rights and no special preferences,
privileges or voting rights is given.
"Capital Lease Obligation" means, at the time any determination
thereof is to be made, the amount of the liability in respect of a capital lease
that would at such time be required to be capitalized on a balance sheet in
accordance with GAAP.
"Capital Stock" means (i) in the case of a corporation, corporate
stock, (ii) in the case of an association or business entity, any and all
shares, interests, participations, rights or other equivalents (however
designated) of corporate stock, (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.
"Cash Equivalents" means (i) United States dollars or Euros, (ii)
securities issued or directly and fully guaranteed or insured by (a) the United
States government or any agency or instrumentality thereof (provided that the
full faith and credit of the United States is pledged in support thereof) or (b)
any member of the European Economic Area or Switzerland or any agency or
instrumentality thereof provided that such country, agency or instrumentality
has a credit rating at least equal to that of the Unites States of America
(provided, further, that the full faith and credit of such respective nation is
pledged in support thereof), in each case having maturities of not more than six
months from the date of acquisition, (iii) certificates of deposit and
eurodollar time deposits with maturities of six months or less from the date of
acquisition, bankers' acceptances with maturities not exceeding six months and
overnight bank deposits, in each case with any domestic commercial bank having
capital and surplus in excess of $500 million and a Thompson Bank Watch Rating
of "B" or better, (iv) repurchase obligations with a term of not more than seven
days for underlying securities of the types described in clause (ii) above
entered into with any financial institution meeting the qualifications specified
in clause (iii) above, (v) commercial paper having the highest rating obtainable
from Moody's Investors Service, Inc. or Standard & Poor's Ratings Services and
in each case maturing within six months after the date of acquisition and (vi)
money market funds at least 95% of the assets of which constitute Cash
Equivalents of the kinds described in clauses (i)-(v) of this definition,
provided that with respect to any Foreign Subsidiary, Cash Equivalents shall
also mean those investments that are comparable to clauses (iii) through (vi)
above in such Foreign Subsidiary 's country of organization or country where it
conducts business operations.
"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 number of shares) of the
3
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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, other
than a consolidation or merger (a) of the Company into a Wholly Owned Restricted
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 immediately following such transaction or (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 Restricted Subsidiaries taken as a whole to any
person other than a Wholly Owned Restricted 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 Restricted Subsidiary or of
telecommunications capacity or transmission rights, rights of way or conduit
acquired by the Company or any Restricted Subsidiary for use in the
Telecommunications Business of the Company or a Restricted Subsidiary,
including, without limitation, for sale, lease, transfer, conveyance or other
disposition to any customer of the Company or any Restricted Subsidiary shall
not be deemed a disposition of assets for purposes of this clause (iv).
"Common Depositary" means a common depositary for Morgan Guarantee
Trust Company of New York, Brussels office, as operator of the Euroclear system.
"Company" means Metromedia Fiber Network, Inc., a Delaware
corporation, and any and all successors thereto.
4
<PAGE>
"Company Order" or "Company Request" means a written request or
order signed in the name of the Company by a member of the Company's Board of
Directors, the Chief Executive Officer, the President or a Vice President, and
by the Chief Financial Officer, the Chief Accounting Officer, the Treasurer, an
Assistant Treasurer, the Secretary, an Assistant Secretary or other authorized
representative of the Company and delivered to the Trustee.
"Consolidated Capital Ratio" means, with respect to the Company as
of any date, the ratio of (i) the aggregate consolidated amount of Indebtedness
of the Company and its Restricted Subsidiaries then outstanding to (ii) the
Consolidated Net Worth of the Company and its Consolidated Subsidiaries as of
such date.
"Consolidated Cash Flow" means, with respect to the Company for any
period, the Consolidated Net Income of the Company and its Consolidated
Subsidiaries for such period plus (A), to the extent that any of the following
items were deducted in computing such Consolidated Net Income, but without
duplication, (i) provision for taxes based on income or profits of the Company
and its Consolidated Subsidiaries for such period, plus (ii) consolidated
interest expense of the Company and its Consolidated Subsidiaries for such
period, whether paid or accrued and whether or not capitalized (including,
without limitation, amortization of debt issuance costs and original issue
discount, non-cash interest payments, the interest component of any deferred
payment obligations, the interest component of all payments associated with
Capital Lease Obligations, commissions, discounts and other fees and charges
incurred in respect of letter of credit or bankers' acceptance financings, and
net payments (if any) pursuant to Hedging Obligations), plus (iii) depreciation,
amortization (including amortization of goodwill and other intangibles and the
amount of capacity available for sale (other than for backhaul capacity) charged
to cost of sales, but excluding amortization of prepaid cash expenses that were
paid in a prior period), and other non-cash expenses (excluding any such
non-cash expense to the extent that it represents an accrual of or reserve for
cash expenses in any future period or amortization of a prepaid cash expense
that was paid in a prior period) of the Company and its Consolidated
Subsidiaries for such period, minus (B) non-cash items increasing such
Consolidated Net Income for such period (other than items that were accrued in
the ordinary course of business), in each case, on a consolidated basis and
determined in accordance with GAAP. Notwithstanding the foregoing, the provision
for taxes on the income or profits of, and the depreciation and amortization and
other non-cash expenses of, a Restricted Subsidiary of the Company shall be
added to Consolidated Net Income to compute Consolidated Cash Flow of the
Company only to the extent that a corresponding amount would be permitted at the
date of determination to be dividended to the Company by such Restricted
Subsidiary without prior governmental approval (that has not been obtained), and
without direct or indirect restriction pursuant to the terms of its charter and
all agreements, instruments, judgments, decrees, orders, statutes, rules and
governmental regulations applicable to that Restricted Subsidiary or its
shareholders.
5
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"Consolidated Leverage Ratio" means, with respect to the Company, as
of any date, the ratio of (i) the aggregate consolidated amount of Indebtedness
of the Company and its Restricted Subsidiaries then outstanding to (ii) the
annualized (that is, multiplied by four) Consolidated Cash Flow of the Company
and its Consolidated Subsidiaries for the most recently ended fiscal quarter.
"Consolidated Net Income" means, with respect to the Company for any
period, the aggregate of the Net Income of the Company and its Consolidated
Subsidiaries for such period, on a consolidated basis, determined in accordance
with GAAP; provided that (i) the Net Income (but not loss) of any Person that is
accounted for by the equity method of accounting shall be included only to the
extent of the amount of dividends or distributions paid in cash to the Company
or a Consolidated Subsidiary thereof by such Person but not in excess of the
Company's Equity Interests in such Person, (ii) the Net Income of any Restricted
Subsidiary shall be excluded to the extent that the declaration or payment of
dividends or similar distributions by that Restricted Subsidiary of that Net
Income is not at the date of determination permitted without any prior
governmental approval (that has not been obtained) or, directly or indirectly,
by operation of the terms of its charter or any agreement, instrument, judgment,
decree, order, statute, rule or governmental regulation applicable to that
Restricted Subsidiary or its shareholders, except that the Company's equity in
the net income of any such Restricted Subsidiary for such period may be included
in such Consolidated Net Income up to the aggregate amount of cash that could
have been distributed by such Restricted Subsidiary during such period to the
Company as a dividend, (iii) the Net Income of any Person acquired in a pooling
of interests transaction for any period prior to the date of such acquisition
shall be excluded, (iv) the equity of the Company or any Restricted Subsidiary
in the net income (if positive) of any Unrestricted Subsidiary shall be included
in such Consolidated Net Income up to the aggregate amount of cash actually
distributed by such Unrestricted Subsidiary during such period to the Company or
a Consolidated Subsidiary as a dividend or other distribution (but not in excess
of the amount of the Net Income of such Unrestricted Subsidiary for such period)
and (v) the cumulative effect of a change in accounting principles shall be
excluded.
"Consolidated Net Worth" means, with respect to the Company as of
any date, the sum of (i) the consolidated equity of the common shareholders of
the Company and its Consolidated Subsidiaries that are Consolidated Subsidiaries
as of such date plus (ii) the respective amounts reported on the Company's
balance sheet as of such date with respect to any series of Preferred Stock
(other than Disqualified Stock) that by its terms is not entitled to the payment
of dividends unless such dividends may be declared and paid only out of net
earnings in respect of the year of such declaration and payment, but only to the
extent of any cash received by the Company upon issuance of such Preferred
Stock, less (x) all write-ups (other than write-ups resulting from foreign
currency translations and write-ups of tangible assets of a going concern
business made within 12 months after the acquisition of such business)
subsequent to the Issue Date in the book value of any asset owned by the Company
or a Restricted Subsidiary that is a Consolidated Subsidiary of the Company, (y)
all outstanding net Investments as of such date in unconsolidated Restricted
Subsidiaries and
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<PAGE>
in Persons that are not Restricted Subsidiaries (except, in each such case,
Permitted Investments), and (z) all unamortized debt discount and expense and
unamortized deferred charges as of such date, all of the foregoing determined in
accordance with GAAP.
"Consolidated Subsidiary" means, for any Person, each Restricted
Subsidiary of such Person (whether now existing or hereafter created or
acquired) the financial statements of which are consolidated for financial
statement reporting purposes with the financial statements of such Person in
accordance with GAAP.
"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 12.02 hereof or such other address as to which
the Trustee may give notice to the Company.
"Credit Agreement" means one or more credit agreements, loan
agreements or similar facilities, secured or unsecured, entered into from time
to time by the Company and its Restricted Subsidiaries, and including any
related notes, Guarantees, collateral documents, instruments and agreements
executed in connection therewith, as the same may be amended, supplemented,
modified, restated or replaced from time to time.
"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 2.07 hereof, in the
form of Exhibit A-1 hereto (in the case of a Dollar Note) or Exhibit A-2 (in the
case of a Euro Note) 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.
"Depositary" means, with respect to the Notes issuable or issued in
whole or in part in global form, the Persons specified in Section 2.03 hereof as
the Depositary with
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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.
"Disqualified Stock" means any Capital Stock that, by its terms (or
by the terms of any security into which it is convertible, or for which it is
exchangeable, in each case at the option of the holder thereof), or upon the
happening of any event, matures or is mandatorily redeemable, pursuant to a
sinking fund obligation or otherwise, or redeemable at the option of the Holder
thereof, in whole or in part, on or prior to the date that is 91 days after the
date on which the Notes mature; provided, however, that any Capital Stock that
would constitute Disqualified Stock solely because the holders thereof have the
right to require the Company to repurchase such Capital Stock upon the
occurrence of a Change of Control or an Asset Sale shall not constitute
Disqualified Stock if the terms of such Capital Stock provide that the Company
may not repurchase or redeem any such Capital Stock pursuant to such provisions
unless such repurchase or redemption complies with Section 4.07 hereof.
"Dollars" or "$" or "U.S. Dollars" means the lawful currency of the
United States of America and, in relation to any amount to be advanced or paid
under this Indenture or the Note, funds having immediate value.
"Dollar Note" has the meaning assigned to it in the preamble to this
Indenture.
"Dollar Global Note" means the Global Note in the form of Exhibit
A-1 hereto.
"Dollar Paying Agent" means an office or agency of the Company where
Dollar Notes may be presented for payment.
"Dollar Registrar" means an office or agency of the Company, where
Dollar Notes may be presented for registration of transfer or exchange.
"DTC" means The Depository Trust Company, its nominees and
successors.
"EEA Government Obligation" means direct non-callable obligations
of, or non-callable obligations guaranteed by, any member nation of the European
Union for the payment of which obligation or guarantee the full faith and credit
of the respective nation is pledged; provided that such nation has a credit
rating at least equal to that of the highest rated member nation of the European
Economic Area.
"Equity Interests" means Capital Stock and all warrants, options or
other rights to acquire Capital Stock (but excluding any debt security that is
convertible into, or exchangeable for, Capital Stock).
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"Euro" or "(EURO)" means the currency adopted by those countries
participating in the third stage of European monetary union.
"Euro Global Note" means the Global Note in the form of Exhibit A-2
hereto.
"Euro Note" has the meaning assigned to it in the preamble to this
Indenture.
"Euroclear" means Morgan Guaranty Trust Company of New York,
Brussels office, as operator of the Euroclear system.
"European Economic Area" means the member nations of the European
Economic Area pursuant to the Oporto Agreement on the European Economic Area
dated May 2, 1992 as amended.
"European Union" means the member nations to the third stage of
economic and monetary union pursuant to the treaty of Rome establishing the
European Community, as amended by the Treaty on European Union, signed at
Maastricht on February 7, 1992.
"Euro Paying Agent" means an office or agency of the Company where
Euro Notes may be presented for payment.
"Euro Registrar" means an office or agency of the Company where Euro
Notes may be presented for registration of transfer or exchange.
"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).
"Existing Assets" means property, plant and equipment and other
tangible business assets existing as of the Issue Date used in a
Telecommunications Business of the Company, but does not include cash or Cash
Equivalents existing on the Issue Date, and the proceeds from the sale,
disposition or other transfer of any Existing Assets outside the ordinary course
of business.
"Existing Indebtedness" means Indebtedness of the Company and its
Restricted Subsidiaries in existence on the Issue Date, until such amounts are
repaid.
"Foreign Subsidiary" means any Restricted Subsidiary of the Company
which (i) is not organized under the laws of the United States, any state
thereof or the District of Columbia, and (ii) conducts substantially all of its
business operations outside the United States of America.
"Foreign Subsidiary Credit Agreement" means one or more credit
agreements, loan agreements or similar facilities, secured or unsecured, entered
into from
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time to time by one or more of the Company's Foreign Subsidiaries, and including
any related notes, Guarantees, collateral documents, instruments and agreements
executed in connection therewith, as the same may be amended, supplemented,
modified, restated or replaced 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.
"German Joint Venture" means the Person(s) formed or organized to
engineer, develop, construct and own a fiber optic telecommunications network in
Germany.
"Global Note Legend" means the legend set forth in Section 2.07(f),
which is required to be placed on all Global Notes issued under this Indenture.
"Global Notes" means, collectively, the Global Notes, in the form of
Exhibit A-1 (in the case of the Dollar Notes) or Exhibit A-2 (in the case of the
Euro Notes) hereto issued in accordance with Section 2.01 hereof and bearing the
Global Note Legend.
"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.
"Guarantee" means any obligation, contingent or otherwise, of any
Person directly or indirectly guaranteeing any Indebtedness of any other Person
(i) to purchase or pay (or advance or supply funds for the purchase or payment
of) such Indebtedness of such other Person (whether arising by virtue of
partnership arrangements, or by agreement to keep-well, to purchase assets,
goods, securities or services, to take-or-pay, or to maintain financial
statement conditions or otherwise) or (ii) entered into for purposes of assuring
in any other manner the obligee of such Indebtedness of the payment thereof or
to protect such obligee against loss in respect thereof (in whole or in part);
provided, however, that the term "Guarantee" shall not include endorsements for
collection or deposit in the ordinary course of business. The term "Guarantee"
used as a verb has a corresponding meaning.
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"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.
"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 representing Capital Lease Obligations or the balance of the deferred and
unpaid of the 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), Disqualified Stock of such Person and
Preferred Stock of such Person's Restricted Subsidiaries and, to the extent not
otherwise included, the 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
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.
"Interest Payment Date" shall have the meaning assigned to such term
in the Notes.
"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.
"Investments" means, with respect to any Person, all investments by
such Person in other Persons (including Affiliates) in the forms of direct or
indirect loans (including Guarantees of Indebtedness or other obligations),
advances or capital
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contributions (excluding commission, travel and similar advances to directors,
officers and employees made in the ordinary course of business), purchases or
other acquisitions for consideration of Indebtedness, Equity Interests or other
securities, together with all items that are or would be classified as
investments on a balance sheet prepared in accordance with GAAP. If the Company
or any of its Restricted Subsidiaries sells or otherwise disposes of any Equity
Interests of any direct or indirect Subsidiary such that, after giving effect to
any such sale or disposition, such Person is no longer a Subsidiary of the
Company or such Restricted Subsidiary, the Company shall be deemed to have made
an Investment on the date of any such sale or disposition equal to the fair
market value of the Equity Interests of such Subsidiary not sold or disposed of
in an amount determined as provided in the final paragraph of Section 4.07
hereof.
"ION" means International Optical Network, L.L.C., a Delaware
limited liability company.
"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 London 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, security interest or encumbrance of any kind in respect of such asset,
whether or not filed, recorded or otherwise perfected under applicable law
(including any conditional sale or other title retention agreement, any lease in
the nature thereof, any option or other agreement to sell or give a security
interest in, and any filing of or agreement to give any financing statement
under the Uniform Commercial Code (or equivalent statutes) of any jurisdiction).
"Management Advances" means loans or advances made to directors,
officers or employees of the Company or any Restricted Subsidiary (i) in respect
of travel, entertainment or moving-related expenses incurred in the ordinary
course of business, (ii) in respect of moving-related expenses incurred in
connection with any closing or consolidation of any facility, or (iii) otherwise
in the ordinary course of business not exceeding $3.0 million in the aggregate
at any time outstanding.
"Management Agreement" means the management agreement between the
Company and Metromedia Company, dated as of January 2, 1998, as the same may be
amended, supplemented, modified, restated or replaced from time to time with the
approval of a majority of the disinterested members of the Board of Directors.
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"Net Cash Proceeds" means the aggregate amount of cash or Cash
Equivalents received by the Company in the case of a sale, or Capital
Contribution in respect, of Capital Stock and by the Company and its Restricted
Subsidiaries in respect of an Asset Sale plus, in the case of an issuance of
Capital Stock upon any exercise, exchange or conversion of securities (including
options, warrants, rights and convertible or exchangeable debt) of the Company
that were issued for cash on or after the Issue Date, the amount of cash
originally received by the Company upon the issuance of such securities
(including options, warrants, rights and convertible or exchangeable debt) less,
in each case, the sum of all payments, fees, commissions and reasonable and
customary expenses (including, without limitation, the fees and expenses of
legal counsel and investment banking fees and expenses) incurred in connection
with such Asset Sale or sale of Capital Stock, and, in the case of an Asset Sale
only, less the amount (estimated reasonably and in good faith by the Company) of
income, franchise, sales and other applicable federal, state, provincial,
foreign or local taxes required to be paid or accrued as a liability by the
Company or any of its respective Restricted Subsidiaries in connection with such
Asset Sale in the taxable year that such sale is consummated or in the
immediately succeeding taxable year, the computation of which shall take into
account the reduction in tax liability resulting from any available operating
losses and net operating loss carryovers, tax credits and tax credit
carryforwards, and similar tax attributes.
"Net Income" means, with respect to any Person, the net income
(loss) of such Person, determined in accordance with GAAP and before any
reduction in respect of preferred stock dividends, excluding, however, (i) any
gain (but not loss), together with any related provision for taxes on such gain
(but not loss), realized in connection with (a) any Asset Sale or (b) the
disposition of any securities by such Person or any of its Restricted
Subsidiaries or the extinguishment of any Indebtedness of such Person or any of
its Restricted Subsidiaries and (ii) any extraordinary gain or loss, together
with any related provision for taxes on such extraordinary gain or loss.
"Non-Recourse Debt" means Indebtedness (i) as to which neither the
Company nor any Restricted Subsidiary (a) provides any Guarantee or credit
support of any kind (including any undertaking, guarantee, indemnity, agreement
or instrument that would constitute Indebtedness) or (b) is directly or
indirectly liable (as a guarantor or otherwise) and (ii) no default with respect
to which (including any rights that the holders thereof may have to take
enforcement action against an Unrestricted Subsidiary) would permit (upon
notice, lapse of time or both) any holder of any other Indebtedness of the
Company or any Restricted Subsidiary to declare a default under such other
Indebtedness or cause the payment thereof to be accelerated or payable prior to
its Stated Maturity.
"Note Custodian" means the Persons 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.
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"Notes" has the meaning assigned to it in the preamble to this
Indenture.
"Officer" means the President, the Chief Executive Officer, any
Executive 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
12.05 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.
"pari passu Indebtedness" means Indebtedness of the Company ranking
pari passu in right of payment with the Notes.
"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).
"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.
"Permitted Investments" means (a) any Investment in the Company or
in a Consolidated Subsidiary of the Company that is engaged entirely or
substantially entirely in a Telecommunications Business; (b) any Investment in
Cash Equivalents; (c) any Guarantee of Indebtedness of the Company or a
Restricted Subsidiary to the extent such Indebtedness is permitted under Section
4.09 hereof; and (d) any Investment by the Company or any of its Restricted
Subsidiaries in a Person, if as a result of such Investment (i) such Person
becomes a Consolidated Subsidiary of the Company that is engaged entirely or
substantially entirely in a Telecommunications Business or (ii) such Person is
merged, consolidated or amalgamated with or into, or transfers or conveys
substantially all of its assets to, or is liquidated into, the Company or a
Consolidated Subsidiary of the Company that is engaged entirely or substantially
entirely in a Telecommunications Business.
"Permitted Liens" means (i) Liens to secure Indebtedness permitted
by clauses (e), (f), (g) and (h) of the second paragraph of Section 4.09 hereof
or any Permitted Refinancing Indebtedness, provided that with respect to Liens
to secure Indebtedness permitted by clause (f) thereof or any Permitted
Refinancing Indebtedness of such Indebtedness, such Lien must cover only the
assets acquired with such Indebtedness; (ii) Liens in favor of the Company or
any Restricted Subsidiary; (iii) Liens on property of a Person existing at the
time such Person is merged with or into or consolidated with the Company or any
of its Restricted Subsidiaries, provided that such Liens were in existence
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prior to the contemplation of such merger or consolidation and do not extend to
any assets other than those of the Person merged into or consolidated with the
Company or such Restricted Subsidiary; (iv) Liens on property existing at the
time of acquisition thereof by the Company or any of its Restricted
Subsidiaries, provided that such Liens were in existence prior to the
contemplation of such acquisition; (v) Liens to secure the performance of
statutory obligations, surety or appeal bonds, performance bonds or other
obligations of a like nature incurred in the ordinary course of business; (vi)
Liens existing on the Issue Date; (vii) Liens for taxes, assessments or
governmental charges or claims that are not yet delinquent or that are being
contested in good faith by appropriate proceedings promptly instituted and
diligently concluded, provided that any reserve or other appropriate provision
as shall be required in conformity with GAAP shall have been made therefor;
(viii) zoning restrictions, rights-of-way, easements and similar charges or
encumbrances incurred in the ordinary course which in the aggregate do not
detract from the value of the property thereof, and (ix) Liens incurred in the
ordinary course of business of the Company or any of its Restricted Subsidiaries
with respect to obligations that do not exceed $5.0 million at any one time
outstanding and that (a) are not incurred in connection with the borrowing of
money or the obtaining of advances or credit (other than trade credit in the
ordinary course of business) and (b) do not in the aggregate materially detract
from the value of the property or materially impair the use thereof in the
operation of business by the Company or such Restricted Subsidiary.
"Permitted Refinancing Indebtedness" means any Indebtedness of the
Company or any of its Restricted Subsidiaries issued in exchange for, or the net
proceeds of which are used to extend, refinance, renew, replace, defease or
refund other Indebtedness of the Company or any of its Restricted Subsidiaries
(other than intercompany Indebtedness); provided that: (i) the principal amount
(or accreted value, if applicable) of such Permitted Refinancing Indebtedness
does not exceed the principal amount of (or accreted value, if applicable), plus
accrued interest on, the Indebtedness so extended, refinanced, renewed,
replaced, defeased or refunded (plus the amount of any premium required to be
paid in connection with such refinancing pursuant to the terms of such
Indebtedness or otherwise reasonably determined by the Company to be necessary
and reasonable expenses incurred in connection therewith); (ii) such Permitted
Refinancing Indebtedness has a final maturity date later than the final maturity
date of, and has a Weighted Average Life to Maturity equal to or greater than
the Weighted Average Life to Maturity of, the Indebtedness being extended,
refinanced, renewed, replaced, defeased or refunded; (iii) if the Indebtedness
being extended, refinanced, renewed, replaced, defeased or refunded is
subordinated in right of payment to the Notes, such Permitted Refinancing
Indebtedness has a final maturity date later than the final maturity date of,
and is expressly subordinated in right of payment to, the Notes on terms at
least as favorable to the Holders of the Notes as those contained in the
documentation governing the Indebtedness being extended, refinanced, renewed,
replaced, defeased or refunded; (iv) such Indebtedness is incurred solely by the
Company or the Restricted Subsidiary who is the obligor on the Indebtedness
being extended, refinanced, renewed, replaced, defeased or refunded; and (v)
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such Indebtedness is secured only by the assets, if any, that secured the
Indebtedness being extended, refinanced, renewed, replaced, defeased or
refunded.
"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.
"Preferred Stock" means any Equity Interest of any class or classes
of a Person (however designated) which is preferred as to payments of dividends,
or as to distributions upon any liquidation or dissolution, over Equity
Interests of any other class of such Person.
"Public Equity Offering" means an underwritten offering of common
stock of the Company for cash pursuant to an effective registration statement
under the Securities Act.
"Purchase Money Indebtedness" means Indebtedness (including Acquired
Debt, in the case of leases, Capital Lease Obligations, mortgage financings and
purchase money obligations) incurred for the purpose of financing all or any
part of the cost of the engineering, construction, installation, acquisition,
lease (other than pursuant to a sale and leaseback of Existing Assets),
development or improvement of any Telecommunications Assets used by the Company
or any Restricted Subsidiary, in the case of Indebtedness incurred by the
Company, or any Foreign Subsidiary in the case of Indebtedness incurred by any
Foreign Subsidiary, including any related notes, Guarantees, collateral
documents, instruments and agreements executed in connection therewith, as the
same may be amended, supplemented, modified or restated from time to time.
"Record Date" for the interest payable on any Interest Payment Date
means the June 1 or December 1 (whether or not a Business Day), as the case may
be, next preceding such Interest Payment Date.
"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," shall mean, when used with respect to the
Trustee, any officer within the corporate trust department of the Trustee,
including any vice president, assistant vice president, assistant secretary,
assistant treasurer, trust officer or any other officer of the Trustee who
customarily performs functions similar to those performed by the Persons who at
the time shall be such officers, respectively, or to whom any corporate trust
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matter is referred because of such person's knowledge of and familiarity with
the particular subject and who shall have direct responsibility for the
administration of this Indenture.
"Restricted Investment" means any Investment other than a Permitted
Investment.
"Restricted Subsidiary" of a Person means any Subsidiary of the
referent Person that is not an Unrestricted Subsidiary. Unless the context
specifically requires otherwise, Restricted Subsidiary means a direct or
indirect Restricted Subsidiary of the Company.
"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).
"Significant Subsidiary" means any Restricted 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 Company pursuant to Section 2.13 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.
"Subordinated Indebtedness" means Indebtedness of the Company that
is subordinated in right of payment by its terms or the terms of any document or
instrument or instrument relating thereto to the Notes, in any respect.
"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
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only general partners of which are such Person or of one or more Subsidiaries of
such Person (or any combination thereof).
"Telecommunications Assets" means all assets, rights (contractual or
otherwise) and properties, whether tangible or intangible, used or intended for
use in connection with a Telecommunications Business and the Equity Interests of
a Person engaged entirely or substantially entirely in a Telecommunications
Business.
"Telecommunications Business" means the business of (i)
transmitting, or providing services relating to the transmission of, voice,
video or data through owned or leased transmission facilities, (ii)
constructing, creating, developing or marketing communications related network
equipment, software and other devices for use in a telecommunications business
or (iii) evaluating, participating or pursuing any other activity or opportunity
that is primarily related to those identified in (i) or (ii) above; provided,
that, the determination of what constitutes a Telecommunications Business shall
be made in good faith by the Board of Directors of the Company.
"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.
"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 Subsidiary" means (i) any Subsidiary of the Company
that is designated by the Board of Directors as an Unrestricted Subsidiary
pursuant to a Board Resolution; but only to the extent that such Subsidiary at
the time of such designation: (a) has no Indebtedness other than Non-Recourse
Debt; (b) is a Person with respect to which neither the Company nor any of its
Restricted Subsidiaries has any direct or indirect obligation to maintain or
preserve such Person's financial condition or to cause such Person to achieve
any specified levels of operating results; and (c) has not Guaranteed or
otherwise directly or indirectly provided credit support for any Indebtedness of
the Company or any of its Restricted Subsidiaries. Any such designation by the
Board of Directors shall be evidenced by filing with the Trustee a certified
copy of the Board Resolution giving effect to such designation and an Officers'
Certificate certifying that such designation complied with the foregoing
conditions and was permitted by the covenant described under Section 4.07
hereof. The Board of Directors of the Company may at any time designate any
Unrestricted Subsidiary to be a Restricted Subsidiary; provided that such
designation shall be deemed to be an incurrence of Indebtedness by a Restricted
Subsidiary of the Company of any outstanding Indebtedness of such Unrestricted
Subsidiary and such designation shall only be permitted if (i) such Indebtedness
is permitted under the covenant described under Section 4.09 hereof calculated
on a pro forma basis as if such designation had occurred at
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the beginning of the applicable reference period, and (ii) no Default or Event
of Default would be in existence following such designation.
"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.
"Weighted Average Life to Maturity" means, when applied to any
Indebtedness at any date, the number of years obtained by dividing (i) the sum
of the products obtained by multiplying (a) the amount of each then remaining
installment, sinking fund, serial maturity or other required payments of
principal, including payment at final maturity, in respect thereof, by (b) the
number of years (calculated to the nearest one-twelfth) that will elapse between
such date and the making of such payment, by (ii) the then outstanding principal
amount of such Indebtedness.
"Wholly Owned Restricted Subsidiary" of any Person means a
Restricted 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
Restricted Subsidiaries of such Person and one or more Wholly Owned Restricted
Subsidiaries of such Person.
SECTION 1.2 OTHER DEFINITIONS.
Defined in
Term Section
---- -------
"Affiliate Transaction" 4.11
"Asset Sale Offer" 4.10
"Authentication Order" 2.02
"Change of Control Offer" 4.14
"Change of Control Payment" 4.14
"Change of Control Payment Date" 4.14
"Covenant Defeasance" 8.03
"Designation" 4.07
"Event of Default" 6.01
"Excess Proceeds" 4.10
"incur" 4.09
"Judgment Currency" 12.15
"Legal Defeasance" 8.02
"Offer Amount " 3.09
"Offer Period" 3.09
"Paying Agent " 2.03
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"Permitted Indebtedness" 4.09
"Purchase Date" 3.09
"Registrar " 2.03
"Restricted Payments" 4.07
"Revocation" 4.07
SECTION 1.3 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 security Holder" means a Holder of a Note;
"indenture to be qualified" means this Indenture;
"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 1.4 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
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(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 2.1 FORM AND DATING.
(a) General.
The Notes and the Trustee's certificate of authentication shall be
substantially in the form of Exhibits A-1 and A-2 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. Each Note shall be dated the date
of its authentication. The Dollar Notes shall be in denominations of $1,000 and
integral multiples thereof. The Euro Notes shall be in denominations of
(euro)1,000 and integral multiples thereof.
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.
Dollar Notes issued in global form shall be substantially in the
form of Exhibit A-1 and Euro Notes issued in global form shall be substantially
in the form of Exhibit A-2 attached hereto (in both cases, including the Global
Note Legend thereon and the "Schedule of Exchanges of Interests in the Global
Note" attached thereto). Dollar Notes issued in definitive form shall be
substantially in the form of Exhibit A-1 and Euro Notes issued in definitive
form shall be substantially in the form of Exhibit A-2 attached hereto (but, in
both cases, without the Global Note Legends 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
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Trustee or the Note Custodian, at the direction of the Trustee, in accordance
with instructions given in writing by the Holder thereof as required by Section
2.07 hereof.
(c) 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 Global Notes that are
held by Participants through Euroclear or CEDEL Bank.
SECTION 2.2 EXECUTION AND AUTHENTICATION.
Two Officers or one Officer and the Secretary or an Assistant
Secretary of the Company shall sign the Notes for the Company by manual or
facsimile signature.
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 shall, upon a written order of the Company signed by two
Officers or one officer and the Secretary or an Assistant Secretary of the
Company (an "Authentication Order"), authenticate Notes for original issue up to
the aggregate principal amount stated in paragraph 4 of the Notes. The aggregate
principal amount of Notes outstanding at any time may not exceed such amount
except as provided in Section 2.07 hereof.
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.
In authenticating such Notes, and accepting the additional
responsibilities under this Indenture in relation to such Notes, the Trustee
shall be entitled to receive, and shall be fully protected in relying upon:
(1) A copy of the resolution or resolutions of the Board of
Directors in or pursuant to which the terms and form of the Notes were
established, certified by the Secretary or an Assistant Secretary of the
Company to have been
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duly adopted by the Board of Directors and to be in full force and effect
as of the date of such certificate, and if the terms and form of such
Notes are established by an Officers' Certificate pursuant to general
authorization of the Board of Directors, such Officers' Certificate;
(2) an executed supplemental indenture, if any is required under
the Indenture;
(3) an Officers' Certificate delivered in accordance with
Section 12.04, if required;
(4) an Opinion of Counsel, if any is required under the
Indenture, which shall state:
(i) that the form of such Notes has been established by a
supplemental indenture or by or pursuant to a resolution of the
Board of Directors and in conformity with the provisions of this
Indenture;
(ii) that the terms of such Notes have been established in
accordance with Section 2.01 and in conformity with the other
provisions of this Indenture;
(iii) that such Notes, when authenticated and delivered by the
Trustee and issued by the Company in the manner and subject to
any conditions specified in such Opinion of Counsel, will
constitute valid and legally binding obligations of the Company,
enforceable in accordance with their terms, subject to
bankruptcy, insolvency, reorganization and other laws of general
applicability relating to or affecting the enforcement of
creditors' rights and to general equity principles; and
(iv) that all laws and requirements in respect of the
execution and delivery by the Company of such Notes have been
complied with.
The Trustee shall have the right to decline to authenticate and
deliver any Notes under this Section if the Trustee, being advised by counsel,
determines that such action may not lawfully be taken or if the Trustee in good
faith shall determine that such action would expose the Trustee to personal
liability to existing Holders.
SECTION 2.3 REGISTRAR AND PAYING AGENT.
The Company shall maintain an office or agency where Notes may be
presented for registration of transfer or for exchange ("Registrar", which term
shall also include any co-registrar) and any office or agency where Notes may be
presented for
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payment ("Paying 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 and the term "Paying Agent" includes any additional
paying agent. The Company may change any Paying Agent or Registrar without
notice to any Holder. The Company shall notify the Trustee in writing of the
name and address of any Agent not a party to this Indenture. If the Company
fails to appoint or maintain another entity as Registrar or Paying Agent, the
Trustee shall act as such. The Company or any of its Subsidiaries may act as
Paying Agent or Registrar.
The Company initially appoints The Depository Trust Company ("DTC")
to act as Depositary with respect to the Dollar Global Notes.
The Company initially appoints The Bank of New York, London branch,
to act as the Depositary and Paying Agent and Note Custodian with respect to the
Euro Global Notes.
The Company initially appoints the Trustee to act as the Registrar
and Paying Agent and to act as Note Custodian with respect to the Dollar Global
Notes.
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 2.4 PAYING AGENT TO HOLD MONEY IN TRUST.
The Company shall require each Paying Agent other than the Trustee
to agree in writing that the Paying Agent will hold in trust for the benefit of
Holders or the Trustee all U.S. Dollars or Euros, as applicable, held by the
Paying Agent for the payment of principal and premium, if any, 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 U.S. Dollars or Euros, as applicable, held by it to
the Trustee. The Company at any time may require a Paying Agent to pay all such
U.S. Dollars or Euros, as applicable, 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 U.S. Dollars or Euros, as
applicable,. 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
U.S. Dollars or Euros, as applicable, 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.
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SECTION 2.5 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 2.6 BOOK-ENTRY PROVISIONS FOR GLOBAL NOTES, CERTIFICATED NOTES
Except as indicated below in this Section 2.06, the Notes shall be
represented only by Global Notes. The Global Notes shall be deposited with a
Depositary for such Notes (and shall be registered in the name of such
Depositary or its nominee). The Depositary for the Dollar Notes shall be DTC
unless the Company appoints a successor Depositary by delivery of a Company
Order to the Trustee specifying such successor Depositary. The Depositary for
the Euro Notes shall be The Bank of New York, London branch, unless Euroclear
and CEDEL Bank appoint a successor Depositary (which shall be a Common
Depositary of Euroclear and CEDEL Bank).
All payments on a Dollar Global Note will be made to DTC or its
nominee, as the case may be, as the registered owner and Holder of such Dollar
Global Note. All payments on a Euro Global Note will be made to the order of the
Common Depositary or its nominee, as the case may be, as the registered holder
of such Euro Global Note. In each case, the Company will be fully discharged by
payment to or to the order of such Depositary from any responsibility or
liability in respect of each amount so paid. Upon receipt of any such payment in
respect of a Dollar Global Note, DTC will credit Participants' accounts with
payments in amounts proportionate to their respective beneficial interests in
the principal amount of such Dollar Global Note as shown on the records of DTC.
The Common Depositary will instruct the Euro Paying Agent to make payments in
respect of the Euro Notes to Euroclear and CEDEL Bank in amounts proportionate
to their respective beneficial interests in the principal amount of each Euro
Global Note, and Euroclear and CEDEL Bank will credit Participants' accounts
with payments in amounts proportionate to their respective beneficial interests
in the principal amount of such Global Note as shown on the records of Euroclear
and CEDEL Bank.
Unless and until it is exchanged in whole or in part for Definitive
Notes, a Global Note may not be transferred except as a whole by the relevant
Depositary or nominee thereof to another nominee of the Depositary or to a
successor of the Depositary or a nominee of such successor.
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Owners of beneficial interests in Global Notes shall be entitled or
required, as the case may be, but only under the circumstances described in this
Section 2.06, to receive physical delivery of Definitive Notes.
Interests in a Global Note shall be exchangeable or transferable, as
the case may be, for Definitive Notes if (i) in the case of a Dollar Global
Note, DTC notifies the Company and the Trustee in writing that it is unwilling
or unable to continue as Depositary for such Dollar Global Note, or DTC ceases
to be a "Clearing Agency" registered under the United States Securities Exchange
Act of 1934, and a successor depositary is not appointed by the Company within
one hundred twenty (120) days, (ii) in the case of a Euro Global Note, Euroclear
and CEDEL Bank notify the Company and the Trustee in writing that they are
unwilling or unable to continue as clearing agencies for such Euro Global Note,
(iii) in the case of a Euro Global Note, the Common Depositary notifies the
Company and the Trustee in writing that it is unwilling or unable to continue as
Depositary for such Euro Global Note, and a successor Common Depositary is not
appointed within one hundred twenty (120) days or (iv) in the case of any Global
Note, an Event of Default has occurred and is continuing with respect thereto
and the owner of a beneficial interest therein requests such exchange or
transfer. Upon the occurrence of any of the events described in the preceding
sentence, the Company shall cause the appropriate Definitive Notes to be
delivered to the owners of beneficial interests in the Global Notes or the
Participants in DTC, Euroclear or CEDEL Bank through which such owners hold
their beneficial interest. Definitive Notes shall be exchangeable or
transferable for interests in other Definitive Notes as described herein.
SECTION 2.7 TRANSFER AND EXCHANGE
(a) 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 2.07, execute and
the Trustee shall authenticate Global Notes and Definitive Notes upon the
Company's Order or at the Registrar's request.
(ii) No service charge shall be made to a holder of a beneficial
interest in a Global 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 2.11, 3.06, 3.09, 4.10, 4.14 and 9.05 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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(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 4.14 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 2.07 to
effect a registration of transfer or exchange may be submitted by
facsimile.
(ix) Each Holder of a Note agrees to indemnify the Trustee and the
Registrar against any liability that may result from the transfer,
exchange or assignment of such Holder's Note in violation of any provision
of this Indenture and/or applicable United States federal or state
securities law.
(x) Neither the Trustee nor the Registrar shall have any obligation
or duty to monitor, determine or inquire as to compliance with any
restrictions on transfer imposed under this Indenture or under applicable
law with respect to any transfer of any interest in any Note (including
any transfers between or among Participants or beneficial owners of
interests in any Global Note) other than to require delivery of such
certificates and other documentation or evidence as are expressly required
by, and to do so if and when expressly required by the terms of, this
Indenture, and to examine the same to determine substantial compliance as
to form with the express requirements hereof.
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(xi) Dollar Notes shall not be exchangeable for Euro Notes, or vice
versa.
(b) Obligations with Respect to Transfers and Exchanges of Notes.
Upon surrender for registration of transfer of any Note of a series
to the appropriate Registrar, and subject to the other provisions of this
Section 2.07, the Company shall execute, and the Trustee shall authenticate and
deliver, in the name of the designated transferee or transferees, one or more
new Notes of such series of any authorized denominations and of a like aggregate
principal amount.
At the option of the Holder, and subject to the other provisions of
this Section 2.07, Notes of any series may be exchanged for other Notes of such
series of any authorized denominations and of a like aggregate principal amount,
upon surrender of the Notes to be exchanged at such office or agency. Whenever
any Notes are so surrendered for exchange, and subject to the other provisions
of this Section 2.07, the Company shall execute, and the Trustee shall
authenticate and deliver, the Notes which the Holder making the exchange is
entitled to receive.
All Notes issued upon any registration of transfer or exchange of
Notes shall be the valid obligations of the Company, evidencing the same
Indebtedness, and subject to the other provisions of this Section 2.07, entitled
to the same benefits under this Indenture, as the Notes surrendered upon such
registration of transfer or exchange.
Every Note presented or surrendered for registration of transfer or
for exchange shall (if so required by the Company, the Trustee or the
Depositary) be duly endorsed, or be accompanied by a written instrument of
transfer in form satisfactory to the Company or the appropriate Registrar and be
duly executed by the Holder thereof or his attorney duly authorized in writing.
No service charge shall be made for any registration of transfer or
exchange of Notes, but the Company may require payment of a sum sufficient to
cover any tax or governmental charge payable in connection with any registration
of transfer or exchange of Notes.
(c) Transfer and Exchange of Dollar Global Notes.
Notwithstanding any provisions of this Indenture or the Notes,
transfers of a Dollar Global Note, in whole or in part, and transfers and
exchanges of interests therein shall be made only in accordance with this
Section 2.07. Transfers and exchanges subject to this Section 2.07 shall also be
subject to the other provisions of this Indenture that are not inconsistent with
this Section 2.07. A Dollar Global Note may not be transferred, in whole or in
part, to any Person other than DTC or a nominee thereof or a successor to DTC or
its nominee, and no such transfer to any such other Person may be registered. No
transfer of a Dollar Note of any series to any Person shall be effective under
this Indenture or the Dollar
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Notes of such series unless and until such Dollar Note has been registered in
the name of such Person. Nothing in this Section 2.07(c) shall prohibit or
render ineffective any transfer of a beneficial interest in a Dollar Global Note
effected in accordance with the other provisions of this Section 2.07.
(d) Transfer and Exchange of Euro Global Notes.
Notwithstanding any provisions of this Indenture or the Euro Notes,
transfers of a Euro Global Note, in whole or in part, and transfers and
exchanges of interests therein shall be made only in accordance with this
Section 2.07. Transfers and exchanges subject to this Section 2.07 shall also be
subject to the other provisions of this Indenture that are not inconsistent with
this Section 2.07. A Euro Global Note may not be transferred, in whole or in
part, to any Person other than the Common Depositary or a nominee thereof or a
successor Common Depositary or its nominee, and no such transfer to any such
other Person may be registered; provided that this clause (i) shall not prohibit
any transfer of a Euro Note that is issued in exchange for a Euro Global Note
but is not itself a Euro Global Note. No transfer of a Euro Note to any Person
shall be effective under this Indenture or the Euro Notes unless and until such
Euro Note has been registered in the name of such Person. Nothing in this
Section 2.07(d) shall prohibit or render ineffective any transfer of a
beneficial interest in a Euro Global Note effected in accordance with the other
provisions of this Section 2.07.
Interest in Euro Global Note to be Held Through Euroclear or CEDEL
Bank. Interests in a Euro Global Note may be held only through Agent Members
acting for and on behalf of Euroclear and CEDEL Bank.
(e) Global Notes. The provisions of clauses (i), (ii), (iii), and (iv)
below shall apply only to Global Notes;
(i) General. Each Global Note authenticated under this Indenture
shall be registered in the name of the appropriate Depositary or a nominee
thereof and delivered to such Depositary or a nominee thereof or custodian
therefor.
(ii) Transfer to Persons other than Depositary. Notwithstanding any
other provision in this Indenture or the Notes, no Global Note may be
exchanged in whole or in part for Notes registered, and no transfer of a
Global Note in whole or in part may be registered, in the name of any
person other than the appropriate Depositary or a nominee thereof unless
(A) in the case of a Dollar Global Note, DTC notifies the Company and the
Trustee in writing that it is unwilling or unable to continue as
Depositary for such Global Note, or DTC ceases to be a "Clearing Agency"
registered under the United States Securities Exchange Act of 1934, and a
successor depositary is not appointed by the Company within one hundred
twenty (120) days, (B) in the case of a Euro Global Note, Euroclear and
CEDEL Bank notify the Company and the Trustee in writing that they are
unwilling or unable to continue as
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clearing agencies for such Euro Global Note, (C) in the case of a Euro
Global Note, the Common Depositary notifies the Company and the Trustee in
writing that it is unwilling or unable to continue as Depositary for such
Euro Global Note, and a successor Common Depositary is not appointed
within one hundred twenty (120) days or (D) in the case of any Global
Note, an Event of Default has occurred and is continuing with respect
thereto and the owner of a beneficial interest therein requests such
exchange or transfer. Any Global Note exchanged pursuant to clause (A),
(B) or (C) above shall be so exchanged in whole and not in part and any
Global Note exchanged pursuant to clause (D) above may be exchanged in
whole or from time to time in part as directed by DTC. Any Note issued in
exchange for a Global Note or any portion thereof shall be a Global Note,
provided that any such Note so issued that is registered in the name of a
Person other than the appropriate Depositary or a nominee thereof shall
not be a Global Note.
(iii) Global Note to Definitive Note. Notes issued in exchange for a
Global Note or any portion thereof pursuant to clause (ii) above shall be
issued in definitive, fully registered form without interest coupons,
shall have an aggregate principal amount equal to that of such Global Note
or portion thereof to be so exchanged, shall be registered in such names
and be in such authorized denominations as the appropriate Depositary
shall designate and shall bear any legends required hereunder. Any Global
Note to be exchanged in whole shall be surrendered by the appropriate
Depositary to the Note Registrar. With regard to any Global Note to be
exchanged in part, either such Global Note shall be so surrendered for
exchange or, in the case of a Dollar Global Note, if the Trustee is acting
as custodian for DTC or its nominee with respect to such Global Note or,
in the case of a Euro Global Note, if the Common Depositary is acting as
Depositary for Euroclear and CEDEL Bank, the principal amount thereof
shall be reduced, by an amount equal to the portion thereof to be so
exchanged, by means of an appropriate adjustment made on the records of
the Trustee, as Authenticating Agent, or of the Common Depositary. Upon
any such surrender or adjustment, the Trustee shall authenticate and
deliver the Note issuable on such exchange to or upon the order of the
appropriate Depositary or an authorized representative thereof.
(iv) In the event of the occurrence of any of the events specified
in clause (ii) above, the Company will promptly make available to the
Trustee a supply of Definitive Notes in definitive, fully registered form,
without interest coupons, sufficient to meet the Trustee's requirements
hereunder.
(v) No Rights of Agent Members in Global Note. No Agent Member of
any Depositary nor any other Persons on whose behalf Agent Members may act
(including Euroclear and CEDEL Bank and account Holders and Participants
therein) shall have any rights under the Indenture with respect to any
Global Note, or under any Global Note, and each Depositary or its nominee,
as the case may be, may be treated by the Company, the Trustee and any
agent of the Company or the
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Trustee as the absolute owner and Holder of such Global Note for all
purposes whatsoever. Notwithstanding the foregoing, nothing herein shall
prevent the Company, the Trustee or any agent of the Company or the
Trustee from giving effect to any written certification, proxy or other
authorization furnished by the applicable Depositary or such nominee, as
the case may be, or impair, as between DTC, Euroclear and CEDEL Bank,
their respective Agent Members and any other person on whose behalf an
Agent Member may act, the operation of customary practices of such Persons
governing the exercise of the rights of a Holder of any Note.
(f) Legends. The following legend shall appear on the face of all Global
Notes issued under this Indenture unless specifically stated otherwise in the
applicable provisions of this Indenture:
"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
2.07 OF THE INDENTURE, (II) THIS GLOBAL NOTE MAY BE EXCHANGED IN
WHOLE BUT NOT IN PART PURSUANT TO SECTION 2.07 OF THE INDENTURE,
(III) THIS GLOBAL NOTE MAY BE DELIVERED TO THE TRUSTEE FOR
CANCELLATION PURSUANT TO SECTION 2.12 OF THE INDENTURE AND (IV) THIS
GLOBAL NOTE MAY BE TRANSFERRED TO A SUCCESSOR DEPOSITARY WITH THE
PRIOR WRITTEN CONSENT OF THE COMPANY."
(g) 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 2.12 hereof.
SECTION 2.8 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 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
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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 attorney's fees and expenses) in replacing a Note.
Every replacement Note is an additional obligation of the Company
and shall be entitled to all of the benefits of this Indenture equally and
proportionately with all other Notes duly issued hereunder.
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 2.9 OUTSTANDING NOTES.
The Notes outstanding at any time are all the Notes authenticated by
the Trustee except for those cancelled 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 2.10 hereof, a Note
does not cease to be outstanding because the Company or an Affiliate of the
Company holds the Note; however, Notes held by the Company or a Subsidiary of
the Company shall not be deemed to be outstanding for purposes of Section
3.07(b) hereof.
If a Note is replaced pursuant to Section 2.08 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
4.01 hereof, it ceases to be outstanding and interest on it ceases to accrue.
If the Paying Agent (other than the Company, a Subsidiary or an
Affiliate of any thereof) holds, on a redemption date or maturity date, U.S.
Dollars or Euros, as applicable, 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 2.10 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 Person directly or indirectly controlling
or controlled by or under direct or indirect common control with the Company,
shall be considered as though not outstanding, except that for the purposes of
determining whether the Trustee shall be
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protected in relying on any such direction, waiver or consent, only Notes that a
Responsible Officer of the Trustee knows are so owned shall be so disregarded.
SECTION 2.11 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 definitive Notes in exchange for temporary Notes.
Holders of temporary Notes shall be entitled to all of the benefits
of this Indenture.
SECTION 2.12 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 return
cancelled Notes (subject to the record retention requirements of the Exchange
Act) to the Company upon a Company Order. 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 2.13 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 4.01 hereof. The Company shall notify the Trustee in
writing of the amount of defaulted interest proposed to be paid on each Note,
the Special Record Date 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 U.S. Dollars or Euros, as applicable, equal to the
aggregate amount proposed to be paid in respect of such defaulted interest, and
interest on such defaulted interest shall
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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.
SECTION 2.14 CUSIP AND ISIN NUMBERS.
The Company in issuing the Notes may use "CUSIP" and/or "ISIN"
number (if then generally in use), and, if so, the Trustee and the Common
Depositary shall use CUSIP and/or ISIN 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 and the Common Depositary
in writing of any change in the CUSIP and/or ISIN numbers.
ARTICLE 3.
REDEMPTION AND PREPAYMENT
SECTION 3.1 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 30 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
and/or ISIN numbers of the Notes to be redeemed.
SECTION 3.2 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, by lot or in accordance with any other
method the Company considers fair and appropriate; provided that no Notes of
$1,000 or (euro)1,000, as the case may be, or less shall be redeemed in part. In
the event of partial redemption by lot, the particular Notes to be redeemed
shall be selected, unless otherwise provided herein, not less than 30 nor more
than 60 days prior to the redemption date by the Trustee from the outstanding
Notes not previously called for redemption.
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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 (euro)1,000, as the case may be,
or whole multiples of $1,000 or (euro)1,000, as the case may be; except 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 or (euro)1,000,
as the case may be, 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.
SECTION 3.3 NOTICE OF REDEMPTION
Subject to the provisions of Section 3.09 hereof, at least 30 days
but not more than 60 days before a redemption date, the Company shall mail or
cause to be mailed, by first class mail, a notice of redemption to each Holder
whose Notes are to be redeemed at its registered address.
The notice shall identify the Notes (including any CUSIP and/or ISIN
number, if any) to be redeemed and shall state:
(a) the redemption date;
(b) the redemption price;
(c) the CUSIP and/or ISIN numbers of the Notes;
(d) 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;
(e) the name and address of the Paying Agent;
(f) that Notes called for redemption must be surrendered to the Paying
Agent to collect the redemption price;
(g) 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;
(h) the paragraph of the Notes and/or Section of this Indenture pursuant
to which the Notes called for redemption are being redeemed; and
(i) 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.
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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 3.4 EFFECT OF NOTICE OF REDEMPTION
Once notice of redemption is mailed in accordance with Section 3.03
hereof, 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.
SECTION 3.5 DEPOSIT OF REDEMPTION PRICE
Prior to 10:00 AM New York City time on the redemption date, the
Company shall deposit with the Trustee or with the Paying Agent U.S. Dollars
sufficient to pay the redemption price of and accrued interest on all Dollar
Notes to be redeemed on that date. Prior to 10:00 AM London time on the
redemption date, the Company shall deposit with the Trustee or the Paying Agent
Euros sufficient to pay the redemption price of and accrued interest on all Euro
Notes to be redeemed on that date. Upon a Company Order or written request, the
Trustee or the Paying Agent shall promptly return to the Company any U.S.
Dollars or Euros, as applicable, 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 4.01 hereof.
SECTION 3.6 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.
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SECTION 3.7 OPTIONAL REDEMPTION.
(a) Except as set forth in Sections 3.07(b) and (c) below, the Notes shall
not be redeemable at the Company's option prior to December 15, 2004.
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 30 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 December 15 of
the years indicated below:
Percentage Percentage
of Principal of Principal
Amount of Amount of
Year Dollar Notes Euro Notes
---- ------------- -------------
2004......................... 105.000% 105.000%
2005......................... 103.333% 103.333%
2006......................... 101.667% 101.667%
2007 and thereafter.......... 100.000% 100.000%
(b) Notwithstanding the foregoing, at any time prior to December 15, 2002,
the Company may, on any one or more occasions, redeem up to 35% of the aggregate
principal amount of each of the Dollar Notes and the Euro Notes (determined
separately) originally issued pursuant to this Indenture at a redemption price
of 110.000% of the principal amount of the Dollar Notes and 110.000% of the
principal amount of the Euro Notes, in each case plus accrued and unpaid
interest thereon to the 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), with the Net Cash Proceeds received from any Public
Equity Offering made by the Company resulting in gross proceeds to the Company
of at least $100 million; provided that at least 65% of the aggregate principal
amount of the Dollar Notes and the Euro Notes (determined separately) originally
issued pursuant to this Indenture remain outstanding immediately after the
occurrence of any such redemption. The Company may make any such redemption upon
not less than 30 nor more than 60 days' written notice to the Trustee (but in no
event more than 90 days after the closing of the related Public Equity
Offering).
(c) Any redemption pursuant to this Section 3.07 shall be made pursuant to
the provisions of Section 3.01 through 3.06 hereof.
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SECTION 3.8 MANDATORY REDEMPTION.
The Company shall not be required to make mandatory redemption or
sinking fund payments with respect to the Notes.
SECTION 3.9 OFFER TO PURCHASE BY APPLICATION OF EXCESS PROCEEDS.
In the event that, pursuant to Section 4.10 hereof, the Company
shall be required to commence an Asset Sale Offer, it shall follow the
procedures specified below.
The Asset Sale Offer shall remain open for a period of 20 Business
Days following its commencement and no longer, except to the extent that a
longer period is required by applicable law (the "Offer Period"). No later than
five Business Days after the termination of the Offer Period (the "Purchase
Date"), the Company shall purchase the principal amount of Notes required to be
purchased pursuant to Section 4.10 hereof (the "Offer Amount") or, if less than
the Offer Amount has been tendered, all Notes tendered in response to the Asset
Sale Offer. Payment for any Notes so purchased shall be made in the same manner
as interest payments are made.
If the Purchase Date is on or after a Record Date and on or before
the related Interest Payment Date, any accrued and unpaid interest shall be paid
to the Person in whose name a Note is registered at the close of business on
such Record Date, and no additional interest shall be payable to Holders who
tender Notes pursuant to the Asset Sale Offer.
Upon the commencement of an Asset Sale Offer, the Company shall
send, by first class mail, a notice to the Trustee and each of the Holders, with
a copy to the Trustee. The notice shall contain all instructions and materials
necessary to enable such Holders to tender Notes pursuant to the Asset Sale
Offer. The Asset Sale Offer shall be made to all Holders. The notice, which
shall govern the terms of the Asset Sale Offer, shall state:
(a) that the Asset Sale Offer is being made pursuant to this Section 3.09
and Section 4.10 hereof and the length of time the Asset Sale Offer shall remain
open;
(b) the Offer Amount, the purchase price and the Purchase Date;
(c) that any Note not tendered or accepted for payment shall continue to
accrue interest;
(d) that, unless the Company defaults in making such payment, any Note
accepted for payment pursuant to the Asset Sale Offer shall cease to accrue
interest after the Purchase Date;
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(e) that Holders electing to have a Note purchased pursuant to an Asset
Sale Offer may only elect to have all of such Note purchased and may not elect
to have only a portion of such Note purchased;
(f) that Holders electing to have a Note purchased pursuant to any Asset
Sale Offer shall be required to surrender the Note, with the form entitled
"Option of Holder to Elect Purchase" on the reverse of the Note completed, or
transfer by book-entry transfer, to the Company, a depositary, if appointed by
the Company, or a Paying Agent at the address specified in the notice at least
three business days before the Purchase Date;
(g) that Holders shall be entitled to withdraw their election if the
Company, the depositary or the Paying Agent, as the case may be, receives, not
later than the expiration of the Offer Period, a facsimile transmission or
letter setting forth the name of the Holder, the aggregate principal amount of
the Note the Holder delivered for purchase and a statement that such Holder is
withdrawing his election to have such Note purchased;
(h) that, if the aggregate principal amount of Notes surrendered by
Holders exceeds the Offer Amount, the Company shall select the Notes to be
purchased on a pro rata basis (with such adjustments as may be deemed
appropriate by the Company so that only Notes in denominations of $1,000 or
(euro)1,000, as the case may be, or integral multiples thereof, shall be
purchased); and
(i) that Holders whose Notes were purchased only in part shall be issued
new Notes equal in principal amount to the unpurchased portion of the Notes
surrendered (or transferred by book-entry transfer).
On or before 10:00 AM New York City time (in the case of the Dollar
Notes) and 10:00 AM London time (in the case of the Euro Notes) on the Purchase
Date, the Company shall, to the extent lawful, accept for payment, on a pro rata
basis to the extent necessary, the Offer Amount or portions thereof tendered
pursuant to the Asset Sale Offer, or if less than the Offer Amount has been
tendered, all Notes tendered, and shall deliver to the Trustee an Officers'
Certificate stating that such Notes or portions thereof were accepted for
payment by the Company in accordance with the terms of this Section 3.09. The
Company, the Depositary or the Paying Agent, as the case may be, shall promptly
(but in any case not later than five days after the Purchase Date) mail or
deliver to each tendering Holder an amount equal to the purchase price of the
Notes tendered by such Holder and accepted by the Company for purchase, and the
Company shall promptly issue a new Note, and the Trustee, upon written request
from the Company, shall authenticate and mail or deliver such new Note to such
Holder, in a principal amount equal to any unpurchased portion of the Note
surrendered. Any Note not so accepted shall be promptly mailed or delivered by
the Company to the Holder thereof. The Company shall publicly announce the
results of the Asset Sale Offer on the Purchase Date.
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Other than as specifically provided in this Section 3.09, any
purchase pursuant to this Section 3.09 shall be made pursuant to the provisions
of Sections 3.01 through 3.06 hereof.
ARTICLE 4.
COVENANTS
SECTION 4.1 PAYMENT OF NOTES
The Company shall pay or cause to be paid the principal of, premium,
if any, and interest on the Dollar Notes on the dates and in the manner provided
in the Dollar Notes. Principal, premium, if any, and interest shall be
considered paid on the date due if the Paying Agent, if other than the Company
or a Subsidiary thereof, holds as of 10:00 AM New York City time on the due date
U.S. Dollars deposited by the Company in immediately available funds and
designated for and sufficient to pay all principal, premium, if any, and
interest then due.
The Company shall pay or cause to be paid the principal of, premium,
if any, and interest on the Euro Notes on the dates and in the manner provided
in the Euro Notes. Principal, premium, if any, and interest shall be considered
paid on the date due if the Paying Agent, if other than the Company or a
Subsidiary thereof, holds as of 10:00 AM London time on the due date Euros
deposited by the Company in immediately available funds and designated for and
sufficient to pay all principal, premium, if any, and interest then due.
Notwithstanding anything to the contrary in this Indenture, the
Company may, to the extent it is required to do so by law, deduct or withhold
income or other similar taxes imposed by the United States of America from
principal or interest payments hereunder.
The Company shall pay interest (including post-petition interest in
any proceeding under any Bankruptcy Law) on overdue principal 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 any Bankruptcy Law) on overdue installments of interest
(without regard to any applicable grace period) at the same rate to the extent
lawful.
SECTION 4.2 MAINTENANCE OF OFFICE OR AGENCY.
The Company shall maintain in The City of New York and London, and
for so long as the Notes are listed on the Luxembourg Stock Exchange, in
Luxembourg, an office or agency where Notes may be presented or surrendered for
payment, where Notes may be surrendered for registration of transfer or exchange
and where notices and demands (other than service of process) to or upon the
Company in respect of the Notes and this Indenture may be served. The Corporate
Trust Office of the Trustee shall be such office or
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agency of the Company, unless the Company shall designate and maintain some
other office or agency for one or more of such purposes. The Company shall give
prompt written notice to the Trustee of any change in the location of any 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, and the Company hereby
appoints the Trustee as its agent to receive all such presentations, surrenders,
notices and demands.
The Company hereby initially designates (i) the Trustee at its
address set forth in Section 12.02 hereof as its office or agency in New York,
for such purposes, (ii)The Bank of New York, London branch, as its office or
agency in London for such purposes, and (iii) Kredietbank S.A. Luxembourgeoise,
at its office or agency in Luxembourg for such purposes.
The Company may also from time to time designate one or more other
offices or agencies (in or outside of The City of New York) where the Notes may
be presented or surrendered for any or all such purposes and may from time to
time rescind any such designation; 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 City of New York and, for so long as the
Notes are listed on the Luxembourg Stock Exchange, in Luxembourg, for such
purposes. The Company shall give prompt written notice to the Trustee of any
such designation or rescission and any change in the location of any such other
office or agency.
SECTION 4.3 REPORTS.
Whether or not required by the rules and regulations of the SEC, so
long as any Notes are outstanding, the Company will furnish to the Trustee and
the Holders of the Notes (i) all quarterly and annual financial 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.
Delivery of such reports, information and documents to the Trustee
is for informational purposes only and the Trustee's receipt of such shall not
constitute constructive notice of any information contained therein or
determinable from information contained therein, including the Company's
compliance with any of its covenants hereunder (as to
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which the Trustee is entitled to rely exclusively on Officers' Certificates).
The Company shall at all times comply with TIA ss. 314(a).
SECTION 4.4 COMPLIANCE CERTIFICATE.
(a) The Company shall deliver to the Trustee within 90 days after the end
of each fiscal year, beginning 2000, 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 recommendations of the
American Institute of Certified Public Accountants, the year-end financial
statements delivered pursuant to Section 4.03 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 Article 4 or Article 5 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, within five days 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 4.5 TAXES.
The Company shall pay, and shall cause each of its Subsidiaries to
pay, prior to delinquency, all material taxes, assessments, and governmental
levies except such as are
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contested in good faith and by appropriate proceedings or where the failure to
effect such payment is not adverse in any material respect to the Holders of the
Notes.
SECTION 4.6 STAY, EXTENSION AND USURY LAWS.
The Company covenants (to the extent that it may lawfully do so)
that it shall not at any time insist upon, plead, or in any manner whatsoever
claim or take the benefit or advantage of, any stay, extension or usury law
wherever enacted, now or at any time hereafter in force, that may affect the
covenants or the performance of this Indenture; and the Company (to the extent
that it may lawfully do so) hereby expressly waives all benefit or advantage of
any such law, and covenants that it shall not, by resort to any such law,
hinder, delay or impede the execution of any power herein granted to the
Trustee, but shall suffer and permit the execution of every such power as
through no such law has been enacted.
SECTION 4.7 RESTRICTED PAYMENTS.
The Company shall not, and shall not permit any of its Restricted
Subsidiaries to, directly or indirectly: (i) declare or pay any dividend or make
any other payment or distribution on account of the Company's or any of its
Restricted Subsidiaries' Equity Interests or to the direct or indirect holders
of the Company's or any of its Restricted Subsidiaries' Equity Interests in
their capacity as stockholders (other than dividends or distributions payable in
Equity Interests (other than Disqualified Stock) of the Company or to the
Company or a Restricted Subsidiary of the Company); (ii) purchase, redeem or
otherwise acquire or retire for value any Equity Interests of the Company or any
of its Restricted Subsidiaries or any direct or indirect parent of the Company
(other than any such Equity Interests owned by the Company or any Consolidated
Subsidiary of the Company); (iii) make any payment on or with respect to, or
purchase, redeem, defease or otherwise acquire or retire for value any
Subordinated Indebtedness, except a payment of interest or principal at Stated
Maturity; or (iv) make any Restricted Investment (all such payments and other
actions set forth in clauses (i) through (iv) above being collectively referred
to as "Restricted Payments"), unless:
(a) at the time of and after giving effect to such Restricted
Payment, no Default or Event of Default shall have occurred and be
continuing or would occur as a consequence thereof,
(b) the Company would, at the time of such Restricted Payment
and after giving pro forma effect thereto as if such Restricted
Payment had been made at the beginning of the applicable period,
have been permitted to incur at least $1.00 of additional
Indebtedness pursuant to either clause (i) or (ii) of the first
paragraph of Section 4.09 hereof; and
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(c) such Restricted Payment, together with the aggregate
amount of all other Restricted Payments made by the Company and its
Restricted Subsidiaries on and after the Issue Date (excluding
Restricted Payments permitted by, and made pursuant to, clauses (ii)
and (iii) and (viii) of the next succeeding paragraph), is less than
the sum, without duplication and except as credited in the next
succeeding paragraph, of (i) 50% of the Consolidated Net Income of
the Company for the period (taken as one accounting period)
beginning on the last day of the fiscal quarter immediately
preceding the Issue Date and ending on the last day of the fiscal
quarter immediately preceding the date of such Restricted Payment
(or, if such Consolidated Net Income for such period is a deficit,
less 100% of such deficit), plus (ii) 100% of the aggregate Net Cash
Proceeds received by the Company on and after November 25, 1998 as a
Capital Contribution or from the issue or sale of Equity Interests
of the Company (other than Disqualified Stock) or from the issue or
sale of Disqualified Stock or debt securities of the Company that
have been converted or exchanged into such Equity Interests (other
than Equity Interests (or Disqualified Stock or converted debt
securities) sold to a Subsidiary of the Company), plus the amount of
Net Cash Proceeds received by the Company upon such conversion or
exchange, plus (iii) the aggregate amount equal to the net reduction
in Investments in Unrestricted Subsidiaries on and after the Issue
Date resulting from (x) dividends, distributions, interest payments,
return of capital, repayments of Investments or other transfers of
assets to the Company or any Restricted Subsidiary from any
Unrestricted Subsidiary, (y) proceeds realized by the Company or any
Restricted Subsidiary upon the sale of such Investment to a Person
other than the Company or any Subsidiary of the Company, or (z) the
redesignation of any Unrestricted Subsidiary as a Restricted
Subsidiary, not to exceed in the case of any of the immediately
preceding clauses (x), (y) or (z) the aggregate amount of Restricted
Investments made by the Company or any Restricted Subsidiary in such
Unrestricted Subsidiary on and after the Issue Date, plus (iv) to
the extent that any Restricted Investment that was made on and after
the Issue Date is sold for cash or otherwise liquidated or repaid
for cash, the lesser of, to the extent paid to the Company or a
Restricted Subsidiary, (A) the cash return of capital with respect
to such Restricted Investment (less the cost of disposition, if any)
and (B) the initial amount of such Restricted Investment.
The foregoing provisions will not prohibit (i) the payment of any
dividend within 60 days after the date of declaration thereof, if at said date
of declaration such payment would have complied with the foregoing provisions;
(ii) the redemption, repurchase, retirement, defeasance or other acquisition of
any Subordinated Indebtedness or Equity Interests of the Company in exchange
for, or out of the Net Cash Proceeds of the substantially concurrent sale (other
than to a Subsidiary of the Company) of, Equity Interests of the Company (other
than any Disqualified Stock); provided that the amount of any such
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Net Cash Proceeds that are utilized for, and the Equity Interests issued or
exchanged for, any such redemption, repurchase, retirement, defeasance or other
acquisition shall be excluded from clause (c) of the preceding paragraph and
each other clause of this paragraph; (iii) the defeasance, redemption,
retirement, repurchase or other acquisition of Subordinated Indebtedness with
the Net Cash Proceeds from, or issued in exchange for, a substantially
concurrent incurrence of Permitted Refinancing Indebtedness; provided that the
amount of any such Net Cash Proceeds that are utilized for any such redemption,
repurchase, retirement, defeasance or other acquisition shall be excluded from
clause (c) of the preceding paragraph and each other clause of this paragraph;
(iv) the payment of any dividend or other distribution by a Restricted
Subsidiary of the Company to the holders of its Equity Interests on a pro rata
basis; (v) the repurchase, redemption or other acquisition or retirement for
value of any Equity Interests of the Company or any of its Restricted
Subsidiaries held by any member of the Company's or such Restricted Subsidiary's
management; provided that the aggregate price paid for all such repurchased,
redeemed, acquired or retired Equity Interests shall not exceed $1.0 million in
any fiscal year; (vi) retiring any Equity Interests of the Company to the extent
necessary (as determined in good faith by a majority of the disinterested
members of the Board of Directors, whose determination shall be evidenced by a
resolution thereof) to prevent the loss, or to secure the renewal or
reinstatement, of any license or franchise held by the Company or any Restricted
Subsidiary from any governmental agency; (vii) Investments in Telecommunications
Assets, provided that the aggregate fair market value (measured on the date each
such Investment was made or returned, as applicable), when taken together with
all other Investments made pursuant to this clause (vii) that are at the time
outstanding, does not exceed the sum of (y) $15.0 million, plus (z) the
aggregate amount equal to the net reduction in Investments made pursuant to this
clause (vii) on and after the Issue Date resulting from dividends,
distributions, interest payments, return of capital, repayments of such
Investments or Net Cash Proceeds realized by the Company or any Restricted
Subsidiary upon the sale of such Investment to a Person other than the Company
or any Subsidiary of the Company, except to the extent any such net reduction
amount is included in the amount calculated pursuant to clause (c) of the
preceding paragraph or any other clause of this paragraph; (viii) Investments in
Telecommunications Assets made after November 25, 1998 with the (x) Net Cash
Proceeds, (y) the fair market value of Telecommunications Assets or (z) Equity
Interests of a Person that becomes a Restricted Subsidiary (provided that the
assets of such Person consist entirely or substantially entirely of
Telecommunications Assets), in each case, received from the issuance or sale
(other than to a Subsidiary of the Company) of Equity Interests of the Company
(other than any Disqualified Stock) provided, that the amount of any such Net
Cash Proceeds that are utilized for any such Investment shall be excluded from
clause (c) of the preceding paragraph and each other clause of this paragraph;
(ix) Investments in ION, provided that the aggregate fair market value thereof
(measured on the date each such Investment was made or returned, as applicable),
when taken together with all other Investments made pursuant to this clause (ix)
does not exceed the sum of (I) $15.0 million, plus, (II) for each fiscal year,
an amount equal to the amount of cash received by the Company or any of its
Restricted Subsidiaries from ION or any of its Subsidiaries during such fiscal
year, except to the extent any such amount is included in the amount calculated
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pursuant to clause (c) of the preceding paragraph or any other clause of this
paragraph, plus (III), to the extent necessary to pay reasonable and necessary
operating expenses of ION, an amount not to exceed $1.0 million in each fiscal
year; and (x) Investments in the German Joint Venture, provided that the
aggregate fair market value (measured on the date each such Investment was made
or returned, as applicable), when taken together with all other Investments made
pursuant to this clause (x) that are at the time outstanding, does not exceed
the sum of (y) $100.0 million, plus (z) the aggregate amount equal to the net
reduction in Investments made pursuant to this clause (x) on and after the Issue
Date resulting from dividends, distributions, interest payments, return of
capital, repayments of such Investments or Net Cash Proceeds realized by the
Company or any Restricted Subsidiary upon the sale of such Investment to a
Person other than the Company or any Subsidiary of the Company, except to the
extent such amount is included in the amount calculated pursuant to clause (c)
of the preceding paragraph or any other clause of this paragraph.
The Board of Directors may not designate any Subsidiary of the
Company (other than a newly created Subsidiary in which no Investment has
previously been made (other than any de minimus amount required to capitalize
such Subsidiary in connection with its organization)) as an Unrestricted
Subsidiary (a "Designation") unless: (i) no Default or Event of Default shall
have occurred and be continuing at the time of or after giving effect to such
Designation; (ii) the Company would, immediately after giving effect to such
Designation, have been permitted to incur at least $1.00 of additional
Indebtedness pursuant to either clause (i) or (ii) of the first paragraph of
Section 4.09 hereof and (iii) the Company would not be prohibited under the
Indenture from making an Investment at the time of such Designation (assuming
the effectiveness of such Designation for purposes of this Section 4.07) in an
amount equal to the fair market value of the net Investment of the Company and
all Restricted Subsidiaries in such Subsidiary on such date.
In the event of any such Designation, all outstanding Investments
owned by the Company and its Restricted Subsidiaries in the Subsidiary so
designated will be deemed to be an Investment made as of the time of such
Designation and will reduce the amount available for Restricted Payments under
the first or second paragraph of this covenant, as applicable. All such
outstanding Investments will be deemed to constitute Restricted Payments in an
amount equal to the fair market value of such Investments at the time of such
Designation.
A Designation may be revoked and an Unrestricted Subsidiary may thus
be redesignated a Restricted Subsidiary (a "Revocation") by a resolution of the
Board of Directors delivered to the Trustee; provided that the Company will not
make any Revocation unless: (i) no Default or Event of Default shall have
occurred and be continuing at the time of or after giving effect to such
Designation; and (ii) all Liens and Indebtedness of such Unrestricted Subsidiary
outstanding immediately following such Revocation would, if incurred at such
time, have been permitted to be incurred at such time for all purposes under
this Indenture.
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The amount of all Restricted Payments (other than cash) shall be the
fair market value on the date of the Restricted Payment of the asset(s) or
securities proposed to be transferred or issued by the Company (or such
Restricted Subsidiary, as the case may be) pursuant to the Restricted Payment.
The fair market value of any asset(s) or securities that are required to be
valued by this covenant shall be determined in good faith by the Board of
Directors (such determination to be based upon an opinion or appraisal issued by
an accounting, appraisal or investment banking firm of national standing if such
fair market value exceeds $15.0 million).
SECTION 4.8 DIVIDEND AND OTHER PAYMENT RESTRICTIONS AFFECTING RESTRICTED
SUBSIDIARIES.
The Company shall not, and shall not permit any of its Restricted
Subsidiaries to, directly or indirectly, create or otherwise cause or suffer to
exist or become effective any encumbrance or restriction on the ability of any
Restricted Subsidiary to (i)(a) pay dividends or make any other distributions to
the Company or any of its Restricted Subsidiaries (1) on its Capital Stock or
(2) with respect to any other interest or participation in, or measured by, its
profits, or (b) pay any indebtedness owed to the Company or any of its
Restricted Subsidiaries, (ii) make loans or advances to the Company or any of
its Restricted Subsidiaries or (iii) transfer any of its properties or assets to
the Company or any of its Restricted Subsidiaries. However, the foregoing
restrictions shall not apply to encumbrances or restrictions existing under or
by reason of (a) Existing Indebtedness as in effect on the Issue Date, (b) this
Indenture and the Notes, and Indebtedness ranking pari passu with the Notes
provided such provisions are no more restrictive than the Notes (c) the Credit
Agreement and any Foreign Subsidiary Credit Agreement, provided that the
restrictions contained in the Credit Agreement are no more restrictive, taken as
a whole, than those contained in a credit agreement with terms that are
commercially reasonable for a borrower that has substantially comparable
Indebtedness and provided, further, that no such provision in the Credit
Agreement shall prohibit or restrict the ability of any Restricted Subsidiary to
pay dividends or make other upstream distributions or other payments to the
Company or any of its Restricted Subsidiaries, (d) applicable law, (e) any
instrument governing Indebtedness or Capital Stock of a Person or assets
acquired by the Company or any of its Restricted Subsidiaries as in effect at
the time of such acquisition (except to the extent such Indebtedness was
incurred in connection with or in contemplation of such acquisition), which
encumbrance or restriction is not applicable to any Person, or the properties or
assets of any Person, other than the Person, or the property or assets of the
Person, so acquired; provided, that in the case of Indebtedness, such
Indebtedness was permitted by the terms of the Indenture to be incurred, (f)
customary non-assignment provisions in leases entered into in the ordinary
course of business and consistent with past practices, (g) purchase money
obligations (including pursuant to Purchase Money Indebtedness obligations) for
property acquired in the ordinary course of business that impose restrictions of
the nature described in clause (iii) above on the property so acquired,
constructed, leased or improved, (h) any agreement for the sale or other
disposition of a Restricted Subsidiary that restricts distributions by that
Restricted Subsidiary pending its sale or other disposition, provided that
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the consummation of such transaction would not result in an Event of Default or
an event that, with the passing of time or giving of notice or both, would
constitute an Event of Default, that such restriction terminates if such
transaction is not consummated and that the consummation or abandonment of such
transaction occurs within one year of the date such agreement was entered into,
(i) Permitted Refinancing Indebtedness, provided that the restrictions contained
in the agreements governing such Permitted Refinancing Indebtedness are no more
restrictive, taken as a whole, than those contained in the agreements governing
the Indebtedness being extended, refinanced, renewed, replaced, defeased or
refunded, (j) Liens securing Indebtedness otherwise permitted to be incurred
pursuant to Section 4.12 hereof that limit the right of the Company or any of
its Restricted Subsidiaries to dispose of the assets subject to such Lien, (k)
provisions with respect to the disposition or distribution of assets or property
in joint venture agreements and other similar agreements entered into in the
ordinary course of business, and (l) restrictions on cash or other deposits or
net worth imposed by customers under contracts entered into in the ordinary
course of business.
SECTION 4.9 INCURRENCE OF INDEBTEDNESS AND ISSUANCE OF PREFERRED STOCK.
The Company shall not, and shall not permit any of its Restricted
Subsidiaries to, directly or indirectly, create, incur, issue, assume, guarantee
or otherwise become directly or indirectly liable, contingently or otherwise
(including by way of merger, consolidation or acquisition), with respect to
(collectively, "incur") any Indebtedness and the Company shall not issue or
incur any Disqualified Stock and shall not permit any of its Restricted
Subsidiaries to issue or incur any shares of Preferred Stock; provided, however,
that the Company may incur Indebtedness or issue or incur shares of Disqualified
Stock and its Restricted Subsidiaries may incur Acquired Debt or Acquired
Preferred Stock if either:
(i) the Consolidated Leverage Ratio at the end of the
Company's most recently ended fiscal quarter (the "Reference
Period") for which a consolidated balance sheet of the Company is
available immediately preceding the date on which such additional
Indebtedness is incurred or such Preferred Stock is issued or
incurred would have been less than 5.5 to 1.0 (if the Reference
Period ends on or prior to December 31, 2001), or 5.0 to 1.0 (if the
Reference Period ends subsequent to December 31, 2001), determined
on a pro forma basis (including, a pro forma application of the net
proceeds therefrom), as if the additional Indebtedness had been
incurred, or the Preferred Stock had been issued, as the case may
be, at the beginning of the Reference Period; or
(ii) the Consolidated Capital Ratio at the end of the
Reference Period would have been less than 2.0 to 1.0, determined
after giving effect to the incurrence or issuance of such
Indebtedness or Preferred Stock and on a pro forma basis (including
a pro forma application of the net proceeds therefrom).
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Notwithstanding the foregoing, the provisions of the paragraph set
forth immediately above will not prohibit the incurrence of any of the following
items of Indebtedness (collectively, "Permitted Indebtedness"):
(a) the incurrence by the Company of Indebtedness represented
by the Notes;
(b) the incurrence by the Company or any of its Restricted
Subsidiaries of Existing Indebtedness;
(c) the incurrence of Indebtedness by the Company to any
Consolidated Subsidiary or Indebtedness of any Restricted Subsidiary
to the Company or any Consolidated Subsidiary (but such Indebtedness
shall be deemed to be incurred upon such Indebtedness being held by
any person other than the Company or such Consolidated Subsidiary
including upon Designation and upon such Restricted Subsidiary
otherwise no longer being a Consolidated Subsidiary); provided that
in the case of Indebtedness of the Company, such obligations shall
be unsecured and subordinated in all respects to the Company's
obligations pursuant to the Notes;
(d) the incurrence by the Company of Indebtedness in an
aggregate amount incurred and outstanding at any time pursuant to
this clause (d) (plus any Permitted Refinancing Indebtedness
incurred pursuant to clause (j) hereof to retire, defease,
refinance, replace or refund such Indebtedness) of up to $25
million;
(e) the incurrence by the Company, or any Guarantee thereof by
any Restricted Subsidiary (other than any Foreign Subsidiary), of
Indebtedness pursuant to the Credit Agreement in an aggregate amount
incurred and outstanding at any time pursuant to this clause (e)
(plus any Permitted Refinancing Indebtedness incurred pursuant to
clause (j) hereof to retire, defease, refinance, replace or refund
such Indebtedness) of up to $300 million, minus the amount of any
such Indebtedness (i) retired with the Net Cash Proceeds from any
Asset Sale applied to permanently reduce the outstanding amounts or
the commitments with respect to such Indebtedness pursuant to
Section 4.10 hereof or (ii) assumed by a transferee in an Asset
Sale;
(f) the incurrence by the Company or any of its Foreign
Subsidiaries of Purchase Money Indebtedness; provided that in each
case, such Indebtedness shall not constitute more than 100% of the
cost (determined in accordance with GAAP in good faith by the Board
of Directors of the Company) to the Company or such Foreign
Subsidiary, as
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applicable, of the property so purchased, developed, acquired,
constructed, improved or leased;
(g) the incurrence by the Company or any of its Restricted
Subsidiaries of Hedging Obligations that are incurred for the
purpose of fixing or hedging interest or foreign currency exchange
rate risk with respect to any floating rate Indebtedness or foreign
currency based Indebtedness, respectively, that is permitted by the
terms of the Indenture to be outstanding; provided that the notional
amount of any such Hedging Obligation does not exceed the amount of
Indebtedness or other liability to which such Hedging Obligation
relates;
(h) the incurrence by a Foreign Subsidiary of Indebtedness
pursuant to a Foreign Subsidiary Credit Agreement (or any Guarantee
thereof by any other Foreign Subsidiary) in an aggregate principal
amount incurred and outstanding at any time pursuant to this clause
(h) (plus any Permitted Refinancing Indebtedness incurred pursuant
to clause (j) hereof to retire, defease, refinance, replace or
refund such Indebtedness) of up to $150.0 million (or the equivalent
thereof at the time of incurrence in the applicable foreign
currencies), minus the amount of any such Indebtedness (i) retired
with the Net Cash Proceeds from any Asset Sale applied to
permanently reduce the outstanding amounts or the commitments with
respect to such Indebtedness pursuant to Section 4.10 hereof or (ii)
assumed by a transferee of an Asset Sale;
(i) the Company and its Restricted Subsidiaries may incur
Indebtedness solely in respect of bankers acceptances, letters of
credit and performance bonds, all in the ordinary course of business
in accordance with customary industry practices, in amounts and for
the purposes customary in the Company's industry (other than to the
extent supporting Indebtedness); and
(j) the incurrence by the Company or any of its Restricted
Subsidiaries, as applicable, of Permitted Refinancing Indebtedness
in exchange for, or the net proceeds of which are used to refund,
refinance or replace Indebtedness that was incurred pursuant to the
first paragraph hereof or clauses (a), (b), (d), (e), (f), (h) or
this clause (j) of this paragraph.
Indebtedness or Preferred Stock of any Person which is outstanding
at the time such Person becomes a Restricted Subsidiary of the Company
(including upon designation of any Subsidiary or other Person as a Restricted
Subsidiary or upon a Revocation such that such Subsidiary becomes a Restricted
Subsidiary) or is merged with or into or consolidated with the Company or a
Restricted Subsidiary of the Company shall be deemed to have been incurred at
the time such Person becomes such a Restricted
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Subsidiary of the Company or is merged with or into or consolidated with the
Company or a Restricted Subsidiary of the Company, as applicable.
Upon each incurrence, the Company may designate pursuant to which
provision of this covenant such Indebtedness is being incurred and such
Indebtedness shall not be deemed to have been incurred by the Company under any
other provision of this covenant, except as stated otherwise in the foregoing
provisions.
The Company shall not, and shall not permit any of its Restricted
Subsidiaries to, incur any Indebtedness (including Permitted Indebtedness) that
is contractually subordinated in right of payment to any other Indebtedness of
the Company unless such Indebtedness is also contractually subordinated in right
of payment to the Notes on substantially identical terms; provided, however,
that no Indebtedness of the Company shall be deemed to be contractually
subordinated in right of payment to any other Indebtedness of the Company solely
by virtue of being unsecured.
SECTION 4.10 ASSET SALES.
The Company shall not, and shall not permit any of its Restricted
Subsidiaries to, directly or indirectly, consummate any Asset Sale, unless (i)
the Company (or such Restricted Subsidiary, as the case may be) receives
consideration at the time of such Asset Sale at least equal to the fair market
value (as determined in good faith by the Board of Directors (including as to
the value of all noncash consideration) and set forth in an Officer's
Certificate delivered to the Trustee) of the assets or Equity Interests issued
or sold or otherwise disposed of and (ii) at least 75% of the consideration
therefor is in the form of cash and/or Cash Equivalents or Telecommunications
Assets, and (iii) the Net Cash Proceeds received by the Company (or such
Restricted Subsidiary, as the case may be) from such Asset Sale are applied
within 360 days following the receipt of such Net Cash Proceeds, to the extent
the Company (or such Restricted Subsidiary, as the case may be) elects, (a) to
the permanent redemption or repurchase of outstanding Indebtedness (other than
Subordinated Indebtedness) that is secured Indebtedness (including that in the
case of a revolver or similar arrangement that makes credit available, such
commitment is so permanently reduced by such amount) or Indebtedness of the
Company or such Restricted Subsidiary that ranks equally with the Notes but has
a maturity date that is prior to the maturity date of the Notes and/or (b) to
reinvest such Net Cash Proceeds (or any portion thereof) in Telecommunications
Assets. Notwithstanding anything herein to the contrary, with respect to the
reinvestment of Net Cash Proceeds, only proceeds from an Asset Sale of assets,
or Equity Interests, of a Foreign Subsidiary may be used to retire Indebtedness
of a Foreign Subsidiary or reinvest in assets or Equity Interests of a Foreign
Subsidiary. The balance of such Net Cash Proceeds, after the application of such
Net Cash Proceeds as described in the immediately preceding clauses (a) and (b),
shall constitute "Excess Proceeds."
When the aggregate amount of Excess Proceeds equals or exceeds $15.0
million (taking into account income earned on such Excess Proceeds), the Company
will be
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required to make a pro rata offer to all Holders of Notes and pari passu
Indebtedness with comparable provisions requiring such Indebtedness to be
purchased with the proceeds of such Asset Sale (an "Asset Sale Offer") to
purchase the maximum principal amount (or accreted value in the case of
Indebtedness issued with an original issue discount) of Notes and pari passu
Indebtedness that may be purchased out of the Excess Proceeds, at a purchase
price in cash in an amount equal to 100% of the principal amount thereof or the
accreted value thereof, as applicable, plus accrued and unpaid interest thereon
to the date of purchase (subject to the right of Holders of record on the
relevant Record Date to receive interest due on the relevant Interest Payment
Date), in accordance with the procedures set forth in Article 3 of this
Indenture and the agreements governing such pari passu Indebtedness. To the
extent that any Excess Proceeds remain after consummation of an Asset Sale
Offer, the Company may use such Excess Proceeds for any purpose not otherwise
prohibited by this Indenture. If the aggregate principal amount of Notes and
pari passu Indebtedness tendered into such Asset Sale Offer surrendered by
Holders thereof exceeds the amount of Excess Proceeds, the Company shall select
the Notes and pari passu Indebtedness to be purchased on a pro rata basis in
proportion to the respective principal amounts (or accreted values in the case
of Indebtedness issued with an original issue discount) of the Notes and such
other Indebtedness. Upon completion of such Asset Sale Offer, the amount of
Excess Proceeds shall be reset at zero for purposes of the first sentence of
this paragraph.
The amount of (x) any liabilities (as shown on the Company's (or
such Restricted Subsidiary's, as the case may be) most recent balance sheet),
other than Subordinated Indebtedness of the Company or any Restricted Subsidiary
that are assumed by the transferee of any such assets pursuant to an agreement
that immediately releases the Company and all of its Restricted Subsidiaries
from all liability in respect thereof, (y) Indebtedness of any Restricted
Subsidiary that is no longer a Restricted Subsidiary as a result of such Asset
Sale, if the Company and all of its Restricted Subsidiaries are immediately
released from all Guarantees of payment of such Indebtedness and such
Indebtedness is no longer the liability of the Company or any of its Restricted
Subsidiaries, and (z) any securities, notes or other obligations received by the
Company (or such Restricted Subsidiary, as the case may be) from such transferee
that are contemporaneously (subject to ordinary settlement periods) converted by
the Company (or such Restricted Subsidiary, as the case may be) into cash and/or
Cash Equivalents (to the extent of the cash and/or Cash Equivalents received),
will be deemed to be cash and/or Cash Equivalents for purposes of this
provision.
To the extent that the provisions of any securities laws or
regulations shall conflict with the Asset Sale provisions of this Indenture, the
Company shall comply with the applicable securities laws and regulations and
shall not be deemed to have breached its obligations under the Asset Sale
provisions of this Indenture by virtue thereof.
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SECTION 4.11 TRANSACTIONS WITH AFFILIATES.
The Company shall not, and shall not permit any of its Restricted
Subsidiaries to, make any payment to, or sell, lease, transfer or otherwise
dispose of any of its properties or assets to, or purchase any property or
assets from, or enter into or make or amend any transaction, contract,
agreement, understanding, loan, advance or Guarantee with, or for the benefit
of, any Affiliate (each of the foregoing, an "Affiliate Transaction"), unless
(i) such Affiliate Transaction is on terms that are not materially less
favorable to the Company or the relevant Restricted Subsidiary than those that
would have been obtained in a comparable transaction by the Company or such
Restricted Subsidiary with an unrelated Person and (ii) with respect to any
Affiliate Transaction or series of related Affiliate Transactions (A) involving
aggregate consideration in excess of $5.0 million, the Company delivers to the
Trustee a resolution of the Board of Directors set forth in an Officers'
Certificate that such Affiliate Transaction is approved by a majority of the
disinterested members of the Board of Directors and that, except with respect to
matters governed by the Management Agreement, certifying that such Affiliate
Transaction complies with clause (i) above and is in the best interests of the
Company or such Restricted Subsidiary and (B) if involving aggregate
consideration in excess of $15.0 million, a favorable written opinion as to the
fairness to the Company of such Affiliate Transaction from a financial point of
view is also obtained by the Company from an accounting, appraisal or investment
banking firm of national standing with a copy delivered to the Trustee.
Notwithstanding the foregoing, the following items shall not be deemed to be
Affiliate Transactions: (i) (a) the entering into, maintaining or performance of
any employment contract, collective bargaining agreement, benefit plan, program
or arrangement, related trust agreement or any other similar arrangement for or
with any employee, officer or director heretofore or hereafter entered into in
the ordinary course of business, including vacation, health, insurance, deferred
compensation, retirement, savings or other similar plans, (b) the payment of
compensation, performance of indemnification or contribution obligations, or an
issuance, grant or award of stock, options, or other equity-related interests or
other securities, to employees, officers or directors in the ordinary course of
business, (c) any transaction with an officer or director in the ordinary course
of business not involving more than $100,000 in any one case, or (d) Management
Advances and payments in respect thereof, (ii) transactions between or among the
Company and/or its Restricted Subsidiaries, (iii) payment of reasonable
directors fees, (iv) any sale or other issuance of Equity Interests (other than
Disqualified Stock) of the Company, (v) Affiliate Transactions in effect or
approved by the Board of Directors on the Issue Date, including any amendments
thereto (provided that the terms of such amendments are not materially less
favorable to the Company than the terms of such agreement prior to such
amendment), (vi) transactions with respect to capacity between the Company or
any Restricted Subsidiary and any Unrestricted Subsidiary or other Affiliate and
joint sales and marketing pursuant to an agreement or agreements between the
Company or any Restricted Subsidiary and any Unrestricted Subsidiary or other
Affiliate (provided that in the case of this clause (vi), such agreements are on
terms that are no less favorable to the Company or the relevant Restricted
Subsidiary than those that could have been obtained at the time of such
transaction in an arm's-length transaction with an unrelated third party or, in
the case
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of a transaction with an Unrestricted Subsidiary, ION or another Affiliate, are
either (x) entered into in connection with a transaction involving the selection
by a customer of cable system capacity entered into in the ordinary course of
business or (y) involve the provision by the Company or a Restricted Subsidiary
to an Unrestricted Subsidiary, ION or another Affiliate of sales and marketing
services, operations, administration and maintenance services or development
services for which the Company or such Restricted Subsidiary receives a fair
rate of return (as determined by the Board of Directors and set forth in an
Officers' Certificate delivered to the Trustee) above its expenses of providing
such services), and (vii) Restricted Payments that are permitted by Section 4.07
hereof.
SECTION 4.12 LIENS.
The Company shall not, and shall not permit any of its Restricted
Subsidiaries to, directly or indirectly, create, incur, assume or otherwise
cause or suffer to exist or become effective any Lien of any kind (other than
Permitted Liens) upon any of their property or assets, now owned or hereafter
acquired, or upon any income or profits therefrom unless all payments due under
this Indenture and the Notes are secured (except as provided in the next clause)
on an equal and ratable basis with the obligations so secured and no Lien shall
be granted or be allowed to exist which secures Subordinated Indebtedness except
with respect to Acquired Debt, in which case, however, such Liens must be made
junior and subordinate to the Liens granted to the Holders of the Notes.
SECTION 4.13 CORPORATE EXISTENCE.
Subject to Article 5 hereof, the Company shall do or cause to be
done all things necessary to preserve and keep in full force and effect (i) its
corporate existence, and the corporate, partnership or other existence of each
of its Subsidiaries, in accordance with the respective organizational documents
(as the same may be amended from time to time) of the Company or any such
Subsidiary and (ii) the rights (charter and statutory), licenses and franchises
of the Company and its Subsidiaries; provided, however, that the Company shall
not be required to preserve any such right, license or franchise, or the
corporate, partnership or other existence of any of its Subsidiaries, if the
Board of Directors shall determine that the preservation thereof is no longer
desirable in the conduct of the business of the Company and its Subsidiaries,
taken as a whole, and that the loss thereof is not adverse in any material
respect to the Holders of the Notes.
SECTION 4.14 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 (euro)1,000, as the case may be, or an integral multiple thereof, as
the case may be) of such Holder's Notes pursuant to the offer described below
(the "Change of Control Offer") at a purchase price in cash equal to 101% of the
aggregate principal amount thereof (the "Change of Control Payment") plus
accrued and unpaid interest thereon to the date of purchase (subject
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to the right of Holders of record on the relevant Record Date to receive
interest 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
describe 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 4.14, 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.
(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 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 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 (euro)1,000, as the case may be, or an integral multiple thereof, as the case
may be. 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 4.14, 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 4.14, and purchases all Notes
validly tendered and not withdrawn under such Change of Control Offer.
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SECTION 4.15 BUSINESS ACTIVITIES.
The Company shall not, and shall not permit any of its Restricted
Subsidiaries to, engage, to more than a de minimus extent, in any business other
than a Telecommunications Business.
SECTION 4.16 PAYMENTS FOR CONSENT.
Neither the Company nor any of its Restricted Subsidiaries shall,
directly or indirectly, pay or cause to be paid any consideration, whether by
way of interest, fee or otherwise, to any Holder of any 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
such terms or provisions of this Indenture or the Notes in the time frame set
forth in the solicitation documents relating to such consent, waiver or
agreement.
SECTION 4.17 MONEY FOR PAYMENTS TO BE HELD IN TRUST.
If the Company shall at any time act as its own Paying Agent, it
will, on or before each due date of the principal, premium or interest with
respect to the Notes, segregate and hold in trust for the benefit of the Persons
entitled thereto a sum sufficient to pay the principal, premium or interest so
becoming due until such sums shall be paid to such Persons or otherwise disposed
of as herein provided, and will promptly notify the Trustee in writing of its
action or failure so to act.
Whenever the Company shall have one or more Paying Agents for the
Notes, it will, on or before each due date of the principal, premium or interest
with respect to the Notes, deposit with a Paying Agent U.S. Dollars or Euros, as
applicable, in same day funds sufficient to pay the principal, premium or
interest so becoming due (or at the option of the Company, payment of interest
may be mailed by check to the Holders of the Notes at their respective addresses
set forth in the register of Holders of Notes; provided that all payments with
respect to Notes represented by one or more permanent global Notes will be paid
by wire transfer of immediately available funds to the account of the Depository
Trust Company in the case of the Dollar Notes, or any successor thereto, or to
the Common Depositary, in the case of the Euro Notes, or any successor thereto)
such sum to be held in trust for the benefit of the Persons entitled to such
principal, premium or interest and (unless such Paying Agent is the Trustee) the
Company will promptly notify the Trustee in writing of such action or any
failure so to act.
The Company will cause each Paying Agent other than the Trustee to
execute and deliver to the Trustee an instrument in which such Paying Agent
shall agree with the Trustee, subject to the provisions of this Section, that
such Paying Agent will:
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(a) hold all sums held by it for the payment of the principal of, premium,
if any, or interest on Notes in trust for the benefit of the Persons entitled
thereto until such sums shall be paid to such Persons or otherwise disposed of
as herein provided;
(b) give the Trustee written notice of any default by the Company (or any
other obligor upon the Notes) in the making of any payment of principal, premium
or interest;
(c) at any time during the continuance of any such default, upon the
written request of the Trustee, forthwith pay to the Trustee all sums so held in
trust by such Paying Agent; and
(d) acknowledge, accept and agree to comply in all respects with the
provisions of this Indenture relating to the duties, rights and obligations of
such Paying Agent.
The Company may at any time, for the purpose of obtaining the
satisfaction and discharge of this Indenture or for any other purpose, pay, or
direct any Paying Agent to pay, to the Trustee all sums held in trust by the
Company or such Paying Agent, such sums to be held by the Trustee upon the same
trusts as those upon which such sums were held by the Company or such Paying
Agent; and, upon such payment by any Paying Agent to the Trustee, such Paying
Agent shall be released from all further liability with respect to such money.
Any U.S. Dollars or Euros, as applicable, deposited with the Trustee
or any Paying Agent, or then held by the Company, in trust for the payment of
the principal, premium or interest with respect to a Note and remaining
unclaimed for two years after such principal, premium, if any, or interest has
become due and payable shall be paid to the Company at the written request of
the Company or (if then held by the Company) shall be discharged from such
trust; and the Holder of such Note shall thereafter, as an unsecured general
creditor, look only to the Company for payment thereof, and all liability of the
Trustee or such Paying Agent with respect to such trust U.S. Dollars or Euros,
as applicable, 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, shall at the expense of the
Company cause notice to be promptly sent to each Holder that such U.S. Dollars
or Euros, as applicable, remain unclaimed and that, after a date specified
therein, which shall not be less than 30 days from the date of such notification
any unclaimed balance of such U.S. Dollars or Euros, as applicable, then
remaining will be repaid to the Company.
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ARTICLE 5.
SUCCESSORS
SECTION 5.1 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 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; (iv)
except in the case of a merger of the Company with or into a Wholly Owned
Restricted Subsidiary of the Company, the Company 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 will immediately after such transaction and after giving pro
forma effect thereto and any related financing transactions as if the same had
occurred at the beginning of the applicable period, be permitted to incur at
least $1.00 of additional Indebtedness pursuant to either clause (i) or (ii) of
the first paragraph of Section 4.09 hereof; (v) if, as a result of any such
transaction, property or assets of the Company would become subject to a Lien
subject to the provisions of Section 4.12 hereof, the Company or the successor
entity to the Company shall have secured the Notes as required by said covenant;
and (vi) 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
terms of 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 Restricted
Subsidiaries.
(b) For purposes of this Article 5, 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 5.2 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 5.01
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 6.
DEFAULTS AND REMEDIES
SECTION 6.1 EVENTS OF DEFAULT.
"Events of Default" are:
(i) default for 30 days in the payment when due of interest on the
Notes;
(ii) default in the payment when due of the principal of, or
premium, if any, on the Notes;
(iii) failure by the Company or any of its Restricted Subsidiaries
to comply with Sections 4.10 or 4.14;
(iv) failure by the Company or any of its Restricted Subsidiaries
for 60 days after notice to comply with any other covenants in this
Indenture or the Notes;
(v) 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 Restricted
Subsidiaries (or the payment of which is Guaranteed by the Company or any
of its Restricted 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;
(vi) failure by the Company or any of its Restricted Subsidiaries to
pay final judgments not subject to appeal aggregating in excess of $15.0
million (net of
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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;
(vii) the Company or any of its Restricted Subsidiaries:
(a) commences a voluntary case under any Bankruptcy Law,
(b) consents to the entry of an order for relief against it in
an involuntary case under any Bankruptcy Law,
(c) consents to the appointment of a custodian of it or for
all or substantially all of its property,
(d) makes a general assignment for the benefit of its
creditors, or
(e) generally is not paying its debts as they become due; and
(viii) a court of competent jurisdiction enters an order or decree
under any Bankruptcy Law that:
(a) is for relief against the Company or any of its Restricted
Subsidiaries
(b) appoints a custodian of the Company or any of its
Restricted Subsidiaries or for all or substantially all of the
property of the Company or any of its Restricted Subsidiaries; or
(c) orders the liquidation of the Company or any of its
Restricted Subsidiaries;
and the order or decree remains unstayed and in effect for 60 consecutive
days.
SECTION 6.2 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 (vii)
or (viii) of Section 6.01 hereof occurs with respect to the Company, any of its
Restricted Subsidiaries that constitutes a Significant Subsidiary or any group
of Restricted Subsidiaries that, taken as a whole, would constitute a
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
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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 6.3 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 6.4 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 66 2/3% in aggregate
principal amount of the then outstanding Notes, the Holders of not less than
66 2/3% 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, if any, 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.
SECTION 6.5 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.
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SECTION 6.6 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 6.7 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, premium, if any, 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.
SECTION 6.8 COLLECTION SUIT BY TRUSTEE.
If an Event of Default specified in Section 6.01(i) or (ii) hereof
occurs and is continuing, the Trustee is authorized to recover judgment in its
own name and as trustee of an express trust against the Company for the whole
amount of principal of, premium, if any, 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.
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SECTION 6.9 TRUSTEE MAY FILE PROOFS OF CLAIM.
The Trustee is authorized to file such proofs of claim and other
papers or documents as may be necessary or advisable in order to have the claims
of the Trustee (including any claim for the reasonable compensation, expenses,
disbursements and advances of the Trustee, its agents and counsel) and the
Holders of the Notes allowed in any judicial proceedings relative to the Company
(or any other obligor upon the Notes), its creditors or its property and shall
be entitled and empowered to participate as a member, voting or otherwise, of
any official committee of creditors appointed in such matter and shall be
entitled and empowered to collect, receive and distribute any money or other
property payable or deliverable on any such claims and any custodian in any such
judicial proceeding is hereby authorized by each Holder to make such payments to
the Trustee, and in the event that the Trustee shall consent to the making of
such payments directly to the Holders, to pay to the Trustee any amount due to
it for the reasonable compensation, expenses, disbursements and advances of the
Trustee, its agents and counsel, and any other amounts due the Trustee under
Section 7.07 hereof. To the extent that the payment of any such compensation,
expenses, disbursements and advances of the Trustee, its agents and counsel, and
any other amounts due the Trustee under Section 7.07 hereof out of the estate in
any such proceeding, shall be denied for any reason, payment of the same shall
be secured by a Lien on, and shall be paid out of, any and all distributions,
dividends, money, securities and other properties 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 6.10 PRIORITIES.
If the Trustee collects any money pursuant to this Article 6, it
shall pay out the money in the following order:
First: to the Trustee, its agents and counsel for amounts due under
Section 7.07 hereof, including payment of all compensation, expense and
liabilities incurred, and all advances made, by the Trustee and the costs and
expenses of collection;
Second: to Holders of Notes for amounts due and unpaid on the Notes
for principal, premium, if any, and interest, ratably, without preference or
priority of any kind, according to the amounts due and payable on the Notes for
principal, premium, if any, and interest, respectively, and
Third: to the Company or to such party as a court of competent
jurisdiction shall direct.
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The Trustee may fix a record date and payment date for any payment
to Holders of Notes pursuant to this Section 6.10.
SECTION 6.11 UNDERTAKING FOR COSTS.
In any suit for the enforcement of any right or remedy under this
Indenture or in any suit against the Trustee for any action taken or omitted by
it as 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 6.11 does not apply to a suit by the Trustee, a suit by a Holder of
a Note pursuant to Section 6.07 hereof, or a suit by Holders of more than 10% in
principal amount of the then outstanding Notes.
ARTICLE 7.
TRUSTEE
SECTION 7.1 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
(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 thereof).
(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:
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(i) this paragraph does not limit the effect of paragraph (b) of
this Section 7.01;
(ii) the Trustee shall not be liable for any error of judgment made
in good faith by a Responsible Officer, unless it is proved that the
Trustee was 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 6.05 hereof.
(d) Whether or not therein expressly so provided, every provision of this
Indenture that in any way relates to the Trustee is subject to paragraphs (a),
(b), (c) and (e) of this Section 7.01.
(e) No provision of this Indenture shall require the Trustee to expend or
risk its own funds or incur any liability. The Trustee shall be under no
obligation to exercise any of its rights and powers under this Indenture at be
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.
SECTION 7.2 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.
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(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 security or
indemnity satisfactory to it 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, however, that if the
payment within a reasonable time to the Trustee of the costs, expenses or
liabilities likely to be incurred by it in the making of such investigation is,
in the opinion of the Trustee, not reasonably assured to the Trustee by the
security afforded to it by the terms of this Indenture, the Trustee may require
indemnity reasonably satisfactory to it against such cost, expense or liability
as a condition to so proceeding.
(h) The Trustee may execute any of the trusts or powers hereunder or
perform any duties hereunder either directly or by or through agents or
attorneys and the Trustee shall not be responsible for any misconduct or
negligence on the part of any agent or attorney appointed with due care by it
hereunder.
(i) The rights, privileges, protections, immunities and benefits given to
the Trustee, including, without limitation, its right to be indemnified, are
extended to, and shall be enforceable by, the Trustee in each of its capacities
hereunder, and to each agent, custodian and other Person employed to act
hereunder.
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SECTION 7.3 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 7.10 and 7.11 hereof
SECTION 7.4 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 7.5 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 7.05, 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.
SECTION 7.6 REPORTS BY TRUSTEE TO HOLDERS OF THE NOTES.
Within 60 days after each May 15 beginning with the May 15 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
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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 in writing when the Notes are listed
or delisted on any stock exchange.
SECTION 7.7 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 any predecessor Trustee
and hold it harmless against any and all losses, liabilities or expenses,
including taxes (other than taxes based upon, measured by, or determined by the
income of the Trustee) 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 7.07) 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 7.07 shall survive
the satisfaction and discharge of this Indenture or the resignation or removal
of the Trustee.
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 6.01 (vii) or (viii) hereof occurs, the expenses
and the
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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 7.8 REPLACEMENT OF TRUSTEE.
A resignation or removal of the Trustee and appointment of a
successor Trustee shall become effective only upon the successor Trustee's
acceptance of appointment as provided in this Section 7.08.
The Trustee may resign in writing at any time and be discharged from
the trust hereby created by so notifying the Company. The Holders of 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 7.10 hereof;
(b) the Trustee is adjudged a bankrupt or an insolvent or an order for
relief is entered with respect to the Trustee under any Bankruptcy Law;
(c) a custodian or public officer takes charge of the Trustee or its
property; or
(d) the Trustee becomes incapable of acting.
If the Trustee resigns or is removed or if a vacancy exists in the
office of Trustee for any reason (the 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 principal 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 30 days after the
retiring Trustee resigns or is removed, the retiring Trustee, the Company, or
the 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 7.10 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.
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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 7.07 hereof. Notwithstanding replacement of the Trustee pursuant
to this Section 7.08, the Company's obligations under Section 7.07 hereof shall
continue for the benefit of the retiring Trustee.
SECTION 7.9 SUCCESSOR TRUSTEE BY MERGER, ETC.
If the Trustee consolidates, merges or converts into, or transfers
all or substantially all of its corporate trust business to, another
corporation, the successor corporation without any further act shall be the
successor Trustee.
SECTION 7.10 ELIGIBILITY; DISQUALIFICATION.
There shall at all times be a Trustee hereunder 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 7.11 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.
SECTION 7.12 MONEY HELD IN TRUST.
Money held by the Trustee in trust hereunder need not be segregated
from other funds except to the extent required by law. The Trustee shall be
under no liability for interest on any money received by it hereunder except as
otherwise agreed in writing with the Company.
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ARTICLE 8.
LEGAL DEFEASANCE AND COVENANT DEFEASANCE
SECTION 8.1 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 delivered to the Trustee,
at any time, elect to have either Section 8.02 or 8.03 hereof applied to all
outstanding Notes upon compliance with the conditions set forth below in this
Article 8.
SECTION 8.2 LEGAL DEFEASANCE AND DISCHARGE.
Upon the Company's exercise under Section 8.01 hereof of the option
applicable to this Section 8.02, the Company shall, subject to the satisfaction
of the conditions set forth in Section 8.04 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 8.05 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 mutilated, destroyed, lost or stolen Notes and the maintenance of an
office or agency for payment and money for security payments held in trust; (c)
the rights, powers, trusts, duties and immunities of the Trustee, and the
Company's obligations in connection therewith; and (d) the Legal Defeasance
provisions of this Indenture. Subject to compliance with this Article 8, the
Company may exercise its option under this Section 8.02 notwithstanding the
prior exercise of its option under Section 8.03 hereof.
SECTION 8.3 COVENANT DEFEASANCE.
Upon the Company's exercise under Section 8.01 hereof of the option
applicable to this Section 8.03, the Company shall, subject to the satisfaction
of the conditions set forth in Section 8.04 hereof, be released from its
obligations under the covenants contained in Article V and in Sections 4.03,
4.07, 4.08, 4.09, 4.10, 4.11, 4.12, 4.13, 4.14, 4.15 and 4.16 hereof with
respect to the outstanding Notes on and after the date the conditions set forth
in Section 8.04 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
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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). 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 directly or
indirectly, by reason of any reference elsewhere herein to any such covenant or
by reason of any reference in any such covenant to any other provision herein or
in any other document and such omission to comply shall not constitute a Default
or an Event of Default under Section 6.01 hereof, but, except as specified
above, the remainder of this Indenture and such Notes shall be unaffected
thereby. In addition, upon the Company's exercise under Section 8.01 hereof of
the option applicable to this Section 8.03, subject to the satisfaction of the
conditions set forth in Section 8.04 hereof, Sections 6.01(iii) through 6.01(vi)
hereof shall not constitute Events of Default.
SECTION 8.4 CONDITIONS TO LEGAL OR COVENANT DEFEASANCE.
The following shall be the conditions to the application of either
Section 8.02 or 8.03 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, (a) cash in
U.S. dollars, non-callable Government Securities, or a combination thereof (with
respect to the Dollar Notes) and (b) legal tender in the countries constituting
the European Union, EEA Government Obligations, or a combination thereof (with
respect to the Euro Notes), in all cases in such amounts as will be sufficient,
in the opinion of a firm of independent public accountants that is nationally
recognized in the United States (with a copy of such opinion to the Trustee), 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 in writing to the Trustee 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 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;
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(c) in the case of Covenant Defeasance, the Company must deliver to the
Trustee 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;
(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
Restricted Subsidiaries is a party or by which the Company or any of its
Restricted 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 8.5 DEPOSITED MONEY AND GOVERNMENT SECURITIES TO BE HELD IN TRUST;
OTHER MISCELLANEOUS PROVISIONS.
Subject to Section 8.06 hereof, all money and non-callable
Government Securities and EEA Government Obligations (including the proceeds
thereof) deposited with the Trustee (or other qualifying trustee, collectively,
and solely for purposes of this Section 8.05, the "Trustee") pursuant to Section
8.04 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.
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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 8.04 hereof or the principal
and interest received in respect thereof other than any such tax, fee or other
charge which by law is for the account of the Holders of the outstanding Notes.
Anything in this Article 8 to the contrary notwithstanding, the
Trustee shall deliver or pay to the Company from time to time upon the written
request of the Company any money or non-callable Government Securities or EEA
Government Obligations held by it as provided in Section 8.04 hereof which, in
the opinion of a firm of independent public accountants, that is nationally
recognized in the United States, expressed in a written certification thereof
delivered to the Trustee (which may be the opinion delivered under Section
8.04(a) hereof), are in excess of the amount thereof that would then be required
to be deposited to effect an equivalent Legal Defeasance or Covenant Defeasance.
SECTION 8.6 REPAYMENT TO COMPANY.
Any money deposited with the Trustee or any Paying Agent, or then
held by the Company, in trust for the payment of the principal of, premium or
interest on any Note and remaining unclaimed for two years after such principal,
and premium, if any, or interest has become due and payable shall be paid to the
Company on its written request or (if then held by the Company) shall be
discharged from such trust; and the Holder of such 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 8.7 REINSTATEMENT.
If the Trustee or Paying Agent is unable to apply any money or
non-callable Government Securities or EEA Government Obligations in accordance
with Section 8.02 or 8.03 hereof, as the case may be, by reason of any order or
judgment of any court or governmental authority enjoining, restraining or
otherwise prohibiting such application, then the Company's obligations under
this Indenture and the Notes shall be revived and reinstated as though no
deposit had occurred pursuant to Section 8.02 or 8.03 hereof until such time as
the Trustee or Paying Agent is permitted to apply all such money in accordance
with Section 8.02 or 8.03 hereof, as the case may be; provided, however, that,
if the Company makes any payment of principal of, premium, if any, or interest
on any Note following the
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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 8.8 SURVIVAL.
The Trustee's rights under this Article 8 shall survive termination
of this Indenture.
ARTICLE 9.
AMENDMENT, SUPPLEMENT AND WAIVER
SECTION 9.1 WITHOUT CONSENT OF HOLDERS OF NOTES
Notwithstanding Section 9.02 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 materially 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 5 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 legal
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;
(g) to effect any change to the transfer and exchange restrictions and
security delivery procedures contained in Article 2 in order to conform with
changes in any applicable law or Applicable Procedures.
Upon the written 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 7.02 hereof, the Trustee shall join with the Company in the
execution of any amended or
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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.
SECTION 9.2 WITH CONSENT OF HOLDERS OF NOTES.
Except as provided below in this Section 9.02, the Company and the
Trustee, may amend or supplement this Indenture (including Section 3.09 and 4.10
hereof) 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 6.04 and 6.07 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). Any such consent shall be delivered to the Trustee.
Notwithstanding the foregoing, without the consent of Holders of at
least 66 2/3% in 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 4.14 hereof in a manner
adverse to the Holders or (ii) release or modify a Lien granted to the Holders
of the Notes.
Upon the written 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 7.02
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 9.02 to approve the particular form of any proposed amendment
or waiver, but it shall be sufficient if such consent approves the substance
thereof.
After an amendment, supplement or waiver under this Section 9.02
becomes effective, the Company shall mail to the Holders of 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
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any such amended or supplemental indenture or waiver. Subject to the provisions
of this Section 9.02 and Sections 6.04 and 6.07 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. A copy of any such waiver shall be
delivered to the Trustee. However, without the consent of each Holder affected,
an amendment or waiver under this Section 9.02 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 or the Asset Sale
Offer Price after the corresponding Asset Sale or 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;
(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;
(e) cause the Notes to become subordinate in right of payment to any other
Indebtedness; or
SECTION 9.3 COMPLIANCE WITH TRUST INDENTURE ACT.
Every amendment or supplement to this Indenture or the Notes shall
be set forth in a amended or supplemental indenture that complies with the TIA
as then in effect.
SECTION 9.4 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,
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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 9.01 or 9.02
as applicable.
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 designated 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. If such record date is fixed by
the Company, it shall so notify the Trustee in writing.
SECTION 9.5 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 9.6 TRUSTEE TO SIGN AMENDMENTS, ETC.
Trustee shall sign any amended or supplemental indenture authorized
pursuant to this Article 9 if the amendment or supplement does not adversely
affect the rights, duties, liabilities or immunities of the Trustee and all
other conditions to the execution and delivery of such amendment or supplement
set forth in this Article 9 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 7.01 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 supplemental 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
9.03).
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ARTICLE 10.
SATISFACTION AND DISCHARGE
SECTION 10.1 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
(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 U.S. Dollars or Euros, as applicable, have theretofore been deposited in
trust and thereafter repaid to the Company) have been delivered to the Trustee
for cancellation; or
(b) 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 U.S. Dollars or Euros, as
applicable, sufficient to pay and discharge the entire Indebtedness on such
Notes not theretofore delivered to the Trustee for cancellation for principal,
premium and accrued interest to the date of maturity, redemption or repurchase;
(i) 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 of or constitute a default under, any
other instrument to which the Company is a party or by which the Company
is bound;
(ii) the Company has paid or caused to be paid all sums payable by
it under this Indenture; and
(iii) the Company has delivered irrevocable written instructions to
the Trustee under this Indenture to apply the deposited U.S. Dollars or
Euros, as applicable, 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 in
this Article 10 to satisfaction and discharge have been satisfied.
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SECTION 10.2 APPLICATION OF TRUST MONEY.
Subject to the provisions of the last paragraph of Section 4.17
hereof, all U.S. Dollars or Euros, as applicable, deposited with the Trustee
pursuant to Section 10.01 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 (and premium, if any), and interest, for whose payment such U.S.
Dollars or Euros, as applicable, have been deposited with the Trustee.
If the Trustee or Paying Agent is unable to apply any U.S. Dollars
or Euros, as applicable, or Government Securities in accordance with Section
10.01 hereof by reason of any legal proceeding or by reason of any order or
judgment of any court or governmental authority enjoining, restraining or
otherwise prohibiting such application, the Company's obligations under this
Indenture and the Notes shall be revived and reinstated as though such deposit
had occurred pursuant to Section 10.01 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 U.S.
Dollars or Euros, as applicable, or Government Securities held by the Trustee or
Paying Agent.
ARTICLE 11.
[INTENTIONALLY OMITTED]
ARTICLE 12.
MISCELLANEOUS
SECTION 12.1 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 12.2 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 (registered or certified, return receipt requested), telecopier or
overnight air courier guaranteeing next day delivery, to the others' address:
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If to the Company:
Metromedia Fiber Network Services, Inc.
c/o 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:
The Bank of New York
101 Barclay Street, 21 West
New York, New York 10286
Attn: Corporate Trust Administration
Re: Metromedia Fiber Network, Inc.
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 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
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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 12.3 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 12.4 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 12.05
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 12.05
hereof) stating that, in the opinion of such counsel, all such conditions
precedent and covenants have been satisfied.
SECTION 12.5 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;
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(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 12.6 RULES BY TRUSTEE AND AGENTS.
The Trustee may make reasonable rules for action by or at a meeting
of Holders. The Registrar or Paying Agent may make reasonable rules and set
reasonable requirements for its functions.
SECTION 12.7 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 12.8 GOVERNING LAW.
THIS INDENTURE AND THE NOTES SHALL BE GOVERNED BY, AND CONSTRUED IN
ACCORDANCE WITH, THE LAWS OF THE STATE OF NEW YORK, INCLUDING, WITHOUT
LIMITATION SECTION 5-1401 OF THE NEW YORK GENERAL OBLIGATIONS LAW.
SECTION 12.9 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, 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
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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 12.10 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 12.11 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 12.12 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 12.13 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.
SECTION 12.14 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.
SECTION 12.15 JUDGMENT CURRENCY.
The Company hereby agrees to indemnify the Trustee, its directors,
its officers and each person, if any, who controls the Trustee within the
meaning of Section 15 of the Securities Act or Section 20 of the Exchange Act
against any loss incurred by such person as a result of any judgment or order
being given or made against the Company for any U.S. Dollar amount due under
this Indenture and such judgment or order being
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expressed and paid in a currency (the "Judgment Currency") other than U.S.
Dollars and as a result of any variation as between (i) the rate of exchange at
which the U.S. Dollar amount is converted into the Judgment Currency for the
purpose of such judgment or order and (ii) the spot rate of exchange in The City
of New York at which such party on the date of payment of such judgment or order
is able to purchase U.S. Dollars with the amount of the Judgment Currency
actually received by such party. The foregoing indemnity shall continue in full
force and effect notwithstanding any such judgment or order as aforesaid. The
term "spot rate of exchange" shall include any premiums and costs of exchange
payable in connection with the purchase of, or conversion into, U.S. Dollars.
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[Indenture signature page]
Dated as of the date first written above
METROMEDIA FIBER NETWORK,
INC.
By: /s/ Gerard Benedetto
-------------------------------------
Name: Gerard Benedetto
Title: Chief Financial Officer and
Senior Vice President
<PAGE>
[Indenture signature page]
Dated as of the date first written above
THE BANK OF NEW YORK, not
in its individual capacity but solely
as Trustee
By: /s/ JoAnn Manieri
-------------------------------------
Name: JoAnn Manieri
Title: Vice President
<PAGE>
EXHIBIT A-1
(Face of Dollar Note)
[Remove the Global Note Legend below, if applicable pursuant to the provisions
of the Indenture]
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 2.07 OF THE INDENTURE, (II) THIS GLOBAL NOTE MAY BE
EXCHANGED IN WHOLE BUT NOT IN PART PURSUANT TO SECTION 2.07 OF THE INDENTURE,
(III) THIS GLOBAL NOTE MAY BE DELIVERED TO THE TRUSTEE FOR CANCELLATION PURSUANT
TO SECTION 2.12 OF THE INDENTURE AND (IV) THIS GLOBAL NOTE MAY BE TRANSFERRED TO
A SUCCESSOR DEPOSITARY WITH THE PRIOR WRITTEN CONSENT OF THE COMPANY.
CUSIP 591689AE4
$10% Senior Notes due 2009
No. $
METROMEDIA FIBER NETWORK, INC.'
promises to pay to Cede & Co. or registered assigns, the principal sum of [ ]
Dollars on December 15, 2009.
Interest Payment Dates: June 15 and December 15.
Record Dates: June 1 and December 1.
<PAGE>
IN WITNESS WHEREOF, the Company has caused this instrument to be
signed manually or by facsimile by its duly authorized officer.
Dated: November , 1999
METROMEDIA FIBER NETWORK, INC.
By:
-------------------------------------
Name:
Title:
By:
-------------------------------------
Name:
Title:
[Global Dollar Note]
<PAGE>
This is one of the
Notes referred to in the
within-mentioned Indenture:
THE BANK OF NEW YORK,
not in its individual capacity but solely as Trustee
By: Dated:
-------------------------------- -----------------------
Name:
Title:
[Global Dollar Note]
<PAGE>
(Back of Dollar Note)
$10% Senior Notes due 2009
Capitalized terms used herein shall have the meanings assigned to
them in the Indenture referred to below unless otherwise indicated.
1. INTEREST. Metromedia Fiber Network, Inc., a Delaware corporation
(the "Company"), promises to pay interest on the principal amount of this Dollar
Note at 10% per annum from the date of issuance and authentication of this
Dollar Note (November 17, 1999) until maturity payable in accordance with the
provisions of the following paragraph. The Company shall pay interest
semi-annually on June 15 and December 15 of each year, or if any such day is not
a Business Day, on the next succeeding Business Day (each an "Interest Payment
Date"). Interest on the Dollar Notes shall accrue from the most recent date to
which interest has been paid or, if no interest has been paid, from the date of
issuance; provided that if there is no existing Default or Event of Default
relating to the payment of interest, and if this Dollar Note is authenticated
between a Record Date referred to on the face hereof and the next succeeding
Interest Payment Date, interest shall accrue from such next succeeding Interest
Payment Date; provided, further, that the first Interest Payment Date shall be
June 15, 2000. The Company shall pay interest (including post-petition interest
in any proceeding under any Bankruptcy Law) on overdue principal and premium, if
any, from time to time on demand at a rate that is 1.0% per annum in excess of
the rate then in effect; it shall pay interest (including post-petition interest
in any proceeding under any Bankruptcy Law) on overdue installments of interest
(without regard to any applicable grace periods) from time to time on demand at
the same rate to the extent lawful. Interest shall be computed on the basis of a
360-day year of twelve 30-day months.
2. METHOD OF PAYMENT. The Company shall pay interest on the Dollar
Notes (except defaulted interest) to the Persons who are registered Holders of
Dollar Notes at the close of business on the June 1 or December 1, whether or
not a Business Day, next preceding the Interest Payment Date, even if such
Dollar Notes are canceled after such Record Date and on or before such Interest
Payment Date, except as provided in Section 2.13 of the Indenture with respect
to defaulted interest. The Dollar Notes shall be payable as to principal,
premium, if any, and interest at the office or agency of the Company maintained
for such purpose within or outside of the City and State of New York, or, at the
option of the Company, payment of interest may be made by check mailed to the
Holders at their addresses set forth in the register of Holders kept by the
Registrar, and provided that payment by wire transfer of immediately available
funds shall be required with respect to principal of and interest and premium
on, all Dollar Global Notes and all other Dollar Notes the Holders of which
shall have provided wire transfer instructions to the Company (with a copy to
the Paying Agent) or the Paying Agent. Such payment shall be in such coin or
currency of the United States of America as at the time of payment is legal
tender for payment of public and private debts.
3. PAYING AGENT AND REGISTRAR. Initially, The Bank of New York, the
Trustee under the Indenture, shall act as Paying Agent and Registrar and
Kredietbank S.A. Luxembourgeoise will act as Paying Agent in Luxembourg. The
Company may change any Paying Agent or Registrar without notice to any Holder.
The Company or any of its Restricted Subsidiaries may act in any such capacity.
4. INDENTURE. The Company issued the Dollar Notes under an Indenture
dated as of November 17, 1999 ("Indenture") between the Company and the Trustee.
The terms of the Dollar Notes include those stated in the Indenture and those
made part of the Indenture by reference to the Trust Indenture Act of 1939, as
amended (15 U.S. Code ss.ss. 77aaa-77bbbb) (the "TIA"). The Dollar Notes are
subject to all such terms, and Holders are referred to the Indenture and the TIA
for a statement of such terms. To the extent any provision of this Dollar Note
conflicts with the express provisions of the Indenture, the provisions of the
Indenture shall govern and be controlling. The Dollar Notes are obligations of
the Company limited to $750,000,000 million in aggregate principal amount.
<PAGE>
5. OPTIONAL REDEMPTION.
(a) Except as set forth in subparagraphs (b) and (c) below, the
Dollar Notes shall not be redeemable at the Company's option prior to December
15, 2004. Thereafter, the Dollar Notes shall be subject to redemption at any
time at the option of the Company, in whole or in part, upon not less than 30
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 December 15 of the years indicated below:
Percentage of
Principal
Year Amount
---- -------------
2004.......................... 105.000%
2005.......................... 103.333%
2006.......................... 101.667%
2007 and thereafter........... 100.000%
(b) Notwithstanding the foregoing, at any time prior to December 15,
2002, the Company may, on any one or more occasions, redeem up to 35% of the
aggregate principal amount of each of the Dollar Notes and the Euro Notes
(determined separately) originally issued pursuant to the Indenture at a
redemption price of 110.000% of the principal amount of the Dollar Notes, plus
accrued and unpaid interest thereon to the 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), with the Net Cash Proceeds received from any
Public Equity Offering made by the Company resulting in gross proceeds to the
Company of at least $100 million; provided that at least 65% of the aggregate
principal amount of the Dollar Notes and the Euro Notes (determined separately)
originally issued pursuant to the Indenture remain outstanding immediately after
the occurrence of any such redemption. The Company may make any such redemption
upon not less than 30 nor more than 60 days' notice (but in no event more than
90 days after the closing of the related Public Equity Offering).
(c) Any redemption pursuant to this Section 5 shall be made pursuant
to the provisions of Section 3.01 through 3.06 of the Indenture.
6. MANDATORY REDEMPTION.
The Company shall not be required to make mandatory redemption or
sinking fund payments with respect to the Dollar Notes.
7. REPURCHASE AT OPTION OF HOLDER.
(a) Upon the occurrence of a Change of Control, each Holder of
Dollar 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 Dollar
Notes pursuant to the offer described below (the "Change of Control Offer") at a
purchase price in cash equal to 101% of the aggregate principal amount thereof
(the "Change of Control Payment") plus accrued and unpaid interest thereon to
the date of purchase (subject to the right of Holders of record on the relevant
Record Date to receive interest due on the relevant Interest Payment Date).
Within 30 days following any Change of Control, the Company will mail a notice
to each Holder setting forth the procedures governing the Change of Control
Offer as required by the Indenture.
(b) The Company shall not, and shall not permit any of its
Restricted Subsidiaries to, directly or indirectly, consummate any Asset Sale,
unless (i) the Company (or such Restricted Subsidiary, as the case may be)
receives consideration at the time of such Asset Sale at least equal to the fair
market value
<PAGE>
(as determined in good faith by the Board of Directors (including as to the
value of all noncash consideration) and set forth in an Officer's Certificate
delivered to the Trustee) of the assets or Equity Interests issued or sold or
otherwise disposed of and (ii) at least 75% of the consideration therefor is in
the form of cash and/or Cash Equivalents or Telecommunications Assets, and (iii)
the Net Cash Proceeds received by the Company (or such Restricted Subsidiary, as
the case may be) from such Asset Sale are applied within 360 days following the
receipt of such Net Cash Proceeds, to the extent the Company (or such Restricted
Subsidiary, as the case may be) elects, (a) to the permanent redemption or
repurchase of outstanding Indebtedness (other than Subordinated Indebtedness)
that is secured Indebtedness (including that in the case of a revolver or
similar arrangement that makes credit available, such commitment is so
permanently reduced by such amount) or Indebtedness of the Company or such
Restricted Subsidiary that ranks equally with the Notes but has a maturity date
that is prior to the maturity date of the Notes and/or (b) to reinvest such Net
Cash Proceeds (or any portion thereof) in Telecommunications Assets.
Notwithstanding anything herein to the contrary, with respect to the
reinvestment of Net Cash Proceeds, only proceeds from an Asset Sale of assets,
or Equity Interests, of a Foreign Subsidiary may be used to retire Indebtedness
of a Foreign Subsidiary or reinvest in assets or Equity Interests of a Foreign
Subsidiary. The balance of such Net Cash Proceeds, after the application of such
Net Cash Proceeds as described in the immediately preceding clauses (a) and (b),
shall constitute "Excess Proceeds."
(c) When the aggregate amount of Excess Proceeds equals or exceeds
$15.0 million (taking into account income earned on such Excess Proceeds), the
Company will be required to make a pro rata offer to all Holders of Notes and
pari passu Indebtedness with comparable provisions requiring such Indebtedness
to be purchased with the proceeds of such Asset Sale (an "Asset Sale Offer") to
purchase the maximum principal amount or accreted value in the case of
Indebtedness issued with an original issue discount of Notes and pari passu
Indebtedness that may be purchased out of the Excess Proceeds, at a purchase
price in cash in an amount equal to 100% of the principal amount thereof or the
accreted value thereof, as applicable, plus accrued and unpaid interest thereon
to the date of purchase (subject to the right of Holders of record on the
relevant Record Date to receive interest due on the relevant Interest Payment
Date), in accordance with the procedures set forth in Article 3 of the Indenture
and the agreements governing such pari passu Indebtedness. To the extent that
any Excess Proceeds remain after consummation of an Asset Sale Offer, the
Company may use such Excess Proceeds for any purpose not otherwise prohibited by
the Indenture. If the aggregate principal amount of Notes and pari passu
Indebtedness tendered into such Asset Sale Offer surrendered by Holders thereof
exceeds the amount of Excess Proceeds, the Company shall select the Notes and
pari passu Indebtedness to be purchased on a pro rata basis in proportion to the
respective principal amounts (or accreted values in the case of Indebtedness
issued with an original issue discount) of the Notes and such other
Indebtedness. Upon completion, of such Asset Sale Offer, the amount of Excess
Proceeds shall be reset at zero for purposes of the first sentence of this
paragraph.
8. NOTICE OF REDEMPTION. Notice of redemption shall be mailed at
least 30 days but not more than 60 days before the redemption date to each
Holder whose Notes are to be redeemed at its registered address. Dollar Notes in
denominations larger than $1,000 may be redeemed in part but only in whole
multiples of $1,000, unless all of the Dollar Notes held by a Holder are to be
redeemed. On and after the redemption date interest shall cease to accrue on
Notes or portions thereof called for redemption.
9. DENOMINATIONS, TRANSFER, EXCHANGE. The Dollar Notes are in
registered form without coupons in denominations of $1,000 and integral
multiples of $1,000. The transfer of Notes may be registered and Notes may be
exchanged as provided in the Indenture. The Registrar and the Trustee may
require a Holder, among other things, to furnish appropriate endorsements and
transfer documents and the Company may require a Holder to pay any taxes and
fees required by law or permitted by the Indenture. The Company need not
exchange or register the transfer of any Note or portion of a Note selected for
redemption, except for the unredeemed portion of any Note being redeemed in
part. Also, the Company need not exchange or register the transfer of any Notes
for a period of 15 days before a selection of Notes to be redeemed or during the
period between a Record Date and the corresponding Interest Payment Date.
<PAGE>
10. PERSONS DEEMED OWNERS. The registered Holder of a Note on the
Registrar's books may be treated as its owner for all purposes under the
Indenture.
11. AMENDMENT, SUPPLEMENT AND WAIVER. Subject to certain exceptions,
the Indenture and the Notes may be amended or supplemented with the consent of
the Holders of at least a majority in aggregate principal amount of the then
outstanding Notes voting as a single class, and any existing default or
compliance with any provision of the Indenture or the Note 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. Without the consent of any
Holder of a Note, the Indenture or the Notes may be amended or supplemented,
among other things, to cure any ambiguity, omission, defect or inconsistency, to
provide for uncertificated Notes in addition to or in place of certificated
Notes, to provide for the assumption of the Company's obligations to Holders of
the Notes in case of a merger or consolidation or sale of all or substantially
all of the Company's assets in accordance with the terms of the Indenture, 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 legal rights under
the Indenture of any such Holder, to comply with the requirements of the SEC in
order to effect or maintain the qualification of the Indenture under the TIA, to
add to the covenants of the Company for the benefit of the Holders or to
surrender any right or power conferred by the Indenture upon the Company, or to
effect any change to the transfer and exchange restrictions and security
delivery procedures contained in the Indenture in order to conform with changes
in any applicable law or Applicable Procedures.
12. DEFAULTS AND REMEDIES.
(a) Events of Default under the Indenture include: (i) the failure
to pay interest the Notes, when the same becomes due and payable if such default
continues for a period of 30 days, (ii) the failure to pay principal of any
Notes when such principal becomes due and payable, at maturity, upon redemption
or otherwise; (iii) failure by the Company or any Restricted Subsidiary to
comply with Sections 4.10 or 4.14 of the Indenture; (iv) failure by the Company
or any Restricted Subsidiary for 60 days after notice to comply with any of its
other agreements in the Indenture or this Note; (v) 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 Restricted Subsidiaries (or the payment of which is Guaranteed by the
Company or any of its Restricted 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 principal amount of any such Indebtedness, together with the
principal amount of any other such Indebtedness or the maturity of which has
been so accelerated, aggregates $15.0 million or more; (vi) failure by the
Company or any of its Restricted 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; and (vii)
certain events of bankruptcy or insolvency with respect to the Company or any of
the Company's Restricted Subsidiaries.
(b) 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.
Notwithstanding the foregoing, in the case of an Event of Default arising from
certain events of bankruptcy or insolvency, all outstanding Notes shall become
due and payable without further action or notice. Holders may not enforce the
Indenture or the Notes except as provided in the Indenture. Subject to certain
limitations, Holders of a majority in principal amount of the then outstanding
Notes may direct the Trustee in its exercise of any trust or power. The Trustee
may withhold from Holders of the Notes notice of any continuing Default or Event
of Default (except a Default or Event of Default relating to the payment of
principal or interest) if it determines that withholding notice is in their
interest. Except as provided in the Indenture, the Holders of a majority in
principal amount of the then outstanding Notes by notice to the Trustee may on
behalf of the Holders of all of the Notes waive any existing Default or Event of
Default and its consequences under the Indenture, except a continuing Default or
Event of Default in the payment of interest on, or principal of, the Notes. The
Company shall deliver to the Trustee annually a statement
<PAGE>
regarding compliance with the Indenture, and the Company, upon becoming aware of
any Default or Event of Default, deliver to the Trustee a statement specifying
such Default or Event of Default.
13. TRUSTEE DEALINGS WITH COMPANY. The Trustee, in its individual or
any other capacity, may make loans to, accept deposits from, and perform
services for the Company or its Affiliates, and may otherwise deal with the
Company or its Affiliates, as if it were not the Trustee.
14. NO RECOURSE AGAINST OTHERS. A director, officer, employee,
incorporator or shareholder, of the Company, as such, shall not have any
liability for any obligations of the Company under the Notes or the Indenture or
for any claim based on, in respect of, or by reason of, such obligations or
their creation. Each Holder by accepting a Note waives and releases all such
liability. The waiver and release are part of the consideration for the issuance
of the Notes.
15. EXECUTION. Two Officers or one Officer and the Secretary or an
Assistant Secretary of the Company shall sign this Note for the Company by
manual or facsimile signature.
16. AUTHENTICATION. This Note shall not be valid until authenticated
by the manual signature of the Trustee or an authenticating agent.
17. ABBREVIATIONS. Customary abbreviations may be used in the name
of a Holder or an assignee, such as: TEN COM (= tenants in common), TEN ENT (=
tenants by the entirety), JT TEN (= joint tenants with right of survivorship and
not as tenants in common), CUST (= Custodian), and U/G/M/A (= Uniform Gifts to
Minors Act).
18. CUSIP, ISIN OR COMMON CODE NUMBERS. The Company has caused
CUSIP, ISIN or Common Code numbers, as applicable, to be printed on the Notes
and the Trustee may use CUSIP, ISIN or Common Code numbers, as applicable, in
notices of redemption as a convenience to Holders. No representation is made as
to the accuracy of such numbers either as printed on the Notes or as contained
in any notice of redemption and reliance may be placed only on the other
identification numbers placed thereon.
19. GOVERNING LAW. This Dollar Note and the Indenture shall be
governed by, and construed in accordance with, the laws of The State of New
York, including, without limitation, Section 5- 1401of the New York General
Obligations Law.
The Company will furnish to any Holder upon written request and
without charge a copy of the Indenture. Requests may be made to:
Metromedia Fiber Network Services, Inc.
c/o Metromedia Fiber Network, Inc.
One North Lexington Avenue
White Plains, NY 10601
Attention: Chief Financial Officer
<PAGE>
ASSIGNMENT FORM
To assign this Note, fill in the form below: (I) or (we) assign and transfer
this Note to
- --------------------------------------------------------------------------------
(Insert assignee's soc. sec. or tax I.D. no.)
- --------------------------------------------------------------------------------
- --------------------------------------------------------------------------------
- --------------------------------------------------------------------------------
- --------------------------------------------------------------------------------
(Print or type assignee's name, address and zip code)
and irrevocably appoint ________________________________________________________
to transfer this Note on the books of the Company. The agent may substitute
another to act for him.
- --------------------------------------------------------------------------------
Date: Your Signature:
--------------- -------------------------
(Sign exactly as your name appears on
the face of this Note)
Tax Identification No:
------------------
SIGNATURE GUARANTEE:
----------------------------------------
Signatures must be guaranteed by an
"eligible guarantor institution" meeting
the requirements of the Registrar, which
requirements include membership or
participation in the Security Transfer
Agent Medallion Program ("STAMP") or
such other "signature guarantee program"
as may be determined by the Registrar in
addition to, or in substitution for,
STAMP, all in accordance with the
Securities Exchange Act of 1934, as
amended.
<PAGE>
OPTION OF HOLDER TO ELECT PURCHASE
If you want to elect to have this Note purchased by the Company
pursuant to Section 4.10 or 4.14 of the Indenture, check the box below:
|_| Section 4. 10 |_| Section 4.14
If you want to elect to have only part of the Note purchased by the
Company pursuant to Section 4. 10 or Section 4.14 of the Indenture, state the
amount you elect to have purchased: $___________________________________________
Date: Your Signature:
--------------- -------------------------
(Sign exactly as your name appears on
the face of this Note)
Tax Identification No:
------------------
SIGNATURE GUARANTEE:
----------------------------------------
Signatures must be guaranteed by an
"eligible guarantor institution" meeting
the requirements of the Registrar, which
requirements include membership or
participation in the Security Transfer
Agent Medallion Program ("STAMP") or
such other "signature guarantee program"
as may be determined by the Registrar in
addition to, or in substitution for,
STAMP, all in accordance with the
Securities Exchange Act of 1934, as
amended.
<PAGE>
SCHEDULE OF EXCHANGES OF INTERESTS IN THE GLOBAL NOTE(1)
The following exchanges of a part of this Global Note for an
interest in another Global Note or for a Definitive Note, or exchanges of a part
of another Global Note or Definitive Note for an interest in this Global Note,
have been made:
<TABLE>
<CAPTION>
Principal Amount
Amount of decrease Amount of decrease of this Global Note Signature of
in Principal in Principal following such authorized officer
Amount of this Amount of this decrease of Trustee or
Date of Exchange Global Note Global Note (or increase) Note Custodian
- ---------------- ----------- ----------- ------------- --------------
<S> <C> <C> <C> <C>
</TABLE>
- --------
(1) This should be included only if the Note is issued in global form.
<PAGE>
EXHIBIT A-2
(Face of Note)
[Remove the Global Note Legend below, if applicable pursuant to the provisions
of the Indenture]
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 2.07 OF THE INDENTURE, (II) THIS GLOBAL NOTE MAY BE
EXCHANGED IN WHOLE BUT NOT IN PART PURSUANT TO SECTION 2.07 OF THE INDENTURE,
(III) THIS GLOBAL NOTE MAY BE DELIVERED TO THE TRUSTEE FOR CANCELLATION PURSUANT
TO SECTION 2.12 OF THE INDENTURE AND (IV) THIS GLOBAL NOTE MAY BE TRANSFERRED TO
A SUCCESSOR DEPOSITARY WITH THE PRIOR WRITTEN CONSENT OF THE COMPANY.
ISIN XS0104413231
(EURO)10% Senior Notes due 2009
No. (euro)
METROMEDIA FIBER NETWORK, INC.
promises to pay to The Bank of New York Depository (Nominees) Limited or
registered assigns, the principal sum of [ ] Euros on December 15, 2009.
Interest Payment Dates: June 15 and December 15.
Record Dates: June 1 and December 1.
<PAGE>
IN WITNESS WHEREOF, the Company has caused this instrument to be
signed manually or by facsimile by its duly authorized officer.
Dated: November , 1999
METROMEDIA FIBER NETWORK, INC.
By:
-------------------------------------
Name:
Title:
By:
-------------------------------------
Name:
Title:
[Global Euro Note]
<PAGE>
This is one of the
Notes referred to in the
within-mentioned Indenture:
THE BANK OF NEW YORK
not in its individual capacity but solely as Trustee
By: Dated:
-------------------------------- ----------------------
Name:
Title:
[Global Euro Note]
<PAGE>
(Back of Euro Note)
(euro)10% Senior Notes due 2009
Capitalized terms used herein shall have the meanings assigned to
them in the Indenture referred to below unless otherwise indicated.
1. INTEREST. Metromedia Fiber Network, Inc., a Delaware corporation
(the "Company"), promises to pay interest on the principal amount of this Euro
Note at 10% per annum from from the date of issuance and authentication of this
Euro Note (November 17 , 1999) until maturity payable in accordance with the
provisions of the following paragraph. The Company shall pay interest
semi-annually on June 15 and December 15 of each year, or if any such day is not
a Business Day, on the next succeeding Business Day (each an "Interest Payment
Date"). Interest on the Euro Notes shall accrue from the most recent date to
which interest has been paid or, if no interest has been paid, from the date of
issuance; provided that if there is no existing Default or Event of Default
relating to the payment of interest, and if this Euro Note is authenticated
between a Record Date referred to on the face hereof and the next succeeding
Interest Payment Date, interest shall accrue from such next succeeding Interest
Payment Date; provided, further, that the first Interest Payment Date shall be
June 15, 2000. The Company shall pay interest (including post-petition interest
in any proceeding under any Bankruptcy Law) on overdue principal and premium, if
any, from time to time on demand at a rate that is 1.0% per annum in excess of
the rate then in effect; it shall pay interest (including post-petition interest
in any proceeding under any Bankruptcy Law) on overdue installments of interest
(without regard to any applicable grace periods) from time to time on demand at
the same rate to the extent lawful. Interest shall be computed on the basis of a
360-day year of twelve 30-day months.
2. METHOD OF PAYMENT. The Company shall pay interest on the Euro
Notes (except defaulted interest) to the Persons who are registered Holders of
Euro Notes at the close of business on the June 1 or December, whether or not a
Business Day, next preceding the Interest Payment Date, even if such Euro Notes
are canceled after such Record Date and on or before such Interest Payment Date,
except as provided in Section 2.13 of the Indenture with respect to defaulted
interest. The Euro Notes shall be payable as to principal, premium, if any, and
interest at the office or agency of the Company maintained for such purpose
within or outside of the City and State of New York, or, at the option of the
Company, payment of interest may be made by check mailed to the Holders at their
addresses set forth in the register of Holders kept by the Registrar, and
provided that payment by wire transfer of immediately available funds shall be
required with respect to principal of and interest and premium on, all Euro
Global Notes and all other Euro Notes the Holders of which shall have provided
wire transfer instructions to the Company (with a copy to the Paying Agent) or
the Paying Agent. Such payment shall be in such coin or currency of the European
Union as at the time of payment is legal tender for payment of public and
private debts.
3. PAYING AGENT AND REGISTRAR. Initially, The Bank of New York,
London branch, shall act as Paying Agent and Registrar and Kredietbank S.A.
Luxembourgeoise will act as Paying Agent in Luxembourg. The Company may change
any Paying Agent or Registrar without notice to any Holder. The Company or any
of its Restricted Subsidiaries may act in any such capacity.
4. INDENTURE. The Company issued the Euro Notes under an Indenture
dated as of November 17, 1999 ("Indenture") between the Company and the Trustee.
The terms of the Euro Notes include those stated in the Indenture and those made
part of the Indenture by reference to the Trust Indenture Act of 1939, as
amended (15 U.S. Code ss.ss. 77aaa-77bbbb) (the "TIA"). The Euro Notes are
subject to all such terms, and Holders are referred to the Indenture and the TIA
for a statement of such terms. To the extent any provision of this Euro Note
conflicts with the express provisions of the Indenture, the provisions of the
Indenture shall govern and be controlling. The Euro Notes are obligations of the
Company limited to e250,000,000 million in aggregate principal amount.
<PAGE>
5. OPTIONAL REDEMPTION.
(a) Except as set forth in subparagraphs (b) and (c) below, the Euro
Notes shall not be redeemable at the Company's option prior to December 15,
2004. Thereafter, the Euro Notes shall be subject to redemption at any time at
the option of the Company, in whole or in part, upon not less than 30 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 December 15 of
the years indicated below:
Percentage of
Principal
Year Amount
---- -------------
2004.......................... 105.000%
2005.......................... 103.333%
2006.......................... 101.667%
2007 and thereafter........... 100.000%
(b) Notwithstanding the foregoing, at any time prior to December 15,
2002, the Company may, on any one or more occasions, redeem up to 35% of the
aggregate principal amount of the Dollar Notes and the Euro Notes (determined
separately) originally issued pursuant to the Indenture at a redemption price of
110.000% of the principal amount thereof, plus accrued and unpaid interest
thereon to the 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), with the Net Cash Proceeds received from any Public Equity Offering made
by the Company resulting in gross proceeds to the Company of at least $100
million; provided that at least 65% of the aggregate principal amount of the
Dollar Notes and the Euro Notes (determined separately) originally issued
pursuant to the Indenture remain outstanding immediately after the occurrence of
any such redemption. The Company may make any such redemption upon not less than
30 nor more than 60 days' notice (but in no event more than 90 days after the
closing of the related Public Equity Offering).
(c) Any redemption pursuant to this Section 5 shall be made pursuant
to the provisions of Section 3.01 through 3.06 of the Indenture.
6. MANDATORY REDEMPTION.
The Company shall not be required to make mandatory redemption or
sinking fund payments with respect to the Euro Notes.
7. REPURCHASE AT OPTION OF HOLDER.
(a) Upon the occurrence of a Change of Control, each Holder of Euro
Notes will have the right to require the Company to purchase all or any part
(equal to (euro)1,000 or an integral multiple thereof) of such Holder's Euro
Notes pursuant to the offer described below (the "Change of Control Offer") at a
purchase price in cash equal to 101% of the aggregate principal amount thereof
(the "Change of Control Payment") plus accrued and unpaid interest thereon to
date of purchase (subject to the right of Holders of record on the relevant
Record Date to receive interest due on the relevant Interest Payment Date).
Within 30 days following any Change of Control, the Company will mail a notice
to each Holder setting forth the procedures governing the Change of Control
Offer as required by the Indenture.
(b) The Company shall not, and shall not permit any of its
Restricted Subsidiaries to, directly or indirectly, consummate any Asset Sale,
unless (i) the Company (or such Restricted Subsidiary, as the case may be)
receives consideration at the time of such Asset Sale at least equal to the fair
market value
<PAGE>
(as determined in good faith by the Board of Directors (including as to the
value of all noncash consideration) and set forth in an Officer's Certificate
delivered to the Trustee) of the assets or Equity Interests issued or sold or
otherwise disposed of and (ii) at least 75% of the consideration therefor is in
the form of cash and/or Cash Equivalents or Telecommunications Assets, and (iii)
the Net Cash Proceeds received by the Company (or such Restricted Subsidiary, as
the case may be) from such Asset Sale are applied within 360 days following the
receipt of such Net Cash Proceeds, to the extent the Company (or such Restricted
Subsidiary, as the case may be) elects, (a) to the permanent redemption or
repurchase of outstanding Indebtedness (other than Subordinated Indebtedness)
that is secured Indebtedness (including that in the case of a revolver or
similar arrangement that makes credit available, such commitment is so
permanently reduced by such amount) or Indebtedness of the Company or such
Restricted Subsidiary that ranks equally with the Notes but has a maturity date
that is prior to the maturity date of the Notes and/or (b) to reinvest such Net
Cash Proceeds (or any portion thereof) in Telecommunications Assets.
Notwithstanding anything herein to the contrary, with respect to the
reinvestment of Net Cash Proceeds, only proceeds from an Asset Sale of assets,
or Equity Interests, of a Foreign Subsidiary may be used to retire Indebtedness
of a Foreign Subsidiary or reinvest in assets or Equity Interests of a Foreign
Subsidiary. The balance of such Net Cash Proceeds, after the application of such
Net Cash Proceeds as described in the immediately preceding clauses (a) and (b),
shall constitute "Excess Proceeds."
(c) When the aggregate amount of Excess Proceeds equals or exceeds
$15.0 million (taking into account income earned on such Excess Proceeds), the
Company will be required to make a pro rata offer to all Holders of Notes and
pari passu Indebtedness with comparable provisions requiring such Indebtedness
to be purchased with the proceeds of such Asset Sale (an "Asset Sale Offer") to
purchase the maximum principal amount or accreted value in the case of
Indebtedness issued with an original issue discount of Notes and pari passu
Indebtedness that may be purchased out of the Excess Proceeds, at a purchase
price in cash in an amount equal to 100% of the principal amount thereof or the
accreted value thereof, as applicable, plus accrued and unpaid interest thereon
to the date of purchase (subject to the right of Holders of record on the
relevant Record Date to receive interest due on the relevant Interest Payment
Date), in accordance with the procedures set forth in Article 3 of the Indenture
and the agreements governing such pari passu Indebtedness. To the extent that
any Excess Proceeds remain after consummation of an Asset Sale Offer, the
Company may use such Excess Proceeds for any purpose not otherwise prohibited by
the Indenture. If the aggregate principal amount of Notes and pari passu
Indebtedness tendered into such Asset Sale Offer surrendered by Holders thereof
exceeds the amount of Excess Proceeds, the Company shall select the Notes and
pari passu Indebtedness to be purchased on a pro rata basis in proportion to the
respective principal amounts (or accreted values in the case of Indebtedness
issued with an original issue discount) of the Notes and such other
Indebtedness. Upon completion, of such Asset Sale Offer, the amount of Excess
Proceeds shall be reset at zero for purposes of the first sentence of this
paragraph.
8. NOTICE OF REDEMPTION. Notice of redemption shall be mailed at
least 30 days but not more than 60 days before the redemption date to each
Holder whose Notes are to be redeemed at its registered address. Euro Notes in
denominations larger than (euro)1,000 may be redeemed in part but only in whole
multiples of (euro)1,000, unless all of the Euro Notes held by a Holder are to
be redeemed. On and after the redemption date interest shall cease to accrue on
Notes or portions thereof called for redemption.
9. DENOMINATIONS, TRANSFER, EXCHANGE. The Euro Notes are in
registered form without coupons in denominations of (euro)1,000 and integral
multiples of (euro)1,000. The transfer of Notes may be registered and Notes may
be exchanged as provided in the Indenture. The Registrar and the Trustee may
require a Holder, among other things, to furnish appropriate endorsements and
transfer documents and the Company may require a Holder to pay any taxes and
fees required by law or permitted by the Indenture. The Company need not
exchange or register the transfer of any Note or portion of a Note selected for
redemption, except for the unredeemed portion of any Note being redeemed in
part. Also, the Company need not exchange or register the transfer of any Notes
for a period of 15 days before a selection of Notes to be redeemed or during the
period between a Record Date and the corresponding Interest Payment Date.
<PAGE>
10. PERSONS DEEMED OWNERS. The registered Holder of a Euro Note on
the Registrar's books may be treated as its owner for all purposes under the
Indenture.
11. AMENDMENT, SUPPLEMENT AND WAIVER. Subject to certain exceptions,
the Indenture and the Notes may be amended or supplemented with the consent of
the Holders of at least a majority in aggregate principal amount of the then
outstanding Notes voting as a single class, and any existing default or
compliance with any provision of the Indenture or the Note 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. Without the consent of any
Holder of a Note, the Indenture or the Notes may be amended or supplemented,
among other things, to cure any ambiguity, omission, defect or inconsistency, to
provide for uncertificated Notes in addition to or in place of certificated
Notes, to provide for the assumption of the Company's obligations to Holders of
the Notes in case of a merger or consolidation or sale of all or substantially
all of the Company's assets in accordance with the terms of the Indenture, 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 legal rights under
the Indenture of any such Holder, to comply with the requirements of the SEC in
order to effect or maintain the qualification of the Indenture under the TIA, to
add to the covenants of the Company for the benefit of the Holders or to
surrender any right or power conferred by the Indenture upon the Company, or to
effect any change to the transfer and exchange restrictions and security
delivery procedures contained in the Indenture in order to conform with changes
in any applicable law or Applicable Procedures.
12. DEFAULTS AND REMEDIES.
(a) Events of Default under the Indenture include: (i) the failure
to pay interest on the Notes, when the same becomes due and payable if such
default continues for a period of 30 days, (ii) the failure to pay principal of
any Notes when such principal becomes due and payable, at maturity, upon
redemption or otherwise; (iii) failure by the Company or any Restricted
Subsidiary to comply with Sections 4.10 or 4.14 of the Indenture; (iv) failure
by the Company or any Restricted Subsidiary for 60 days after notice to comply
with any of its other agreements in the Indenture or this Note; (v) 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 Restricted Subsidiaries (or the payment of which is
Guaranteed by the Company or any of its Restricted 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 principal amount of any such Indebtedness,
together with the principal amount of any other such Indebtedness or the
maturity of which has been so accelerated, aggregates $15.0 million or more;
(vi) failure by the Company or any of its Restricted 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; and (vii) certain events of bankruptcy or insolvency with respect to the
Company or any of the Company's Restricted Subsidiaries.
(b) 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.
Notwithstanding the foregoing, in the case of an Event of Default arising from
certain events of bankruptcy or insolvency, all outstanding Notes shall become
due and payable without further action or notice. Holders may not enforce the
Indenture or the Notes except as provided in the Indenture. Subject to certain
limitations, Holders of a majority in principal amount of the then outstanding
Notes may direct the Trustee in its exercise of any trust or power. The Trustee
may withhold from Holders of the Notes notice of any continuing Default or Event
of Default (except a Default or Event of Default relating to the payment of
principal or interest) if it determines that withholding notice is in their
interest. Except as provided in the Indenture, the Holders of a majority in
principal amount of the then outstanding Notes by notice to the Trustee may on
behalf of the Holders of all of the Notes waive any existing Default or Event of
Default and its consequences under the Indenture, except a continuing Default or
Event of Default in the payment of interest on, or principal of, the Notes. The
Company shall deliver to the Trustee annually a statement
<PAGE>
regarding compliance with the Indenture, and the Company, upon becoming aware of
any Default or Event of Default, deliver to the Trustee a statement specifying
such Default or Event of Default.
13. TRUSTEE DEALINGS WITH COMPANY. The Trustee, in its individual or
any other capacity, may make loans to, accept deposits from, and perform
services for the Company or its Affiliates, and may otherwise deal with the
Company or its Affiliates, as if it were not the Trustee.
14. NO RECOURSE AGAINST OTHERS. A director, officer, employee,
incorporator or shareholder, of the Company, as such, shall not have any
liability for any obligations of the Company under the Notes or the Indenture or
for any claim based on, in respect of, or by reason of, such obligations or
their creation. Each Holder by accepting a Note waives and releases all such
liability. The waiver and release are part of the consideration for the issuance
of the Notes.
15. EXECUTION. Two Officers or one Officer and the Secretary or an
Assistant Secretary of the Company shall sign this Note for the Company by
manual or facsimile signature.
16. AUTHENTICATION. This Note shall not be valid until authenticated
by the manual signature of the Trustee or an authenticating agent.
17. ABBREVIATIONS. Customary abbreviations may be used in the name
of a Holder or an assignee, such as: TEN COM (= tenants in common), TEN ENT (=
tenants by the entirety), JT TEN (= joint tenants with right of survivorship and
not as tenants in common), CUST (= Custodian), and U/G/M/A (= Uniform Gifts to
Minors Act).
18. CUSIP, ISIN OR COMMON CODE NUMBERS. The Company has caused
CUSIP, ISIN or Common Code numbers, as applicable, to be printed on the Notes
and the Trustee may use CUSIP, ISIN or Common Code numbers, as applicable, in
notices of redemption as a convenience to Holders. No representation is made as
to the accuracy of such numbers either as printed on the Notes or as contained
in any notice of redemption and reliance may be placed only on the other
identification numbers placed thereon.
19. GOVERNING LAW. This Euro Note and the Indenture shall be
governed by, and construed in accordance with, the laws of The State of New
York, including, without limitation, Section 5- 1401of the New York General
Obligations Law.
The Company will furnish to any Holder upon written request and
without charge a copy of the Indenture. Requests may be made to:
Metromedia Fiber Network Services, Inc.
c/o Metromedia Fiber Network, Inc.
One North Lexington Avenue
White Plains, NY 10601
Attention: Chief Financial Officer
<PAGE>
ASSIGNMENT FORM
To assign this Note, fill in the form below: (I) or (we) assign and transfer
this Note to
- --------------------------------------------------------------------------------
(Insert assignee's soc. sec. or tax I.D. no.)
- --------------------------------------------------------------------------------
- --------------------------------------------------------------------------------
- --------------------------------------------------------------------------------
- --------------------------------------------------------------------------------
(Print or type assignee's name, address and zip code)
and irrevocably appoint_________________________________________________________
to transfer this Note on the books of the Company. The agent may substitute
another to act for him.
Date: Your Signature:
--------------- -------------------------
(Sign exactly as your name appears on
the face of this Note)
Tax Identification No:
------------------
SIGNATURE GUARANTEE:
----------------------------------------
Signatures must be guaranteed by an
"eligible guarantor institution" meeting
the requirements of the Registrar, which
requirements include membership or
participation in the Security Transfer
Agent Medallion Program ("STAMP") or
such other "signature guarantee program"
as may be determined by the Registrar in
addition to, or in substitution for,
STAMP, all in accordance with the
Securities Exchange Act of 1934, as
amended.
<PAGE>
OPTION OF HOLDER TO ELECT PURCHASE
If you want to elect to have this Note purchased by the Company
pursuant to Section 4.10 or 4.14 of the Indenture, check the box below:
|_| Section 4.10 |_| Section 4.14
If you want to elect to have only part of the Note purchased by the
Company pursuant to Section 4. 10 or Section 4.14 of the Indenture, state the
amount you elect to have purchased: (euro)______________________________________
Date: Your Signature:
--------------- -------------------------
(Sign exactly as your name appears on
the face of this Note)
Tax Identification No:
------------------
SIGNATURE GUARANTEE:
----------------------------------------
Signatures must be guaranteed by an
"eligible guarantor institution" meeting
the requirements of the Registrar, which
requirements include membership or
participation in the Security Transfer
Agent Medallion Program ("STAMP") or
such other "signature guarantee program"
as may be determined by the Registrar in
addition to, or in substitution for,
STAMP, all in accordance with the
Securities Exchange Act of 1934, as
amended.
<PAGE>
SCHEDULE OF EXCHANGES OF INTERESTS IN THE GLOBAL NOTE(2)
The following exchanges of a part of this Global Note for an
interest in another Global Note or for a Definitive Note, or exchanges of a part
of another Global Note or Definitive Note for an interest in this Global Note,
have been made:
<TABLE>
<CAPTION>
Principal Amount
Amount of decrease Amount of decrease of this Global Note Signature of
in Principal in Principal following such authorized officer
Amount of this Amount of this decrease of Trustee or
Date of Exchange Global Note Global Note (or increase) Note Custodian
- ---------------- ----------- ----------- ------------- --------------
<S> <C> <C> <C> <C>
</TABLE>
- --------
(2) This should be included only if the Note is issued in global form.
