<PAGE>
SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, DC 20549
FORM 10-Q
(Mark One)
[X] QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15 (d) OF THE SECURITIES
EXCHANGE ACT OF 1934 FOR THE QUARTERLY PERIOD ENDED: MARCH 31, 2000.
[ ] TRANSITION REPORT PURSUANT SECTION 13 OR 15 (d) OF THE SECURITIES
EXCHANGE ACT OF 1934 FOR THE TRANSITION PERIOD FROM __________ TO
__________
Commission file number: 000-30075
COMPLETEL EUROPE N.V.
(Exact name of registrant as specified in its charter)
Amsterdam, The Netherlands 98-0202823
(State or other jurisdiction of (IRS Employer
incorporation or organization) Identification No.)
Kruisweg 609
2132 NA Hoofddorp
The Netherlands
(Address of principal executive offices)
(31) 20 666 1701
(Issuer's telephone number)
Not Applicable
(Former name, former address and former fiscal year, if changed since last
report)
Indicate by check mark whether the registrant (1) has filed all reports required
to be filed by section 13 or 15 (d) of the Securities Exchange Act of 1934
during the preceding 12 months (or for such shorter period that the registrant
was required to file such reports) and (2) has been subject to such filing
requirements for the past 90 days.
[ ] Yes [X] No
As of April 1, 2000, the Registrant had outstanding 157,413,060 shares of its
capital stock.
<PAGE>
COMPLETEL EUROPE N.V.
FORM 10-Q
INDEX
<TABLE>
<CAPTION>
Page
Number
------
<S> <C> <C>
PART I. FINANCIAL INFORMATION 1
ITEM 1. Financial Statements (unaudited) 1
Consolidated Condensed Balance Sheets as of
March 31, 2000 and December 31, 1999 (unaudited) 1
Consolidated Condensed Statements of Operations for the
Three Months Ended March 31, 2000 and 1999 (unaudited) 2
Consolidated Condensed Statement of Shareholders' Equity (Deficit) for the
Three Months Ended March 31, 2000 (unaudited) 3
Consolidated Condensed Statements of Cash Flows for the
Three Months Ended March 31, 2000 and 1999 (unaudited) 4
Notes to Unaudited Consolidated Condensed Financial Statements (unaudited) 5
ITEM 2. Management's Discussion and Analysis of Financial Condition and
Results of Operations 12
ITEM 3. Quantitative and Qualitative Disclosures About Market Risk 22
PART II OTHER INFORMATION 23
ITEM 1. Legal Proceedings 23
ITEM 2. Changes in Securities and use of Proceeds 23
ITEM 3. Defaults upon Senior Securities 23
ITEM 4. Submission of Matters to a Vote of Security Holders 23
ITEM 5. Other Information 25
ITEM 6. Exhibits and Reports on Form 8-K 25
SIGNATURES 28
</TABLE>
i
<PAGE>
When used in this Report, the words "intend," "expects," "plans," "estimates,"
"anticipates," "projects," "believes," and similar expressions are intended to
identify forward-looking statements. Specifically, statements included in this
Report that are not historical facts, including statements about our beliefs and
expectations about our business and our industry are forward-looking statements.
These statements are subject to risks and uncertainties that could cause actual
results or outcomes to differ materially. These risks and uncertainties include,
but are not limited to, our ability to implement the senior credit facility, the
degree to which we are leveraged and the restrictions imposed on us under our
existing debt instruments that may adversely affect our ability to finance our
future operations, our ability to compete effectively against better capitalized
competitors and to develop a sufficient customer base, and other factors
discussed in our filings with the Securities and Exchange Commission. Forward-
looking statements included in this Report speak only as of the date of this
report and we will not revise or update these statements to reflect events or
circumstances after the date of this report or to reflect the occurrence of
unanticipated events.
Unless otherwise indicated, all share numbers reflect the five-for-one split we
effected February 25, 2000.
ii
<PAGE>
PART I. FINANCIAL INFORMATION
ITEM 1. Financial Statements
COMPLETEL EUROPE N.V. AND SUBSIDIARIES
--------------------------------------
CONSOLIDATED CONDENSED BALANCE SHEETS
-------------------------------------
(Stated in thousands of Euros see Note 2)
(Unaudited)
<TABLE>
<CAPTION>
March 31, December 31,
ASSETS 2000 1999
------ ------------- ------------
CURRENT ASSETS:
<S> <C> <C>
Cash and cash equivalents (Euro)521,643 (Euro)57,115
Customer accounts receivable 4,588 1,709
Affiliate receivables 6,635 304
Prepaid expenses, VAT receivables, and other current assets 12,102 14,677
------------- ------------
Total current assets 544,968 73,805
------------- ------------
LONG-TERM ASSETS:
Property and equipment, net (Note 4) 123,871 91,946
Licenses and other intangibles, net 4,188 4,557
Deferred financing costs, net 12,164 5,082
Other long-term assets 846 818
------------- ------------
Total long-term assets 141,069 102,403
------------- ------------
TOTAL ASSETS (Euro)686,037 (Euro)176,208
LIABILITIES AND SHAREHOLDERS' EQUITY:
------------------------------------
CURRENT LIABILITIES:
Construction payables (Euro)28,388 (Euro) 28,593
Trade accounts payable 12,947 9,850
Accrued liabilities 21,303 12,686
Affiliate payables 5,781 2,412
------------- ------------
Total current liabilities 68,419 53,541
------------- ------------
LONG-TERM DEBT 86,143 79,596
------------- ------------
SHAREHOLDERS' EQUITY:
Ordinary shares, Euro.10 par value; 625,000,000 shares
authorized, 157,413,060 and 126,133,060 shares issued
and outstanding at March 31, 2000 and December 31, 1999,
respectively 15,741 12,613
Additional paid-in capital 778,217 120,121
Deferred compensation (105,493) (28,087)
Other cumulative comprehensive loss (2,426) (4,268)
Accumulated deficit (154,564) (57,308)
------------- ------------
TOTAL SHAREHOLDERS' EQUITY 531,475 43,071
------------- ------------
TOTAL LIABILITIES AND SHAREHOLDERS' EQUITY (Euro)686,037 (Euro)176,208
</TABLE>
The accompanying notes are an integral part of these unaudited
condensed consolidated balance sheets.
1
<PAGE>
COMPLETEL EUROPE N.V. AND SUBSIDIARIES
--------------------------------------
CONSOLIDATED CONDENSED STATEMENTS OF OPERATIONS
-----------------------------------------------
(Stated in thousands of Euros, except share and per share amounts see Note 2)
(Unaudited)
<TABLE>
<CAPTION>
Three Months Ended
March 31, March 31,
2000 1999
----------------------------
<S> <C> <C>
REVENUES (Euro) 2,972 (Euro) -
------------- ------------
OPERATING EXPENSES:
Network costs 3,011 119
Selling, general and administrative 13,127 3,454
Management fees to affiliated party 2,117 856
Non-cash compensation charges 69,660 31
Depreciation and amortization 2,946 123
------------- ------------
Total operating expenses 90,861 4,583
------------- ------------
OPERATING LOSS (87,889) (4,583)
OTHER INCOME (EXPENSE)
Interest income 444 500
Interest expense, net of capitalized interest (1,868) (1,170)
Foreign exchange loss and other expense (7,943) -
------------- ------------
Total other income (expense) (9,367) 670
------------- ------------
NET LOSS BEFORE INCOME TAXES (97,256) (5,253)
INCOME TAX PROVISION - -
------------- ------------
NET LOSS (Euro)(97,256) (Euro)(5,253)
BASIC AND DILUTED LOSS PER ORDINARY SHARE (Euro) (0.77) (Euro) (0.07)
============= ============
WEIGHTED AVERAGE NUMBER OF ORDINARY
SHARES OUTSTANDING 126,820,533 76,258,178
============= ============
</TABLE>
The accompanying notes are an integral part of these unaudited
condensed consolidated financial statements.
2
<PAGE>
COMPLETEL EUROPE N.V. AND SUBSIDIARIES
--------------------------------------
CONSOLIDATED CONDENSED STATEMENT OF SHAREHOLDERS' EQUITY (DEFICIT)
------------------------------------------------------------------
FOR THE THREE MONTHS ENDED MARCH 31, 2000
-----------------------------------------
(Stated in thousands of Euros, except share and per share amounts - see Note 2)
(Unaudited)
<TABLE>
<CAPTION>
Other
Cumulative
Common Shares Additional Comprehensive
--------------------------- Paid-In Deferred Income
Number Amount Capital Compensation (Loss)
----------- ------------ ------------- -------------- ------------
<S> <C> <C> <C> <C> <C>
BALANCE, December 31, 1999 126,133,060 (Euro)12,613 (Euro)120,121 (Euro) (28,087) (Euro)(4,268)
Issuance of ordinary shares
in connection with initial
public offering, net of underwriters'
discount and offering costs 31,280,000 3,128 508,008 - -
Deemed contributions by
Parent related to allocation
of non-cash compensation
charges - - 141,312 (141,312) -
Repurchase of shares allocated
from Parent - - 3,022 - -
Issuance of stock options - - 5,754 (5,754) -
Amortization of deferred
compensation - - - 69,660 -
Cumulative translation
adjustment - - - - 1,842
Net loss - - - - -
----------- ------------ ------------- -------------- ------------
BALANCE, March 31, 2000 157,413,060 (Euro)15,741 (Euro)778,217 (Euro)(105,493) (Euro)(2,426)
=========== ============ ============= ============== ============
Total
Accumulated Comprehensive
Deficit Income (loss) Total
-------------- ------------ -------------
<C> <C> <C>
BALANCE, December 31, 1999 (Euro) (57,308) (Euro)(55,486) (Euro) 43,071
Issuance of ordinary shares
in connection with initial
public offering, net of underwriters'
discount and offering costs - - 511,136
Deemed contributions by
Parent related to allocation
of non-cash compensation
charges - - -
Repurchase of shares allocated
from Parent - - 3,022
Issuance of stock options - - -
Amortization of deferred
compensation - - 69,660
Cumulative translation
adjustment - 1,842 1,842
Net loss (97,256) (97,256) (97,256)
BALANCE, March 31, 2000 (Euro)(154,564) (Euro)(95,414) (Euro)531,475
============== ============= =============
</TABLE>
The accompanying notes are an integral part of this unaudited
condensed consolidated financial statements.
3
<PAGE>
COMPLETEL EUROPE N.V. AND SUBSIDIARIES
--------------------------------------
CONSOLIDATED CONDENSED STATEMENT OF CASH FLOWS
----------------------------------------------
(Stated in thousands of Euros, except unit and per unit amounts - see Note 2)
(Unaudited)
<TABLE>
<CAPTION>
Three Months Ended
March 31, March 31,
2000 1999
------------- -------------
OPERATING ACTIVITIES:
<S> <C> <C>
Net loss (Euro)(97,256) (Euro) (5,253)
Adjustments to reconcile net loss to cash
used by operating activities-
Depreciation and amortization 2,946 123
Non-cash compensation expense 69,660 31
Accretion of senior notes 2,933 1,161
Amortization of deferred financing costs 74 -
Changes in assets and liabilities-
Increase in receivables (2,879) (1,422)
Decrease (increase) in other current assets 2,575 (282)
Increase in other long-term assets (28) (45)
Increase in trade accounts payable 3,097 5,220
Increase (decrease) in accrued liabilities 5,595 (620)
Increase (decrease) in net affiliate
payables/receivables 2,962 (4,460)
------------- -------------
Net cash used by operating activities (10,321) (5,547)
------------- -------------
INVESTING ACTIVITIES:
Expenditures for property and equipment (33,254) (9,776)
Purchase of licenses and other intangibles - (1,819)
Senior discount notes offering proceeds and
investment earnings placed in escrow - (64,676)
------------- -------------
Net cash used by investing activities (33,254) (76,271)
------------- -------------
FINANCING ACTIVITIES:
Proceeds from senior discount notes - 62,858
Proceeds from initial public offering 511,136 -
Proceeds from issuance of common shares
and subsequent capital contributions - 55,720
Deferred financing costs (6,938) (3,269)
------------- -------------
Net cash provided by financing activities 504,198 115,310
------------- -------------
Effect of exchange rates on cash 3,905 (2,072)
------------- -------------
NET INCREASE IN CASH AND CASH EQUIVALENTS 464,528 31,420
CASH AND CASH EQUIVALENTS, beginning of period 57,115 1,531
------------- -------------
CASH AND CASH EQUIVALENTS, end of period (Euro)521,643 (Euro) 32,951
============= =============
</TABLE>
The accompanying notes are an integral part of these unaudited
condensed consolidated financial statements.
4
<PAGE>
COMPLETEL EUROPE N.V. AND SUBSIDIARIES
--------------------------------------
NOTES TO UNAUDITED CONSOLIDATED CONDENSED FINANCIAL STATEMENTS
--------------------------------------------------------------
1. GENERAL:
--------
CompleTel Europe N.V. ("CompleTel Europe") (together with its wholly-owned
subsidiaries, the "Company") seeks to be a leading facilities-based operator of
a technologically advanced, high capacity fiber optic communications
infrastructure and provider of telecommunications and Internet-related services
to business and government end-users, carriers and Internet service providers in
targeted metropolitan areas across Western Europe, with an initial focus on
network deployment in France and Germany. Additionally, the Company intends to
provide Internet access services in France, Germany and the United Kingdom
("UK"). The Company's deployment plan includes building networks in ten
metropolitan markets in France and seven markets in Germany.
The Company is majority owned by CompleTel LLC ("Parent").
The company has been principally engaged in developing its business plans,
applying for and procuring regulatory and government authorizations, raising
capital, hiring management and other key personnel, working on the design,
development and construction of its fiber optic networks and operation support
systems, negotiating equipment and facilities agreements, and negotiating
interconnection agreements and certain right-of-way agreements. As a result of
these activities, the Company has experienced significant operating losses and
negative cash flows from operations. The Company expects to continue to
generate negative cash flows from operations in each market while it emphasizes
development, construction and expansion of its business and until the Company
establishes a sufficient revenue generating customer base in that market. The
Company also expects to experience increasing operating losses and negative cash
flows from operations as it expands its operations and enters new markets, even
if and after it achieves positive cash flow from operations in its initial
markets.
The Company's ultimate success will be affected by the problems, expenses and
delays encountered in connection with the formation of any new business and by
the competitive environment in which the Company intends to operate. The
Company's performance will further be affected by its ability to obtain
licenses, properly assess potential markets, secure financing or raise
additional capital, design networks, acquire right-of-way and building access
rights, implement interconnection with incumbent public telecommunications
operators ("PTOs"), lease adequate trunking capacity from PTOs, purchase and
install switches in additional markets, implement efficient OSS and other back
office systems, develop a sufficient customer base, and attract, retain and
motivate qualified personnel. Delays or failure in receiving required
regulatory approvals or the enactment of new adverse regulations or regulatory
requirements may have a material adverse effect upon the Company. Although
management believes that the Company will be able to successfully mitigate these
risks, there is no assurance that the Company will be able to do so or that the
Company will ever operate profitably.
The actual amount and timing of the Company's future capital requirements may
differ materially from the Company's current estimates, and additional financing
may be required in the event of departures from the Company's business plans and
projections, including those caused by unforeseen delays, cost overruns,
engineering design changes, demand for the Company's services that varies from
that expected by the Company, and adverse regulatory, technological or
competitive developments. The Company may
5
<PAGE>
also require additional capital (or require financing sooner than anticipated)
if it alters the schedule or targets of its roll-out plan in response to
regulatory, technological or competitive developments (including additional
market developments and new opportunities in and outside of its target markets).
The Company intends to evaluate potential joint ventures, strategic alliances,
and acquisition opportunities on an ongoing basis as they arise, and the Company
may require additional financing if it elects to pursue any such opportunities.
The Company also will be required to seek additional financing if it elects to
deploy networks in other Western European markets beyond its target markets.
Sources of additional financing may include commercial bank borrowings, vendor
financing and/or the private or public sale of equity or debt securities.
2. BASIS OF PRESENTATION:
----------------------
The accompanying unaudited consolidated condensed financial statements have been
prepared by the Company in accordance with accounting principles generally
accepted in the United States ("US GAAP") for interim financial information and
are in the form prescribed by the Securities and Exchange Commission.
Accordingly, they do not include all of the information and footnotes required
by US GAAP for complete financial statements. The interim unaudited financial
statements should be read in conjunction with the audited financial statements
of the Company as of and for the year ended December 31, 1999. In the opinion of
management, all adjustments (consisting only of normal recurring adjustments)
considered necessary for a fair presentation have been included. Operating
results for the three month period ended March 31, 2000 are not necessarily
indicative of the results that may be expected for the year ended December 31,
2000.
The preparation of financial statements in conformity with US GAAP requires
management to make estimates and assumptions that affect the reported amounts of
assets and liabilities and disclosure of contingent assets and liabilities at
the date of the financial statements and the reported amounts of expenses during
the reporting period. Actual results could differ from those estimates. The
Company has adopted a calendar fiscal year. Certain prior year amounts have been
reclassified to conform with the current year presentation.
Functional Currency
Prior to January 1, 2000, the functional currency for CompleTel Europe was the
U.S. dollar and the functional currency for each of CompleTel Europe's
subsidiaries was the applicable local currency. Effective January 1, 2000,
CompleTel Europe and each of its subsidiaries except those in the U.K. adopted
the euro as their functional currency. Additionally, the Company has elected the
euro as its financial reporting currency. As a result, the Company has restated
prior period amounts by translating prior period U.S. dollar amounts into the
euro. The Company's results of operations (accumulated deficit) for periods
prior to January 1, 1999 introduction date for the euro have been restated using
the January 1, 1999 exchange rate between the U.S. dollar and the euro.
3. INITIAL PUBLIC OFFERING:
------------------------
On March 30, 2000, the Company completed its initial public offering ("IPO") of
common stock. In that offering, the Company issued 31,280,000 shares of its
common stock in exchange for gross proceeds of approximately (Euro)547.4
million. The Company will use the proceeds to (i) further develop fiber optic
networks in its target markets in France and Germany, (ii) fund the expansion of
its Internet-related services, (iii) develop complimentary local access systems,
(iv) fund net operating losses and (v) for general corporate purposes.
We have applied for an exemption from regulations required by the Investment
Company Act of 1940. As a result of the regulation, to remain in compliance with
the investment requirements we have invested approximately (Euro)434.8 million
of our initial public offering proceeds in short-term maturities of U.S.
treasury bills. As a result of this requirement, we have entered into forward
currency contracts for the amount of these investments to minimize our currency
exposure.
Compensation Charges
The Company's IPO caused certain common units of Parent held by employees of the
Company and Parent to vest as a result of meeting specified performance vesting
criteria. As a result, the Company recorded compensation expense of
approximately (Euro)42.4 million based on the value of those vested common units
as implied by the IPO price received. In addition, based upon the IPO value of
the Company as indicated above, the Company recorded additional compensation
expense and deferred compensation of approximately (Euro)24.0 million and
(Euro)74.9 million, respectively, for performance vesting units that did not
vest as a result of the IPO but which may vest upon a qualified sale by Madison
Dearborn Partners ("MDP") (investor in Parent) or in May 2005 based on a deemed
vesting date as defined. The additional deferred compensation will be amortized
to expense over the remaining vesting period to May 18, 2005 (deemed vesting
date if not prior due to a qualified sale by MDP as defined in the executive
securities agreements). The recorded amount of compensation expense and deferred
6
<PAGE>
compensation for these awards will be adjusted at each reporting date to reflect
management's estimate of the number of such units that will ultimately vest and
the fair market value of those units as of the end of each reporting period
based on the then current market value of the Company's ordinary shares. For
each (euro)1 increase in the market value per ordinary share, additional
compensation expense and deferred compensation of approximately (euro)7.5
million will be recorded with respect to non-vested performance vesting units.
The compensation charges described above are included in non-cash compensation
charges in the accompanying statement of operations for the three months ended
March 31, 2000. Also included in non-cash compensation charges is (Euro)3.3
million resulting from the recognition of deferred compensation on stock options
granted to employees and other common units of Parent held by employees subject
only to time vesting.
Employee Loans
In January 2000 iPcenta Limited, a wholly-owned indirect subsidiary of the
Company loaned a Managing Director of CompleTel Europe the principal amount of
$206,500 to purchase common units of CompleTel LLC. The principal amount,
together with accumulated interest at the rate of 7% compounded semi-annually,
is due and payable on the earlier of January 15, 2003, or 30 days after a
termination for cause, or 90 days after any other termination of employment. The
common units are subject to vesting and forfeiture provisions and will, if
vested, entitle the Managing Director to receive a pro rata number of CompleTel
Europe shares when and if Parent is liquidated. iPcenta has agreed to forgive a
pro rata portion of the principal and interest on the note as the common units
vest or upon any forfeiture. The Company is recognizing compensation expense
equal to the $206,500 loan amount which will be forgiven over the related
vesting period of the common units.
A limited number of the Company's employees have obtained interest bearing loans
in an approximate aggregate principal amount of (Euro)2,000,000 from a
commercial bank to purchase the Company's shares. These include two loans to
Managing Directors of CompleTel Europe, in the principal amounts of
(Euro)567,000 and (Euro)309,000, respectively. The loans are for a term of 18
months and are secured by a pledge of the shares purchased by such individuals.
In addition, CompleTel Europe has agreed to guarantee the employee and officer
loans in the approximate total amount of (Euro)2 million and has agreed to
assume the interest cost payments on the loans.
4. PROPERTY AND EQUIPMENT:
-----------------------
Property and equipment includes network equipment, office furniture and
equipment, computer equipment and software, leasehold improvements and
construction in progress. These assets are stated at cost and are depreciated
when ready for their intended use. Property and equipment at March 31, 2000 and
December 31, 1999, consisted of the following (in thousands):
<TABLE>
<CAPTION>
March 31, December 31,
2000 1999
-------------- ------------
<S> <C> <C> <C>
Network equipment (Euro) 61,743 (Euro)42,343
Office furniture and equipment 2,182 1,384
Computer equipment and software 6,334 5,095
Leasehold improvements 3,558 1,847
Buildings 216 205
-------------- ------------
Property and equipment, in service 74,033 50,874
Less: accumulated depreciation (7,013) (4,144)
-------------- ------------
Property and equipment, in service, net 67,020 46,730
Network construction in progress 56,851 45,216
-------------- ------------
Property and equipment, net (Euro)123,871 (Euro)91,946
============== ============
</TABLE>
7
<PAGE>
5. LONG-TERM DEBT:
---------------
Senior Discount Notes
In February 1999, the Company completed an Offering of 147,500 units (the
"Units") consisting of $147.5 million aggregate principal amount at maturity of
14% Senior Discount Notes due 2009 (the "Notes") issued by CompleTel Europe and
1,475,000 non-voting Class B Membership Interests of CompleTel Holdings.
CompleTel Europe issued the Notes at a substantial discount from their principal
amount at maturity. The proceeds of the Offering, net of offering fees and
costs, were approximately $72.6 million ((Euro) 74.1 million) and were held in
an escrow account until CompleTel Europe received a minimum commitment of $90
million in senior credit facilities. To comply with Netherlands laws, the Notes
are guaranteed by Parent on a senior unsecured basis. As Parent is a holding
company with no operations other than the operations to be conducted by
CompleTel Europe and its subsidiaries, it is unlikely that Parent will have
sufficient funds to satisfy CompleTel Europe's obligations on the Notes if
CompleTel Europe is unable to satisfy its own obligation on the Notes. Of the
$75 million ((Euro) 76.6 million) gross proceeds from the Offering,
approximately $70.5 million ((Euro) 72.0 million) was attributed to the Notes
and approximately $4.5 million ((Euro) 4.6 million) was attributed to the
1,475,000 Class B Membership Interests of CompleTel Holdings.
Cash interest will not accrue on the Notes prior to February 15, 2004, with the
Notes accreting to their stated principal amount at maturity at an effective
interest rate of 15.1%. The accretion will be charged to interest expense.
Commencing February 15, 2004, interest on the Notes will accrue at 14% per annum
and will be payable in cash on August 15 and February 15 of each year. The
Notes mature February 16, 2009.
Credit Agreement
- ----------------
In January 2000, the Company executed an agreement for a (Euro)265 million
senior secured credit facility with Goldman Sachs International and Paribas as
co-arrangers of the facility. The funds will be available to the Company's
subsidiaries, initially to include CompleTel ECC, CompleTel Services S.A.S.,
CompleTel France and CompleTel Germany, in two tranches including a euro term
facility available until December 31, 2000, in the aggregate amount of (Euro)105
million and a euro revolving loan facility available until December 31, 2002, in
the aggregate amount of (Euro)160 million. The (Euro)160 million tranche will
become available after May 31, 2000, if the euro term facility is fully drawn,
and other conditions are satisfied. Following December 31, 2002, up to (Euro)141
million of the outstanding advances under the euro revolving loan facility will
first be converted into a term loan, and any other outstanding advances will
become part of a (Euro)19 million working capital facility. The facility matures
on December 31, 2006.
This agreement terminates, supersedes and replaces, without penalty, an original
commitment from Paribas for $90 million in senior credit. Additionally, a
commitment with Nortel Networks for $20 million in vendor financing has been
terminated. No termination fees are payable to Nortel Networks or Paribas.
The notes are structurally subordinated to any debt incurred under the senior
secured credit facility. Additionally, the terms of the agreement require that
the senior secured credit facility be guaranteed to the extent allowed by law by
CompleTel Europe and each of its subsidiaries. The terms of the agreement
further require that the senior secured credit facility be secured by a
perfected security interest in all of the Company's present and future material
assets and revenue and those of its subsidiaries and by a pledge of the stock of
each of the borrowers.
8
<PAGE>
The funds are to be used substantially to deploy our networks in France and
Germany. Advances under the facility cannot exceed certain limits that increase
with time, and are subject to other conditions, including that the subsidiaries
must be operational in designated cities in France and Germany, and satisfy a
debt to capital test. In addition, the facility includes various financial and
other covenants and restrictions that limit our ability to pay dividends,
dispose of assets, and effect merger and consolidation transactions. The
facility also limits the use of proceeds of an initial public offering, other
equity investments, or a high yield debt issue as it provides that any such
proceeds be held as cash equivalent investments or used to develop our
telecommunications businesses in France and Germany.
The rate of interest will be variable based on EURIBOR, plus a margin of up to
3.75% per annum for the term loan facility or 3.00% per annum for the revolving
loan facility that will be determined based on a senior debt leverage ratio
test, and costs. Upon an event of default, advances may accelerate and become
immediately due and payable and the undrawn portion of the facilities will be
cancelled and the commitments of the banks reduced to zero. The facility is
secured by our assets and the assets of our subsidiaries and the stock in
certain of our subsidiaries, and we and several of our subsidiaries have agreed
to guarantee the payments under the facility and to indemnify the banks against
certain losses.
See note 7 for a discussion regarding structural modifications to the Company's
credit agreement which are required as a result of the Company's April 2000
senior notes offering (Note7).
Long-term debt consists of the following:
<TABLE>
<CAPTION>
March 31, December 31,
2000 1999
------------ ------------
<S> <C> <C>
14% Senior Discount Notes, face amount
$147.5 million, due 2009, effective interest rate
of 15.1%, at accreted value (Euro)86,143 (Euro)79,596
(Euro)265 million senior secured credit facility - -
------------ ------------
Total (Euro)86,143 (Euro)79,596
============ ============
</TABLE>
6. SEGMENT REPORTING:
------------------
SFAS 131, "Disclosures about Segments of an Enterprise and Related Information,"
establishes standards for the way that public business enterprises report
information about operating segments in annual financial statements and requires
that those enterprises report selected information about operating segments in
interim financial reports issued to shareholders. Operating segments are
components of an enterprise about which separate financial information is
available that is evaluated regularly by the chief operating decision maker in
deciding how to allocate resources and in assessing performance.
Through March 31, 2000, the significant portion of the Company's expenditures
were associated with its network deployment in France and Germany. A
significant portion of the Company's revenues through March 31, 2000 have been
generated by an indirect subsidiary of the Company's U.K. subsidiary.
Management currently evaluates the Company's development efforts according to
the geographic location of its markets. Certain financial information
reflecting the Company's development efforts is presented below.
9
<PAGE>
As of and for the three months ended March 31, 2000 (in thousands):
<TABLE>
<CAPTION>
CompleTel
CompleTel CompleTel CompleTel Europe
SAS GmbH UK Ltd. And Other Consolidated
----------- ---------- ---------- ---------- -------------
<S> <C> <C> <C> <C> <C>
Revenues (Euro)1,808 (Euro) 228 (Euro) 936 (Euro) - (Euro) 2,972
Depreciation and amortization 2,039 725 35 147 2,946
Net loss (13,436) (6,515) (313) (76,992) (97,256)
Total assets 112,736 64,889 2,573 505,839 686,037
Expenditures for long-lived
assets 18,616 14,446 165 1,317 34,544
As of and for the three months ended March 31, 1999 (in thousands):
CompleTel
CompleTel CompleTel CompleTel Europe
SAS GmbH UK Ltd. And Other Consolidated
----------- ---------- ---------- ---------- -------------
Revenues (Euro) - (Euro) - (Euro) - (Euro) - (Euro) -
Depreciation and amortization 123 - - - 123
Net income (loss) (3,680) (127) (368) 1,078 (5,253)
Total assets 50,321 47 49 75,130 125,547
Expenditures for long-lived
assets 9,220 25 19 512 9,776
</TABLE>
7. SUBSEQUENT EVENTS:
------------------
Senior Notes Offering
- ---------------------
In April 2000, the Company completed an offering of an aggregate (Euro)200
million 14% senior notes due 2010 (the "Senior Notes"). A portion of the
proceeds were used to repurchase $27.0 million ((Euro 27.6 million) principal
amount at maturity of the existing notes. The Company lent approximately
(Euro)78.0 million of the net proceeds to a wholly-owned subsidiary which used
the funds to invest in a portfolio of securities which is pledged as security
for the Senior Notes. The proceeds of these pledged securities will be used to
made the first six interest payments on the Senior Notes. The remaining proceeds
from the Senior Notes offering will be used to (i) fund the further deployment
of the Company's networks in existing markets and an additional six cities in
France and Germany, (ii) fund the expansion of the Company's Internet-related
services, (iii) develop complementary local access systems, (iv) fund net
operating losses and (v) for general and corporate purposes.
10
<PAGE>
Credit Agreement with Lender
- ----------------------------
In April 2000, the Company entered into an agreement (the "Suspension
Agreement") with the lenders under its credit facility which provides that the
Company will not borrow funds under its credit facility until the credit
facility is amended and that, in turn, during this period, the lenders will
suspend the application of various provisions, including substantially all of
the representations, covenants and events of default in the credit facility.
During such period, certain other provisions of the credit facility will remain
in effect including, without limitation, the obligation to maintain the security
interests of the lenders and to pay, among other things, commitment fees to the
lenders. The Suspension Agreement will be in effect until the earlier of (a) six
months or, if extended by the Company, nine months after the effective date of
the Suspension Agreement, (b) the date the Company cancels its credit facility
or (c) the date an amendment to the credit facility is in effect. In the event
that an amendment to the credit facility cannot be agreed upon by six months,
or, if extended by the Company, nine months, after the effective date of the
Suspension Agreement, the Suspension Agreement and credit facility will
terminate. After giving effect to this offering, without this suspension of the
covenants, the Company would not be able to borrow under its credit facility
without obtaining a waiver from the lenders. The Company intends to negotiate an
amendment to the credit facility prior to the expiration of the Suspension
Agreement which will include modifications to the covenants and permit the
Company to borrow under such amended credit facility.
11
<PAGE>
ITEM 2. Management's Discussion and Analysis of Financial Condition and
Results of Operations
Introduction
We are a rapidly growing CLEC operating in France and Germany. We offer
traditional fixed wireline retail business telecommunications services to our
directly connected on-net customers and sell wholesale services to other
carriers. We also have established an Internet division to offer a full range
of Internet-related services through Internet data centers we are establishing
in France, Germany and the United Kingdom.
We have adopted the euro as our functional and reporting currency effective
January 1, 2000, as the principal economic environment in which we raise
capital, earn revenue and incur expenses has become significantly tied to euro
currency environments, such as France and Germany.
Significant Milestones
. Between May 1998 and January 1999, Madison Dearborn Partners, Inc. and LPL
Investment Group Inc., our founders, other directors and other individual
investors, contributed a total of $65.8 million to CompleTel LLC for our
initial financing.
. In December 1998, we were awarded licenses to operate telecommunications
facilities and provide services in selected regions in France.
. In February 1999, we closed a units offering in which we issued senior
discount notes and CompleTel Holdings LLC issued Class B interests
representing a 7% ownership interest in our then outstanding share capital.
Net proceeds to us totaled $72.6 million.
. In March 1999, we were awarded licenses to operate telecommunications
facilities and provide services in selected regions in Germany.
. In March 1999, we acquired all of the outstanding capital stock of Acces et
Solutions Internet S.A.R.L., a Lyon-based Internet service provider for $2.1
million in cash.
. In April 1999, we received a $90 million credit facility commitment from
Paribas and Nortel Networks.
. In June 1999, we launched commercial services in France and obtained an
experimental authorization for point-to-multipoint in Marseille.
. In June 1999, we acquired all of the outstanding capital stock of Web
International Networks Limited (now iPcenta), a London-based Internet service
provider for approximately $365,000 in cash plus approximately $240,000 in
contingent earnout payments.
. In July 1999, we received an extension of the markets for our German
licenses.
12
<PAGE>
. In October 1999, we received a commitment from Goldman Sachs International
and Paribas, as co-arrangers for syndicated bank financing in the form of a
(Euro)265 million senior secured credit facility. The commitment
terminated, superseded and replaced, without penalty, our commitment from
Paribas and Nortel Networks.
. In November 1999, we launched commercial operations in Germany.
. In the fourth quarter of 1999, CompleTel LLC received additional equity
contributions from its initial private equity investors, directors and
management, and from a new private equity investor, Meritage Investment
Partners, totaling $42.1 million, which CompleTel LLC immediately
contributed to us and our operating subsidiaries.
. In January 2000, we executed the (Euro)265 million senior secured credit
facility. To date, we have made no draws under this facility.
. In March 2000, we completed our initial public offering of 31,280,000 of
our ordinary shares for total gross proceeds of euro 547.4 million.
. In April 2000, we completed a (Euro)200 million senior notes offering.
Results of Operations
We have generated operating losses and negative cash flow from our operating
activities to date. As a result of our operating history, prospective investors
have limited operating and financial data about us upon which to base an
evaluation of our performance.
Revenues
We generated our first revenues in the quarter ended June 30, 1999. For the
quarter ended March 31, 2000, revenues totaled (Euro)3.0 million. Since January
1998, we have developed and refined our business plans, procured regulatory and
governmental authorizations for our 17 markets, raised capital, hired management
and other key personnel, designed, developed and begun installing our fiber
optic metropolitan area networks and operation support systems, obtained senior
financing commitments and negotiated equipment and facilities agreements.
Operating Expenses
- ------------------
Our primary operating expenses consist of network costs, selling, general and
administrative expenses, including start-up costs, management fees to affiliate,
and depreciation and amortization expenses.
Network Costs
Network costs for the quarter ended March 31, 2000 totaled (Euro)3.0 million,
compared to (Euro)0.1 million for the comparable period in 1999. We expect these
costs will increase as we expand our networks and services. Our network costs
include costs such as interconnection costs, the cost of leasing high capacity
digital lines that interconnect our network with the networks of other
providers, the cost of leasing local loop lines that connect our customers to
our network, and switch site rent, operating and maintenance costs. We also
lease dark fiber and conduit to establish and augment our networks in certain
markets.
For the quarter ended March 31, 2000, our direct operating margin, which
includes network costs directly associated with our revenues, such as
interconnect costs, totaled (Euro)1.6 million, or 54 percent. For the same time
period our gross margin, which includes all network costs, was approximately
break-even.
13
<PAGE>
Selling, General and Administrative Expenses
Our selling, general and administrative expenses include selling and marketing
costs, customer care, billing, corporate administration, salaries and other
personnel costs and legal fees. For the quarter ended March 31, 2000, selling,
general and administrative expenses totaled (Euro)13.1 million compared to
(Euro)3.5 million for the comparable period in 1999. This increase was primarily
due to the rapid growth of personnel costs since commencement of operations.
We are assembling a large, locally based, direct sales force in our local and
regional markets and a national account team to service multiple location
customers and key account executives. We are supplementing our direct sales
force with commissioned indirect sales agents. To attract and retain a highly
qualified sales force, we offer our sales and customer-care personnel a highly
competitive compensation package. The number of employees increased from 109 as
of March 31, 1999 to 465 as of March 31, 2000. On March 31, 2000, we had a sales
force of 118 (including managers and administrators), compared to 18 on March
31, 1999. We expect the number of sales and marketing personnel to continue to
grow and our selling, general and administrative costs to increase as we develop
and expand our operations.
We incurred amortization of stock-based compensation expense of approximately
(Euro)1.6 million under our stock option plan for the three months ended March
31, 2000. This amount is based on deferred compensation totaling approximately
(Euro)31.9 million.
We incurred additional stock-based compensation expense of approximately
(Euro)42.4 million upon completion of our IPO due to the resulting vesting of
certain CompleTel LLC performance vesting units held by certain of our employees
in connection with a qualified public offering. This compensation expense is
based on an assumed IPO price of (Euro)17.50 per share. In addition, based upon
our value as indicated in the IPO, we recorded compensation expense and deferred
compensation of approximately (Euro)24.0 million and (Euro)74.9 million,
respectively, for performance vesting units that will not vest as a result of
the IPO but which may vest upon a qualified sale by Madison Dearborn Partners or
in May 2005 based on a deemed vesting date. The additional deferred compensation
is being amortized to expense over the remaining vesting period to May 18, 2005
(deemed vesting date if not prior due to a qualified sale by Madison Dearborn
Partners). The recorded amount of compensation expense and deferred compensation
for these awards will be adjusted at each reporting date to reflect management's
estimate of the number of such units that will ultimately vest and the fair
market value of those units as of the end of the reporting period based on the
then current market value of ordinary shares. For each (Euro)1 increase in the
market value per ordinary share, additional compensation expense and deferred
compensation totalling approximately (Euro)7.5 million will be recorded with
respect to non-vested performance vesting units.
Management Fees to Affiliate
CompleTel LLC operating subsidiaries, CompleTel Europe, and each of the entities
between CompleTel Europe and our operating subsidiaries, incur overhead costs
and expenses associated with their holding company operations. Our operating
subsidiaries bear their proportionate share of these costs and expenses. The
operating subsidiaries pay CableTel Management, Inc. a management fee of 105%
(103% for periods prior to the end of January 1999) of all allocated costs,
expenses, charges and disbursements that CableTel Management, Inc. and CompleTel
Europe incur in rendering services to each of the companies. For the quarter
ended March 31, 2000, we recorded (Euro)2.1 million of related-party management
fees compared to (Euro)0.9 for the same period of 1999.
14
<PAGE>
Depreciation and Amortization
For the quarter ended March 31, 2000, we recorded depreciation and amortization
expense of (Euro) 2.9 million, compared to (Euro) 0.1 for the similar period in
1999. This increase is due to increases in network and non-network related
property and equipment. We started recording network depreciation during the
quarter ended June 30, 1999 when we initiated network services.
Other Income and Expense
We incurred interest expense, net of (Euro) 1.3 million of capitalized interest,
of (Euro) 1.9 million during the quarter ended March 31, 2000. Interest expense
for the quarter ended March 31, 1999 totaled (Euro) 1.2 million. The interest
expense recorded reflects the accretion of the notes and the amortization of
deferred financing costs. We capitalize a portion of our interest costs as part
of the construction cost of our networks, in accordance with Statement of
Financial Accounting Standards No. 34 "Capitalization of Interest Costs" ("SFAS
34" ). Interest income totaled (Euro) 0.4 million for the quarter ended March
31, 2000, compared to (Euro) 0.5 for the similar period in 1999. We have applied
for an exemption from regulations required by the Investment Company Act of
1940. As a result of the regulation, to remain in compliance with the investment
requirements we have invested approximately (Euro) 434.8 million of our initial
public offering proceeds in short-term maturities of U.S. treasury bills. As a
result of this requirement, we have entered into forward currency contracts for
the amount of these investments to minimize our currency exposure.
Foreign Exchange Rates
We are not significantly exposed to changes in currency exchange rates because
our revenues, costs, assets and liabilities are, for the most part, denominated
in euros. However, the notes which we issued in February 1999 expose us to
exchange rate fluctuations as the payment of principal and interest on the notes
will be made in U.S. dollars, and a substantial portion of our future cash flow
used to service these payments will be denominated in local currencies,
including the euro. While we intend to take steps to minimize exchange rate
risks, we cannot assure you that we will not be materially adversely affected by
variations in currency exchange rates.
As a result of exchange rate fluctuations between the date of pricing of the
initial public offering and the date of closing of the initial public offering,
when we purchased U.S. treasury bills to remain in compliance with the
Investment Company Act, we incurred an unrealized foreign exchange loss.
We adopted the euro as our functional and reporting currency effective
January 1, 2000.
Net Loss
Our net loss during the quarters ended March 31, 2000 and 1999 was (Euro) 97.3
million and (Euro) 5.3 million, respectively. The increase was primarily the
result of non-cash compensation charges and substantial start-up costs of the
operating subsidiaries, primarily our French subsidiary.
Adjusted EBITDA
Since the commencement of our operations, we have experienced significant
operating losses and negative Adjusted EBITDA, as set forth below. We expect to
continue to generate significant operating losses and negative Adjusted EBITDA
in each of our markets as we develop, construct and expand our business, until
we have established a sufficient revenue-generating customer base in each
market.
15
<PAGE>
We expect to experience increasing consolidated operating losses and negative
cash flows from operations as we expand our operations and enter new markets,
even if and after we have achieved positive cash flow from operations in our
initial markets. The following table summarizes our Adjusted EBITDA calculation
for the periods indicated (amounts in thousands of euros).
<TABLE>
<CAPTION>
Three Months Ended
-------------------------------
March 31, March 31,
2000 1999
-------------- -------------
<S> <C> <C>
Net Loss (Euro) (97,256) (Euro) (5,253)
Interest expense (net of interest income
and capitalized interest) 1,424 (670)
Income taxes - -
Depreciation and amoritization 2,946 123
Non-cash compensation expense 69,660 31
Foreign exchange loss and other expense 7,943 -
-------------- -------------
Negative Adjusted EBITDA (Euro) (15,283) (Euro) (4,429)
============== =============
</TABLE>
In view of our highly leveraged capital structure, we consider Adjusted EBITDA
to be an important performance measure. Adjusted EBITDA consists of net
earnings (loss) before interest expense, interest income, income taxes, non-cash
compensation expense, depreciation and amortization and other non-cash charges,
including foreign currency exchange rate gains and losses. Conceptually,
Adjusted EBITDA measures the amount of income generated each period that could
be used to service debt, because it is independent of the actual leverage
employed by the business; but Adjusted EBITDA ignores funds needed for capital
expenditures, income taxes and expansion. Some investment analysts track the
relationship of Adjusted EBITDA to total debt as one measure of financial
strength. However, Adjusted EBITDA does not represent cash provided or used by
operating activities and you should not consider Adjusted EBITDA in isolation or
as a substitute for measures of performance prepared in accordance with U.S.
generally accepted accounting principles.
You also should be aware that Adjusted EBITDA may differ significantly from cash
flows from operating activities as reflected in a statement of cash flows
prepared in accordance with U.S. generally accepted accounting principles. Cash
from operating activities is net of interest and taxes paid and is a more
comprehensive determination of periodic income on a cash, rather than accrual,
basis and is exclusive of non-cash items of income and expenses such as
depreciation and amortization. In contrast, Adjusted EBITDA is derived from
accrual basis income and is not adjusted for changes in working capital.
Consequently, Adjusted EBITDA is not affected by the timing of receivable
collections or when accrued expenses are paid. We are not aware of any uniform
standards for determining Adjusted EBITDA. Presentations of Adjusted EBITDA may
not be calculated consistently by different companies in the same or similar
businesses. As a result, our reported Adjusted EBITDA may not be comparable to
similarly titled measures used by other companies.
16
<PAGE>
Statements of Cash Flows
- ------------------------
We had cash and cash equivalents of (Euro) 521.6 million as of March 31, 2000,
an increase of (Euro) 464.5 million from (Euro) 57.1 million as of December 31,
1999. Details of the change in cash and cash equivalents are set forth in the
table below.
<TABLE>
<CAPTION>
Three Months Ended
-------------------------------------
March 31, March 31,
2000 1999
------------- -------------
<S> <C> <C>
Cash flows from operating activities (Euro)(10,321) (Euro) (5,547)
Cash flows from investing activities (33,254) (76,271)
Cash flows from financing activities 504,198 115,310
Effect of exchange rates on cash 3,905 (2,072)
------------- -------------
Net increase in cash and cash equivalents 464,528 31,420
Cash and cash equivalents at beginning of period 57,115 1,531
------------- -------------
Cash and cash equivalents at end of period (Euro) 521,643 (Euro) 32,951
============= =============
</TABLE>
Cash Flows from Operating Activities
During the quarter ended March 31, 2000, we used (Euro)10.3 million in operating
activities, a (Euro)4.8 million decrease from the (Euro)5.5 million used in
operating activities for the similar period in 1999. This decrease was primarily
related to the substantial organization and start-up costs incurred during the
development of our networks. Our development efforts increased significantly
since the first quarter of 1999.
Cash Flows from Investing Activities
We used approximately (Euro) 33.3 million of cash in investing activities during
the quarter ended March 31, 2000, compared to a use of (Euro) 76.3 million for
the similar period in 1999. The increase was primarily due to investment of our
initial public offering proceeds during the first quarter of 2000.
Cash Flows from Financing Activities
We had approximately (Euro) 504.2 million of cash flows from financing
activities during the quarter ended March 31, 2000, compared to (Euro) 115.3
million for the similar period in 1999. The increase was due to the proceeds
from our initial public offering. Cash flows from financing activities during
the first quarter of 1999 resulted from proceeds from our senior discount note
offering and equity contributions from our parent.
Liquidity and Capital Resources
The telecommunications business is capital intensive. Since January 1998, and
for the foreseeable future, we have needed and will continue to need large
amounts of capital to fund capital expenditures, working capital, debt service,
and operating losses. As of March 31, 2000, we had (Euro) 521.6 million of cash
and short-term investments and net working capital of (Euro) 476.5 million.
17
<PAGE>
In January 2000, we executed an agreement for a (Euro) 265 million senior
secured credit facility with Goldman Sachs International and Paribas as co-
arrangers of the facility. As of March 31, 2000, we had no borrowings
outstanding under the facility. In April 2000, we entered into an agreement with
the co-arrangers and other parties whereby we agreed not to borrow funds under
the credit facility in exchange for their agreement to suspend the application
of substantially all of the representations, covenants and events of default.
18
<PAGE>
In April 2000, we completed an offering of an aggregate (Euro) 200 million 14%
senior notes due 2010 (the "Senior Notes"). A portion of the proceeds were used
to repurchase $27.0 million ((Euro) 27.6 million) principal amount at maturity
of the existing notes. We lent approximately (Euro) 78.0 million of the net
proceeds to a wholly-owned subsidiary which used the funds to invest in a
portfolio of securities which is pledged as security for the Senior Notes. The
proceeds of these pledged securities will be used to made the first six interest
payments on the Senior Notes. The remaining proceeds from the Senior Notes
offering will be used to (i) fund the further deployment of our networks in
existing markets and an additional six cities in France and Germany, (ii) fund
the expansion of our Internet-related services, (iii) develop complementary
local access systems, (iv) fund net operating losses and (v) for general and
corporate purposes.
Capital Expenditures
During the quarters ended March 31, 2000 and 1999, we made capital expenditures
of (Euro) 34.5 million and (Euro) 9.8 million, respectively, for property and
equipment necessary to deploy networks in our initial markets. We also used
capital during these periods to fund our operating losses.
Based on our current plan, we believe we will satisfy our aggregate capital
requirements to fund the deployment of our business plan through December 31,
2001, with the remaining funds we have already raised, the proceeds from our
initial public offering and the proceeds from our senior note offering.
19
<PAGE>
Euro Conversion
Effective January 1, 1999, the euro became the single legal currency of the
eleven participating European Union member states, including The Netherlands,
France and Germany and the conversion rates of the currencies of the
participating member states were irrevocably fixed against the euro as of that
date. Effective January 1, 1999, the French franc, the German mark and the
Netherlands guilder ceased to be the legal currency. From January 1, 1999 until
December 21, 2001, the French franc, the German mark and the Netherlands guilder
will be denominations of the euro and, as such, will be legal tender. The status
of the French franc, the German mark and the Netherlands guilder as
denominations of the euro will continue until, at the latest, June 30, 2002. On
that date (or, if these countries so determine, on some earlier date after
January 1, 2002), French francs, German marks and Netherlands guilders will be
withdrawn from circulation and will cease to be legal tender. Euro notes and
coins are not expected to be issued before January 1, 2002. Prior to that date,
cash payments will continue to be made in the local currencies. From January 1,
2002 until the local currencies are withdrawn and cease to be legal tender, cash
payments may be made by means of euro notes and coins or by way of French
francs, German marks and Netherlands guilders as appropriate.
We are not burdened with systems that must be redesigned to accommodate the
introduction of the euro as we have purchased and specified our business support
systems, including our billing systems, to accommodate euro transactions and
dual currency operations during the transition period. In addition, we intend
to require all vendors supplying third party software to us to warrant to us
that their programs support dual currency operations.
We will be dependent on banks, customers and other providers to complete
business transactions and we will be exposed to problems inherent in these
third-party systems. During the transition period, to the extent we are
supplying local and national service, we may continue billings and collections
in the legacy currency to avoid euro conversion problems. However, to the
extent we have international transactions, we will be exposed to euro-related
risks.
The establishment of the European Monetary Union may have a significant effect
on the economies of the participant countries. While we believe that the
introduction of the euro will eliminate exchange rate risks in respect of the
currencies of those member states that have adopted the euro, which includes
Germany and France, there can be no assurance as to the relative strength of the
euro against other currencies.
20
<PAGE>
Regulation and Licensing Matters
- --------------------------------
France, Germany and the United Kingdom, and any new markets across Europe in
which we intend to operate, subject the telecommunications industry to a
significant degree of regulation. We need telecommunications licenses and other
equivalent authorizations to operate in each of these countries. Our ability to
deploy metropolitan area networks and provide Internet-related services in the
additional six cities included in our business plan depends on our ability to
obtain additional licenses and other authorizations or permissions. There can be
no assurance that we will be able to obtain the required licenses and, if we are
unsuccessful, we will heed to revise our network deployment strategy.
We must keep our licenses in our existing markets in force or we may be in
default under our senior discount notes and senior note indentures and our
credit facility, and we risk sanctions from the government authorities that
grant our licenses. In most cases, these licenses and other authorizations are
of fixed duration, and we must comply with regulations and technical
requirements in order to maintain them. For example, in France, we must comply
with French and European Union regulations and technical standards regarding
interconnection, secrecy, neutrality, non-discrimination, security,
environmental protection, limitations on ownership, and public service.
We cannot assure you that we will be successful in obtaining, maintaining, or
renewing licenses and other authorizations required for the services we provide
or plan to provide. In addition, we cannot assure you that the required
licenses and other authorizations will be issued or renewed on commercially
viable terms.
New Accounting Standards
- ------------------------
Statement of Financial Accounting Standards No. 133, "Accounting for Derivative
Instruments and Hedging Activities" ("SFAS 133") establishes accounting and
reporting standards for derivative instruments, including certain instruments
embedded in other contracts, and for hedging activities. SFAS 133 requires that
an entity recognize all derivatives as either assets or liabilities and measure
those instruments at fair value. It also specifies the accounting for changes
in the fair value of a derivative instrument depending on the intended use of
the instrument and whether (and how) it is designated as a hedge. SFAS 133 was
effective for all fiscal quarters of fiscal years beginning after June 15, 1999.
During 1999, the Financial Accounting Standards Board issued Statement of
Financial Accounting Standards No. 137, "Accounting for Derivative Instruments
and Hedging Activities--Deferral of the Effective Date of SFAS 133" (SFAS 137)
which delayed the effective date of SFAS 133 until all fiscal quarters of fiscal
years beginning after June 15, 2000. As of March 31, 2000, the Company was not
entered into any transactions involving derivative financial instruments and,
therefore, cannot predict the financial statement impact of adopting SFAS 133
with respect to transactions which have not yet been entered into.
In December 1999, the staff of the Securities and Exchange Commission issued
Staff Accounting Bulletin No. 101 ("SAB 101") "Views on Selected Revenue
Recognition Issues" which provides the staff's views in applying generally
accepted accounting principles to selected revenue recognition issues. The
Company has evaluated SAB 101 and it believes that there is no effect on the
revenue recognition policies currently in place.
21
<PAGE>
Item 3. Quantitative and Qualitative Disclosures about Market Risk
Investment Portfolio and Interest Rate Sensitivity
Our investment policy is limited by the indenture for the senior discount notes
and our senior secured credit facility. We are restricted to investing in
financial instruments with a maturity of one year or less (with certain limited
exceptions). The indenture requires investments that meet high credit quality
standards, such as obligations of the U.S. government securities or any European
Economic Community member government or any agency thereof guaranteed by the
country, certificates of deposits, money market deposits, and commercial paper
with a rating of A-1 or P-1. When and it we terminate the suspension of our
credit facility, we would be required to enter into an interest rate hedging
program with respect to 50% of every tranche of (EURO) 50 million borrowed to
mitigate foreign currency exchange rate risk.
Interest income earned on our investment portfolio is affected by changes in
short-term interest rates. We are thus exposed to market risk related to
changes in market interest rates. To date, we have managed these risks by
monitoring market rates and the duration of our investments.
Impact of Foreign Currency Rate Changes
Our operations are not significantly exposed to changes in currency exchange
rates because our revenues, costs, assets and liabilities are, for the most
part, denominated in euros. However, the senior discount notes which we issued
in February 1999 expose us to exchange rate fluctuations as the payment of
principal and interest on the notes will be made in dollars, and a substantial
portion of our future cash flows used to service these payments will be
denominated in euros. In addition, because of the issues surrounding our desire
to not be considered an investment company under the Investment Company Act of
1940, we must invest a substantial portion of our available cash in U.S.
government treasury bills with various short-term maturities. Accordingly, we
have executed certain forward currency contracts in order to hedge our risk
against foreign currency fluctuations between the U.S. dollar and the euro.
While we intend to take steps to minimize exchange rate risks, we cannot assure
you that we will not be materially adversely affected by variations in currency
exchange rates.
Our operating subsidiaries' monetary assets and liabilities are subject to
foreign currency exchange risk if purchases of network equipment and services
are denominated in currencies other than the subsidiary's own functional
currency. However, the majority of such purchases to date have been based on
each subsidiary's functional currency.
The spot rates for the euro are shown below expressed in dollar per one euro.
December 31, 1998 $1.181(1)
March 31, 1999 $1.073
December 31, 1999 $1.007
March 31, 2000 $0.961
- ------------------------
(1) Based on the exchange rate as of January 4, 1999, the date on which the Euro
Noon Buying Rate was first quoted.
We intend to manage exchange rate risk by incurring financing liabilities
denominated in the currency of the country of operations. In addition, we intend
to adopt hedging strategies to manage our exposure to foreign currency exchange
rate risk.
22
<PAGE>
PART II. OTHER INFORMATION
Item 1. Legal Proceedings
We are not party to any pending legal proceedings that we believe would,
individually or in the aggregate, have a material adverse effect on our
financial condition or results of operations.
Item 2. Changes in Securities and Use of Proceeds
a) Securities sold:
On February 18, 2000, the Company issued 19,534,725 of its ordinary shares
to CompleTel SPC II for consideration of one Class B Share of CompleTel Holding
I BV, pursuant to Section 4(2) of the Securities Act of 1933, as amended. This
transaction was part of a series of planned transactions resulting from November
and December 1999 capital contributions to our parent, CompleTel LLC and was
accounted for as a reorganization of entities under common control. Accordingly,
the accompanying financial statements retroactively reflect the contribution and
share issuance as if the transaction had occurred in December 1999.
b) Use of proceeds from initial public offering:
Pursuant to our initial public offering of our ordinary shares, we issued
31,280,000 ordinary shares. The shares were registered with the Securities and
Exchange Commission pursuant to a Registration Statement on Form S-1 (No. 333-
78483) which was declared effective on March 27, 1999. The offering commenced on
the effective date and terminated after 31,280,000 ordinary shares were sold
pursuant to the Registration Statement for an aggregate offering price of $534.6
million (Euro 547.4 million). The public offering was underwritten by a
syndicate of underwriters led by Salomon Brothers International Limited, Goldman
Sachs International, Paribas and Merrill Lynch International. After deducting
discounts and commissions of (Euro)30.0 million and expenses of (Euro)6.3
million, we received net proceeds of (Euro)511.1 million.
Through March 31, 2000, the proceeds have been applied as follows (millions of
Euros):
Temporary investment - U.S. Treasury Bills $428.0
Temporary investment - Cash, U.S. $ denominated 2.6
Temporary investment - Cash, euro denominated 80.5
------
511.1
======
Item 3. Defaults upon Senior Securities
None
Item 4. Submission of Matters to a Vote of Security Holders
The following matters were submitted to a vote of security holders
during the quarter ended March 31, 2000:
By written consent dated January 14, 2000, the sole shareholder appointed of
James E. Dovey, Lawrence F. DeGeorge and Paul J. Finnegan as additional managing
directors of the Company.
By written consent dated January 28, 2000, the sole shareholder granted to the
Board of Management the power and authority to resolve to issue shares in the
Company with the right to limit or exclude the pre-emptive right of
shareholders, subject to the approval of the Supervisory Board if one exists.
23
<PAGE>
By written consent dated January 28, 2000, the sole shareholder approved the
appointment of Arthur Andersen LLP to audit the Company's 1998 and 1999
accounts.
By written consent dated February 17, 2000, the sole shareholder approved an
increase in the number of shares reserved for issuance under the Company's Stock
Option Plan to 18,919,955, and to determine that with regard to options granted
to employees resident in France the option price shall be the fair market value
of the Company's shares on the date of grant.
By written consent dated February 18, 2000, the sole shareholder approved the
issuance of 19,534,725 shares in CompleTel Europe NV to CompleTel SPC II in
exchange for CompleTel SPC II's one Class B Share in CompleTel Holding I BV and
waiving any pre-emptive rights.
By unanimous written consent dated February 25, 2000, the shareholders approved
an amendment of the company's articles of association to (i) increase the
nominal value of shares from NLG 0.03 to NLG 1.00 and (ii) convert such nominal
value into Euro 0.50.
By unanimous written consent dated February 25, 2000, the shareholders approved
an amendment of the company's articles of association to increase the authorized
capital of the company to Euro 62,500,000, divided into 625,000,000 ordinary
shares, each with a nominal value of Euro 0.10.
By unanimous written consent dated March 9, 2000, the shareholders approved an
amendment to the Company's Stock Option Plan to give the Management Board the
authority to determine vesting for options granted to residents of the United
States.
By unanimous written consent dated March 16, 2000, the shareholders approved the
execution, delivery and performance of the Amended and Restated Euro 265,000,000
Credit Facility Agreement and all collateral agreements.
By unanimous written consent dated March 16, 2000, the shareholders approved the
amended articles of association of the Company.
At its annual meeting held March 27, 2000, the company's sole shareholder
adopted the company's annual accounts for fiscal years 1998 and 1999.
126,133,060 votes were cast in favor, none against and none withheld.
By written consent dated March 29, 2000, the sole shareholder, subject to the
consummation of the public offering of the Company's ordinary shares: appointed
William H. Pearson, Martin Rushe and Hansjoerg Rieder as managing directors of
the Company; appointed James E. Dovey, James C. Allen, Lawrence F. DeGeorge,
Paul J. Finnegan, Royce J. Holland, James H. Kirby and James N. Perry as
supervisory directors of the Company; to authorize the Board of Management for
an 18-month period to acquire shares of the Company; to extend the period to
March 29, 2005 for which the Board of Management is authorized to grant rights
under the Company's Stock Option Plan; to revoke the authorization of the Board
of Management pursuant to the January 28, 2000 shareholder resolution and to
irrevocably authorize the Board of Management through March 29, 2005 to issue
shares in the capital of the Company and to limit or exclude the pre-emptive
right of shareholders as well as grant the right to subscribe for shares, upon
approval of the Supervisory Board if one exists; and to authorize the
overallotment option described in the registration statement for the public
offering of the Company's ordinary shares.
24
<PAGE>
Item 5 Other Information
None
Item 6(a) Exhibits
<TABLE>
<CAPTION>
<C> <S>
Exhibit No. Description
- ----------- -----------
3.1 Amended Articles of Association of CompleTel Europe N.V.
4.1(1) Indenture dated as of February 16, 1999, among CompleTel Europe N.V as issuer, CompleTel ECC B.V. as guarantor and
U.S. Bank Trust National Association as trustee
4.2 Indenture dated as of April 13, 2000, between CompleTel Europe N.V as issuer and the Chase Manhattan Bank as trustee
10.1(4) (Euro) 265 Million Senior Secured Credit Facility dated January 6, 2000, among Goldman Sachs International and Paribas
Corporation, as co-arrangers, and other banks
10.2(4) Purchase Agreement dated August 4, 1999, between CompleTel GmbH and Siemens AG
10.3(1) Supply Agreement dated January 8, 1999, between CompleTel SAS and Matra Nortel Communications
10.4(1) Arrete dated November 17, 1988 authorizing CompleTel SARL to set up and operate a telecommunications network open to
the public and to supply the public with the telephone service, as published December 13, 1998
10.5(1) License dated January 11, 1999 granted by the Secretary of State for Trade and Industry to CompleTel UK Limited under
Section 7 of the Telecommunications Act 1984
10.6(2) German License Certificate Class 3 for the Operation and Performance of Public Telecommunications German license
certificate Class 3 for the Operation and Performance of Public Telecommunications Services by the Licensee or Others
dated March 8, 1999
10.7(2) German License Certificate Class 4 for the Operations of Voice Telephone Service on the Basis of a Self-Operated
Telecommunications Network dated March 8, 1999
10.8(3) Extension of Class 3 German License
10.9(3) Extension of Class 4 German License
10.11(1) Employment Agreement by and between CableTel Management, Inc. and William H. Pearson, dated as of May 18, 1998
10.12(1) Employment Agreement by and between CableTel Management, Inc. and Richard N. Clevenger, dated as of May 18, 1998
10.13(1) Employment Agreement by and between CableTel Management, Inc. and David Lacey dated as of December 16, 1998
10.14(1) Employment Agreement by and between CableTel Management, Inc. and James E. Dovey dated as of May 18, 1999
10.15(1) Amended and Restated CompleTel LLC Guaranty Agreement, dated as of July 14, 1999 by CompleTel LLC in favor of the
noteholders
10.16(1) Equity Registration Rights Agreement dated as of February 16, 1999 among CompleTel (N.A.) N.V., CompleTel Europe N.V.,
the Shareholders named therein, the initial purchasers and U.S. Bank Trust National Association, as Transfer Agent
10.17(7) First Amendment to CompleTel Europe N.V. 2000 Stock Option Plan
10.18(6) Second Amended and Restated Registration Agreement dated as of November 23, 1999 by and among CompleTel LLC and the
Holders named therein
10.19 First Supplement dated as of March 24, 2000 to Second Amended and Restated Registration Agreement dated as of November
23, 1999 by and among CompleTel LLC and the Holders named therein
</TABLE>
25
<PAGE>
<TABLE>
<CAPTION>
<C> <S>
10.20 Pledge Agreement dated as of April 13, 2000 by CompleTel Europe N.V., CompleTel Escrow B.V. and The Chase Manhattan Bank as
Trustee and The Chase Manhattan Bank as Securities Intermediary
10.21 Exchange and Registration Rights Agreement dated April 13, 2000 among CompleTel Europe N.V. and the Purchasers defined
therein.
10.22 CompleTel Europe N.V. Guaranty Agreement, dated March 30, 2000 by CompleTel Europe N.V.
10.23 Amended and Restated (Euro) 265 Million Senior Secured Credit Facility Agreement dated March 17, 2000 among Members of the
CompleTel Group as Borrowers, Goldman Sachs International and Paribas as Lead Arrangers, Paribas as Facility Agent, Paribas
as Security Agent and Others
10.24 Supplemental Agreement dated April 6, 2000 between CompleTel Europe N.V. as Parent, CompleTel S.A.S. as Obligors' Agent,
Members of the CompleTel Group as Original Borrowers, Members of the CompleTel Group as Original Guarantors, Goldman Sachs
International and Paribas as Lead Arrangers, European Investment Fund as Risk Participant, Paribas as Security Agent,
Paribas as Facility Agent and Others
10.25 Promissory Note dated March 23, 2000 between Martin Rushe as Maker and iPcenta Limited as Payee
10.26 Letter Agreement dated March 23, 2000 between Martin Rushe and iPcenta Limited
21.1(5) Subsidiaries of CompleTel Europe N.V.
27.1 Financial Data Schedule
</TABLE>
___________
(1) Previously filed as an exhibit to the Registrant's Registration Statement
on Form S-4, file number 333-82305, filed with the Securities and Exchange
Commission on July 2, 1999 and incorporated herein by reference.
(2) Previously filed as an exhibit to Amendment No. 1 to the Registrant's
Registration Statement on Form S-4, file number 333-82305, filed with the
Securities and Exchange Commission on August 27, 1999 and incorporated
herein by reference.
(3) Previously filed as an exhibit to Amendment No. 2 to the Registrant's
Registration Statement on Form S-4, file number 333-82305 filed with the
Securities and Exchange Commission on September 14, 1999 and incorporated
herein by reference.
(4) Previously filed as an exhibit to the Post-Effective Amendment No. 1 to the
Registrant's Registration Statement on Form S-4, file number 333-82305,
filed with the Securities and Exchange Commission on January 31, 2000 and
incorporated herein by reference.
(5) Previously filed as an exhibit to the Registrant's Registration Statement
on Form F-1, file number 333-30834, filed with the Securities and Exchange
Commission on February 22, 2000 and incorporated herein by reference.
(6) Previously filed as an exhibit to Amendment No. 1 to the Registrant's
Registration Statement on Form F-1, file number 333-30834, filed with the
Securities and Exchange Commission on March 6, 2000 and incorporated herein
by reference.
(7) Previously filed as an exhibit to Amendment No. 2 to the Registrant's
Registration Statement on Form F-1, file number 333-30834, filed with the
Securities and Exchange Commission on March 22, 2000 and incorporated
herein by reference.
Item 6(b) Reports on Form 8-K
The Company filed the following reports on Form 8-K during the three months
ended March 31, 2000:
26
<PAGE>
On February 22, 2000, attaching a press release reporting the filing with the
Securities and Exchange Commission of a registration statement on Form F-1 for
an initial public offering of its ordinary shares.
27
<PAGE>
SIGNATURE
Pursuant to the requirements of the Securities Exchange Act of 1934, the
Registrant has duly caused this Report to be signed on its behalf by the
undersigned, thereunto duly authorized.
COMPLETEL EUROPE N.V.
(Registrant)
Date: May 15, 2000 /s/ William H. Pearson
---------------------------------------
William H. Pearson
Authorized Signatory
Date: May 15, 2000 /s/ David E. Lacey
---------------------------------------
David E. Lacey
Chief Financial Officer
28
<PAGE>
Exhibit 3.1
-1-
AMENDMENT TO THE
ARTICLES OF ASSOCIATION
On this day, the thirtieth of March
two thousand, appeared before me,
Hajo Bart Hendrik Kraak, civil-law notary in Amsterdam:
Cornelia Holdinga, care of Stibbe Simont Monahan Duhot, 1077 ZZ Amsterdam,
Strawinskylaan 2001, born in Ankeveen on the fifteenth day of May nineteen
hundred and sixty-five.
The appearing person declared:
- - that of the company with limited liability: CompleTel Europe N.V., with
official seat in Amsterdam, having its office at 1083 HK Amsterdam,
Drentestraat 24 and filed with the Trade Register under number 34108119, the
articles of association were last amended by deed executed on the first day
of March two thousand, before a legal substitute of P.J. Dortmond, civil law
notary in Amsterdam, in respect of which amendment the Minister of Justice on
the first day of March two thousand under number N.V. 1.055.197 has advised
that no objections have been apparent;
- - that the sole shareholder of the company resolved to amend the articles of
association of the company integrally.
- - that furthermore a decision was made to authorize the appearing person to
execute the deed of amendment to the articles of association;
- - that the resolutions mentioned above are evidenced by a shareholders
resolution which will be annexed to this deed.
Consequently the appearing person declared that the articles of association of
the company are hereby amended as follows:
DEFINITIONS
ARTICLE 1.
In these Articles of Association the following definitions apply:
<PAGE>
-2-
a. Annual Accounts shall mean: the balance sheet, the profit and loss account
---------------
and the explanatory notes to these accounts;
b. Annual Meeting shall mean: the General Meeting with the purpose of
--------------
considering and approving the Annual Accounts, the annual report and any
other documents required by law;
c. Articles of Association shall mean: the articles of association of the
-----------------------
Company;
d. Board of Management shall mean: the board of management of the Company;
-------------------
e. Company shall mean: CompleTel Europe N.V., registered in Amsterdam;
-------
f. Distributable reserves shall mean: that part of the Company's shareholders'
----------------------
equity which is in excess of (i) the paid-up and called-up part of the
capital, and (ii) the reserves, if any, which are required by law and by
virtue of these Articles of Association;
g. General Meeting shall mean: both the body formed by shareholders and others
---------------
with voting rights as well as the meeting of shareholders and others with
meeting rights;
h. Group Company shall mean: a legal entity or a company which is associated
-------------
with the Company in a group, as defined in article 24b of Book 2 of the
Dutch Civil Code;
i. Subsidiary shall mean:
----------
1. a legal entity in which the Company or one or more of its Subsidiaries,
whether or not pursuant to an agreement with other persons entitled to
vote, can jointly or by itself exercise more than half of the voting
rights at the general meeting;
2. a legal entity, of which the Company or one or more of its Subsidiaries
are member or shareholder and, whether or not pursuant to an agreement
with other persons entitled to vote, can jointly or by itself appoint or
remove from office more than half of the members of the board of
management or the supervisory board, even if all the persons entitled to
vote cast their votes;
3. a company acting under its own name in which the Company or one or more
of its Subsidiaries, as partner is or are fully liable for the debts
towards
<PAGE>
-3-
creditors;
j. Supervisory Board shall mean: the supervisory board of the Company.
-----------------
NAME AND SEAT
ARTICLE 2.
1. The name of the Company is: CompleTel Europe N.V..
2. Its registered seat is in Amsterdam.
3. The Company may have branch offices and branch establishments elsewhere,
both at home and abroad.
OBJECTS
ARTICLE 3.
The objects of the company are:
- - to finance companies and other enterprises, to borrow, to lend and to raise
funds, to participate in all types of financial transactions, including the
issue of bonds, promissory notes or other securities or evidences of
indebtedness, to invest in securities;
- - to grant guarantees, to bind the company and to grant security over its
assets, for the obligations of companies and other enterprises with which
the company is affiliated and of third parties;
- - to enter into additional financial and other agreements (including swaps and
derivatives transactions) in relation to the activities named above;
- - to incorporate and to participate in any way whatsoever in, to manage, to
supervise and to co-operate with companies and other enterprises, to
acquire, to keep, to alienate or in any other manner to manage all sorts of
participations and interests in other companies and other enterprises, to
enter into joint ventures with other companies and enterprises;
- - to acquire, to manage, to operate, to encumber and to alienate personal and
real property and any right to or interest in personal and real property;
- - to obtain, to exploit and to alienate patents and other intellectual
property rights, to acquire and to grant licenses, sub-licenses and similar
rights of whatever name and description and if necessary, to protect rights
derived from patents and other
<PAGE>
-4-
intellectual property rights, licenses, sub-licenses and similar rights
against infringement by third parties;
- - to enter into agreements concerning the indemnification of its managing
directors and its supervisory directors, and
- - to undertake all that which is connected to the foregoing or in furtherance
thereof, all in the widest sense of the words.
CAPITAL AND SHARES
ARTICLE 4.
1. The authorized capital amounts to seventy-six million six hundred sixty-six
thousand five hundred thirty Euro ( 76,666,530.-).
2. It is divided into seven hundred sixty-six million six hundred sixty-five
thousand three hundred (766,665,300) shares, each with a nominal value of
ten Eurocents ( 0.10), consisting of three hundred eighty-three million
three hundred thirty-two thousand six hundred fifty (383,332,650) ordinary
shares and three hundred eighty-three million three hundred thirty-two
thousand six hundred fifty (383,332,650) preference shares.
Where these Articles of Association refer to shares and shareholders, these
shall be understood to refer to the aforementioned classes and holders
thereof, unless the contrary is indicated.
3. The preference shares are registered shares and are numbered consecutively.
Share certificates thereof shall not be issued.
The ordinary shares shall be registered shares.
4. If a share belongs to more than one person, the collectively entitled
parties may only have themselves represented vis-a-vis the Company by one
person.
SHARE CERTIFICATES
ARTICLE 5.
1. To the extent the Company is listed on one or more stock exchanges, ordinary
registered shares shall be available:
- - in the form of an entry in the shareholders register without issue of a
share certificate;
<PAGE>
-5-
shares of this type are referred to in these Articles of Association as
type I registered shares;
- and - should the Board of Management so decide - also in the form of an
entry in the share register with issue of a certificate, which
certificate shall consist of a main part without dividend coupon; shares
of this type and share certificates relating thereto are referred to in
these Articles as type II registered shares and type II share
certificates.
2. The Board of Management can decide that the registration of type I
registered shares may only take place for one or more quantities of shares -
which quantities are to be specified by the said Board - at the same time.
3. Type II share certificates shall be available in such denominations as the
Board of Management shall determine.
4. All share certificates shall be signed by or on behalf of the Board of
Management or by the CEO acting jointly with another member of the Board of
Management; the signatures may be effected by printed facsimile.
Furthermore, type II share certificates shall, and all other share
certificates may, be countersigned by one or more persons designated by the
Board of Management for that purpose.
5. All share certificates shall be identified by numbers and/or letters.
6. Subject to the approval of the Supervisory Board, the Board of Management
can determine that for the trade at foreign exchanges share certificates
shall be issued complying with the requirements set by said foreign
exchange(s) and not provided with any dividend sheet.
7. The expression "share certificate" as used in these Articles shall include a
share certificate in respect of more than one share.
DUPLICATES
ARTICLE 6.
1. Upon written request from a shareholder, missing or damaged share
certificates, or parts thereof, may be replaced by new certificates or by
duplicates bearing the same numbers and/or letters, provided the applicant
proves his title and, in so far
<PAGE>
-6-
as applicable, his loss to the satisfaction of the Board of Management, and
further subject to such conditions as the Board of Management may deem fit.
2. In appropriate cases, at its own discretion, the Board of Management may
stipulate that the identifying numbers and/or letters of missing documents
be published three times, at intervals of at least one month, in at least
three newspapers to be indicated by the Board of Management announcing the
application made;
in such a case new certificates or duplicates may not be issued until six
months have expired since the last publication, always provided that the
original documents have not been produced to the Board of Management before
that time.
3. The issue of new certificates or duplicates shall render the original
document invalid.
SHAREHOLDERS REGISTER
ARTICLE 7.
1. Notwithstanding the provisions of the law in respect of registered shares, a
register shall be kept by or on behalf of the Company, which register shall
be regularly updated and, at the discretion of the Board of Management, may,
in whole or in part, be kept in more than one copy and at more than one
place.
If the listing of the shares of the Company on a stock exchange or a
regulated over the counter market in a country or countries other than the
Netherlands so requires, part or parts of the shareholders register may be
kept in such country or countries.
2. Each shareholder's name, his address and such further data as the Board of
Management deems desirable, whether at the request of a shareholder or not,
shall be entered in the register.
3. The form and the contents of the share register shall be determined by the
Board of Management with due regard to the provisions of paragraphs 1 and 2
of this Article. The Board of Management may determine that the records
shall vary as to their form and contents according to whether they relate to
type I registered shares or to type II registered shares.
4. Upon request a shareholder shall be given free of charge a declaration of
what is
<PAGE>
-7-
stated in the register with regard to the shares registered in his name,
which declaration may be signed by one of the specially authorized persons
to be appointed by the Board of Management for this purpose.
5. The provisions of the last four paragraphs shall equally apply to rights of
usufruct or pledge on one or more registered shares, with the proviso that
the other data required by law must be entered in the shareholders register.
CONVERSION
ARTICLE 8.
1. Subject to the provisions of Article 5, the holder of type I registered
shares may, upon his request and at his option, have one or more type II
registered shares entered in the share register for the same nominal amount
and have issued to him one or more type II shares certificates.
2. Subject to the provisions of Article 5, the holder of type II registered
shares registered in his name may, after lodging the type II share
certificates with the Company, upon his request and at his option, have one
or more type I registered shares entered in the shareholders register for
the same nominal amount.
A shareholder who requests that type I registered shares are registered in
his name may require that such shares are registered in his name in a
register held outside of the Netherlands as provided in Article 7 paragraph
1.
3. The holder of one or more share certificates may, after lodging the share
certificates with the Company, upon his request and at his option have
issued to him one or more share certificates, of the same type, and for the
same nominal amount, each for as many shares as he requests, subject however
to the provisions of Article 5, paragraph 3.
4. A request as mentioned in this Article shall, if the Board of Management so
requires, be made on a form obtainable from the Company free of charge,
which shall be signed by the applicant.
TRANSFER OF SHARES
ARTICLE 9.
1. The transfer of a registered share shall be effected either by service upon
the
<PAGE>
-8-
Company of the instrument of transfer or by written acknowledgement of the
transfer by the Company.
2. Where a transfer of a type II registered share is effected by service in
writing of an instrument of transfer on the Company, the Company shall, at
the discretion of the Board of Management, either endorse the transfer on
the share certificate or cancel the share certificate and issue to the
transferee one or more new share certificates registered in his name to the
same nominal amount.
3. The Company's written acknowledgement of a transfer of a type II registered
share shall, at the discretion of the Board of Management, be effected
either by endorsement of the transfer on the share certificates or by the
issue to the transferee of one or more new share certificates registered in
his name to the same nominal amount.
4. The provisions of the foregoing paragraphs of this Article shall equally
apply to the allotment of registered shares in the event of a judicial
partition of any community of property or interests, the transfer of a
registered share as a consequence of a judgement execution and the creation
of limited rights in rem on a registered share.
5. The submission of requests and lodging of documents referred to in Articles
5 to 9 inclusive shall be made at an address to be indicated by the Board of
Management.
Different addresses may be indicated for the different classes and types of
shares and share certificates among which in any case an address in
Amsterdam.
6. The Company is authorized to charge amounts to be determined by the Board of
Management not exceeding cost price to those persons who request any
services to be carried out by virtue of Articles 5 to 9 inclusive, provided
that a number of shares, which number shall be determined by the Board of
Management, will be combined without cost in one share certificate, which
share certificate at request of the shareholder may again without cost, be
divided in simple share certificates or in share certificates which
represent a different number of shares, which number shall be determined by
the Board of Management.
<PAGE>
-9-
ISSUE OF SHARES
ARTICLE 10.
1. The General Meeting or the Board of Management, if designated thereto by the
General Meeting, shall resolve on further issues of shares; if the Board of
Management has been designated thereto, the General Meeting may not, as long
as such designation is valid, resolve on further issues.
A resolution on the issue of shares of the Board of Management requires the
approval of the Supervisory Board.
2. The General Meeting or, as the case may be, the Board of Management shall
determine the price and further conditions of issue, with due observance of
the other relevant provisions in these Articles of Association.
3. If the Board of Management is designated as authorized to resolve on the
further issue of shares, it shall also be determined by the General Meeting
when such designation is made, how many and what class of shares may be
issued.
When such designation is made, the duration of the designation, which shall
not exceed five years, shall also be stipulated.
The designation can be renewed each time for a period of no more than five
years.
Unless otherwise stipulated when the designation is made, said designation
cannot be withdrawn.
4. If a resolution of the General Meeting pertaining to an issue or to the
designation of the Board of Management, as referred to above, is to be
valid, it shall require a prior or simultaneous positive resolution from
each group of holders of shares of the same class whose rights are affected
by the issue.
5. Within eight days after a resolution of the General Meeting on an issue or
on a designation of the Board of Management as referred to above, the Board
of Management shall submit a full text thereof at the office of the Trade
Register.
The Board of Management shall notify the office of the Trade Register of
each issue of shares within eight days thereafter, stating the number and
class thereof.
6. The provisions in paragraphs 1 to 5, inclusive, of this Article shall apply
<PAGE>
-10-
accordingly to the granting of rights to take shares but shall not apply to
the issue of shares to a person who is exercising a previously acquired
right to subscribe for shares.
7. Shares shall not be issued below par value, without prejudice to the
provisions in article 80, paragraph 2 of Book 2 of the Dutch Civil Code.
On the issue of an ordinary share, at least the nominal amount shall be paid
up thereon, as well as, in the event the share is taken for a higher amount,
the difference between such amounts.
8. Upon the issue of preference shares it may be stipulated that a part of the
nominal amount, not exceeding three-fourths of the nominal amount, must be
paid up only if and when requested by the Company.
A decision of the Board of Management to request such payment requires the
approval of the Supervisory Board.
9. Payment shall be made in cash insofar as another form of payment has not
been agreed upon, without prejudice to the provisions in article 80b of Book
2 of the Dutch Civil Code.
Payment may only be made in foreign currency with the permission of the
Company and, furthermore, with due observance of the provisions in article
80a paragraph 3 of Book 2 of the Dutch Civil Code.
10. The Board of Management is authorized to effect legal transactions as
referred to in article 94, paragraph 1 of Book 2 of the Dutch Civil Code
without prior approval of the General Meeting, subject however to the
approval of the Supervisory Board.
PRE-EMPTIVE RIGHT
ARTICLE 11.
1. Each holder of ordinary shares shall have a pre-emptive right to ordinary
shares to be issued in proportion to the aggregate nominal amount of his
ordinary shares, except to the extent shares are issued to employees of the
Company or to a Group Company or to a foundation ("stichting") or similar
entity that will hold the shares on behalf of such employees.
<PAGE>
-11-
2. When shares are issued, there shall be no pre-emptive right in respect of
shares to be issued against any payment other than in cash.
3. With due observance of this Article, the General Meeting or, as the case may
be, the Board of Management shall resolve, when the resolution in respect of
issue is passed, on the manner and time-frame within which the pre-emptive
right may be exercised.
4. The Board of Management shall announce an issue with pre-emptive right and
the time-frame within which such may be exercised in the manner as provided
in Article 23.
5. The pre-emptive right may be exercised for a period of at least two weeks
after the day of announcement.
6. The pre-emptive right may be limited or excluded by resolution of the
General Meeting.
In the proposal thereto, the reasons for the proposal and the choice of the
intended price of issue shall be explained in writing.
The pre-emptive right may, subject to approval of the Supervisory Board,
also be limited or excluded by the Board of Management, if the Board of
Management has been designated by resolution of the General Meeting for a
specific period of no more than five years as authorized to limit or exclude
the pre-emptive right; such designation is only possible if the Board of
Management has also been designated previously or simultaneously the right
to issue shares as referred to in Article 10, paragraph 1.
The designation can be renewed each time for a period not in excess of five
years;
the authority granted thereby may only be exercised with the issue of shares
to which the Board of Management has competently resolved.
Unless otherwise stipulated in the designation, it may not be withdrawn.
7. The Board of Management shall deposit a full text of the resolution of the
General Meeting on the limitation or exclusion of the pre-emptive right or
on designation as referred to in the previous paragraph at the office of the
Trade
<PAGE>
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Register.
8. In case rights to subscribe for ordinary shares are to be granted, holders
of ordinary shares shall have a pre-emptive right;
the provisions stipulated above in this Article shall apply accordingly.
Shareholders shall not have a pre-emptive right on shares to be issued to a
person exercising a previously acquired right to subscribe for shares.
OWN SHARES
ARTICLE 12.
1. Upon any issue of shares the Company may not subscribe for shares in its own
capital.
2. The Company may only acquire pursuant to a proposal of the Board of
Management and subject to approval of the Supervisory Board fully paid-up
shares in its own capital for no consideration or under universal title or
if:
a. the distributable reserves are at least equal to the price of
acquisition;
b. the nominal amount of the shares in its capital to be acquired, already
held or held in pledge by the Company or a Subsidiary does not exceed
one-tenth of the issued capital;
c. the authorization for such acquisition has been granted by the General
Meeting. Such authorization shall be valid for no more than eighteen
months.
The General Meeting shall determine in its authorization the number of
shares which may be acquired, the manner in which they may be acquired
and the maximum and minimum to be observed in respect of the price of
acquisition.
For the validity of such acquisition shall be decisive the extent of the
Company's shareholders' equity according to the last-adopted balance sheet,
minus the price for the acquisition of the shares in the capital of the
Company and distributions from profits or reserves to others, which the
Company and its Subsidiaries became indebted for after the date of the
balance sheet.
If a financial year has expired for a period in excess of six months without
the Annual Accounts having been adopted, then acquisition other than under
universal title in accordance with this paragraph 2 shall not be allowed.
<PAGE>
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The authorization referred to here shall not be required, insofar as the
Company acquires own shares, listed on an official price list of a stock
exchange, in order to transfer such by virtue of an arrangement applicable
to employees of the Company or of a Group Company to such employees.
3. Neither the Company nor any of its Subsidiaries may extend loans, give
security, grant a price guarantee, guarantee in any other way or, severally
or in any other way, bind itself in addition to or for other persons with a
view to subscribing for or acquiring shares in the Company.
This prohibition shall, however, not apply if shares or depositary receipts
are subscribed or acquired by or for employees of the Company or a Group
Company.
4. Alienation of shares held by the Company in its own capital shall only be
effected pursuant to a resolution of the Board of Management, subject to the
approval of the Supervisory Board.
With the resolution in respect of alienation, the conditions of such
alienation shall also be determined.
5. No votes can be cast at a General Meeting on a share owned by the Company or
a Subsidiary thereof.
Usufructuaries and pledgees of shares which are owned by the Company and its
Subsidiaries, are not, however, excluded from exercising their voting right
if the right of usufruct or the right of pledge was created before the share
was held by the Company or a Subsidiary.
The Company or a Subsidiary cannot cast votes on a share in respect of which
it has a right of usufruct or a right of pledge.
6. In determining to which extent shareholders cast votes, are present or
represented, or to which extent the share capital is supplied or is
represented, shares in respect of which the law provides that no votes may
be cast shall not be taken into account.
7. A Subsidiary may not for its own account subscribe for shares in the capital
of the Company, nor have such done.
<PAGE>
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The acquisition of such shares may only be effected directly or indirectly
by Subsidiaries for their own account under specific title insofar as the
Company may, pursuant to the provisions laid down in the preceding
paragraphs of this Article, acquire shares in its own capital.
A Subsidiary may not,
a. after it has become a Subsidiary; or
b. after the company of which it is a Subsidiary has been converted into a
company with limited liability ("Naamloze Vennootschap"); or
c. after it has as a Subsidiary acquired shares in the capital of the
Company for no consideration or under universal title,
for a period in excess of three years hold or cause to be held for its own
account shares in excess of one-tenth of the issued capital together with
the Company and its other Subsidiaries.
CAPITAL REDUCTION
ARTICLE 13.
1. The General Meeting may, at the proposal of the Board of Management subject
to the approval of the Supervisory Board, resolve on reduction of the issued
capital by cancelling shares or by reducing the nominal amount of shares by
means of an amendment of the Articles of Association.
In this resolution, the shares to which the resolution pertains shall be
indicated and the execution of the resolution shall be laid down.
2. A resolution to cancel shares can relate only to shares which are held by
the Company or to all outstanding preference shares.
3. Reduction of the amount of shares without repayment of capital and without
release from the obligation to pay calls shall be effected in proportion to
all the shares of one and the same class.
4. Partial repayment of capital on shares or release from the obligation to pay
calls shall only be possible in proportion to all the shares or to all the
preference shares exclusively.
5. The pro-rata requirements mentioned in paragraphs 3 and 4 of this Article
may be
<PAGE>
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deviated from with the approval of all the shareholders concerned.
6. A resolution in respect of capital reduction shall require a majority of at
least two-thirds of the votes cast, if less than half the issued capital is
represented at the meeting.
7. The convocation of a meeting in which a resolution is to be passed as
referred to in this Article shall state the purpose of the capital reduction
and the manner of execution.
8. The Company is obliged to publish the resolutions referred to in this
Article in conformity with the provisions of the law.
A resolution to reduce the issued capital shall not come into force as long
as creditors of the Company may oppose the same in conformity with the
relevant provisions of the law.
RIGHT OF USUFRUCT, RIGHT OF PLEDGE
ARTICLE 14.
1. A right of usufruct or pledge may be created on a share.
In that event, the voting right shall accrue to the shareholder or the
usufructuary or the pledgee, if this has been provided for at the time of
creation of the right of usufruct or pledge.
2. The shareholder who has no voting right and the usufructuary or pledgee who
does have a voting right shall have the rights granted by law to holders of
depositary receipts for shares issued with the cooperation of a company.
3. The rights referred to in paragraph 2 do not accrue to the usufructuary or
pledgee who has no voting rights.
4. A right of pledge may also be created without acknowledgement by or
notification to the Company.
In that event article 239 of Book 3 of the Dutch Civil Code shall apply
accordingly, in which case acknowledgement by or notification of the Company
shall replace the notification referred to in paragraph 3 of that article.
MANAGEMENT
ARTICLE 15.
<PAGE>
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1. The Company shall be managed by a Board of Management.
The maximum number of members of the Board of Management shall be three.
Only natural persons may be a member of the Board of Management.
The Supervisory Board shall determine the number of the members of the Board
of Management.
2. The members of the Board of Management shall be appointed by the General
Meeting from a binding nomination, drawn up by the Supervisory Board, of at
least two nominees for each vacancy to be filled.
The binding nomination shall be drawn up within two months after the
occurrence of a vacancy to filled.
If the Supervisory Board fails to make use of its right to draw up a binding
nomination or fails to do so in a timely manner, the General Meeting shall
be free to make the appointment.
The General Meeting may at all times override the binding nature of the
Supervisory Board's nomination by adopting a resolution to this effect with
two-thirds of the votes cast representing more than half of the issued
capital.
3. The General Meeting may suspend and dismiss the members of the Board of
Management.
The Supervisory Board may also suspend the members of the Board of
Management.
Other than upon a proposal thereto by the Supervisory Board, the General
Meeting may only resolve upon a suspension or dismissal of members of the
Board of Management with a majority of two-thirds of the votes cast which
represent more than half of the issued capital.
4. Even after having been extended, a suspension shall not last for more than
three months.
If no decision has been reached after that time on the lifting of the
suspension or the removal from office, the suspension shall cease to exist.
5. The Supervisory Board shall determine the remuneration and other conditions
of employment of the members of the Board of Management.
<PAGE>
-17-
6. If there is more than one member of the Board of Management in office, the
members of the Board of Management shall mutually allocate their duties,
such subject to the approval of the Supervisory Board.
7. The Supervisory Board appoints a president (the "President") and a chief
executive officer (the "CEO") from among the members of the Board of
Management.
8. The Board of Management shall meet whenever a member of the Board of
Management shall so require.
It shall pass resolutions by an absolute majority of votes cast by all
members of the Board of Management in office.
Blank votes shall be considered null and void.
The Board of Management must establish rules pertaining to the decision-
making process of the Board of Management.
Such rules shall require the approval of the Supervisory Board.
9. The Board of Management is authorized to appoint officials who may represent
the Company and to grant to such persons any title and powers as it seems
appropriate.
10. Board of Management resolutions relating to any of the matters as shall be
determined and clearly defined by the Supervisory Board and notified to the
Board of Management shall be subject to the approval of the Supervisory
Board.
Failure to obtain such approval from the Supervisory Board shall not affect
the Board of Management or the authority of the members of the Board of
Management to represent the Company.
REPRESENTATION
ARTICLE 16.
1. The Company shall be represented by the Board of Management except to the
extent otherwise provided by law.
In addition, the authority to represent the Company is vested in the CEO
acting jointly with another member of the Board of Management.
2. In all events of the Company having a conflict of interest with one or more
<PAGE>
-18-
members of the Board of Management, the Company shall continue to be
represented in the manner described in paragraph 1 above.
In all events in which the Company has a conflict of interest with a member
of the Board of Management in his private capacity, the board resolution
regarding that relevant legal act requires the prior approval of the
Supervisory Board.
Failure to obtain the approval defined in the present paragraph shall not
affect the Board of Management or the authority of the members of the Board
of Management to represent the Company.
3. If a member of the Board of Management is absent or prevented from acting,
the remaining members of the Board of Management or the remaining member of
the Board of Management shall be charged with the management of the Company.
If the sole member of the Board of Management or all the members of the
Board of Management are absent or prevented from acting, the person to be
designated for that purpose by the Supervisory Board shall be charged with
the management of the Company until the situation of absence or other
prevention has ceased to exist in respect of at least one member of the
Board of Management.
SUPERVISORY BOARD
ARTICLE 17.
1. The company shall have a Supervisory Board consisting of at least three
natural persons.
The General Meeting shall determine the number of the members of the
Supervisory Board.
2. The duties of the Supervisory Board shall be the supervision of the conduct
of management by the Company's Board of Management and of the general course
of affairs of the Company and of any affiliated enterprise.
The Supervisory Board shall assist the Board of Management by rendering
advice.
In performing their duties, the members of the Supervisory Board shall be
guided by the interests of the company and of any enterprise affiliated
therewith.
3. The Board of Management shall provide the Supervisory Board the necessary
<PAGE>
-19-
information in a timely manner.
4. Members of the Supervisory Board shall be appointed by the General Meeting
from a nomination by the Supervisory Board.
These nominations are not binding on the General Meeting.
5. Members of the Supervisory Board may be suspended or dismissed by the
General Meeting at any time.
A resolution of the General Meeting to suspend or dismiss members of the
Supervisory Board not pursuant to a proposal thereto by the Supervisory
Board require a majority of two-thirds of the votes, representing more than
half of the issued capital.
A suspension may last no longer than three months in total, even after
having been extended one or more times.
In case no decision on a termination of the suspension or dismissal has been
made following such time, the suspension ends.
6. The Supervisory Board shall at any time have access to all buildings and
premises in use by the Company, and shall be entitled to inspect all of the
Company's books and records and to examine all of the Company's assets.
The Supervisory Board may delegate this authority to one or more of its
members, or an expert.
7. If the Supervisory Board consists of two or more members, it shall appoint a
chairman from among its members.
8. The Supervisory Board shall hold meetings as often as one or more of its
members shall desire, as often as the Board of Management shall request, or
as often as necessary in pursuance of the provisions of the present Articles
of Association.
9. The Supervisory Board shall adopt resolutions by an absolute majority of the
votes cast.
If there is a tie in votes the proposal shall be rejected.
The Supervisory Board may establish rules pertaining to the decision-making
process of the Supervisory Board.
<PAGE>
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10. Each member of the Supervisory Board shall be entitled to cast one vote.
11. A member of the Supervisory Board may be represented at a meeting of the
Supervisory Board only by another member of the Supervisory Board.
12. The Supervisory Board may also adopt valid resolutions without convening a
meeting, provided that all of its members have been consulted and that none
has stated an objection to adopting resolutions in this manner.
13. If it is necessary to provide the shareholders or the Board of Management
with evidence of a resolution adopted by the Supervisory Board, the
signature of the chairman of that Board shall suffice.
INDEMNIFICATION, LIMITED LIABILITY
ARTICLE 18.
1. The Company shall indemnify any person who is or was a member of the Board
of Management or member of the Supervisory Board or proxyholder
(procuratiehouder) and who was or is a party or is threatened to be made a
----------------
party to any threatened, pending or completed action, suit or proceeding,
whether civil, criminal, administrative or investigative (other than an
action by or in the right of the Company) by reason of the fact that he is
or was a member of the Board of Management or member of the Supervisory
Board or proxyholder (procuratiehouder), officer, employee or agent of the
----------------
Company, or is or was serving at the request of the Company as a member of
the board of management or member of the supervisory board or proxyholder
(procuratiehouder), officer, employee, trustee or agent of another company,
----------------
a partnership, joint venture, trust or other enterprise or entity, including
with respect to employee benefit plans maintained or sponsored by the
Company or for the benefit of its or any of its group companies' employees
or consultants, (each an "Indemnitee"), against any and all liabilities
including all expenses (including attorneys' fees), judgements, fines and
amounts paid in settlement actually and reasonably incurred by him in
connection with such action, suit or proceeding if he acted in good faith
and in a manner he reasonably believed to be in or not opposed to the best
interests of the Company, and, with respect to any criminal action or
proceeding, had no
<PAGE>
-21-
reasonable cause to believe his conduct was unlawful or outside of his
mandate.
The termination of any action, suit or proceeding by a judgement, order,
settlement, conviction, or upon a plea of nolo contendere or its equivalent,
shall not, in and of itself, create a presumption that the person did not
act in good faith and not in a manner which he reasonably could believe to
be in or not opposed to the best interests of the Company, and, with respect
to any criminal action or proceeding, had reasonable cause to believe that
his conduct was unlawful.
2. No indemnification pursuant to paragraph 1 of this Article shall be made in
respect of any claim, issue or matter as to which such person shall have
been adjudged to be liable for gross negligence or wilful misconduct in the
performance of his duty to the Company, unless and only to the extent that
the court in which such action or proceeding was brought or any other court
having appropriate jurisdiction shall determine upon application that,
despite the adjudication of liability but in view of all of the
circumstances of the case, such person is fairly and reasonably entitled to
indemnification against such expenses which the court in which such action
or proceeding was brought or such other court having appropriate
jurisdiction shall deem proper.
3. Expenses (including attorneys' fees) incurred by an Indemnitee in defending
a civil or criminal action, suit or proceeding may be paid by the Company in
advance of the final disposition of such action, suit or proceeding upon
receipt of an undertaking by or on behalf of an Indemnitee to repay such
amount if it shall ultimately be determined that he is not entitled to be
indemnified by the Company as authorized in this Article.
Such expenses incurred by Indemnitees may be so advanced upon such terms and
conditions as the Board of Management decides.
4. The indemnification provided for by this Article shall not be deemed
exclusive of any other right to which a person seeking indemnification or
advancement of expenses may be entitled under the laws of the Netherlands as
from time to time amended or under any by-laws, agreement, resolution of the
General Meeting or of the disinterested members of the Board of Management
or otherwise, both as
<PAGE>
-22-
to actions in his official capacity and as to actions in another capacity
while holding such position, and shall continue as to a person who has
ceased to be a member of the Board of Management or member of the
Supervisory Board, or proxyholder (procuratiehouder), officer, employee,
----------------
trustee or agent and shall also inure to the benefit of the heirs,
executors, administrators and the estate of such a person.
The Company may, to the extent authorized from time to time by the Board of
Management, grant rights to indemnification and to the advancement of
expenses to any Indemnitee to the fullest extent of the provisions of this
Article 18 with respect to the indemnification and advancement of expenses
of Indemnitees.
5. The Company may purchase and maintain insurance on behalf of any Indemnitee,
whether or not the Company would have the power to indemnify him against
such liability under the provisions of this Article.
6. Whenever in this Article reference is made to the Company, this shall
include, in addition to the resulting or surviving company also any
constituent company (including any constituent company of a constituent
company) absorbed in a consolidation or merger which, if its separate
existence had continued, would have had the power to indemnify its members
of the board of management or members of the supervisory board, or
proxyholders (procuratiehouder), officers, employees and agents, so that any
----------------
person who is or was a member of the supervisory board, member of the board
of management, or proxyholder (procuratiehouder), officer, employee or agent
----------------
of such constituent company, or is or was serving at the request of such
constituent company as a member of the supervisory director, member of the
managing board, or proxyholder (procuratiehouder), officer, employee,
----------------
trustee or agent of another company, a partnership, joint venture, trust or
other enterprise or entity, shall stand in the same position under the
provisions of this Article with respect to the resulting or surviving
company as he would have with respect to such constituent company if its
separate existence had continued.
7. No person shall be personally liable to the Company or its shareholders for
<PAGE>
-23-
monetary damages for breach of fiduciary duty as a member of the Board of
Management or member of the Supervisory Board or proxyholder
(procuratiehouder); provided, however, that the foregoing shall not
----------------
eliminate or limit the liability of a member of the Board of Management or
proxyholder (procuratiehouder) (1) for any breach of such individual's duty
----------------
of loyalty to the Company or its shareholders, (2) for acts or omissions not
in good faith or which involve intentional misconduct or a knowing violation
of law, (3) for any transaction from which the member of the Board of
Management or member of the Supervisory Board or proxyholder
(procuratiehouder) derived an improper personal benefit or (4) for personal
----------------
liability which is imposed by Dutch law, as from time to time amended.
8. No amendment, repeal or modification of this Article 18 shall adversely
affect any right or protection of any person entitled to indemnification or
advancement of expenses under this Article 18 prior to such amendment,
repeal or modification.
FINANCIAL YEAR, ANNUAL ACCOUNTS, ANNUAL REPORT AND PUBLICATION
ARTICLE 19.
1. The financial year shall be equal to the calendar year.
2. Each year, within five months after the close of the financial year -subject
to extension of this period by the General Meeting on the grounds of
circumstances of an exceptional nature by at most six months - the Board of
Management shall draw up the Annual Accounts.
Within this period the Board of Management shall also submit the annual
report.
The Annual Accounts shall be signed by all the members of the Board of
Management and all the members of the Supervisory Board.
If the signature of one or more of them is missing, mention thereof shall be
made and the reason therefor stated.
3. The Board of Management shall submit the Annual Accounts to the General
Meeting.
<PAGE>
-24-
4. From the day the Annual Meeting has been convened until the close of that
meeting, the documents referred to in paragraph 2 of this Article shall,
together with the information to be added pursuant to article 392 of Book 2
of the Dutch Civil Code, be deposited at the Company's offices and in
Amsterdam at the place to be mentioned in the convocation for inspection by
all shareholders and other parties with meeting rights and each of them may
obtain copies thereof at no cost.
5. The General Meeting shall adopt the Annual Accounts.
The adoption of the Annual Accounts shall discharge the members of the Board
of Management for their management and the members of the Supervisory Board
for their supervision, insofar as such management and such supervision is
apparent from the Annual Accounts.
6. The Annual Accounts may not be adopted by the General Meeting if they have
been unable to ascertain to their satisfaction the statement of the auditor
referred to in Article 20, paragraph 1, which must be attached to the Annual
Accounts, unless the other information include mentioning of a legal ground
why the statement is lacking.
7. The Company shall procure the publication of the documents and information
referred to in this Article, if and insofar as and in the manner as
prescribed in articles 394 et seq. of Book 2 of the Dutch Civil Code.
AUDITOR
ARTICLE 20.
1. The General Meeting shall give, without prejudice to any relevant statutory
provisions, an auditor ("register accountant") or another expert as referred
to in article 393 of Book 2 of the Dutch Civil Code or an organization in
which such experts are working together, the instruction to examine and
audit the Annual Accounts.
That expert shall report on his audit to the Board of Management and the
Supervisory Board and shall lay down the result of his audit in a report,
stating whether the Annual Accounts give a true and fair view of the
financial position of the Company.
<PAGE>
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2. If both the General Meeting and the Supervisory Board fail to appoint an
auditor then the Board of Management shall be competent to do so.
3. The General Meeting or the party who gave the instruction, shall at all
times be authorized to cancel the instruction mentioned in this Article.
The Supervisory Board may cancel an instruction by the Board of Management
additionally.
PROFITS
ARTICLE 21.
1. The Company may make distributions to the shareholders and to other persons
entitled to the profits only up to a sum not exceeding the amount of the
distributable reserves.
2. Profits shall be distributed after adoption of the Annual Accounts showing
such is allowed.
3. Each year, the Board of Management subject to approval of the Supervisory
Board, shall determine which part of the profits - the positive balance of
the profit and loss account - shall be reserved.
4. From the profits remaining after reservation according to the above, a
dividend shall be distributed on the preference shares equal to the average
rate of Euribor plus two calculated over the amounts paid on such shares,
the average being taken over the number of days this rate applied over the
financial year concerned.
5. The balance then remaining shall be distributed as a dividend on ordinary
shares.
6. In calculating the profit appropriation, the shares held by the Company in
its own capital shall not count, unless a usufruct has been created on these
shares.
7. Insofar as profit is available in the Company, the Board of Management,
subject to approval of the Supervisory Board, may resolve on payment of an
interim dividend on account of the expected dividend, provided always that
the provisions laid down in paragraph 1 of this Article have been satisfied,
such to be shown by an interim balance sheet as referred to in article 105
paragraph 4 of Book 2 of the Dutch Civil Code.
8. The General Meeting may, following a proposal of the Board of Management,
<PAGE>
-26-
which has been approved by the Supervisory Board, resolve to make
distributions to the holders of ordinary shares from one or more reserves
which need not be maintained pursuant to the law or to these Articles of
Association.
The provisions of the paragraphs 1, 2, 7 and 9 apply accordingly.
9. The resolutions to distribute (interim) dividends may entail that (interim)
dividends will be wholly or partly distributed not in cash, but in the form
of shares in the Company or in a Subsidiary.
10. The (interim) dividend shall be made payable on a day to be determined by
the Board of Management.
11. (Interim) dividends which have not been collected within five years after
they became payable shall be forfeited to the Company.
ANNUAL MEETING
ARTICLE 22.
The Annual Meeting shall be held within six months after the close of the
financial year, for the purpose of:
a. the discussion of the Annual Accounts and of the other information referred
to in article 392 of Book 2 of the Dutch Civil Code, except in case
extension has been granted for the preparation of the Annual Accounts
pursuant to article 101 of Book 2 of the Dutch Civil Code;
b. adoption of the Annual Accounts, unless an extension as referred to in
paragraph a. of this Article has been granted;
c. delivery of the written report made by the Board of Management on the state
of the Company's affairs and the management conducted during the past
financial year, unless an extension as referred to in a. above has been
granted;
d. effecting all such things as furthermore prescribed by the law;
e. dealing with all such further items of business as stated in the convocation
of the meeting.
CONVOCATION
ARTICLE 23.
1. All convocations for the General Meeting and all announcements,
notifications
<PAGE>
-27-
and communications to shareholders and other parties with meeting rights
shall be effected by means of letters sent to the addresses as recorded in
the register referred to in Article 7, without prejudice to the relevant
provisions of the law.
2. The convocation shall be effected no later than on the fifteenth day before
the day of the meeting.
3. In the convocation the agenda shall be given or it shall be communicated
that shareholders and other parties with meeting rights may inspect the
agenda at the offices of the Company, without prejudice to the relevant
provisions of the law.
4. Insofar as all documents which must be available for inspection by
shareholders and other parties with meeting rights have not been included in
the convocation, these documents shall be made available at the offices of
the Company and, if the Company is listed on a stock exchange, with such
paying agent as referred to in the rules relating to securities of such
stock exchange, to be designated in the convocation for shareholders and
other parties with meeting rights at no cost.
OTHER GENERAL MEETINGS
ARTICLE 24.
1. Other General Meetings shall be held whenever the shareholders and other
parties with meeting rights shall be called and convened for that purpose by
the Board of Management or by the Supervisory Board.
2. If one or more shareholders and/or other parties with meeting rights,
jointly representing at least one-tenth of the issued capital, have
requested the Board of Management or the Supervisory Board in writing to
call and convene a General Meeting, at the same time specifying the items of
the agenda, and the Board of Management or the Supervisory Board has not
complied with such request in such a way that the General Meeting can be
held within six weeks following such request, they shall be authorized to
call such meeting themselves.
PLACE, CHAIRMANSHIP, MINUTES
ARTICLE 25.
1. General Meetings shall be held in Amsterdam, Schiphol (Haarlemmermeer) or
The Hague, at a location to be stated in the convocation.
<PAGE>
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2. General Meetings shall be presided over by the chairman of the Supervisory
Board;
if the chairman is absent, the member of the Supervisory Board designated by
the Supervisory Board shall preside and if such member is absent, the
Meeting itself shall choose its chairman.
Until that moment a member of the Board of Management designated by the
Board of Management shall preside temporarily.
3. Minutes shall be kept of the business transacted at the meeting.
The minutes shall be acknowledged, in evidence whereof the chairman and the
person who took the minutes shall sign them.
Minutes need not be taken of the business transacted if a notarial record is
made.
ACCESS
ARTICLE 26.
1. All members of the Board of Management and of the Supervisory Board,
shareholders and other parties with meeting rights or their authorized
agents -the latter with due observance of the provisions of Article 27 -
shall be entitled to attend the General Meeting, to address the meeting and,
insofar as they have voting rights, to cast their vote thereat.
In order to exercise that right holders of ordinary registered shares,
usufructuaries and pledgees of registered shares with the rights granted by
law under article 88 casu quo article 89 of Book 2 of the Dutch Civil Code
to holders of depositary receipts issued with the cooperation of a company
must express their desire to do so to the Company in writing, such no later
than at the time and place mentioned in the convocation and also - insofar
as it concerns type II registered shares - stating the identifying number of
the share certificate.
2. The time referred to in the previous paragraph cannot be set earlier than on
the seventh day before the day of the meeting.
3. If the voting right on a share accrues to the usufructuary or the pledgee
instead of to the shareholder, the shareholder shall also be authorised to
attend the General Meeting and address it, provided that the Company has
been notified of the intention to attend the meeting in accordance with
paragraph 1.
<PAGE>
-29-
4. The chairman of the meeting shall decide on access to the meeting by others
than those who are entitled thereto by law.
POWER OF ATTORNEY
ARTICLE 27.
Shareholders and other parties with meeting rights may have themselves
represented by written power of attorney. The Company shall be notified hereof
in accordance with the provisions of Article 26, paragraph 1 of the Articles of
Association.
VOTES
ARTICLE 28.
1. Each person entitled to vote or his representative must sign the attendance
list.
2. Each share confers the right to cast one vote.
3. The Board of Management, subject to the prior approval of the Supervisory
Board, is authorized to provide in the convocation notice for a meeting,
that shareholders and other parties with meeting rights will only be
considered as shareholders or parties with meeting rights if they are
registered in a register designated for that purpose by the Board of
Management at such time as determined by the Board of Management,
irrespective of who at the time of the actual meeting is entitled to the
shares or depositary receipts.
The last day of registration may not be determined to be earlier than on the
seventh day before the day of the meeting.
The convocation notice shall stipulate the day of registration as well as
the manner in which the shareholders and other parties with meeting rights
may have themselves registered and the manner in which those rights can be
exercised.
4. Insofar as the law or these Articles of Association do not prescribe a
greater majority, resolutions are passed by an absolute majority of the
votes cast.
Resolutions of the General Meeting can only be adopted validly in a meeting
in which no less than one-third of the issued capital is represented.
A new meeting as referred in article 120 paragraph 3 of Book 2 of the Dutch
Civil Code cannot be convened.
5. All votes shall be oral votes.
<PAGE>
-30-
However, the chairman may resolve to have votes cast by ballot.
In the event of an election of persons, a person with voting rights present
at the meeting may also require that the votes be cast by ballot.
Voting by ballot shall be effected with closed, unsigned ballot papers.
6. If the votes are tied the drawing of lots shall decide if it concerns an
election of persons and the motion shall be defeated if it concerns an item
of business.
7. Blank votes and invalid votes shall count as not having been cast.
8. The Board of Management shall keep records of the resolutions passed.
The notes shall be deposited at the offices of the Company for inspection by
shareholders and other persons with meeting rights who shall if so requested
be furnished with a transcript or extract of these notes at no more than the
cost price.
AMENDMENT OF ARTICLES OF ASSOCIATION AND LIQUIDATION
ARTICLE 29.
1. A resolution of the General Meeting to amend the Articles of Association or
to dissolve the Company may only be taken at the proposal of the Board of
Management, which proposal shall require the approval of the Supervisory
Board.
2. The full proposal shall be deposited for inspection by the shareholders and
other parties with meeting rights at the offices of the Company at a
location to be mentioned in the convocation as of the day of convocation to
the General Meeting until the conclusion thereof;
the transcripts of this proposal shall be made available for the
shareholders and other parties with meeting rights at no cost.
3. A resolution to dissolve the Company may only be adopted in a General
Meeting with a majority of no less than three-fourths of the votes cast.
4. Upon the dissolution of the Company the liquidation shall be effected by the
Board of Management.
5. During the liquidation the provisions of these Articles of Association shall
remain in full force as much as possible.
6. The balance of the liquidation shall be distributed as follows:
a. to the holders of preference shares, the amount paid on such shares;
<PAGE>
-31-
b. the remaining balance shall be distributed to the holders of ordinary
shares in proportion to everyone's nominal possession of said shares.
7. The books and records of the Company shall be kept for ten years after the
completion of the liquidation by the party designated for that purpose by
the General Meeting.
FINAL STATEMENTS.
Finally the appearing person declared:
- - that the issued capital amounts to fifteen million seven hundred forty-one
thousand three hundred six Euro ( 15,741 ,306.-), divided into one hundred
fifty-seven million four hundred thirteen thousand sixty (157,413,060)
ordinary shares, each with nominal value of ten Eurocents ( 0.10);
- - that on the twenty-second day of March two thousand under number
N.V.1.055.197 the Minister of Justice has - according to the certificate
attached to this deed
- - advised that no objections to the present amendment to the articles of
association have been apparent.
This deed was executed today in Amsterdam.
The substance of this deed was stated and explained to the appearing person.
The appearing person declared not to require a full reading of the deed, to have
taken note of the contents of this deed and to consent to it.
Subsequently, this deed was read out in a limited form, and immediately
thereafter signed by the appearing person and myself, civil-law notary, at eight
hours forty-five minutes ante meridiem.
<PAGE>
Exhibit 4.2
================================================================================
COMPLETEL EUROPE N.V.,
as Issuer
and
THE CHASE MANHATTAN BANK,
as Trustee
________________________________
Indenture
Dated as of April 13, 2000
________________________________
up to (Euro)300,000,000 Aggregate Principal Amount
14% Senior Notes due 2010
================================================================================
<PAGE>
CROSS-REFERENCE TABLE
<TABLE>
<CAPTION>
TIA Sections Indenture Sections
- ------------ ------------------
<S> <C> <C>
Section 3.10 (a)(1)..................................... 7.10
(a)(2)..................................... 7.10
(b)........................................ 7.03; 7.08
Section 3.11 ........................................... 7.03
Section 3.13 (a)........................................ 7.06
(c)........................................ 7.05; 7.06
Section 3.14 (a)........................................ 4.17
(a)(4)..................................... 4.16
(c)(1)..................................... N/A
(c)(2)..................................... N/A
(e)........................................ N/A
Section 3.15 (a)........................................ 7.02
(b)........................................ 7.02; 7.05
(c)........................................ 7.02
(d)........................................ 7.02
Section 3.16 (a)........................................ 6.05; 6.06
(a)(1)(A).................................. 6.05
(a)(1)(B).................................. 6.04
(b)........................................ 6.07
Section 3.17 (a)(1)..................................... 6.08
(a)(2)..................................... 6.09
Section 3.18 (a)........................................ N/A
(c)........................................ N/A
</TABLE>
Note: The Cross-Reference Table shall not for any purpose be deemed to be a
part of this Indenture.
<PAGE>
TABLE OF CONTENTS
<TABLE>
<CAPTION>
Page
----
<S> <C> <C>
ARTICLE ONE DEFINITIONS AND INCORPORATION BY REFERENCE............................... 2
SECTION 1.01. Definitions....................................................... 2
-----------
SECTION 1.02. Incorporation by Reference of Trust Indenture Act................. 27
-------------------------------------------------
SECTION 1.03. Rules of Construction............................................. 28
---------------------
ARTICLE TWO THE NOTES................................................................ 2
SECTION 2.01. Form and Dating................................................... 29
---------------
SECTION 2.02. Restrictive Legends............................................... 30
-------------------
SECTION 2.03. Execution, Authentication and Denominations....................... 32
-------------------------------------------
SECTION 2.04. Registrar and Paying Agent........................................ 33
--------------------------
SECTION 2.05. Paying Agent To Hold Money in Trust............................... 34
-----------------------------------
SECTION 2.06. Transfer and Exchange............................................. 35
---------------------
SECTION 2.07. Book-Entry Provisions for Global Notes............................ 36
--------------------------------------
SECTION 2.08. Registration of Transfers and exchanges........................... 37
---------------------------------------
SECTION 2.09. Replacement Notes................................................. 41
-----------------
SECTION 2.10. Outstanding Notes................................................. 42
-----------------
SECTION 2.11. Temporary Notes................................................... 43
---------------
SECTION 2.12. Cancellation...................................................... 43
------------
SECTION 2.13. CUSIP Numbers..................................................... 43
-------------
SECTION 2.14. Defaulted Interest................................................ 44
------------------
ARTICLE THREE REDEMPTION............................................................. 44
SECTION 3.01. Optional Redemption............................................... 44
-------------------
SECTION 3.02. Notices to Trustee................................................ 45
------------------
SECTION 3.03. Selection of Notes To Be Redeemed................................. 45
---------------------------------
SECTION 3.04. Notice of Redemption.............................................. 46
--------------------
SECTION 3.05. Effect of Notice of Redemption.................................... 47
------------------------------
SECTION 3.06. Deposit of Redemption Price....................................... 47
---------------------------
SECTION 3.07. Payment of Notes Called for Redemption............................ 48
--------------------------------------
SECTION 3.08. Notes Redeemed in Part............................................ 48
----------------------
ARTICLE FOUR COVENANTS............................................................... 48
SECTION 4.01. Payment of Notes.................................................. 48
----------------
SECTION 4.02. Maintenance of Office or Agency................................... 49
-------------------------------
SECTION 4.03. Limitation on Indebtedness........................................ 50
--------------------------
SECTION 4.04. Limitation on Restricted Payments................................. 52
---------------------------------
</TABLE>
-i-
<PAGE>
<TABLE>
<CAPTION>
Page
----
<S> <C> <C>
SECTION 4.05. Limitation on Dividend and Other Payment Restrictions
-----------------------------------------------------
Affecting Restricted Subsidiaries................................ 55
---------------------------------
SECTION 4.06. Limitation on the Issuance and Sale of Capital Stock of
-------------------------------------------------------
Restricted Subsidiaries.......................................... 57
-----------------------
SECTION 4.07. Limitation on Issuances of Guaranties and Incurrence of
-------------------------------------------------------
Certain Indebtedness by Restricted Subsidiaries.................. 57
-----------------------------------------------
SECTION 4.08. Limitation on Transactions with Shareholders and Affiliates........ 58
-----------------------------------------------------------
SECTION 4.09. Limitation on Liens Securing Certain Indebtedness.................. 60
-------------------------------------------------
SECTION 4.10. Limitation on Asset Sales.......................................... 60
-------------------------
SECTION 4.11. Limitation on Status as Investment Company or Credit
----------------------------------------------------
Institution...................................................... 61
-----------
SECTION 4.12. Repurchase of Notes upon a Change of Control....................... 62
--------------------------------------------
SECTION 4.13. Existence.......................................................... 62
---------
SECTION 4.14. Payment of Taxes and Other Claims.................................. 62
---------------------------------
SECTION 4.15. Maintenance of Properties and Insurance............................ 63
---------------------------------------
SECTION 4.16. Notice of Defaults................................................. 63
------------------
SECTION 4.17. Compliance Certificates............................................ 63
-----------------------
SECTION 4.18. Commission Reports and Reports to Holders.......................... 65
-----------------------------------------
SECTION 4.19. Waiver of Stay, Extension or Usury Laws............................ 65
---------------------------------------
SECTION 4.20. Payment of Additional Amounts...................................... 65
-----------------------------
SECTION 4.21. Escrow Account..................................................... 68
--------------
ARTICLE FIVE SUCCESSOR CORPORATION.................................................... 68
SECTION 5.01. When Company May Merge, Etc........................................ 68
---------------------------
SECTION 5.02. Successor Substituted.............................................. 70
---------------------
ARTICLE SIX DEFAULT AND REMEDIES...................................................... 71
SECTION 6.01. Events of Default.................................................. 73
-----------------
SECTION 6.02. Acceleration....................................................... 74
------------
SECTION 6.03. Other Remedies..................................................... 74
--------------
SECTION 6.04. Waiver of Past Defaults............................................ 74
-----------------------
SECTION 6.05. Control by Majority................................................ 74
-------------------
SECTION 6.06. Limitation on Suits................................................ 74
-------------------
SECTION 6.07. Rights of Holders To Receive Payment............................... 75
------------------------------------
SECTION 6.08. Collection Suit by Trustee......................................... 75
--------------------------
SECTION 6.09. Trustee May File Proofs of Claim................................... 76
--------------------------------
SECTION 6.10. Priorities......................................................... 76
----------
</TABLE>
-ii-
<PAGE>
<TABLE>
<CAPTION>
Page
----
<S> <C> <C>
SECTION 6.11. Undertaking for Costs.............................................. 77
---------------------
SECTION 6.12. Restoration of Rights and Remedies................................. 77
----------------------------------
SECTION 6.13. Rights and Remedies Cumulative..................................... 77
------------------------------
SECTION 6.14. Delay or Omission Not Waiver....................................... 78
----------------------------
ARTICLE SEVEN TRUSTEE................................................................. 78
SECTION 7.01. General............................................................ 78
-------
SECTION 7.02. Certain Rights of Trustee.......................................... 78
-------------------------
SECTION 7.03. Individual Rights of Trustee....................................... 80
----------------------------
SECTION 7.04. Trustee's Disclaimer............................................... 80
--------------------
SECTION 7.05. Notice of Default.................................................. 80
-----------------
SECTION 7.06. Reports by Trustee to Holders...................................... 81
-----------------------------
SECTION 7.07. Compensation and Indemnity......................................... 81
--------------------------
SECTION 7.08. Replacement of Trustee............................................. 82
----------------------
SECTION 7.09. Successor Trustee by Merger, Etc................................... 83
--------------------------------
SECTION 7.10. Eligibility........................................................ 83
----------
SECTION 7.11. Money Held in Trust................................................ 83
-------------------
SECTION 7.12. Withholding Taxes.................................................. 83
-----------------
ARTICLE EIGHT DISCHARGE OF INDENTURE.................................................. 84
SECTION 8.01. Termination of Company's Obligations............................... 84
------------------------------------
SECTION 8.02. Defeasance and Discharge of Indenture.............................. 85
-------------------------------------
SECTION 8.03. Defeasance of Certain Obligations.................................. 88
---------------------------------
SECTION 8.04. Application of Trust Money......................................... 89
--------------------------
SECTION 8.05. Repayment to Company............................................... 89
--------------------
SECTION 8.06. Reinstatement...................................................... 90
-------------
ARTICLE NINE AMENDMENTS, SUPPLEMENTS AND WAIVERS...................................... 91
SECTION 9.01. Without Consent of Holders......................................... 91
--------------------------
SECTION 9.02. With Consent of Holders............................................ 91
-----------------------
SECTION 9.03. Revocation and Effect of Consent................................... 93
--------------------------------
SECTION 9.04. Notation on or Exchange of Notes................................... 94
--------------------------------
SECTION 9.05. Trustee to Sign Amendments, Etc.................................... 94
-------------------------------
SECTION 9.06. Conformity with Trust Indenture Act................................ 95
-----------------------------------
ARTICLE TEN COLLATERAL AND SECURITY................................................... 95
SECTION 10.01. Pledge Agreement................................................... 95
----------------
SECTION 10.02. Recording and Opinions............................................. 96
----------------------
SECTION 10.03. Release of Collateral.............................................. 96
---------------------
SECTION 10.04. Authorization of Actions To Be Taken by the Trustee Under
---------------------------------------------------------
the Pledge Agreement............................................. 97
--------------------
</TABLE>
-iii-
<PAGE>
<TABLE>
<CAPTION>
Page
----
<S> <C> <C>
SECTION 10.05. Authorization of Receipt of Funds by the Trustee Under the
----------------------------------------------------------
Pledge Agreement................................................ 97
----------------
ARTICLE ELEVEN MISCELLANEOUS......................................................... 98
SECTION 11.01. Trust Indenture Act of 1939....................................... 98
---------------------------
SECTION 11.02. Notices........................................................... 98
-------
SECTION 11.03. Certificate and Opinion as to Conditions Precedent................ 99
--------------------------------------------------
SECTION 11.04. Statements Required in Certificate................................ 100
----------------------------------
SECTION 11.05. Rules by Trustee, Paying Agent or Registrar....................... 100
-------------------------------------------
SECTION 11.06. Payment Date Other Than a Business Day............................ 100
--------------------------------------
SECTION 11.07. Governing Law..................................................... 101
-------------
SECTION 11.08. No Adverse Interpretation of Other Agreements..................... 101
---------------------------------------------
SECTION 11.09. No Recourse Against Others........................................ 101
--------------------------
SECTION 11.10. Successors........................................................ 102
----------
SECTION 11.11. Duplicate Originals............................................... 102
-------------------
SECTION 11.12. Separability...................................................... 102
------------
SECTION 11.13. Table of Contents, Headings, Etc.................................. 102
--------------------------------
SECTION 11.14. Agent for Service; Submission to Jurisdiction; Waiver of
--------------------------------------------------------
Immunities...................................................... 102
----------
SECTION 11.15. Judgment Currency................................................. 103
-----------------
</TABLE>
-iv-
<PAGE>
<TABLE>
<S> <C>
EXHIBIT A - Form of Note
EXHIBIT B - Certificate to be Delivered Upon Exchange or Registration of Notes
EXHIBIT C - Form of Certificate to be Delivered in Connection with Transfers to Institutional Accredited Investors
EXHIBIT D - Form of Certificate to be Delivered in Connection with Transfers Pursuant to Regulation S
EXHIBIT E - Terms of Subsidiary Guaranty
EXHIBIT F - Form of Subsidiary Guaranty
</TABLE>
-v-
<PAGE>
INDENTURE, dated as of April 13, 2000, between COMPLETEL EUROPE N.V.,
a Netherlands public company with limited liability (the "Company") with its
corporate seat in Amsterdam, The Netherlands, and THE CHASE MANHATTAN BANK, a
national banking corporation (the "Trustee").
RECITALS OF THE COMPANY
The Company has duly authorized the execution and delivery of this
Indenture to provide for the issuance of up to (Euro)300,000,000 aggregate
principal amount of the Company's 14% Senior Notes due 2010 (the "Notes")
issuable as provided in this Indenture. The Company will issue (Euro)200,000,000
aggregate principal amount of Notes on the Issue Date under this Indenture (the
"Offering"). All things necessary to make this Indenture a valid agreement of
--------
the Company, in accordance with its terms, have been done, and the Company has
done all things necessary to make the Notes, when executed by the Company, when
authenticated and delivered by the Trustee hereunder and duly issued by the
Company, the valid obligations of the Company. By separate agreement dated the
date hereof, CompleTel LLC entered into a guaranty agreement providing for an
unconditional and irrevocable guaranty of the Notes (as defined herein). If the
Company shall determine based upon an Opinion of Counsel (as defined herein)
that it does not require the Guaranty to avoid being a credit institution within
the meaning of the Dutch 1992 Act on the Supervision of Credit Institutions
("Wet toezicht kredietwezen 1992"), CompleTel LLC will be released from all of
its obligations under its Guaranty following notice to the Trustee. Immediately
following the Offering, the Company, will lend approximately (Euro)78.0 million
of the net proceeds of this offering to CompleTel Escrow B.V., a special purpose
subsidiary of the Company. In accordance with a pledge agreement dated the date
hereof among CompleTel Escrow B.V., the Company, the Trustee and The Chase
Manhattan Bank, as Escrow Agent (the "Escrow Agent") (the "Pledge Agreement").
CompleTel Escrow B.V. will use the funds lent to it by the Company to purchase
securities and pledge them to the Trustee for the benefit of the Holders (as
defined herein) of the Notes. The scheduled interest and principal payments on
such pledged securities shall be equal to or exceed the amount needed to pay the
first six scheduled interest payments (excluding Additional Amounts (as defined
herein) and Special Interest (as defined herein) due on the Notes. The Company
may issue Notes from time to time after the Issue Date under this Indenture in
aggregate principal amount not to exceed (Euro)100,000,000 in addition to any
Exchange Notes that may be issued pursuant to the terms hereof.
This Indenture is subject to, and shall be governed by, the provisions
of the Trust Indenture Act of 1939, as
1
<PAGE>
amended, that are required to be a part of and to govern indentures qualified
under the Trust Indenture Act of 1939, as amended.
AND THIS INDENTURE FURTHER WITNESSETH
For and in consideration of the premises and the purchase of the Notes
by the Holders thereof, it is mutually covenanted and agreed, for the equal and
proportionate benefit of all Holders, as follows.
ARTICLE ONE
DEFINITIONS AND INCORPORATION BY REFERENCE
SECTION 1.01. Definitions.
-----------
"Acquired Indebtedness" means Indebtedness of a Person existing at the
time such Person becomes a Restricted Subsidiary or assumed in connection with
an Asset Acquisition by a Restricted Subsidiary and not Incurred in connection
with, or in anticipation of, such Person becoming a Restricted Subsidiary or
such Asset Acquisition.
"Additional Amounts" has the meaning provided in Section 4.20.
"Adjusted Consolidated EBITDA" means, for any period, Adjusted
Consolidated Net Income for such period plus, to the extent such amount was
deducted in calculating such Adjusted Consolidated Net Income,
(1) Consolidated Interest Expense,
(2) income taxes (other than income taxes (either positive or
negative) attributable to extraordinary and nonrecurring gains or losses or
sales of assets),
(3) depreciation expense,
(4) amortization expense,
(5) unrealized foreign currency losses (or minus unrealized foreign
currency gains),
(6) all other non-cash expenses reducing Adjusted Consolidated Net
Income (or minus non-cash income increasing Adjusted Consolidated Net
Income), other than, in each case, items that will require cash payments
and for which
2
<PAGE>
an accrual or reserve is, or is required by GAAP to be, made,
less all non-cash items increasing Adjusted Consolidated Net Income, all as
determined on a consolidated basis for the Company and the Restricted
Subsidiaries in conformity with GAAP.
"Adjusted Consolidated Net Income" means, for any period, the
aggregate net income (or loss) of the Company and the Restricted Subsidiaries
for such period determined in conformity with GAAP; provided that the following
items shall be excluded in computing Adjusted Consolidated Net Income (without
duplication): (i) the net income (or loss) of any Person that is not a
Restricted Subsidiary, except (x) with respect to net income, to the extent of
the amount of dividends or other distributions actually paid to the Company or
any of the Restricted Subsidiaries by such Person during such period and (y)
with respect to net losses, to the extent of the amount of Investments made by
the Company or any Restricted Subsidiary in such Person; (ii) the net income of
any Restricted Subsidiary to the extent that the declaration or payment of
dividends or similar distributions by such Restricted Subsidiary out of such net
income is not at the time permitted by the operation of the terms of its charter
or any agreement, instrument, judgment, decree, order, statute, rule or
governmental regulation applicable to such Restricted Subsidiary; provided that
solely for the purposes of calculating the Consolidated Leverage Ratio, any
determination as to the exclusion of net income of a Restricted Subsidiary
pursuant to this clause (ii) shall not give effect to any restrictions on the
declaration or payment of dividends or other distributions which are permitted
pursuant to clause (vi) of the second paragraph under Section 4.05; (iii) any
gains or losses (on an after-tax basis) attributable to Asset Sales; (iv) except
for purposes of calculating the amount of Restricted Payments that may be made
pursuant to clause (C) of the first paragraph of Section 4.04, any amount paid
or accrued as dividends on Preferred Stock of the Company or any Restricted
Subsidiary owned by Persons other than the Company and any of the Restricted
Subsidiaries; (v) all extraordinary gains and extraordinary losses (on an after-
tax basis); (vi) any compensation expense paid or payable solely with Capital
Stock (other than Disqualified Stock) of the Company or any non-cash
compensation expense allocated to the Company by the Parent in the form of a
non-cash capital contribution in the equivalent amount of such non-cash
compensation expense; and (vii) net income (or loss) of any Person combined with
the Company or any Restricted Subsidiary on a "pooling of interests" basis
attributable to any period commencing prior to the date of combination.
3
<PAGE>
"Affiliate" means, as applied to any Person, any other Person directly
or indirectly controlling, controlled by, or under direct or indirect common
control with, such Person. For purposes of this definition, "control"
(including, with correlative meanings, the terms "controlling," "controlled by"
and "under common control with"), as applied to any Person, means the
possession, directly or indirectly, of the power to direct or cause the
direction of the management and policies of such Person, whether through the
ownership of voting securities, by contract or otherwise.
"Agent" means any Registrar, Principal Paying Agent, authenticating
agent or co-Registrar.
"Agent Members" has the meaning provided in Section 2.07(a).
"Approved Jurisdiction" means any state of the United States or the
District of Columbia, The Netherlands or any other Member State (as defined in
the Maastricht Treaty) of the European Community in respect of which the Company
delivers an Opinion of Counsel to the effect that the laws of such jurisdiction
will not adversely affect the Holders of the Notes.
"Asset Acquisition" means (i) an Investment by the Company or any of
the Restricted Subsidiaries in any other Person pursuant to which such Person
shall become a Restricted Subsidiary or shall be merged into or consolidated
with the Company or any of the Restricted Subsidiaries or (ii) an acquisition by
the Company or any of the Restricted Subsidiaries of the property and assets of
any Person other than the Company or any of the Restricted Subsidiaries that
constitute substantially all of a division or line of business of such Person or
which is otherwise outside of the ordinary course of business.
"Asset Disposition" means the sale or other disposition by the Company
or any of the Restricted Subsidiaries (other than to the Company or another
Restricted Subsidiary) of (i) Capital Stock of any Restricted Subsidiary, (ii)
all or substantially all of the assets that constitute a division or line of
business of the Company or any of the Restricted Subsidiaries or (iii) its
assets outside of the ordinary course of business.
"Asset Sale" means any sale, transfer or other disposition (including
by way of merger, consolidation or sale-leaseback transaction) in one
transaction or a series of related transactions by the Company or any of the
Restricted Subsidiaries to any Person other than the Company or any of the
Restricted Subsidiaries of (i) all or any of the Capital Stock of any Restricted
Subsidiary, (ii) all or substantially all of
4
<PAGE>
the property and assets of an operating unit or business of the Company or any
of the Restricted Subsidiaries or (iii) any other property and assets (other
than the Capital Stock or other Investment in an Unrestricted Subsidiary) of the
Company or any of the Restricted Subsidiaries outside the ordinary course of
business of the Company or such Restricted Subsidiary and, in each case, that is
not governed by the provisions of this Indenture applicable to mergers,
consolidations and sales of all or substantially all of the assets of the
Company; provided that "Asset Sale" shall not include (a) sales or other
dispositions of inventory, receivables and other current assets, (b) sales,
transfers or other dispositions of assets constituting a Restricted Payment
permitted to be made under Section 4.04, (c) sales, liquidation or other
disposition of Temporary Cash Investments, (d) any transfer of properties and
assets that is governed by the provisions described in Section 5 of this
Indenture, (e) sales or other dispositions of damaged, worn out or other
obsolete assets or property in the ordinary course of business, or (f) sales,
transfers or other dispositions of assets with a fair market value (as certified
in an Officers' Certificate) not in excess of (Euro)2.5 million (or, to the
extent non-euro denominated, the Euro Equivalent thereof) in any transaction or
series of related transactions.
"Average Life" means, at any date of determination with respect to any
debt security, the quotient obtained by dividing (i) the sum of the products of
(a) the number of years from such date of determination to the dates of each
successive scheduled principal payment of such debt security and (b) the amount
of such principal payment by (ii) the sum of all such principal payments.
"Board of Directors" means the supervisory board of the Company or any
committee of such board duly authorized to act under this Indenture.
"Business Day" means any day except: (i) Saturday, Sunday or other
day on which commercial banks in The City of New York, London, England or the
city of the Corporate Trust Office are authorized by law to close or (ii) a day
on which the Trans-European Automated Real-Time Gross Settlement Express
Transfer System does not operate.
"Capital Stock" means, with respect to any Person, any and all shares,
interests, participations, rights in or other equivalents (however designated,
whether voting or non-voting) of such Person's capital stock, whether
outstanding on the Issue Date or issued thereafter, and any and all rights
(other than any evidence of Indebtedness), warrants or options exchangeable for
or convertible into such capital stock.
5
<PAGE>
"Capitalized Lease" means, as applied to any Person, any lease of any
property (whether real, personal or mixed) of which the discounted present value
of the rental obligations of such Person as lessee, in conformity with GAAP, is
required to be capitalized on the balance sheet of such Person.
"Capitalized Lease Obligations" means the discounted present value of
the rental obligations under a Capitalized Lease.
"Change of Control" means such time (i) as a "person" or "group"
(within the meaning of Sections 13(d) and 14(d)(2) of the Exchange Act), other
than a person or group controlled exclusively by the Equity Investors, becomes
the ultimate "beneficial owner" (as defined in Rules l3d-3 and 13d-5 under the
Exchange Act, except that a person shall be deemed to have "beneficial
ownership" of all securities that such person has the right to acquire, whether
such right is exercisable immediately or only after the passage of time) of more
than 35% of the total voting power of the Voting Stock of the Company on a fully
diluted basis and such ownership represents a greater percentage of the total
voting power of the Voting Stock of the Company, on a fully diluted basis, than
is held by the Existing Stockholders on such date; or (ii) the Company
consolidates with, or merges with or into, another person or sells, assigns,
conveys, transfers, leases or otherwise disposes of all or substantially all of
its assets to any person, or any person consolidates with, or merges with or
into, the Company, in any such event pursuant to a transaction in which the
outstanding Voting Stock of the Company is converted into or exchanged for cash,
securities or other property, other than any such transaction where (a) the
outstanding Voting Stock of the Company is converted into or exchanged for (1)
Voting Stock (other than Disqualified Stock) of the surviving or transferee
corporation or its parent corporation and/or (2) cash, securities and other
property in an amount that could be paid by the Company as a Restricted Payment
under this Indenture and (b) immediately after such transaction no "person" or
"group" (as such terms are used in Section 13(d) and 14(d) of the Exchange Act),
other than a person or group controlled exclusively by the Equity Investors, is
the "beneficial owner" (as defined in Rules 13d-3 and 13d-5 under the Exchange
Act, except that a person shall be deemed to have "beneficial ownership" of all
securities that such person has the right to acquire, whether such right is
exercisable immediately or only after the passage of time), directly or
indirectly, of more than 35% of the total Voting Stock of the surviving or
transferee corporation or its parent corporation, as applicable and is the
beneficial owner of a greater percentage of such Voting Stock than the Equity
Investors; or (iii) during any period of two consecutive years, individuals who
on the Issue Date constitute the Board of Direc-
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tors (together with any thereafter elected directors whose election by the Board
of Directors or whose nomination by the Board of Directors for election by the
Company's stockholders was approved by a vote of at least two-thirds of the
members of the Board of Directors then in office who either were members of the
Board of Directors on the Issue Date or whose election or nomination for
election was previously so approved) cease for any reason to constitute a
majority of the members of the Board of Directors then in office.
"Clearstream" means Clearstream Banking, Luxemburg, societe anonyme,
formerly Cedelbank.
"Commission" means the Securities and Exchange Commission, as from
time to time constituted, created under the Exchange Act or, if at any time
after the execution of this instrument such Commission is not existing and
performing the duties now assigned to it under the TIA, then the body performing
such duties at such time.
"Common Stock" means, with respect to any person, any and all shares,
interests or other participations in, and other equivalents (however designated
and whether voting or nonvoting) of such person's common equity whether or not
outstanding at the Issue Date, and includes, without limitation, all series and
classes of such common equity.
"Company" means the party named as such in the first paragraph of this
Indenture until a successor replaces it pursuant to Article Five of this
Indenture and thereafter means the successor.
"Company Order" means a written request or order signed in the name of
the Company (i) by a Managing Director of the Company or (ii) by two authorized
signatories (by virtue of a power of attorney or other similar instrument) and
delivered to the Trustee.
"Consolidated Interest Expense" means, for any period, the aggregate
amount of interest in respect of Indebtedness (including, without limitation,
amortization of original issue discount on any Indebtedness and the interest
portion of any deferred payment obligation, calculated in accordance with the
effective interest method of accounting; all commissions, discounts and other
fees and charges owed with respect to letters of credit and bankers' acceptance
financing; the net costs associated with Interest Rate Agreements, and
Indebtedness that is Guarantied or secured by the Company or any of the
Restricted Subsidiaries) and all but the principal component of rentals in
respect of Capitalized Lease Obligations paid, accrued or scheduled to be paid
or to be accrued by the Company
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and the Restricted Subsidiaries during such period; excluding, however, (i) any
amount of such interest of any Restricted Subsidiary if the net income of such
Restricted Subsidiary is excluded in the calculation of Adjusted Consolidated
Net Income pursuant to clause (ii) of the definition thereof (but only in the
same proportion as the net income of such Restricted Subsidiary is excluded from
the calculation of Adjusted Consolidated Net Income pursuant to clause (iii) of
the definition thereof) and (ii) any premiums, fees and expenses (and any
amortization thereof) payable in connection with the offering of the Notes, all
as determined on a consolidated basis (without taking into account Unrestricted
Subsidiaries) in conformity with GAAP.
"Consolidated Leverage Ratio" means, on any Transaction Date, the
ratio of (i) the aggregate amount of Indebtedness of the Company and the
Restricted Subsidiaries on a consolidated basis outstanding on such Transaction
Date to (ii) the aggregate amount of Adjusted Consolidated EBITDA for the then
most recent four fiscal quarters (or since inception of the Company, if less
than four fiscal quarters) for which financial statements of the Company have
been filed with the Commission or provided to the Trustee pursuant to Section
4.18 (such period being the "Four Quarter Period"); provided that, in making the
foregoing calculation, (A) pro forma effect shall be given to any Indebtedness
to be Incurred or repaid on the Transaction Date; (B) pro forma effect shall be
given to Asset Dispositions and Asset Acquisitions (including giving pro forma
effect to the application of proceeds of any Asset Disposition) that occur from
the beginning of the Four Quarter Period through the Transaction Date (the
"Reference Period") as if they had occurred and such proceeds had been applied
on the first day of such Reference Period; (C) pro forma effect shall be given
to asset dispositions and asset acquisitions (including giving pro forma effect
to the application of proceeds of any asset disposition) that have been made by
any Person that has become a Restricted Subsidiary or has been merged with or
into the Company or any Restricted Subsidiary during such Reference Period and
that would have constituted Asset Dispositions or Asset Acquisitions had such
transactions occurred when such Person was a Restricted Subsidiary as if such
asset dispositions or asset acquisitions were Asset Dispositions or Asset
Acquisitions that occurred on the first day of such Reference Period; provided
that to the extent that clause (B) or (C) of this sentence requires that pro
forma effect be given to an Asset Acquisition or Asset Disposition, such pro
forma calculation shall be based upon the four full fiscal quarters immediately
preceding the Transaction Date of the Person, or division or line of business of
the Person, that is acquired or disposed
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of for which financial information is available; and (D) (i) any Subsidiary of
the Company that is a Restricted Subsidiary on the Transaction Date shall be
deemed to have been a Restricted Subsidiary at all times during the Reference
Period and (ii) any Subsidiary of the Company that is not a Restricted
Subsidiary on the Transaction Date shall be deemed not to have been a Restricted
Subsidiary at any time during the Reference Period.
"Corporate Trust Office" means the office of the Trustee at which the
corporate trust business of the Trustee shall, at any particular time, be
principally administered, which office is, at the date of this Indenture,
located at 450 W.33rd Street, 15th Floor, New York, NY 10001, Attention:
Global Trust Services. For purposes of Section 2.04 and Section 4.02 the
Corporate Trust Office of the Trustee is, at the date of this Indenture, located
at Trinity Tower, 9 Thomas More Street, London E1 9YT, England, Attention:
Global Trust Services.
"Cumulative Available Cash Flow" means, as of any date of
determination, the positive cumulative Adjusted Consolidated EBITDA realized
during the period commencing on the first day of the fiscal quarter which
includes the Prior Issue Date and ending on the last day of the last fiscal
quarter preceding the Transaction Date for which reports have been filed with
the Commission or provided to the Trustee pursuant to Section 4.18 or, if such
cumulative Adjusted Consolidated EBITDA for such period is negative, the amount
by which cumulative Adjusted Consolidated EBITDA is less than zero.
"Currency Agreement" means any foreign exchange contract, currency
swap agreement or other similar agreement or arrangement.
"Debt Securities" means any bonds, notes, debentures or other similar
instruments (excluding, in any event, (i) any Capitalized Lease Obligations and
(ii) any notes, bankers' acceptances or other instruments evidencing commercial
loans or equipment financing made by, and bills of exchange drawn on, banks,
other financial lending institutions or equipment vendors) issued by the Company
or by any Restricted Subsidiary (including by means of any Guaranty of the
Company or of any Restricted Subsidiary of securities of another Person),
whether in a public offering or private placement.
"Default" means any event that is, or after notice or passage of time
or both would be, an Event of Default.
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"Depositary" means Euroclear or Clearstream or a person designated as
the common depositary by Euroclear or Clearstream.
"Disqualified Stock" means any class or series of Capital Stock of any
Person that by its terms or otherwise is (i) required to be redeemed prior to
the Stated Maturity of the Notes, (ii) redeemable at the option of the holder of
such class or series of Capital Stock at any time prior to the Stated Maturity
of the Notes or (iii) convertible into or exchangeable for Capital Stock
referred to in clause (i) or (ii) above or Indebtedness having a scheduled
maturity prior to the Stated Maturity of the Notes; provided that any Capital
Stock that would not constitute Disqualified Stock but for provisions thereof
giving holders thereof the right to require such Person to repurchase or redeem
such Capital Stock upon the occurrence of an "asset sale" or "change of control"
occurring prior to the Stated Maturity of the Notes shall not constitute
Disqualified Stock if the "asset sale" or "change of control" provisions
applicable to such Capital Stock are reasonably determined by the Company to be
no more favorable to the holders of such Capital Stock than the provisions
contained in Section 4.10 and Section 4.12 and such Capital Stock, or the
agreements or instruments governing the redemption rights thereof, specifically
provide that such Person will not repurchase or redeem any such stock pursuant
to such provision prior to the Company's repurchase of such Notes as are
required to be repurchased pursuant to Section 4.10 and Section 4.12.
"Equity Investors" means Madison Dearborn Partners, Inc. and LPL
Investment Group, Inc., and their respective Affiliates.
"Escrow Account" has the meaning provided in the Pledge Agreement.
"Escrow Agent" shall the meaning specified in the recitals to this
Indenture.
"Euroclear" means Morgan Guaranty Trust Company of New York (Brussels
office) as operator of the Euroclear system.
"Euro Equivalent" means, with respect to any monetary amount in a
currency other than euros, at any time for the determination thereof, the amount
of euros obtained by converting such foreign currency involved in such
computation into euros at the spot rate for the purchase of euros with the
applicable foreign currency as quoted by Reuters at approximately 11:00 a.m.
(New York time) on the date two business days prior to such determination.
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"Euro Currency Country" means a country for which the euro is the
lawful currency.
"Event of Default" has the meaning provided in Section 6.01.
"Excess Proceeds" has the meaning provided in Section 4.10.
"Exchange Act" means the Securities Exchange Act of 1934, as amended.
"Exchange Notes" means the 14% Senior Notes due 2010 that are issued
and exchanged for the Initial Notes after Registration pursuant to the Notes
Registration Rights Agreement and this Indenture in substantially the form
annexed hereto as Exhibit A, containing the legends in the second and third
paragraphs of Section 2.02.
"Existing Stockholders" means (i) the Equity Investors and (ii) the
Parent and its successors, so long as the Equity Investors, in the aggregate,
beneficially own a majority of the Voting Stock of any such Person.
"fair market value" means the price that would be paid in an arm's
length transaction between an informed and willing seller under no compulsion to
sell and an informed and willing buyer under no compulsion to buy, as determined
in good faith by the Board of Directors, whose determination shall be conclusive
if evidenced by a board resolution; provided that for purposes of the definition
of "Total Incremental Equity," (x) the fair market value of any security
registered under the Exchange Act shall be the average of the closing prices,
regular way, of such security for the 20 consecutive trading days immediately
preceding the sale of Capital Stock and (y) in the event the aggregate fair
market value of any other property (other than cash or cash equivalents)
received by the Company exceeds (Euro)11 million (or, to the extent non-euro
denominated, the Euro Equivalent thereof), the fair market value of such
property shall be determined by an internationally recognized investment banking
firm and set forth in its written opinion which shall be delivered to the
Trustee.
"GAAP" means generally accepted accounting principles in the United
States of America as in effect as of the Issue Date, including, without
limitation, those 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 approved by a significant segment
of the accounting profession.
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All ratios and computations contained or referred to in this Indenture shall be
computed in conformity with GAAP applied on a consistent basis.
"Global Notes" means a security evidencing all or a portion of the
Notes issued to the Depositary or its nominee in accordance with Section 2.01
and bearing the legend in the second and third paragraphs of Section 2.02.
"Government Securities" means direct and fully guarantied or insured
obligations of the United States of America or any agency or instrumentality
thereof, the United Kingdom or any Euro Currency Country rated at least "A" by
S&P or "A" by Moody's or obligations guarantied by the United States of America
or any agency or instrumentality thereof or the United Kingdom or any Euro
Currency Country rated at least "A" by S&P or "A" by Moody's.
"Guarantied Indebtedness" has the meaning provided in Section 4.07.
"Guarantied Parties" means all the persons who are now or who
hereafter become Holders and the Trustee under this Indenture.
"Guaranty" means any obligation, contingent or otherwise, of any
Person directly or indirectly guarantying any Indebtedness of any other Person
and, without limiting the generality of the foregoing, any obligation, direct or
indirect, contingent or otherwise, of such 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
agreements to keep-well, to purchase assets, goods, securities or services
(unless such purchase arrangements are on arm's-length terms and are entered
into in the ordinary course of business), 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 that the term "Guaranty" shall not include endorsements for
collection or deposit in the ordinary course of business. The term "Guaranty"
used as a verb has a corresponding meaning.
"Holder" or "Noteholder" means the registered holder of any Note.
"IAI Global Notes" has the meaning provided in Section 2.01.
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"Incur" means, with respect to any Indebtedness, to directly or
indirectly incur, create, issue, assume, Guaranty or otherwise become liable for
or with respect to, or become responsible for, the payment of, contingently or
otherwise, such Indebtedness, including an "Incurrence" of Acquired
Indebtedness; provided that neither the accrual of interest nor the accretion of
original issue discount shall be considered an Incurrence of Indebtedness.
"Indebtedness" means, with respect to any Person at any date of
determination (without duplication), (i) all indebtedness of such Person for
borrowed money, (ii) all obligations of such Person evidenced by bonds,
debentures, notes or other similar instruments, (iii) all obligations of such
Person in respect of letters of credit or other similar instruments (including
reimbursement obligations with respect thereto, but excluding obligations with
respect to letters of credit (including trade letters of credit) securing
obligations (other than obligations described in (i) or (ii) above or (v), (vi),
(vii) or (viii) below) entered into in the ordinary course of business of such
Person to the extent such letters of credit are not drawn upon or, if drawn
upon, to the extent such drawing is reimbursed no later than the third business
day following receipt by such Person of a demand for reimbursement), (iv) all
obligations of such Person to pay the deferred and unpaid purchase price of
property or services, which purchase price is due more than six months after the
date of placing such property in service or taking delivery and title thereto or
the completion of such services, except Trade Payables or accrued liabilities
arising in the ordinary course of business, (v) all Capitalized Lease
Obligations of such Person, (vi) all indebtedness of other Persons secured by a
Lien on any asset of such Person, whether or not such Indebtedness is assumed by
such Person; provided that the amount of such Indebtedness shall be the lesser
of (A) the fair market value of such asset at such date of determination and (B)
the principal amount of such Indebtedness, (vii) all indebtedness of other
Persons Guarantied by such Person to the extent such Indebtedness is Guarantied
by such Person, (viii) all Disqualified Stock valued at the greater of its
voluntary or involuntary maximum fixed repurchase price plus accrued dividends,
and (ix) to the extent not otherwise included in this definition, all net
obligations of such Person under Currency Agreements and Interest Rate
Agreements. The amount of Indebtedness of any Person at any date shall be the
outstanding balance at such date (or, in the case of a revolving credit or other
similar facility, the total amount of funds outstanding and/or available on the
date of determination) of all unconditional obligations as described above and,
with respect to contingent obligations, the maximum liability upon the
occurrence of the contingency giving rise to the obligation, provided (A) that
the amount outstanding at any
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time of any Indebtedness issued with original issue discount is the face amount
of such Indebtedness less the remaining unamortized portion of the original
issue discount of such Indebtedness at the time of its issuance as determined in
conformity with GAAP, (B) that money borrowed and set aside at the time of the
Incurrence of any Indebtedness in order to prefund the payment of the interest
on such Indebtedness shall not be deemed to be "Indebtedness" so long as such
money is held to secure the payment of such interest and (C) that Indebtedness
shall not include any liability for federal, state, local or any other
applicable taxes.
"Indenture" means this Indenture as originally executed or as it may
be amended or supplemented from time to time by one or more indentures
supplemental to this Indenture entered into pursuant to the applicable
provisions of this Indenture.
"Initial Notes" means, collectively, (i) the 14% Senior Notes due 2010
issued on the Issue Date and (ii) any 14% Senior Notes due 2010 that are issued
under this Indenture subsequent to the Issue Date, prior to Registration and
substantially in the form of Exhibit A and containing the Private Placement
Legend.
"Institutional Accredited Investor" means an institution that is an
"accredited investor" as that term is defined in Rule 501(a)(1), (2), (3) or(7)
under the Securities Act.
"Interest Payment Date" means each semiannual interest payment date on
April 15 and October 15 of each year, commencing October 15, 2000.
"Interest Rate Agreement" means 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, option or future contract or other
similar agreement or arrangement.
"Investment" in any Person means any direct or indirect advance, loan
or other extension of credit (including, without limitation, by way of Guaranty
or similar arrangement; but excluding advances to customers in the ordinary
course of business that are, in conformity with GAAP, recorded as accounts
receivable on the balance sheet of the Company or the Restricted Subsidiaries)
or capital contribution (by means of any transfer of cash or other property
(other than Capital Stock which is not Disqualified Stock) to others or any
payment for property or services for the account or use of others), or any
purchase or acquisition of Capital Stock, bonds, notes, de-
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bentures or other similar instruments issued by, such Person and shall include
(i) the designation of a Restricted Subsidiary as an Unrestricted Subsidiary and
(ii) the fair market value of the Capital Stock (or any other Investment) held
by the Company or any of the Restricted Subsidiaries of (or in) any Person that
has ceased to be a Restricted Subsidiary, including, without limitation, by
reason of any transaction permitted by clause (iii) of Section 4.06. For
purposes of the definition of "Unrestricted Subsidiary" and Section 4.04, (i)
"Investment" shall include the fair market value of the assets (net of
liabilities (other than liabilities to the Company or any of the Restricted
Subsidiaries)) of any Restricted Subsidiary at the time that such Restricted
Subsidiary is designated an Unrestricted Subsidiary, (ii) the fair market value
of the assets (net of liabilities (other than liabilities to the Company or any
of the Restricted Subsidiaries)) of any Unrestricted Subsidiary at the time that
such Unrestricted Subsidiary is designated a Restricted Subsidiary shall be
considered a reduction in outstanding Investments and (iii) any property
transferred to or from an Unrestricted Subsidiary shall be valued at its fair
market value at the time of such transfer. Notwithstanding the foregoing, in no
event shall any issuance of Capital Stock (other than Disqualified Stock) of the
Company in exchange for Capital Stock, property or assets of another Person
constitute an Investment by the Company in such other Person.
"Issue Date" means April 13, 2000, the date on which the Notes are
originally issued under this Indenture.
"Leveraged Subsidiary" means any Subsidiary Guarantor that has
Incurred Indebtedness (other than Acquired Indebtedness) pursuant to the first
paragraph of Section 4.03 and any Refinancings thereof Incurred under clause
(ii) of the second paragraph of Section 4.03 for so long as any such
Indebtedness, or any Refinancing thereof, is outstanding.
"License" means authorization (or renewal thereof) from the applicable
federal or national level governmental agency or authority to construct and
operate a local switched network providing wireline telecommunications services.
"Liquidated Damages" has the meaning provided in the Notes
Registration Rights Agreement.
"Lien" means any mortgage, pledge, security interest, encumbrance,
lien or charge of any kind (including, without limitation, any conditional sale
or other title retention agreement or lease in the nature thereof or any
agreement to give any security interest).
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"Management Services Agreements" means agreements pursuant to which
CableTel Management Inc. provides management services to the Company or a
Restricted Subsidiary; provided that the maximum fee payable by any Person
pursuant to any such agreement does not exceed 105% of the costs, expenses,
charges and disbursements allocated to such Person and incurred by CableTel
Management Inc. in connection with its performance of such agreement.
"Moody's" means Moody's Investors Service, Inc. and its successors.
"Net Cash Proceeds" means (a) with respect to any Asset Sale, the
proceeds of such Asset Sale in the form of cash or cash equivalents, including
payments in respect of deferred payment obligations (to the extent corresponding
to the principal, but not interest, component thereof) when received in the form
of cash or cash equivalents (except to the extent such obligations are financed
or sold with recourse to the Company or any Restricted Subsidiary) and proceeds
from the conversion of other property received when converted to cash or cash
equivalents, net of (i) brokerage commissions and other fees and expenses
(including fees and expenses of counsel and investment bankers) related to such
Asset Sale, (ii) provisions for all taxes (whether or not such taxes will
actually be paid or are payable) as a result of such Asset Sale without regard
to the consolidated results of operations of the Company and the Restricted
Subsidiaries, taken as a whole, (iii) payments made to repay Indebtedness or any
other obligation outstanding at the time of such Asset Sale that either (A) is
secured by a Lien on the property or assets sold or (B) is required to be paid
as a result of such sale and (iv) appropriate amounts to be provided by the
Company or any Restricted Subsidiary as a reserve against any liabilities
associated with such Asset Sale, including, without limitation, pension and
other post-employment benefit liabilities, liabilities related to environmental
matters and liabilities under any indemnification obligations associated with
such Asset Sale, all as determined in conformity with GAAP, and (b) with respect
to any issuance and sale of Capital Stock, the proceeds of such issuance and
sale in the form of cash or cash equivalents, including payments in respect of
deferred payment obligations (to the extent corresponding to the principal, but
not interest, component thereof) when received in the form of cash or cash
equivalents (except to the extent such obligations are financed or sold with
recourse to the Company or any Restricted Subsidiary) and proceeds from the
conversion of other property received when converted to cash or cash
equivalents, net of attorneys' fees, accountants' fees, underwriters' or
placement agents' fees, discounts or commissions and brokerage, consultant and
other fees incurred in con-
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nection with such issuance or sale and net of taxes paid or payable as a result
thereof.
"Netherlands Legend" means the legend set forth in the second
paragraph of Section 2.02 of this Indenture.
"Non-U.S. Person" means a person who is not a U.S. person, as defined
in Regulation S.
"Notes" means, collectively, the Initial Notes and any Exchange Notes
to be issued and exchanged for any Notes pursuant to the Notes Registration
Rights Agreement and this Indenture. For purposes of this Indenture, all Notes
shall vote together as one series of Notes under this Indenture.
"Notes Registration Rights Agreement" means the Exchange and
Registration Rights Agreement, dated April 13, 2000, among the Company and
Goldman Sachs International, Paribas, Barclays Bank PLC, Merrill Lynch
International and Salomon Smith Barney International Limited and certain
permitted assigns specified therein and any other registration rights agreement
dated after the date hereof in connection with Initial Notes issued subsequent
to the date hereof.
"Offering" has the meaning set forth in the recitals hereto.
"Offer to Purchase" means an offer to purchase Notes by the Company
(or, in the event of a Change of Control, by a third party) from the Holders
commenced by mailing a notice to the Trustee and each Holder stating: (i) the
covenant pursuant to which the offer is being made and that all Notes validly
tendered will be accepted for payment on a pro rata basis; (ii) the purchase
price and the date of purchase (which shall be a business day no earlier than 30
days nor later than 60 days from the date such notice is mailed) (the "Payment
Date"); (iii) that any Note not tendered will continue to accrue interest (or
original issue discount, as the case may be) pursuant to its terms; (iv) that,
unless there is a default in the payment of the purchase price, any Note
accepted for payment pursuant to the Offer to Purchase shall cease to accrue
interest (or original issue discount, as the case may be) on and after the
Payment Date; (v) that Holders electing to have a Note purchased pursuant to the
Offer to Purchase will be required to surrender the Note, together with the form
entitled "Option of the Holder to Elect Purchase" on the reverse side of the
Note completed, to the Principal Paying Agent at the address specified in the
notice prior to the close of business on the business day immediately preceding
the Payment Date; (vi) that Holders will be entitled to withdraw their election
if the Principal Paying Agent receives, not later than the close of
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business on the third Business Day immediately preceding the Payment Date, a
telegram, facsimile transmission or letter setting forth the name of such
Holder, the principal amount of Notes delivered for purchase and a statement
that such Holder is withdrawing his election to have such Notes purchased; and
(vii) that Holders whose Notes are being purchased only in part will be issued
new Notes equal in principal amount to the unpurchased portion of the Notes
surrendered; provided that each Note purchased shall be in a principal amount of
(Euro)1,000, or integral multiples thereof; provided further that the principal
amount of any Notes left outstanding will not be less than (Euro)50,000. The
Company (or, in the event of a Change of Control, a third party) will also cause
a copy of such notice to be published in a daily newspaper with general
circulation in Luxembourg (which is expected to be the Luxemberger Wort). On the
Payment Date, the Company shall (i) accept for payment on a pro rata basis as
among Holders of Notes or portions thereof tendered pursuant to an Offer to
Purchase; (ii) deposit with the Principal Paying Agent money sufficient to pay
the purchase price of all Notes or portions thereof so accepted; and (iii)
deliver, or cause to be delivered, to the Trustee all Notes or portions thereof
so accepted together with an officers' certificate specifying the Notes or
portions thereof accepted for payment by the Company. The Principal Paying Agent
shall promptly mail to the Holders of Notes so accepted payment in an amount
equal to the purchase price, and the Trustee shall promptly authenticate and
mail to such Holders a new Note equal in principal amount to any unpurchased
portion of the Note surrendered; provided that each Note purchased and each new
Note issued shall be an integral multiple of (Euro)1,000, principal amount;
provided further that the principal amount of each new Note issued will not be
less than (Euro)50,000. The Company will publicly announce the results of an
Offer to Purchase as soon as practicable after the Payment Date. The Trustee
shall act as the Principal Paying Agent for an Offer to Purchase. The Company
will comply with Rule l4e-1 under the Exchange Act and any other securities laws
and regulations thereunder to the extent such laws and regulations are
applicable, in the event that the Company is required to repurchase Notes
pursuant to an Offer to Purchase. The Company (or in the event of a Change of
Control, the third party) will also cause a copy of such notice to be published
in a daily newspaper with general circulation in Luxembourg (which is expected
to be the Luxemburger Wort).
"Officer" means, with respect to the Company, (i) the Chairman of the
Board, the President, the Chief Executive Officer, any Vice President, the Chief
Financial Officer, and (ii) the Treasurer or any Assistant Treasurer, or the
Secretary or any Assistant Secretary.
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"Officer's Certificate" means a certificate signed by one Officer
listed in clause (i) of the definition thereof and one Officer listed in clause
(ii) of the definition thereof and delivered to the Trustee.
"Offshore Global Note" has the meaning provided in Section 2.01.
"Opinion of Counsel" means a written opinion signed by legal counsel
who may be an employee (who is an attorney) of or counsel to the Company, as
applicable. Each such Opinion of Counsel shall include the statements provided
for in TIA Section 314(e) to the extent required by law.
"Parent" means CompleTel LLC, a Delaware limited liability company.
"Pari Passu Debt" means Pari Passu Debt Securities of the Company or
of any Subsidiary Guarantor the terms of which require that Net Cash Proceeds be
used to permanently reduce (and thereby also reduce commitments relating to)
such Indebtedness.
"Pari Passu Debt Securities" means any Debt Securities of the Company
or any Subsidiary Guarantor which rank pari passu in right of payment with the
Notes and any Subsidiary Guaranties, as applicable.
"Pari Passu Pro Rata Share" means a fraction (i) the numerator of
which is the aggregate principal amount of Pari Passu Debt outstanding on the
date Net Cash Proceeds are received and (ii) the denominator of which is the sum
of (x) the aggregate principal amount of Notes outstanding on such date and (y)
the aggregate principal amount of any Pari Passu Debt on such date.
"Payment Date" has the meaning specified in the definition of "Offer
to Purchase."
"Permitted Investment" means (i) an Investment in the Company or a
Restricted Subsidiary or a Person which will, upon the making of such
Investment, become a Restricted Subsidiary or be merged or consolidated with or
into, or transfer or convey all or substantially all its assets to, the Company
or a Restricted Subsidiary; provided that such Person is primarily engaged in a
Telecommunications Business; (ii) Temporary Cash Investments; (iii) payroll,
travel and similar advances to cover matters that are expected at the time of
such advances ultimately to be treated as expenses in accordance with GAAP; (iv)
stock, obligations or securities received in satisfaction of judgments; (v)
Investments in prepaid expenses, negotiable
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instruments held for collection and lease, utility and worker's compensation,
performance and other similar deposits; (vi) Interest Rate Agreements and
Currency Agreements designed solely to protect the Company or any Restricted
Subsidiary, as the case may be, against fluctuations in interest rates or
foreign currency exchange rates; and (vii) loans or advances to officers or
employees of the Company or any Restricted Subsidiary that do not in the
aggregate exceed (Euro)5 million (or, to the extent non-euro denominated, the
Euro Equivalent thereof) at any time outstanding.
"Person" means an individual, a corporation, a partnership, a limited
liability company, a closed company with limited liability, an association, a
trust or any other entity or organization, including a government or political
subdivision or an agency or instrumentality thereof.
"Physical Notes" means Notes in the form of permanent certificated
notes in registered form, substantially in the form annexed hereto as Exhibit A.
"Pledge Agreement" shall have the meaning specified in the recitals of
this Indenture together with any other pledge agreement executed after the date
hereof pursuant to Section 4.21 of this Indenture.
"Preferred Stock" means, with respect to any Person, any and all
shares, interests, participations or other equivalents (however designated,
whether voting or nonvoting) of such Person's preferred or preference stock,
whether now outstanding or issued after the date of this Indenture, including,
without limitation, all series and classes of such preferred or preference
stock.
"Principal" of a debt security, including the Notes, means the
principal amount due on the Stated Maturity as shown on such debt security.
"Principal Paying Agent" has the meaning provided in Section 2.04,
except that, for the purposes of Article Eight, the Principal Paying Agent shall
not be the Company or a Subsidiary of the Company or an Affiliate of any of
them. The term "Principal Paying Agent" includes any additional Principal
Paying Agent.
"Prior Issue Date" means February 16, 1999, the issue date of the
Company's 14% senior discount notes due 2009.
"Private Placement Legend" means the legend set forth on the Initial
Notes in the form set forth in the first paragraph of Section 2.02.
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"Public Equity Offering" means (a) an underwritten primary public
offering of Common Stock of the Company pursuant to an effective registration
statement under the Securities Act or (b) pursuant to a prospectus prepared in
connection with the listing of shares of Common Stock covered thereby on the
Paris Bourse, and (c) pursuant to a dispensation of the Dutch Securities Board
("Stichting Toezicht Effectenverkeer").
A "Public Market" shall be deemed to exist if (i) a Public Equity
Offering has been consummated and (ii) at least 15% of the total issued and
outstanding Common Stock of the Company has been distributed by means of (a) an
effective registration statement under the Securities Act or sales pursuant to
Rule 144 under the Securities Act or (b) pursuant to a prospectus prepared in
connection with the listing of shares of Common Stock covered thereby on the
Paris Bourse.
"QIB" means a "qualified institutional buyer" as defined in Rule 144A.
"Redemption Date," when used with respect to any note to be redeemed,
means the date fixed for such redemption by or pursuant to this Indenture.
"Redemption Price," when used with respect to any Note to be redeemed,
means the price at which such Note is to be redeemed pursuant to this Indenture.
"Refinancing" means any refinancing (whether by amendment, renewal,
extension, refunding or defeasance) of outstanding Indebtedness of the Company
and/or of any Restricted Subsidiary.
"Refinancing Indebtedness" means (i) Indebtedness of the Company to
the extent the proceeds thereof are used to refinance (whether by amendment,
renewal, extension, refunding or defeasance) Indebtedness of the Company or any
of the Restricted Subsidiaries, in each such event, Incurred or otherwise
permitted under the first paragraph of Section 4.03 or clause (vi) of the second
paragraph of Section 4.03 and (ii) Indebtedness of any Restricted Subsidiary to
the extent the proceeds thereof are used to refinance (whether by amendment,
renewal, extension, refunding or defeasance) Indebtedness of a Restricted
Subsidiary, in each such event, incurred or otherwise permitted under the first
paragraph of Section 4.03 or clause (iv)(A) of the second paragraph of such
Section or otherwise outstanding on the Issue Date; provided that for all
purposes of this definition (a) the principal amount of Refinancing Indebtedness
incurred pursuant to this definition (or, if such Refinancing Indebtedness
provides for an amount less than the principal amount thereof to be due and
payable upon a
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declaration of acceleration of the maturity thereof, the accreted value of such
Indebtedness) shall not exceed the principal amount or accreted value, as the
case may be, of the Indebtedness refinanced, plus the amount of any premium
required to be paid in connection with such refinancing pursuant to the terms of
such Indebtedness or the amount of any premium reasonably determined by the
Board of Directors as necessary to accomplish such refinancing by means of a
tender offer or privately negotiated purchase, plus the amount of reasonable
expenses in connection therewith, (b) such Refinancing Indebtedness (x) shall
have no scheduled principal payment prior to the final maturity of the
Indebtedness being refinanced and (y) shall have an Average Life equal to or
greater than the shorter of (1) the Average Life of the Indebtedness refinanced
or (2) the remaining Average Life of the Notes and (c) if the Indebtedness to be
refinanced is Subordinated Indebtedness, the Indebtedness to be incurred
pursuant to this definition shall also be Subordinated Indebtedness of the
person whose Indebtedness is to be refinanced on terms no less favorable in any
material respect to the Holders of the Notes than the Indebtedness being
refinanced.
"Registrar" has the meaning provided in Section 2.04.
"Registration" means, collectively, the Exchange Registration and the
Shelf Registration (each as defined in the Notes Registration Rights Agreement).
"Registration Statement" means the Exchange Registration Statement or
Shelf Registration Statement as defined and described in the Notes Registration
Rights Agreement.
"Regular Record Date" for the interest payable on any Interest Payment
Date means the April 1 or October 1 (whether or not a Business Day), as the case
may be, next preceding such Interest Payment Date.
"Regulation S" means Regulation S under the Securities Act.
"Replacement Assets" means property or assets (other than current
assets) of a nature or type or that are used or useful in a business (or in a
company having property and assets of a nature or type, or engaged in a
business) similar or related to the nature or type of the property and assets
of, or the business of, the Company and the Restricted Subsidiaries existing on
the date such Replacement Assets are acquired (as determined in good faith by
the Board of Directors, whose determination shall be conclusive and evidenced by
a board resolution).
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"Responsible Officer," when used with respect to the Trustee, means
the chairman or any vice chairman of the board of directors, the chairman or any
vice chairman of the executive committee of the board of directors, the chairman
of the trust committee, the president, any vice president, any assistant vice
president, the secretary, any assistant secretary, the treasurer, any assistant
treasurer, the cashier, any assistant cashier, any trust officer or assistant
trust officer, the controller or any assistant controller or any other officer
of the Trustee customarily performing functions similar to those performed by
any of the above designated officers and also means, with respect to a
particular corporate trust matter, any other officer to whom such matter is
referred because of his or her knowledge of and familiarity with the particular
subject.
"Restricted Payments" has the meaning provided in Section 4.04.
"Restricted Subsidiary" means any Subsidiary of the Company other than
an Unrestricted Subsidiary.
"Rule 144A" means Rule 144A under the Securities Act.
"Securities Act" means the Securities Act of 1933, as amended.
"Security Register" has the meaning provided in Section 2.04.
"Senior Credit Facility" means any senior commercial term loan and/or
revolving credit facility (including any letter of credit subfacility) and/or
vendor financing facility entered into principally with commercial banks and/or
other financial institutions typically party to commercial loan or vendor
financing agreements.
"Shelf Registration Statement" means the Shelf Registration Statement
as defined in the Notes Registration Rights Agreement.
"Significant Subsidiary" means, at any date of determination, any
Restricted Subsidiary that, together with its Subsidiaries, (i) for the most
recent fiscal year of the Company, accounted for more than 10% of the
consolidated revenues of the Company and the Restricted Subsidiaries or (ii) as
of the end of such fiscal year, was the owner of more than 10% of the
consolidated assets of the Company and the Restricted Subsidiaries, all as set
forth on the most recently available consolidated financial statements of the
Company for such fiscal year.
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"Special Interest" means Special Interest as defined in the Notes
Registration Rights Agreement.
"Specified Date" means any Redemption Date, any Payment Date for an
Offer to Purchase or any date on which the Notes first become due and payable
after an Event of Default.
"S&P" means Standard & Poor's Ratings Services and its successors.
"Stated Maturity" means, (i) with respect to any debt security, the
date specified in such debt security as the fixed date on which the final
installment of principal of such debt security is due and payable and (ii) with
respect to any scheduled installment of principal of or interest on any debt
security, the date specified in such debt security as the fixed date on which
such installment is due and payable.
"Subordinated Indebtedness" means any Indebtedness of the Company or
any Restricted Subsidiary which is expressly subordinated in right of payment in
any manner to any other Indebtedness of the Company or such Restricted
Subsidiary, as the case may be.
"Subsidiary" means, with respect to any Person (i) any corporation,
association or other business entity of which more than 50% of the voting power
of the outstanding Voting Stock is owned, directly or indirectly, by such Person
and one or more other Subsidiaries of such Person, or (ii) any limited
partnership of which such Person or any Subsidiary of such Person is a general
partner, or (iii) any other Person in which such Person, or one or more other
Subsidiaries of such Person directly or indirectly has more than 50% of the
outstanding partnership or similar equity interests and has the power by virtue
of such ownership to direct or cause the policies, management and affairs
thereof.
"Subsidiary Guarantor" means any issuer of a Subsidiary Guaranty for
so long as such Subsidiary Guaranty remains outstanding.
"Subsidiary Guaranty" means a guaranty of the Notes issued pursuant to
Section 4.07.
"Taxes" has the meaning provided in Section 4.20.
"Telecommunications Business" means the development, ownership or
operation of one or more telephone, telecommunications, Internet or information
systems or the provision of telephony, telecommunication, Internet or
information services and any related, ancillary or complementary business.
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"Temporary Cash Investment" means any of the following: (i)
Government Securities with a term of not more than one year; provided that money
borrowed and set aside at the time of Incurrence of Indebtedness in order to
prefund the payment of interest on such Indebtedness may be invested in
Government Securities with a term in excess of one year but in no event with a
term in excess of the period for which interest has been prefunded with respect
to such Indebtedness, (ii) time deposit accounts, certificates of deposit and
money market deposits maturing within one year of the date of acquisition
thereof issued by a bank or trust company which is organized under the laws of
the United States of America or any state thereof, the United Kingdom or any
Euro Currency Country and which bank or trust company has capital, surplus and
undivided profits aggregating in excess of (Euro)250 million (or the foreign
currency equivalent thereof) and has outstanding debt which is rated "A" by S&P
or "A" by Moody's (iii) repurchase obligations with a term of not more than 30
days for underlying securities of the types described in clause (i) above
entered into with a bank meeting the qualifications described in clause (ii)
above, (iv) commercial paper, maturing not more than one year after the date of
acquisition, issued by a corporation (other than an Affiliate of the Company)
organized and in existence under the laws of the United States of America or any
state thereof, the United Kingdom or any Euro Currency Country, with a rating at
the time as of which any investment therein is made of "P-1" (or higher)
according to Moody's or "A-l" (or higher) according to S&P, and (v) securities
with maturities of six months or less from the date of acquisition issued or
fully and unconditionally guarantied by any state, commonwealth or territory of
the United States of America, the United Kingdom or any Euro Currency Country,
or by any political subdivision or taxing authority thereof, and rated at least
"A" by S&P or "A" by Moody's.
"TIA" or "Trust Indenture Act" means the Trust Indenture Act of 1939,
as amended (15 U.S. Code Sections 77aaa- 77bbb), as in effect on the date this
Indenture was executed, except as provided in Section 9.06.
"Total Incremental Equity" means, at any time of determination, the
sum of, without duplication, (i) the aggregate Net Cash Proceeds and fair market
value of property (determined as of the date of receipt of such property)
received by the Company from capital contributions in respect of existing
Capital Stock (other than Disqualified Stock) or the issuance or sale of Capital
Stock (other than Disqualified Stock but including Capital Stock issued upon the
conversion of convertible Indebtedness or from the exercise of options, warrants
or rights to purchase Capital Stock (other than Disqualified Stock)) subsequent
to the Prior Issue Date, other than to a
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Subsidiary of the Company, plus (ii) the aggregate cash proceeds received by
the Company or any Restricted Subsidiary from the sale, disposition or repayment
(in whole or in part) of any Investment that is or was made after the Prior
Issue Date and that constitutes a Restricted Payment that has been deducted from
Total Incremental Equity pursuant to clause (iii) below in an amount equal to
the lesser of (a) the return of capital with respect to the applicable portion
of such Investment and (b) the cost of the applicable portion of such
Investment, in either case, less the cost of the disposition of such Investment,
minus (iii) the aggregate amount of all Restricted Payments declared or made on
and after the Prior Issue Date (other than a Restricted Payment made pursuant to
clause (ii) of the second paragraph of Section 4.04).
"Trade Payables" means, with respect to any Person, any accounts
payable or any other indebtedness or monetary obligation to trade creditors
created, assumed or Guarantied by such Person or any of its Subsidiaries arising
in the ordinary course of business in connection with the acquisition of goods
or services.
"Transaction Date" means, with respect to the Incurrence of any
Indebtedness by the Company or any of the Restricted Subsidiaries, the date such
Indebtedness is to be Incurred and, with respect to any Restricted Payment, the
date such Restricted Payment is to be made.
"Trustee" means the party named as such in the first paragraph of this
Indenture until a successor replaces it in accordance with the provisions of
Article Seven of this Indenture and thereafter means such successor.
"Unrestricted Subsidiary" means (i) any Subsidiary of the Company that
at the time of determination shall be designated an Unrestricted Subsidiary by
the Board of Directors in the manner provided below; and (ii) any Subsidiary of
an Unrestricted Subsidiary. The Board of Directors may designate any Restricted
Subsidiary (including any newly acquired or newly formed Subsidiary of the
Company) to be an Unrestricted Subsidiary unless such Subsidiary owns any
Capital Stock of, or owns or holds any Lien on any property of, the Company or
any Restricted Subsidiary; provided that (A) any Guaranty by the Company or any
Restricted Subsidiary of any Indebtedness of the Subsidiary being so designated
shall be deemed an "Incurrence" of such Indebtedness and an "Investment" by the
Company or such Restricted Subsidiary (or both, if applicable) at the time of
such designation; (B) either (I) the Subsidiary to be so designated has total
assets of (Euro)1,000 (or, to the extent non-euro denominated, the Euro
Equivalent thereof) or less or (II) such Subsidiary has assets greater than
(Euro)1,000 (or, to the extent
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non-euro denominated, the Euro Equivalent thereof), such designation would be
permitted under Section 4.04; (C) if applicable, the Incurrence of Indebtedness
and the Investment referred to in clause (A) of this proviso would be permitted
under Section 4.03 and Section 4.04; and (D) except in the case of an Investment
made pursuant to clause (vi) of the second paragraph of Section 4.04 immediately
after giving effect to such designation, the Company would be able to Incur
(Euro)1.00 of Indebtedness under Section 4.03. The Board of Directors may
designate any Unrestricted Subsidiary to be a Restricted Subsidiary; provided
further that (i) no 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 after such designation
would, if Incurred at such time, have been permitted to be Incurred (and shall
be deemed to have been Incurred) for all purposes of this Indenture. Any such
designation by the Board of Directors shall be evidenced to the Trustee by
promptly filing with the Trustee a copy of the Board Resolution giving effect to
such designation and an Officers' Certificate certifying that such designation
complied with the foregoing provisions.
"U.S. Global Note" has the meaning provided in Section 2.01.
"Voting Stock" means, with respect to any Person, Capital Stock of any
class or kind ordinarily having the power to vote for the election of directors,
managers or other voting members of the governing body of such Person.
"Wholly Owned" means, with respect to any Subsidiary of any Person,
the ownership of all of the outstanding Capital Stock of such Subsidiary (other
than any director's qualifying shares or Investments by foreign nationals
mandated by applicable law) by such Person or one or more Wholly Owned
Subsidiaries of such Person.
SECTION 1.02. Incorporation by Reference of Trust Indenture Act.
-------------------------------------------------
Whenever this Indenture refers to a provision of the TIA, the provision is
incorporated by reference in and made a part of this Indenture. The following
TIA terms used in this Indenture have the following meanings:
"indenture notes" means the Notes;
"indenture note holder" means a Holder or a Noteholder;
"indenture to be qualified" means this Indenture;
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"indenture trustee" or "institutional trustee" means the Trustee; and
"obligor" on the indenture securities means the Company or any other
obligor on the Notes.
All other TIA terms used in this Indenture that are defined by the
TIA, defined by TIA reference to another statute or defined by a rule of the
Commission and not otherwise defined herein have the meanings assigned to them
therein.
SECTION 1.03. Rules of Construction. Unless the context otherwise
---------------------
requires:
(i) a term has the meaning assigned to it;
(ii) an accounting term not otherwise defined has the meaning
assigned to it in accordance with GAAP;
(iii) "or" is not exclusive;
(iv) words in the singular include the plural, and words in the
plural include the singular;
(v) provisions apply to successive events and transactions;
(vi) "herein," "hereof" and other words of similar import refer to
this Indenture as a whole and not to any particular Article, Section or
other subdivision;
(vii) all ratios and computations based on GAAP contained in this
Indenture shall be computed in accordance with the definition of GAAP set
forth in Section 1.01;
(viii) all references to Sections or Articles refer to Sections or
Articles of this Indenture unless otherwise indicated; and
(ix) all references to "(Euro)," "euro" or money refer to the
lawful currency of a Euro Currency Country, unless the content expressly
contemplates otherwise.
ARTICLE TWO
THE NOTES
SECTION 2.01. Form and Dating. The Notes and the Trustee's
---------------
certificate of authentication thereof shall be sub-
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stantially in the form annexed hereto as Exhibit A with such appropriate
insertions, omissions, substitutions and other variations as are required or
permitted by this Indenture. The Notes may have notations, legends or
endorsements required by law, stock exchange agreements to which the Company is
subject or usage. The Company shall approve the form of the Notes and any
notation, legend or endorsement on the Notes. Each Note shall be dated the date
of its authentication.
The terms and provisions contained in the forms of the Notes annexed
hereto as Exhibit A shall constitute, and are hereby expressly made, a part of
this Indenture. To the extent applicable, the Company, any Subsidiary
Guarantor, and the Trustee, by their execution and delivery of this Indenture,
expressly agree to such terms and provisions and to be bound thereby.
Initial Notes offered and sold in reliance on Rule 144A shall be
issued in the form of one or more permanent Global Notes in registered form,
substantially in the form set forth in Exhibit A (collectively, the "U.S. Global
Notes"), deposited with the Trustee, as custodian for the Depositary, duly
executed by the Company and authenticated by the Trustee as hereinafter
provided. The aggregate principal amount of the U.S. Global Notes may from time
to time be increased or decreased by adjustments made on the records of the
Trustee, as custodian for the Depositary or its nominee, as hereinafter
provided.
Initial Notes offered and sold in offshore transactions in reliance on
Regulation S shall be issued initially in the form of one or more permanent
Global Notes in registered form substantially in the form set forth in Exhibit A
(collectively, the "Offshore Global Notes") deposited with the Trustee, as
custodian for the Depositary, duly executed by the Company and authenticated by
the Trustee as hereinafter provided. The aggregate principal amount of the
Offshore Global Notes may from time to time be increased or decreased by
adjustments made on the records of the Trustee, as custodian for the Depositary
or its nominee, as hereinafter provided.
Initial Notes offered and sold in reliance on Regulation D to
Institutional Accredited Investors under the Securities Act shall be issued in
the form of one or more Global Notes in registered form in substantially the
form set forth in Exhibit A (the "IAI Global Notes"), deposited with the
Trustee, as custodian for the Depositary, duly executed by the Company and
authenticated by the Trustee, as hereinafter provided. The aggregate principal
amount of the IAI Global Notes may from time to time be increased or decreased
by adjustments made on
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the records of the Trustee, as custodian for the Depositary or its nominee, as
hereinafter provided.
Upon consummation of the Registration, the Exchange Notes shall be
issued in the form of Global Notes, substantially in the form annexed hereto as
Exhibit A.
The definitive Notes shall be typed, printed, lithographed or engraved
or produced by any combination of these methods or may be produced in any other
manner permitted by the rules of any securities exchange on which the Notes may
be listed, all as determined by the Officers executing such Notes, as evidenced
by their execution of such Notes.
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 Clearstream" and "Customer Handbook" of Clearstream shall be
applicable to interests in the Global Notes that are held by the participants
through Euroclear or Clearstream.
SECTION 2.02. Restrictive Legends. Unless and until an Initial
-------------------
Note is exchanged for an Exchange Note or sold in connection with an effective
Registration pursuant to the Notes Registration Rights Agreement, such Initial
Note shall bear the following legend on the face thereof:
THE NOTES EVIDENCED HEREBY HAVE NOT BEEN REGISTERED UNDER THE UNITED STATES
SECURITIES ACT OF 1933, AS AMENDED (THE "SECURITIES ACT"). THE HOLDER OF
THIS SECURITY BY ITS ACCEPTANCE HEREOF (1) REPRESENTS THAT (A) IT IS A
"QUALIFIED INSTITUTIONAL BUYER" (AS DEFINED IN RULE 144A UNDER THE
SECURITIES ACT) OR (B) IT IS AN INSTITUTIONAL "ACCREDITED INVESTOR" (AS
DEFINED IN RULE 501(a)(1), (2), (3), OR (7) UNDER THE SECURITIES ACT) (AN
"INSTITUTIONAL ACCREDITED INVESTOR") OR (C) IT IS NOT A U.S. PERSON AND IS
ACQUIRING THIS SECURITY IN AN "OFFSHORE TRANSACTION" PURSUANT TO REGULATION
S, (2) AGREES THAT IT WILL NOT PRIOR TO (X) THE DATE WHICH IS TWO YEARS (OR
SUCH SHORTER PERIOD AS MAY BE PRESCRIBED BY RULE 144(K) (OR ANY SUCCESSOR
PROVISION THEREOF) UNDER THE SECURITIES ACT) AFTER THE LATER OF THE
ORIGINAL ISSUE DATE HEREOF (OR OF ANY PREDECESSOR OF THIS SECURITY) OR THE
LAST DAY ON WHICH THE COMPANY OR ANY AFFILIATE OF THE COMPANY WAS THE OWNER
OF THIS SECURITY OR ANY PREDECESSOR OF THIS SECURITY AND (Y) SUCH LATER
DATE, IF ANY, AS MAY BE REQUIRED BY APPLICABLE LAWS (THE "RESALE
RESTRICTION TERMINATION DATE"), OFFER, SELL, PLEDGE OR OTHERWISE TRANSFER
THIS SECURITY EXCEPT (A)(1) TO A PERSON WHO THE SELLER REASONABLY BELIEVES
IS A QUALIFIED
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INSTITUTIONAL BUYER WITHIN THE MEANING OF RULE 144A UNDER THE SECURITIES
ACT PURCHASING FOR ITS OWN ACCOUNT OR FOR THE ACCOUNT OR BENEFIT OF A
QUALIFIED INSTITUTIONAL BUYER IN A TRANSACTION MEETING THE REQUIREMENTS OF
RULE 144A, (2) IN AN OFFSHORE TRANSACTION COMPLYING WITH RULE 903 OR RULE
904 OF REGULATION S UNDER THE SECURITIES ACT, (3) PURSUANT TO AN EXEMPTION
FROM REGISTRATION UNDER THE SECURITIES ACT PROVIDED BY RULE 144 THEREUNDER
(IF AVAILABLE), OR (4) PURSUANT TO AN EFFECTIVE REGISTRATION STATEMENT
UNDER THE SECURITIES ACT AND (B) IN ACCORDANCE WITH ALL APPLICABLE
SECURITIES LAWS OF THE STATES OF THE UNITED STATES.
The Notes (including the Initial Notes and the Exchange Notes) shall
bear the following legend on the face thereof:
THIS SECURITY MAY ONLY BE ISSUED IN MINIMUM DENOMINATIONS OF (Euro)50,000
PRINCIPAL AMOUNT AND IN EXCESS OF (Euro)50,000 PRINCIPAL AMOUNT IN
INCREMENTS OF (Euro)1,000 PRINCIPAL AMOUNT.
Each Global Note, whether or not an Exchange Note, shall also bear the
following legend on the face thereof:
THIS SECURITY IS A GLOBAL CERTIFICATE WITHIN THE MEANING OF THE INDENTURE
HEREINAFTER REFERRED TO AND IS REGISTERED IN THE NAME OF A DEPOSITARY OR A
NOMINEE OF A DEPOSITARY OR A SUCCESSOR DEPOSITARY. THIS SECURITY IS NOT
EXCHANGEABLE FOR SECURITIES REGISTERED IN THE NAME OF A PERSON OTHER THAN
THE DEPOSITARY OR ITS NOMINEE EXCEPT IN THE LIMITED CIRCUMSTANCES DESCRIBED
IN THE INDENTURE, AND NO TRANSFER OF THIS SECURITY (OTHER THAN A TRANSFER
OF THIS SECURITY AS A WHOLE BY THE DEPOSITARY TO A NOMINEE OF THE
DEPOSITARY OR BY A NOMINEE OF THE DEPOSITARY TO THE DEPOSITARY OR ANOTHER
NOMINEE OF THE DEPOSITARY) MAY BE REGISTERED EXCEPT IN THE LIMITED
CIRCUMSTANCES DESCRIBED IN THE INDENTURE.
THIS SECURITY IS HELD BY THE DEPOSITARY (AS DEFINED IN THE INDENTURE
GOVERNING THIS SECURITY) 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 2.08 OF THE INDENTURE, (II) THIS GLOBAL
SECURITY MAY BE EXCHANGED IN WHOLE BUT NOT IN PART PURSUANT TO SECTION 2.07
OF THE INDENTURE, (III) THIS GLOBAL SECURITY MAY BE DELIVERED TO THE
TRUSTEE FOR CANCELLA-
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TION PURSUANT TO SECTION 2.12 OF THE INDENTURE AND (IV) THIS GLOBAL
SECURITY MAY BE TRANSFERRED TO A SUCCESSOR DEPOSITARY WITH THE PRIOR
WRITTEN CONSENT OF THE COMPANY.
SECTION 2.03. Execution, Authentication and Denominations. The
-------------------------------------------
Notes shall be executed by two Officers or two authorized signatories as
identified in an Officer's Certificate satisfactory to the Trustee (pursuant to
a power of attorney or other similar instrument) or one Officer and one
authorized signatory as identified in an Officer's Certificate satisfactory to
the Trustee (pursuant to power of attorney or other similar instrument) of the
Company. The signature of any of such officers (or authorized signatories) on
the Notes shall be by manual signature in the name and on behalf of the Company.
If an Officer whose signature is on a Note no longer holds that office
at the time the Trustee or authenticating agent authenticates the Note, the Note
shall be valid nevertheless.
A Note shall not be valid until the Trustee or authenticating agent
manually signs the certificate of authentication on the Note. The signature
shall be conclusive evidence that the Note has been authenticated under this
Indenture.
The Trustee or an authenticating agent shall, upon receipt of a
Company Order, authenticate (i) Initial Notes for original issue in the
aggregate principal amount not to exceed (Euro)200,000,000, (ii) Initial Notes
for original issue after the Issue Date in the aggregate principal amount not to
exceed (Euro)100,000,000 and (iii) Exchange Notes from time to time only in
exchange for a like principal amount of Initial Notes in accordance with the
Notes Registration Rights Agreement and; provided that the Trustee shall be
entitled to receive an Officers' Certificate and an Opinion of Counsel of the
Company in connection with such authentication of Notes. Such Company Order
shall specify the amount of Notes to be authenticated and the date on which the
original issue of Notes is to be authenticated. The aggregate principal amount
of Notes outstanding at any time may not exceed (Euro)300,000,000, except as set
forth in Section 2.09.
The Trustee may appoint an authenticating agent 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 authenticating agent. An authenticating agent has the
same rights as an Agent to deal with the Company or an Affiliate of the Company.
32
<PAGE>
The Notes shall be issuable only in registered form without coupons
and only in minimum denominations of (Euro)50,000 in principal amount and any
integral multiples of (Euro)1,000 in excess thereof.
SECTION 2.04. Registrar and Principal Paying Agent. The Company
------------------------------------
shall maintain an office or agency where Notes may be presented for registration
of transfer or for exchange (the "Registrar"), an office or agency where Notes
may be presented for payment (the "Principal Paying Agent") and offices or
agencies where notices and demands to or upon the Company in respect of the
Notes and this Indenture may be served, which shall be in the Borough of
Manhattan, The City of New York, London, England and, so long as the Notes are
listed on the Luxembourg Stock Exchange and the rules of such stock exchange
require, in Luxembourg. The Company shall cause the Registrar to keep a
register of the Notes and of their transfer and exchange (the "Security
Register"). The Company may have one or more co-Registrars and one or more
additional Principal Paying Agents.
The Company shall enter into an appropriate agency agreement with any
Agent not a party to this Indenture. The agreement shall implement the
provisions of this Indenture that relate to such Agent. The Company shall give
prompt written notice to the Trustee of the name and address of any such Agent
and any change in the address of such Agent. If the Company fails to maintain a
Registrar, Principal Paying Agent and/or agent for service of notices and
demands, the Trustee shall act as such Registrar, Principal Paying Agent and/or
agent for service of notices and demands. The Company may remove any Agent upon
written notice to such Agent and the Trustee; provided that no such removal
shall become effective until (i) the acceptance of an appointment by a successor
Agent to such Agent as evidenced by an appropriate agency agreement entered into
by the Company and such successor Agent and delivered to the Trustee or (ii)
notification to the Trustee that the Trustee shall serve as such Agent until the
appointment of a successor Agent in accordance with clause (i) of this proviso.
The Company, any Subsidiary of the Company, or any Affiliate of any of them may
act as Principal Paying Agent, Registrar or co-Registrar, and/or agent for
service of notice and demands.
The Company initially appoints the Trustee as Registrar, Principal
Paying Agent, authenticating agent and agent for service of notice and demands.
If, at any time, the Trustee is not the Registrar, the Registrar shall make
available to the Trustee on or before each Interest Payment Date and at such
other times as the Trustee may reasonably request, the names and addresses of
the Holders as they appear in the Security Register.
33
<PAGE>
SECTION 2.05. Principal Paying Agent To Hold Money in Trust. Not
---------------------------------------------
later than 9:00 a.m. (New York time) the day before each due date of the
principal, premium, if any, and interest on any Notes, the Company shall deposit
with the Principal Paying Agent money in immediately available funds sufficient
to pay such principal, premium, if any, and interest so becoming due on the
Business Day which falls one day prior to the due date for the payment under the
Notes. The Company shall require each Principal Paying Agent other than the
Trustee to agree in writing that such Principal Paying Agent shall hold in trust
for the benefit of the Holders or the Trustee all money held by the Principal
Paying Agent for the payment of principal of, premium, if any, and interest on
the Notes (whether such money has been paid to it by the Company or any other
obligor on the Notes), and such Principal Paying Agent shall promptly notify the
Trustee of any default by the Company (or any other obligor on the Notes) in
making any such payment. The Company at any time may require a Principal Paying
Agent to pay all money held by it to the Trustee and account for any funds
disbursed, and the Trustee may at any time during the continuance of any payment
default, upon written request to a Principal Paying Agent, require such
Principal Paying Agent to pay all money held by it to the Trustee and to account
for any funds disbursed. Upon doing so, the Principal Paying Agent shall have
no further liability for the money so paid over to the Trustee. If the Company
or any Subsidiary of the Company or any Affiliate of any of them acts as
Principal Paying Agent, it will, on or before each due date of any principal of,
premium, if any, or interest on the Notes, segregate and hold in a separate
trust fund for the benefit of the Holders a sum of money sufficient to pay such
principal, premium, if any, or interest so becoming due until such sum of money
shall be paid to such Holders or otherwise disposed of as provided in this
Indenture, and will promptly notify the Trustee of its action or failure to act.
SECTION 2.06. Transfer and Exchange. The Notes are issuable only
---------------------
in registered form. A Holder may transfer a Note only by written application to
the Registrar stating the name of the proposed transferee and otherwise
complying with the terms of this Indenture. No such transfer shall be effected
until, and such transferee shall succeed to the rights of a Holder only upon,
final acceptance and registration of the transfer by the Registrar in the
Security Register. Prior to the registration of any transfer by a Holder as
provided herein, the Company, the Trustee, and any agent of the Company shall
treat the person in whose name the Note is registered as the owner thereof for
all purposes whether or not the Note shall be overdue, and neither the Company,
the Trustee, nor any such agent shall be affected by notice to the contrary.
Furthermore, any Holder of a Global Note shall, by acceptance of
34
<PAGE>
such Global Note, agree that transfers of beneficial interests in such Global
Note may be effected only by the Holder of such Global Note (or its agent) and
that ownership of a beneficial interest in the Note shall be required to be
reflected in a book entry.
Subject to the provisions of 2.07 and 2.08, when Notes are presented
to the Registrar or a co-Registrar with a request to register the transfer or to
exchange them for an equal principal amount of Notes or other authorized
denominations (including an exchange of Notes for Exchange Notes), the Registrar
shall register the transfer or make the exchange as requested if its
requirements for such transactions are met; provided that no exchanges of
Initial Notes for Exchange Notes shall occur until a Registration Statement
shall have been declared effective by the Commission and that any Initial Notes
that are exchanged for Exchange Notes shall be canceled by the Trustee. To
permit registrations of transfers and exchanges, the Company shall execute and
the Trustee shall authenticate Notes at the Registrar's request. No service
charge shall be made for any registration of transfer or exchange or redemption
of the Notes, 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 other similar governmental charge payable
upon exchanges pursuant to Section 2.11, 3.08 or 9.04).
The Registrar shall not be required (i) to issue, register the
transfer of or exchange any Note during a period beginning at the opening of
business 15 days before the day of the mailing of a notice of redemption of
Notes selected for redemption under Section 3.03 and ending at the close of
business on the day of such mailing, or (ii) to register the transfer of or
exchange any Note so selected for redemption in whole or in part, except the
unredeemed portion of any Note being redeemed in part.
SECTION 2.07. Book-Entry Provisions for Global Notes. (a) The
--------------------------------------
Global Notes shall (i) be registered in the name of the Depositary for such
Global Notes or the nominee of such Depositary, (ii) be delivered to the Trustee
as custodian for such Depositary and (iii) prior to the Registration bear
legends as set forth in the second paragraph of Section 2.02.
Members of, or participants in, the Depositary ("Agent Members") shall
have no rights under this Indenture with respect to any Global Note held on
their behalf by the Depositary, or the Trustee as its custodian, or under the
Global Note, and the Depositary may be treated by the Company, the Trustee and
any agent of the Company or the Trustee as the absolute owner of such Global
Note for all purposes whatsoever.
35
<PAGE>
Notwithstanding the foregoing, nothing herein shall prevent the Company, the
Trustee or any agent of the Company or the Trustee, from giving effect to any
written certification, proxy or other authorization furnished by the Depositary
or impair, as between the Depositary and its Agent Members, the operation of
customary practices governing the exercise of the rights of a holder of any
Note.
(b) Transfers of a Global Note shall be limited to transfers of such
Global Note in whole, but not in part, to the Depositary, its successors or
their respective nominees. Interests of beneficial owners in a Global Note may
be transferred in accordance with the rules and procedures of the Depositary and
the provisions of Section 2.08. In addition, Physical Notes shall be
transferred to all beneficial owners in exchange for their beneficial interests
in Global Notes only if (i) the Depositary notifies the Company that it is
unwilling or unable to continue as Depositary for the Global Notes and a
successor clearing agency is not appointed by the Company within 90 days of such
notice or (ii) an Event of Default has occurred and is continuing and the
Registrar has received a request from the Depositary to issue Physical Notes.
(c) Any beneficial interest in one of the Global Notes that is
transferred to a person who takes delivery in the form of an interest in another
Global Note will, upon transfer, cease to be an interest in such Global Note and
become an interest in the other Global Note and, accordingly, will thereafter be
subject to all transfer restrictions, if any, and other procedures applicable to
beneficial interests in such other Global Note for as long as it remains such an
interest.
(d) In connection with the transfer of Global Notes as an entirety to
beneficial owners pursuant to paragraph (b) of this Section, the Global Notes
shall be deemed to be surrendered to the Trustee for cancellation, and the
Company shall execute, and the Trustee shall authenticate and make available for
delivery, to each beneficial owner identified by the Depositary in exchange for
its beneficial interest in the Global Notes an equal aggregate principal amount
of Physical Notes of authorized denominations.
(e) Any Physical Note delivered in exchange for an interest in a
Global Note pursuant to paragraph (b) of this Section shall, except as otherwise
provided by paragraph (f) of Section 2.08, bear the Private Placement Legend and
the Netherlands Legend.
(f) The registered holder of a Global Note may grant proxies and
otherwise authorize any person, including Agent Members and persons that may
hold interests through Agent Mem-
36
<PAGE>
bers, to take any action which a Holder is entitled to take under this Indenture
or the Notes.
SECTION 2.08. Registration of Transfers and exchanges.
---------------------------------------
(a) Transfer and Exchange of Physical Notes. When Physical Notes are
---------------------------------------
presented to the Registrar with a request:
(i) to register the transfer of the Notes; or
(ii) to exchange such Physical Notes for an equal principal amount
of Physical Notes of other authorized denominations,
the Registrar shall register the transfer or make the exchange as requested if
the requirements under this Indenture as set forth in this Section 2.08 for such
transactions are met; provided, however, that the Physical Notes presented or
surrendered for registration of transfer or exchange:
(I) shall be duly endorsed or accompanied by a written instrument of
transfer in form satisfactory to the Registrar, duly executed by the Holder
thereof or his attorney duly authorized in writing; and
(II) in the case of Initial Notes, such Physical Notes shall be
accompanied, in the sole discretion of the Company, by the following
additional information and documents, as applicable:
(A) if such Physical Note is being delivered to the Registrar by a
Holder for registration in the name of such Holder, without
transfer, a certification from such Holder to that effect
(substantially in the form of Exhibit B hereto); or
(B) if such Physical Note is being transferred to a QIB in accordance
with Rule 144A, a certification to that effect (substantially in
the form of Exhibit B hereto); or
(C) if such Physical Note is being transferred to an Institutional
Accredited Investor, delivery of a certification to that effect
(substantially in the form of Exhibit B hereto) and a transferee
certificate for Institutional Accredited Investors substantially
in the form of Exhibit C hereto and an Opinion of Counsel
reasonably satisfactory to the Company to the effect that such
37
<PAGE>
transfer is in compliance with the Securities Act; or
(D) if such Physical Note is being transferred in reliance on
Regulation S, delivery of a certification to that effect
(substantially in the form of Exhibit B hereto) and a transferor
certificate for Regulation S transfers substantially in the form
of Exhibit D hereto and an Opinion of Counsel reasonably
satisfactory to the Company to the effect that such transfer is
in compliance with the Securities Act; or
(E) if such Physical Note is being transferred in reliance on Rule
144 under the Securities Act, delivery of a certification to that
effect (substantially in the form of Exhibit B hereto) and an
Opinion of Counsel reasonably satisfactory to the Company to the
effect that such transfer is in compliance with the Securities
Act; or
(F) if such Physical Note is being transferred in reliance on another
exemption from the registration requirements of the Securities
Act, a certification to that effect (substantially in the form of
Exhibit B hereto) and an Opinion of Counsel reasonably acceptable
to the Company to the effect that such transfer is in compliance
with the Securities Act.
(b) Restrictions on Transfer of a Physical Note for a Beneficial
------------------------------------------------------------
Interest in a Global Note. A Physical Note may not be exchanged for a
- -------------------------
beneficial interest in a Global Note except upon satisfaction of the
requirements set forth below. Upon receipt by the Registrar of a Physical Note,
duly endorsed or accompanied by appropriate instruments of transfer, in form
satisfactory to the Registrar, together with:
(A) in the case of Initial Notes, certification, substantially in the form
of Exhibit B hereto, that such Physical Note is being transferred (I)
to a QIB, (II) to an Institutional Accredited Investor or (III) in an
offshore transaction in reliance on Regulation S and, with respect to
(II) or (III), an Opinion of Counsel reasonably acceptable to the
Company to the effect that such transfer is in compliance with the
Securities Act; and
(B) written instructions directing the Registrar to make, or to direct the
Depositary to make, an endorsement on the applicable Global Note to
reflect an increase
38
<PAGE>
in the aggregate amount of the Notes represented by the Global Note,
then the Registrar shall cancel such Physical Note and cause, or direct the
Depositary to cause, in accordance with the standing instructions and procedures
existing between the Depositary and the Registrar, the principal amount of Notes
represented by the applicable Global Note to be increased accordingly. If no
Global Note representing Notes held by QIBs, Institutional Accredited Investors
or Persons acquiring Notes in offshore transactions in reliance on Regulation S,
as the case may be, is then outstanding, the Company shall issue and the Trustee
shall, upon written instructions from the Company in accordance with Section
2.03, authenticate such a Global Note in the appropriate principal amount.
(c) Transfer and Exchange of Global Notes. The transfer and exchange
-------------------------------------
of Global Notes or beneficial interests therein shall be effected through the
Depositary in accordance with this Indenture (including the restrictions on
transfer set forth herein) and the procedures of the Depositary therefor. Upon
receipt by the Registrar of written instructions, or such other instruction as
is customary for the Depositary, from the Depositary or its nominee, requesting
the registration of transfer of an interest in a U.S. Global Note, an IAI Global
Note or Offshore Global Note, as the case may be, to another type of Global
Note, (or, if the applicable type of Global Note required to represent the
interest as requested to be transferred is not then outstanding, only the Global
Note representing the interest being transferred), the Registrar shall cancel
such Global Notes (or Global Note) and the Company shall issue and the Trustee
shall, upon written instructions from the Company in accordance with Section
2.03, authenticate new Global Notes of the types so cancelled (or the type so
cancelled and applicable type required to represent the interest as requested to
be transferred) reflecting the applicable increase and decrease of the principal
amount of Notes represented by such types of Global Notes, giving effect to such
transfer. If the applicable type of Global Note required to represent the
interest as requested to be transferred is not outstanding at the time of such
request, the Company shall issue and the Trustee shall, upon written
instructions from the Company in accordance with Section 2.03, authenticate a
new Global Note of such type in principal amount equal to the principal amount
of the interest requested to be transferred.
(d) Restrictions on Transfer of a Beneficial Interest in a Global
-------------------------------------------------------------
Note to Another Global Note. A beneficial interest in one Global Note may not
- ---------------------------
be exchanged for a beneficial interest in another Global Note except upon
satisfaction of the requirements set forth below. Upon receipt by the Registrar
of
39
<PAGE>
written instructions, or such other instructions as are customary for the
Depositary in accordance with the customary procedures at the Depositary, from
or on behalf of any Person having a beneficial interest in a Global Note and
upon receipt by the Trustee of a written order or such other form of
instructions as is customary for the Depositary or the Person designated by the
Depositary as having such a beneficial interest containing registration
instructions and, in the case of any such transfer or exchange of a beneficial
interest in Initial Notes, the following additional information and documents: a
certification, substantially in the form of Exhibit B hereto, that such transfer
is (I) to a QIB, (II) in reliance on Regulation S or (III) to an Institutional
Accredited Investor and, with respect to (II) and (III), at the option of the
Company, an Opinion of Counsel reasonably acceptable to the Company to the
effect that such transfer is in compliance with the Securities Act; then the
Registrar shall reflect the applicable increase and decrease of the principal
amount of Notes represented by such types of Global Notes, giving effect to such
transfer in accordance with its customary procedures and the procedures of the
Depositary. If the applicable type of Global Note required to represent the
interest as requested to be transferred is not outstanding at the time of such
request, the Company shall issue and the Trustee shall, upon written
instructions from the Company in accordance with Section 2.03, authenticate a
new Global Note of such type in principal amount equal to the principal amount
of the interest requested to be transferred.
(e) Restrictions on Transfer and Exchange of Global Notes.
-----------------------------------------------------
Notwithstanding any other provisions of this Indenture, a Global Note may not be
transferred as a whole except by the Depositary to a nominee of the Depositary
or by a nominee of the Depositary to the Depositary or another nominee of the
Depositary or by the Depositary or any such nominee to a successor Depositary or
a nominee of such successor Depositary.
(f) Private Placement Legend. Upon the transfer, exchange or
------------------------
replacement of Notes not bearing the Private Placement Legend, the Registrar
shall deliver Notes that do not bear the Private Placement Legend. Upon the
transfer, exchange or replacement of Notes bearing the Private Placement Legend,
the Registrar, shall deliver only Notes that bear the Private Placement Legend
unless either (i) there is delivered to the Registrar an Opinion of Counsel
reasonably satisfactory to the Company and the Trustee to the effect that
neither such legend nor the related restrictions on transfer are required in
order to maintain compliance with the provisions of the Securities Act or (ii)
such Note has been sold pursuant to an effective registration statement under
the Securities Act (including pursuant to a Registration).
40
<PAGE>
(g) General. By its acceptance of any Note bearing the Private
-------
Placement Legend, each Holder of such a Note acknowledges the restrictions on
transfer of such Note set forth in this Indenture, the Private Placement Legend
and the Netherlands Legend and agrees that it will transfer such Note only as
provided in this Indenture. The Registrar shall not register a transfer of any
Note unless such transfer complies with the restrictions on transfer of such
Note set forth in this Indenture. In connection with any transfer of Notes,
each Holder agrees by its acceptance of the Notes to furnish the Registrar or
the Company such certifications, legal opinions or other information as either
of them may reasonably require to confirm that such transfer is being made
pursuant to an exemption from, or a transaction not subject to, the registration
requirements of the Securities Act; provided that the Registrar shall not be
required to determine (but may rely on a determination made by the Company with
respect to) the sufficiency of any such certifications, legal opinions or other
information.
The Registrar shall retain copies of all letters, notices and other
written communications received pursuant to Section 2.07 or this Section 2.08.
The Company shall have the right to inspect and make copies of all such letters,
notices or other written communications at any reasonable time upon the giving
of reasonable written notice to the Registrar.
SECTION 2.09. Replacement Notes. If a mutilated Note is
-----------------
surrendered to the Trustee or if the Holder claims that the Note has been lost,
destroyed or wrongfully taken, the Company shall issue and the Trustee shall
authenticate a replacement Note of like tenor and amount and bearing a number
not contemporaneously outstanding; provided that the requirements of this
Section 2.09 are met. If required by the Trustee or the Company, an indemnity
bond must be furnished that is sufficient in the judgment of both the Trustee
and the Company to protect the Company, the Trustee or any Agent from any loss
that any of them may suffer if a Note is replaced. The Company may charge such
Holder for its expenses and the expenses of the Trustee in replacing a Note. In
case any such mutilated, lost, destroyed or wrongfully taken Note has become or
is about to become due and payable, the Company in its discretion may pay such
Note instead of issuing a new Note in replacement thereof.
Every replacement Note is an additional obligation of the Company and
shall be entitled to the benefits of this Indenture.
SECTION 2.10. Outstanding Notes. Notes outstanding at any time are
-----------------
all Notes that have been authenticated by the Trustee except for those cancelled
by it, those delivered to it
41
<PAGE>
for cancellation and those described in this Section 2.10 as not outstanding.
If a Note is replaced pursuant to Section 2.09, it ceases to be
outstanding unless and until the Trustee and the Company receive proof
satisfactory to them that the replaced Note is held by a bona fide purchaser.
If the Principal Paying Agent (other than the Company or an Affiliate
of the Company) holds on the maturity date money sufficient to pay Notes payable
on that date, then on and after that date such Notes cease to be outstanding and
interest on them shall cease to accrue.
A Note does not cease to be outstanding because the Company or one of
its Affiliates holds such Note, provided, however, that, in determining whether
the Holders of the requisite principal amount of the outstanding Notes have
given any request, demand, authorization, direction, notice, consent or waiver
hereunder, Notes owned by the Company or any other obligor upon the Notes or any
Affiliate of the Company or of such other obligor shall be disregarded and
deemed not to be outstanding, except that, in determining whether the Trustee
shall be protected in relying upon any such request, demand, authorization,
direction, notice, consent or waiver, only Notes which a Responsible Officer of
the Trustee actually knows to be so owned shall be so disregarded. Notes so
owned which have been pledged in good faith may be regarded as outstanding if
the pledgee establishes to the satisfaction of the Trustee the pledgee's right
so to act with respect to such Notes and that the pledgee is not the Company or
any other obligor upon the Notes or any Affiliate of the Company or of such
other obligor.
SECTION 2.11. Temporary Notes. Until definitive Notes are ready
---------------
for delivery, the Company may prepare and the Trustee shall authenticate
temporary Notes. Temporary Notes shall be substantially in the form of
definitive Notes but may have insertions, substitutions, omissions and other
variations determined to be appropriate by the officers executing the temporary
Notes, as evidenced by their execution of such temporary Notes. If temporary
Notes are issued, the Company will cause definitive Notes to be prepared without
unreasonable delay. After the preparation of definitive Notes, the temporary
Notes shall be exchangeable for definitive Notes upon surrender of the temporary
Notes at the office or agency of the Company designated for such purpose
pursuant to Section 4.02, without charge to the Holder. Upon surrender for
cancellation of any one or more temporary Notes the Company shall execute and
the Trustee shall authenticate and make available for delivery in exchange
therefor a like principal amount of definitive Notes of authorized
denominations. Until so exchanged, the temporary
42
<PAGE>
Notes shall be entitled to the same benefits under this Indenture as definitive
Notes.
SECTION 2.12. Cancellation. The Company at any time may deliver to
------------
the Trustee for cancellation any Notes previously authenticated and delivered
hereunder which the Company may have acquired in any manner whatsoever, and may
deliver to the Trustee for cancellation any Notes previously authenticated
hereunder which the Company has not issued and sold. The Registrar and the
Principal Paying Agent shall forward to the Trustee any Notes surrendered to
them for transfer, exchange or payment. The Trustee shall cancel all Notes
surrendered for transfer, exchange, payment or cancellation in accordance with
its normal procedure.
SECTION 2.13. CUSIP Numbers. The Company in issuing the Notes may
-------------
use "CUSIP," "CINS" or "ISIN" numbers (if then generally in use), and the
Trustee shall use CUSIP, CINS or ISIN numbers, as the case may be, in notices of
redemption or exchange as a convenience to Holders; provided that any such
notice shall state that no representation is made as to the correctness of such
numbers either as printed on the Notes or as contained in any notice of
redemption or exchange and that reliance may be placed only on the other
identification numbers printed on the Notes, and any such redemption shall not
be affected by any defect or omission of such numbers. The Company will
promptly notify the Trustee of any change in the "CUSIP," "CINS" or "ISIN"
numbers.
SECTION 2.14. Defaulted Interest. If the Company defaults on a
------------------
payment of interest on the Notes, it shall pay, or shall deposit with the
Principal Paying Agent money in immediately available funds sufficient to pay
the defaulted interest, plus (to the extent lawful) any interest payable on the
defaulted interest, to the Persons who are Holders on a subsequent special
record date. A special record date, as used in this Section 2.14 with respect
to the payment of any defaulted interest, shall mean the 15th day next preceding
the date fixed by the Company for the payment of defaulted interest, whether or
not such day is a Business Day. At least 15 days before the subsequent special
record date, the Company shall mail to each Holder and to a Responsible Officer
of the Trustee a notice that states the subsequent special record date, the
payment date and the amount of defaulted interest to be paid.
43
<PAGE>
ARTICLE THREE
REDEMPTION
SECTION 3.01. Optional Redemption. (a) The Notes may be redeemed,
-------------------
at the Company's option, in whole or in part, at any time or from time to time,
on or after April 15, 2005 and prior to maturity, upon not less than 30 nor more
than 60 days' prior notice mailed by first class mail to each Holder's last
address as it appears in the Security Register, at the Redemption Prices
(expressed in percentages of principal amount) set forth below, plus accrued and
unpaid interest, if any, to the Redemption Date (subject to the right of Holders
of record on the relevant Regular Record Date that is on or prior to the
Redemption Date to receive interest due on an Interest Payment Date), if
redeemed during the 12-month period commencing on April 15 of the years set
forth below:
<TABLE>
<CAPTION>
Year Redemption Price
- ---- ----------------
<S> <C>
2005 107.000%
2006 104.667%
2007 102.333%
2008 and thereafter 100.000%
</TABLE>
(b) In addition, upon not less than 30 nor more than 60 days' prior
notice mailed by first class mail to each Holder's last address as it appears in
the Security Register, at any time on or prior to April 15, 2003, the Company
may redeem up to 35% of the principal amount of the Notes originally issued with
the proceeds of one or more Public Equity offerings following which there is a
Public Market, at the Company's option, at any time or from time to time in
part, at a Redemption Price (expressed as a percentage of principal amount) of
114.00% plus accrued and unpaid interest, if any, to the Redemption Date;
provided that (i) at least 65% of the aggregate principal amount of Notes
remains outstanding after each such redemption and (ii) the Company mails the
notice of redemption required by this paragraph (b) of this Section 3.01 within
60 days of the receipt of the Public Equity Offering proceeds to be so applied.
(c) If as a result of any change in or amendment to any laws or
regulations or official interpretations or applications thereof which is
announced and becomes effective after the Issue Date, in making any payment due
or to become due under the Notes or this Indenture, the Company or any
Subsidiary Guarantor is or would be required on the next succeeding Interest
Payment Date to pay any Additional Amounts and the payment of such Additional
Amounts cannot be avoided by the use of any reasonable measures available to the
Company or any Subsidiary
44
<PAGE>
Guarantor (which shall not include any adverse modification of the terms of this
Indenture or the Notes), the Notes may be redeemed at the option of the Company,
in whole but not in part, upon not less than 30 nor more than 60 days' prior
notice mailed by first class mail to each Holder's last address as it appears in
the Security Register, at any time prior to the second succeeding Interest
Payment Date following such change or amendment at a Redemption Price equal to
100% of the principal amount thereof, plus accrued and unpaid interest, if any,
thereon to the Redemption Date; provided the Company or any such Subsidiary
Guarantor will also pay to Holders of the Notes on the Redemption Date any
Additional Amounts which are then payable.
SECTION 3.02. Notices to Trustee. If the Company elects to redeem
------------------
Notes pursuant to Section 3.01(a), Section 3.01(b) or Section 3.01(c), it shall
notify the Trustee in writing of the Redemption Date and the principal amount of
Notes to be redeemed.
The Company shall give each notice provided for in this Section 3.02
in an Officers' Certificate at least 45 days before the Redemption Date (unless
a shorter period shall be satisfactory to the Trustee).
SECTION 3.03. Selection of Notes To Be Redeemed. In the case of
---------------------------------
any partial redemption pursuant to Section 3.01(a) or Section 3.01(b), selection
of the Notes for redemption will be made by the Trustee in compliance with the
requirements of the Luxembourg Stock Exchange, if the Notes are so listed, and
principal national securities exchange, if any, on which the Notes are listed
or, if the Notes are not listed on a national securities exchange or the
Luxembourg Stock Exchange, pro rata, or by lot; provided that any partial
redemption pursuant to Section 3.01(b) shall only be selected pro rata as among
the applicable Holders; provided further that no Note of (Euro)1,000, in
principal amount or less shall be redeemed in part; provided further that the
principal amount of any Notes left outstanding will not be less than
(Euro)50,000. The Trustee shall make the selection from the Notes outstanding
and not previously called for redemption. Provisions of this Indenture that
apply to Notes called for redemption also apply to portions of Notes called for
redemption. The Trustee shall notify the Company and the Registrar promptly in
writing of the Notes or portions of Notes to be called for redemption.
SECTION 3.04. Notice of Redemption. With respect to any redemption
--------------------
of Notes pursuant to Section 3.01(a), Section 3.01(b) or Section 3.01(c), at
least 30 days but not more than 60 days before a Redemption Date, the Company
shall mail a notice of redemption by first class mail to each Holder whose
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Notes are to be redeemed. The Company will cause a copy of such notice to be
published in a daily newspaper with general circulation in Luxembourg (which is
expected to be the Luxemburger Wort).
The notice shall identify the Notes to be redeemed and shall state:
(i) the Redemption Date;
(ii) the Redemption Price;
(iii) the name and address of the Principal Paying Agent;
(iv) that Notes called for redemption must be surrendered to the
Principal Paying Agent in order to collect the Redemption Price;
(v) that, unless the Company defaults in making the redemption
payment, interest on Notes called for redemption ceases to accrue on and
after the Redemption Date and the only remaining right of the Holders is to
receive payment of the Redemption Price plus accrued interest to the
Redemption Date upon surrender of the Notes to the Principal Paying Agent;
(vi) that, in the case of a redemption pursuant to section
3.01(a) or Section 3.01(b), if any Note is being redeemed in part, the
portion of the principal amount (equal to (Euro)1,000 in principal amount
or any integral multiple thereof) of such Note to be redeemed and that, on
and after the Redemption Date, upon surrender of such Note, a new Note or
Notes in principal amount equal to the unredeemed portion thereof with a
minimum denomination of (Euro)50,000 will be reissued; and
(vii) that, if any Note contains a CUSIP, CINS or ISIN number as
provided in Section 2.13, no representation is being made as to the
correctness of the CUSIP, CINS or ISIN number either as printed on the
Notes or as contained in the notice of redemption and that reliance may be
placed only on the other identification numbers printed on the Notes.
At the Company's request (which request may be revoked by the Company
at any time prior to the time at which the Trustee shall have given such notice
to the Holders), made in writing to the Trustee at least 30 days (or such
shorter period as shall be satisfactory to the Trustee) before a Redemption
Date, the Trustee shall give the notice of redemption in the
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name and at the expense of the Company. If, however, the Company gives such
notice to the Holders, the Company shall concurrently deliver to the Trustee an
Officers' Certificate stating that such notice has been given.
SECTION 3.05. Effect of Notice of Redemption. Once notice of
------------------------------
redemption is mailed, Notes called for redemption become due and payable on the
Redemption Date and at the Redemption Price. Upon surrender of any Notes to the
Principal Paying Agent, such Notes shall be paid at the Redemption Price, plus
accrued interest, if any, to the Redemption Date.
Notice of redemption shall be deemed to be given when mailed, whether
or not the Holder receives the notice. In any event, failure to give such
notice, or any defect therein, shall not affect the validity of the proceedings
for the redemption of Notes held by Holders to whom such notice was properly
given.
SECTION 3.06. Deposit of Redemption Price. Prior to any Redemption
---------------------------
Date, the Company shall deposit with the Principal Paying Agent (or, if the
Company is acting as its own Principal Paying Agent, shall segregate and hold in
trust as provided in Section 2.05) money sufficient to pay the Redemption Price
of and accrued interest on all Notes to be redeemed on that date other than
Notes or portions thereof called for redemption on that date that have been
delivered by the Company to the Trustee for cancellation.
SECTION 3.07. Payment of Notes Called for Redemption. If notice of
--------------------------------------
redemption has been given in the manner provided above, the Notes or portion of
Notes specified in such notice to be redeemed shall become due and payable on
the Redemption Date at the Redemption Price stated therein, together with
accrued interest to such Redemption Date, and on and after such date (unless the
Company shall default in the payment of such Notes at the Redemption Price and
accrued interest to the Redemption Date, in which case the principal, until
paid, shall bear interest from the Redemption Date at the rate prescribed in the
Notes), such Notes shall cease to accrue interest. Upon surrender of any Note
for redemption in accordance with a notice of redemption, such Note shall be
paid and redeemed by the Company at the Redemption Price, together with accrued
interest, if any, to the Redemption Date; provided that installments of interest
whose Stated Maturity is on or prior to the Redemption Date shall be payable to
the Holders registered as such at the close of business on the relevant Regular
Record Date.
SECTION 3.08. Notes Redeemed in Part. Upon surrender of any Note
----------------------
that is redeemed in part, the Company shall execute and the Trustee, upon the
Company's written request in
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the form of an Company Order, shall authenticate and deliver to the Holder a new
Note equal in principal amount to the unredeemed portion of such surrendered
Note, which shall not, in any event be less than (Euro)50,000 principal amount.
ARTICLE FOUR
COVENANTS
SECTION 4.01. Payment of Notes. The Company shall pay the
----------------
principal of, premium, if any, and interest on the Notes on the dates and in the
manner provided in the Notes and this Indenture. An installment of principal,
premium, if any, or interest shall be considered paid on the date due if the
Trustee or Principal Paying Agent (other than the Company, a Subsidiary of the
Company, or any Affiliate of any of them) holds on that date money designated
for and sufficient to pay the installment. If the Company or any Subsidiary of
the Company or any Affiliate of any of them, acts as Principal Paying Agent, an
installment of principal, premium, if any, or interest shall be considered paid
on the due date if the entity acting as Principal Paying Agent complies with the
last sentence of Section 2.05. As provided in Section 6.09, upon a bankruptcy or
reorganization procedure relative to the Company, the Trustee shall serve as the
Principal Paying Agent and conversion agent, if any, for the Notes.
The Company shall pay interest on overdue principal, premium, if any,
and interest on overdue installments of interest, to the extent lawful, at the
rate per annum then borne upon the Notes.
SECTION 4.02. Maintenance of Office or Agency. The Company will
-------------------------------
maintain in the Borough of Manhattan, The City of New York and in London,
England, and, so long as the Notes are listed on the Luxembourg Stock Exchange
and the rules of such stock exchange require, in Luxembourg, an office or agency
where Notes may be surrendered for registration of transfer or exchange or for
presentation for payment and where notices and demands to or upon the Company in
respect of the Notes and this Indenture may be served. The Company will give
prompt written notice to the Trustee of the location, and any change in the
location, of such office or agency. If at any time the Company shall fail to
maintain any such required office or agency or shall fail to furnish the Trustee
with the address thereof, such presentations, surrenders, notices and demands
may be made or served at the address of the Trustee set forth in Section 12.02.
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The Company may also from time to time designate one or more other
offices or agencies where the Notes may be presented or surrendered for any or
all such purposes and may from time to time rescind such designations; provided
that no such designation or rescission shall in any manner relieve the Company
of its obligation to maintain an office or agency in the Borough of Manhattan,
The City of New York, London, England and so long as the Notes are listed on the
Luxembourg Stock Exchange and the rules of such exchange so require, in
Luxembourg, for such purposes. The Company will give prompt written notice to
the Trustee of any such designation or rescission and of any change in the
location of any such other office or agency.
The Company hereby initially designates (i) the Corporate Trust Office
of the Trustee, located in the Borough of Manhattan, The City of New York, as
such office of the Company in accordance with Section 2.04, (ii) the Corporate
Trust Office of the Trustee's London affiliate, located in London, England, as
such office of the Company in accordance with Section 2.04 and (iii) Banque
Internationale a Luxemboug S.A., as its office or agency in Luxembourg for such
purposes.
SECTION 4.03. Limitation on Indebtedness. The Company will not,
--------------------------
and will not permit any of the Restricted Subsidiaries to, Incur any
Indebtedness (other than Indebtedness existing on the Prior Issue Date);
provided that the Company and any Subsidiary Guarantor may Incur Indebtedness
(including Acquired Indebtedness), and any Restricted Subsidiary may incur
Acquired Indebtedness, if, in either case, after giving effect to the Incurrence
of such Indebtedness and the receipt and application of the proceeds therefrom,
the Consolidated Leverage Ratio would be greater than zero and less than or
equal to 6.0 to 1.0.
Notwithstanding the foregoing, the Company and any Restricted
Subsidiary (except as specified below) may Incur each and all of the following:
(i) Indebtedness (A) of any Restricted Subsidiary owed to the
Company evidenced by a promissory note or (B) of the Company or any
Restricted Subsidiary to any Restricted Subsidiary; provided that, in the
case of clause (B) above, any event which results in any such Restricted
Subsidiary ceasing to be a Restricted Subsidiary or, in the case of clause
(A) and (B) above, any subsequent transfer of such Indebtedness (other than
to the Company or another Restricted Subsidiary) shall be deemed, in each
case, to constitute an Incurrence of such Indebtedness not permitted by
this clause (i);
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(ii) Refinancing Indebtedness;
(iii) Indebtedness of the Company or any Restricted Subsidiary (A)
in respect of performance, surety or appeal bonds provided in the ordinary
course of business, (B) under Currency Agreements and Interest Rate
Agreements; provided that such agreements (a) are designed to provide
protection against fluctuations in foreign currency exchange rates or
interest rates and (b) do not increase the Indebtedness of the obligor
outstanding at any time other than as a result of fluctuations in foreign
currency exchange rates or interest rates or by reason of fees, indemnities
and compensation payable thereunder, and (C) arising from agreements
providing for indemnification, adjustment of purchase price or similar
obligations, or from Guaranties or letters of credit, surety bonds or
performance bonds securing any obligations of the Company or any Restricted
Subsidiary pursuant to such agreements, in any case Incurred in connection
with the disposition of any business, assets or Restricted Subsidiary
(other than Guaranties of Indebtedness Incurred by any Person acquiring all
or any portion of such business, assets or Restricted Subsidiary for the
purpose of financing such acquisition), in an amount not to exceed the
gross proceeds actually received by the Company or any Restricted
Subsidiary in connection with such disposition;
(iv) Indebtedness represented by (A) Guaranties of the Notes, and
(B) Guaranties by any Restricted Subsidiary of Indebtedness of the Company
otherwise permitted under this covenant, provided any Guaranty permitted by
this clause (B) is permitted by and made in accordance Section 4.07;
(v) Indebtedness of the Company (provided that any such
Indebtedness constituting Debt Securities does not mature as to principal
or become mandatorily redeemable prior to the Stated Maturity of the Notes)
or Indebtedness (other than Debt Securities) of any Restricted Subsidiary
Incurred to finance the cost (including the cost of design, development,
acquisition, construction, installation, improvement, transportation or
integration) to acquire equipment, inventory or network assets (including
acquisitions by way of Capitalized Leases and acquisitions of the Capital
Stock of a Person that becomes a Restricted Subsidiary to the extent of the
fair market value of the equipment, inventory or network assets of such
Person so acquired and to the extent of the fair market value of the
acquisition of the Capital Stock of a Restricted Subsidiary that owns all
or part of such equipment, inventory or assets from a person other than the
Company or any Re-
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stricted Subsidiary) by the Company or a Restricted Subsidiary after the
Prior Issue Date for application or use in a Telecommunications Business
and any costs for initial services provided in connection with the
foregoing or to provide, as applicable, for the initial operation of such
equipment or assets in an aggregate principal amount not to exceed
(Euro)250 million (or, to the extent non-euro denominated, the Euro
Equivalent thereof) at any one time outstanding;
(vi) Indebtedness of the Company such that, after giving effect to
the Incurrence thereof, the total aggregate principal amount of
Indebtedness Incurred under this clause (vi) and any Refinancings thereof
otherwise Incurred in compliance with this Indenture would not exceed 200%
of Total Incremental Equity;
(vii) Indebtedness of the Company and its Restricted Subsidiaries
incurred under one or more Senior Credit Facilities in an aggregate
principal amount not to exceed (Euro)300 million (or, to the extent non-
euro denominated, the Euro Equivalent thereof) at any time outstanding; and
(viii) Indebtedness (in addition to Indebtedness permitted under
clauses (i) through (vii) above) outstanding at any time in an aggregate
principal amount not to exceed (Euro)30 million (or, to the extent non-euro
denominated, the Euro Equivalent thereof).
Notwithstanding any other provision of this Section 4.03, the maximum
amount of Indebtedness that the Company or a Restricted Subsidiary may Incur
pursuant to this Section 4.03 shall not be deemed to be exceeded, with respect
to any outstanding Indebtedness due solely to the result of fluctuations in the
exchange rates of currencies.
For purposes of determining compliance with this Section 4.03, in the
event that an item of Indebtedness meets the criteria of more than one of the
types of Indebtedness described in the above clauses, the Company, in its sole
discretion, shall classify, and from time to time may reclassify, such item of
Indebtedness and only be required to include the amount and type of such
Indebtedness in one of such clauses.
The issuance of the Notes shall be deemed to be an Incurrence of
Indebtedness on the date of issuance and is subject to compliance with this
Section 4.03.
SECTION 4.04. Limitation on Restricted Payments. The Company will
---------------------------------
not, and will not permit any Restricted Subsidiary to, directly or indirectly,
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(i) declare or pay any dividend or make any distribution on or with
respect to its Capital Stock (other than (x) dividends or distributions
payable solely in its Capital Stock (other than Disqualified Stock), (y)
pro rata dividends or distributions or other payments on Common Stock of
Restricted Subsidiaries held by Persons other than the Company or any of
the Restricted Subsidiaries and (z) dividends, distributions or other
payments to the Company or any Restricted Subsidiary),
(ii) purchase, redeem, retire or otherwise acquire for value any
Capital Stock of (A) the Company or an Unrestricted Subsidiary held by any
Person or (B) a Restricted Subsidiary held by any Affiliate of the Company
(other than a Restricted Subsidiary) or any holder (or any Affiliate of
such holder) of 5% or more of any class of Capital Stock of the Company
(other than a purchase, redemption, retirement or other acquisition that is
a Permitted Investment in a Restricted Subsidiary),
(iii) make any voluntary or optional principal payment, or
voluntary or optional redemption, repurchase, defeasance, or other
acquisition or retirement for value prior to any scheduled mandatory
payment date, of Subordinated Indebtedness, or
(iv) make any Investment, other than a Permitted Investment, in any
Person
(such payments or any other actions described in clauses (i) through (iv) above
being collectively "Restricted Payments") if, at the time of, and after giving
effect to, the proposed Restricted Payment:
(A) a Default shall have occurred and be continuing,
(B) the Company could not Incur at least (Euro)1.00 of Indebtedness under
the first paragraph of Section 4.03, or
(C) the aggregate amount of all Restricted Payments (the amount, if other
than in cash, to be determined in good faith by the Board of
Directors, whose determination shall be conclusive and evidenced by a
Board Resolution) made after the Prior Issue Date shall exceed the sum
of (1) the amount of (x) Cumulative Available Cash Flow determined at
the time of such Restricted Payment less (y) 150% of the Cumulative
Consolidated Interest Expense determined for the period commencing on
the first day of the fiscal quarter which includes the Prior Issue
Date and ending on the last day of the last fiscal quarter preceding
the
52
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Transaction Date for which reports have been filed with the
Commission or provided to the Trustee pursuant to Section 4.18 plus
(2) the aggregate Net Cash Proceeds received by the Company after the
Prior Issue Date as a capital contribution or from the issuance and
sale of its Capital Stock (other than Disqualified Stock) to a Person
who is not a Subsidiary of the Company, including an issuance or sale
permitted by this Indenture of Indebtedness of the Company for cash
subsequent to the Prior Issue Date upon the conversion of such
Indebtedness into Capital Stock (other than Disqualified Stock) of the
Company, plus (3) an amount equal to the net reduction in Investments
constituting Restricted Payments resulting from payments of interest
on Indebtedness, dividends, repayments of loans or advances, or other
transfers of assets, in each case to the Company or any Restricted
Subsidiary, or from the Net Cash Proceeds from the sale of any such
Investment less the cost of the disposition of such Investment
(except, in each case, to the extent any such payment or proceeds are
included in the calculation of Adjusted Consolidated Net Income), or
from redesignations of Unrestricted Subsidiaries as Restricted
Subsidiaries (valued in each case as provided in the definition of
"Investments"), not to exceed, in each case, the amount of such
Investment, minus (4) 50% of the then outstanding principal amount of
any Indebtedness Incurred pursuant to clause (vi) of the second
paragraph of Section 4.03 and any Refinancings thereof (regardless of
any subsequent reclassification of any such Indebtedness).
The foregoing provision shall not prohibit: (i) the payment of any
dividend within 60 days after the date of declaration thereof if, at the date of
declaration, such payment would comply with the foregoing paragraph; (ii) so
long as no Default shall have occurred and be continuing, the redemption,
repurchase, defeasance or other acquisition or retirement for value of
Subordinated Indebtedness including premium, if any, and accrued and unpaid
interest, with the amount of the proceeds of, or in exchange for, Indebtedness
Incurred under clause (ii) of the second paragraph of Section 4.03; (iii) the
repurchase, redemption or other acquisition of Capital Stock of the Company or a
Subsidiary of the Company in exchange for, or out of the proceeds of a capital
contribution or a substantially concurrent offering of, Capital Stock (other
than Disqualified Stock) of the Company; (iv) so long as no Default shall have
occurred and be continuing, the making of any principal payment or the
repurchase, redemption, retirement, defeasance or other acquisition for value of
Subordinated Indebtedness in exchange for, or out of the proceeds of a capital
con-
53
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tribution or a substantially concurrent offering of, the Capital Stock (other
than Disqualified Stock) of the Company; (v) payments or distributions to
dissenting stockholders pursuant to applicable law, pursuant to or in connection
with a consolidation, merger or transfer of assets that complies with the
provisions of this Indenture applicable to mergers, consolidations and transfers
of all or substantially all of the property and assets of the Company; (vi) so
long as no Default shall have occurred and be continuing, any Investment in any
Person primarily engaged in a Telecommunications Business on the date of such
Investment; provided that after giving effect to the proposed Investment, the
aggregate amount of Investments made pursuant to this clause (vi) does not then
exceed the sum of (a) (Euro)25 million (or, to the extent non-euro denominated,
the Euro Equivalent thereof) plus (b) the amount then available for the making
of Restricted Payments pursuant to clause (C) of the preceding paragraph; or
(vii) (A) dividends or distributions to Parent in respect of the purchase,
redemption, retirement or other acquisition for value of Capital Stock of Parent
held by managers, directors, employees or officers, or former managers,
directors, employees or officers, of Parent, CableTel Management, Inc. the
Company or a Wholly Owned Subsidiary (or their estates or beneficiaries under
their estates), upon the death, disability, retirement, termination of
employment or pursuant to the terms of any agreement under which such Capital
Stock was issued; and (B) payments of amounts required for any repurchase,
redemption or other acquisition or retirement for value of any Capital Stock
owned by any supervisory board member, management board member, officer,
director, or employee of the Company or any Restricted Subsidiary upon the
death, disability, retirement or termination of employment from the Company or
such Restricted Subsidiary; provided that in the case of (A) and (B) the
aggregate dividends or distributions and price paid for such repurchase,
redemption, retirement or acquisition of Capital Stock will not exceed (Euro)6
million (or, to the extent non euro-denominated, the Euro Equivalent thereof) in
any calendar year in the aggregate unless such repurchases are made with the
proceeds of insurance policies and the Capital Stock is purchased from the
executors, administrators, testamentary trustees, heirs, legatees or
beneficiaries).
Each Restricted Payment permitted pursuant to the preceding paragraph
(other than the Restricted Payment referred to in clause (ii) thereof) and the
proceeds from any capital contribution or any issuance of Capital Stock referred
to in clauses (iii) and (iv) thereof shall be included in calculating whether
the conditions of clause (C) of the first paragraph of this Section 4.04 have
been met with respect to any subsequent Restricted Payments.
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SECTION 4.05. Limitation on Dividend and Other Payment Restrictions
-----------------------------------------------------
Affecting Restricted Subsidiaries. The Company will not, and will not permit
- ---------------------------------
any Restricted Subsidiary to, create or otherwise cause or suffer to exist or
become effective any consensual encumbrance or restriction of any kind on the
ability of any Restricted Subsidiary to (i) pay dividends or make any other
distributions permitted by applicable law on any Capital Stock of such
Restricted Subsidiary owned by the Company or any other Restricted Subsidiary,
(ii) pay any Indebtedness owed to the Company or any other Restricted
Subsidiary, (iii) make loans or advances to the Company or any other Restricted
Subsidiary or (iv) transfer any of its property or assets to the Company or any
other Restricted Subsidiary.
The foregoing provisions shall not restrict any encumbrances or
restrictions: (i) existing on the Issue Date or any other agreements in effect
on the Issue Date, and any extensions, refinancings, renewals or replacements of
such agreements; provided that the Company reasonably determines the
encumbrances and restrictions in any such extensions, refinancings, renewals or
replacements are no less favorable in any material respect to the Holders than
those encumbrances or restrictions that are then in effect and that are being
extended, refinanced, renewed or replaced; (ii) existing under or by reason of
applicable law; (iii) existing with respect to any Person or the property or
assets of such Person acquired by the Company or any Restricted Subsidiary,
existing at the time of such acquisition and not incurred in contemplation
thereof, which encumbrances or restrictions are not applicable to any Person or
the property or assets of any Person other than such Person or the property or
assets of such Person so acquired; (iv) in the case of clause (iv) of the first
paragraph of this Section 4.05, (A) that restrict in a customary manner the
subletting, assignment or transfer of any property or asset that is a lease,
license, conveyance or contract or similar property or asset, (B) existing by
virtue of any transfer of, agreement to transfer, option or right with respect
to, or Lien on, any property or assets of the Company or any Restricted
Subsidiary not otherwise prohibited by this Indenture or (C) arising or agreed
to in the ordinary course of business, not relating to any Indebtedness, and
that the Company reasonably determines do not, individually or in the aggregate,
detract from the value of property or assets of the Company or any Restricted
Subsidiary in any manner material to the Company or any Restricted Subsidiary;
(v) with respect to a Restricted Subsidiary and imposed pursuant to an agreement
that has been entered into for the sale or disposition of all or substantially
all of the Capital Stock of, or property and assets of, such Restricted
Subsidiary; or (vi) contained in the terms of any Indebtedness or any agreement
pursuant to which such Indebtedness was issued
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if (A) either (i) the encumbrance or restriction applies only in the event of
and during the continuance of a payment default or a default with respect to a
financial covenant contained in such Indebtedness or agreement, or (ii) the
Company determines at the time any such Indebtedness is Incurred (and at the
time of any modification of the terms of any such encumbrance or restriction)
that any such encumbrance or restriction will not materially affect the
Company's ability to make principal or interest payments on the Notes and (B)
the encumbrance or restriction is not materially more disadvantageous to the
Holders of the Notes than is customary in comparable financings or agreements
(as determined by the Company in good faith). Nothing contained in this Section
4.05 shall prevent the Company or any Restricted Subsidiary from restricting the
sale or other disposition of property or assets of the Company or any Restricted
Subsidiary that secure Indebtedness of the Company or any such Restricted
Subsidiary or from entering into any agreement that contains customary net
worth, leverage, invested capital and other financial covenants, customary
covenants regarding the merger of or sale of all or any substantial part of the
assets of the Company or any Restricted Subsidiary, customary restrictions on
transactions with Affiliates, and customary subordination provisions governing
Indebtedness owed to the Company or any Restricted Subsidiary.
SECTION 4.06. Limitation on the Issuance and Sale of Capital Stock of
-------------------------------------------------------
Restricted Subsidiaries. The Company will not sell, and will not permit any
- -----------------------
Restricted Subsidiary, directly or indirectly, to issue or sell, any Capital
Stock of a Restricted Subsidiary except (i) to the Company or a Restricted
Subsidiary; (ii) issuances of director's qualifying shares or issuances of
Capital Stock to nationals of the jurisdiction of organization of a Restricted
Subsidiary, to the extent required by applicable law; (iii) if, immediately
after giving effect to such issuance or sale, such Restricted Subsidiary would
no longer constitute a Restricted Subsidiary and any Investment in such Person
remaining after giving effect to such issuance or sale would have been permitted
to be made under Section 4.04 if made on the date of such issuance or sale; or
(iv) issuances or sales of Common Stock of a Restricted Subsidiary, provided
that the Company or such Restricted Subsidiary applies an amount equal to the
Net Cash Proceeds, if any, of any such sale in accordance with clause (A), (B)
or (C) of Section 4.10.
SECTION 4.07. Limitation on Issuances of Guaranties and Incurrence of
-------------------------------------------------------
Certain Indebtedness by Restricted Subsidiaries. The Company will not permit
- -----------------------------------------------
any Restricted Subsidiary, directly or indirectly, to (i) Guaranty any
Subordinated Indebtedness or Debt Securities of the Company or (ii) Incur any
Indebtedness under or in respect of Debt Securities or Subordinated Indebtedness
under clauses (ii), (v) or (viii) of the
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second paragraph of Section 4.03 ("Guarantied Indebtedness"), unless (A)(1) such
Restricted Subsidiary simultaneously executes and delivers a supplemental
indenture to this Indenture providing for a Guaranty of payment of the Notes by
such Restricted Subsidiary on the terms set forth in Exhibit E attached hereto
and (2) such Restricted Subsidiary waives, and will not in any manner whatsoever
claim or take the benefit or advantage of, any rights of reimbursement,
indemnity or subrogation or any other rights against the Company or any other
Restricted Subsidiary as a result of any payment by such Restricted Subsidiary
under its Subsidiary Guaranty; or (B)(1) such Guarantied Indebtedness
constitutes Indebtedness of the Company for which money is borrowed and set
aside at the time of the Incurrence of such Indebtedness in order to prefund the
payment of interest on such Indebtedness and is on-lend from the Company to the
applicable Restricted Subsidiary, (2) the applicable Restricted Subsidiary has
no assets (other than assets of a de minimis nature) other than the on-lend
funds referred to in clause (1) above (or Government Securities purchased with
such funds), and (3) the on-lend funds referred to in clause (1) above (or
Government Securities purchased with such funds) secure the performance of the
Company's obligations with respect to such Guarantied Indebtedness; provided
that this paragraph shall not be applicable to any Guaranty of any Restricted
Subsidiary that existed at the time such Person became a Restricted Subsidiary
and was not Incurred in connection with, or in contemplation of, such Person
becoming a Restricted Subsidiary. Any such supplemental indenture shall
supplement this Indenture by, among other things, creating an Article Twelve
applicable to such Subsidiary Guarantor and any other Subsidiary Guarantors in
the form set forth in Exhibit E hereto and, in connection with the execution and
delivery of the supplemental indenture, such Subsidiary Guarantor shall execute
and deliver a Subsidiary Guaranty substantially in the form of Exhibit F hereto
and, at the time of entering into such supplemental indenture, such Subsidiary
Guarantor shall have furnished to the Trustee an Opinion of Counsel, in form
reasonably satisfactory to the Trustee, to the effect that such supplemental
indenture has been duly authorized, executed and delivered by, and constitutes a
legal, valid and binding obligation of, such Subsidiary Guarantor and the
Company, subject to exceptions and qualifications as are customary for
transactions of such nature. Such Article Twelve shall not become effective
until the provisions of Section 12.03 of such Article Twelve have been complied
with and will be subject to release under the conditions described in Section
12.05 of such Article Twelve.
If a Restricted Subsidiary shall issue a Guaranty with respect to the
Notes pursuant to clause (A)(1) above, which Guarantied Indebtedness is (A) not
Subordinated Indebted-
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ness, then the Guaranty of such Guarantied Indebtedness shall be pari passu
with, or subordinated to, the Subsidiary Guaranty or (B) Subordinated
Indebtedness, then the Guaranty of such Guarantied Indebtedness shall be
subordinated to the Subsidiary Guaranty at least to the extent that the
Guarantied Indebtedness is subordinated to the Notes.
SECTION 4.08. Limitation on Transactions with Shareholders and
------------------------------------------------
Affiliates. The Company will not, and will not permit any Restricted
- ----------
Subsidiary to, directly or indirectly, enter into, renew or extend any
transaction (including, without limitation, the purchase, sale, lease or
exchange of property or assets, or the rendering of any service) with any holder
(or any Affiliate of such holder) of 5% or more of any class of Capital Stock of
the Company or with any Affiliate of the Company or any Restricted Subsidiary,
except upon fair and reasonable terms no less favorable to the Company or such
Restricted Subsidiary than could be obtained, at the time of such transaction
or, if such transaction is pursuant to a written agreement, at the time of the
execution of the agreement providing therefor, in a comparable arm's-length
transaction with a Person that is not such a holder or an Affiliate.
The foregoing limitation does not limit and shall not apply to (i)
transactions (A) approved by a majority of the disinterested members of the
Board of Directors as being on fair and reasonable terms no less favorable to
the Company or such Restricted Subsidiary than could be obtained in a comparable
arm's-length transaction with a Person that is not such a holder or an Affiliate
or (B) for which the Company or a Restricted Subsidiary delivers to the Trustee
a written opinion of an internationally recognized investment banking firm
stating that the transaction is fair to the Company or such Restricted
Subsidiary from a financial point of view; (ii) any transaction solely between
the Company and any of its Wholly Owned Restricted Subsidiaries or solely
between Wholly Owned Restricted Subsidiaries; (iii) the payment of reasonable
and customary regular fees to directors of the Company who are not employees of
the Company and the entering into indemnification or similar arrangements with
respect to officers and directors of the Company in their capacities as such;
(iv) any payments or other transactions pursuant to any tax-sharing agreement
between the Company and any other Person with which the Company files a
consolidated tax return or with which the Company is part of a consolidated
group for tax purposes; (v) any transaction not prohibited by Section 4.04; (vi)
issuances of Capital Stock (other than Disqualified Stock) of the Company; (vii)
the payment of fees and expenses pursuant to the Management Services Agreement;
and (viii) any transaction or series of related transactions between the Company
or a Restricted Subsidiary and any Affiliate thereof in an aggregate amount not
to exceed
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(Euro)500,000 (or to the extent non-euro denominated the Euro Equivalent
thereof) and regarding which an Officer's Certificate is delivered to the
Trustee stating that the transaction is fair and reasonable to the Company or
any such Restricted Subsidiary and no less favorable to the Company or such
Restricted Subsidiary than could be obtained in a comparable arm's-length
transaction with a person that is not such a holder or Affiliate.
Notwithstanding the foregoing, any transaction or series of related transactions
covered by the first paragraph of this Section 4.08 and not covered by clauses
(ii) through (v) of this paragraph, the aggregate amount of which exceeds
(Euro)11 million (or, to the extent non-euro denominated, the Euro Equivalent
thereof) in value, must be approved or determined to be fair in the manner
provided for in clause (i)(A) or (B) above.
SECTION 4.09. Limitation on Liens Securing Certain Indebtedness.
-------------------------------------------------
The Company will not, and will not permit any Restricted Subsidiary to, create,
incur, assume or suffer to exist any Liens of any kind against or upon any of
its property or assets, or any proceeds therefrom, which secure either (x)
Subordinated Indebtedness of the Company or any Restricted Subsidiary, unless
the Notes are secured by a Lien on such property, assets or proceeds that is
senior in priority to the Liens securing such Subordinated Indebtedness, or (y)
Pari Passu Debt Securities, unless the Notes are equally and ratably secured
with the Liens securing such Pari Passu Debt Securities; provided that any Lien
which is granted to secure the Notes under this covenant shall be discharged at
the same time as the discharge of the Lien that gave rise to the obligation to
so secure the Notes. Notwithstanding the foregoing, the Company may incur and
allow to exist Liens securing Debt Securities which exclusively consist of Liens
on (x) Government Securities purchased at the time such Debt Securities are sold
with the proceeds therefrom or (y) cash provided by the sale of such Debt
Securities, in either case to the extent that the proceeds used to purchase any
such Government Securities or providing any such cash constitute a prefunding of
the payment of interest on the Debt Securities Secured thereby and are set aside
in an escrow account or similar arrangement to be applied for such purpose.
SECTION 4.10. Limitation on Asset Sales. The Company will not, and
-------------------------
will not permit any Restricted Subsidiary to, consummate any Asset Sale, unless
(i) the consideration received by the Company or such Restricted Subsidiary is
at least equal to the fair market value of the assets sold or disposed of and
(ii) at least 75% of the consideration received consists of (a) cash or
Temporary Cash Investments or (b) Replacement Assets. In the event and to the
extent that the Company and/or the Restricted Subsidiaries receive Net Cash
Proceeds from one
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or more Asset Sales occurring on or after the Issue Date, then the Company shall
or shall cause the relevant Restricted Subsidiary to (i) within 12 months after
the date Net Cash Proceeds are so received (A) apply an amount equal to such
excess Net Cash Proceeds to repay Indebtedness (other than Pari Passu Debt and
Subordinated Indebtedness of the Company or Subordinated Indebtedness of any
Subsidiary Guarantor which is subordinated in right of payment to a Subsidiary
Guaranty of such Subsidiary Guarantor) of the Company or a Restricted Subsidiary
and elect to permanently reduce the commitments thereunder by the amount of such
Indebtedness so repaid and/or (B) apply an amount equal to no more than the Pari
Passu Pro Rata Share of such Net Cash Proceeds to repay, and permanently reduce
any commitments relating to, Pari Passu Debt and/or (C) invest the amount not so
applied pursuant to clauses (A) or (B) (or enter into a definitive agreement
committing to so invest within 12 months after the date of such agreement), in
Replacement Assets, in other assets and property that the Company determines
will be used or useful as part of a Telecommunications Business of the Company
or any Restricted Subsidiary, and (ii) apply (no later than the end of the 12-
month period referred to in clause (i)) such Net Cash Proceeds (to the extent
not applied pursuant to clause (i)) as provided in the following paragraph of
this Section 4.10. The amount of such Net Cash Proceeds required to be applied
(or to be committed to be applied) during such 12-month period as set forth in
clause (i) of the preceding sentence and not applied as so required by the end
of such period shall constitute "Excess Proceeds"; provided that, in the case of
an Asset Sale by a Restricted Subsidiary of the Company that is not a Wholly
Owned Subsidiary, only the Company's and its Restricted Subsidiaries' pro rata
portion of such Net Cash Proceeds shall constitute Net Cash Proceeds subject to
the provisions of this Section 4.10.
If, as of the first day of any calendar month, the aggregate amount of
Excess Proceeds not theretofore subject to an Offer to Purchase pursuant to this
Section 4.10 totals at least (Euro)16.5 million (or, to the extent non-euro
denominated, the Euro Equivalent thereof), the Company must commence, not later
than the fifteenth Business Day of such month, and consummate an Offer to
Purchase from the Holders on a pro rata basis an aggregate principal amount of
Notes equal to the Excess Proceeds on such date, at a purchase price equal to
100% of the principal amount of the Notes on the relevant Payment Date, plus, in
each case, accrued interest (if any) to the Payment Date.
SECTION 4.11. Limitation on Status as Investment Company or Credit
----------------------------------------------------
Institution. The Company will not, and will not permit any of its
- -----------
Subsidiaries or controlled Affiliates to, conduct its business in a fashion that
would cause the Company
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to be required to register as an "investment company" (as that term is defined
in the Investment Company Act of 1940, as amended (the "Investment Company
Act")), or otherwise to become subject to regulation under the Investment
Company Act. For purposes of establishing the Company's compliance with this
provision, any exemption which is or would become available under Section
3(c)(1) or Section 3(c)(7) of the Investment Company Act will be disregarded.
The Company will not, and will not permit any of its Subsidiaries or
controlled Affiliates to, conduct its business in a fashion that would cause the
Company to become (A) a credit institution ("kredietinstelling") pursuant to the
Dutch 1992 Act on the Supervision of the Credit System ("Wet toezicht
kredietwezen 1992") or (B) an investment institution ("beleggingsinstelling")
pursuant to the Dutch Act on the Supervision of Investment Institutions ("Wet
toezicht belleggingsinstellingen").
SECTION 4.12. Repurchase of Notes upon a Change of Control. The
--------------------------------------------
Company or a third party must commence, within 30 days of the occurrence of a
Change of Control, and consummate an Offer to Purchase for all Notes then
outstanding, at a purchase price equal to 101% of the principal amount thereof
on the relevant Payment Date, plus accrued interest (if any) to the Payment
Date.
SECTION 4.13. Existence. Subject to Articles Four and Five of this
---------
Indenture, the Company will do or cause to be done all things necessary to
preserve and keep in full force and effect its existence and the existence of
the Company and each Restricted Subsidiary in accordance with the respective
organizational documents of the Company and each Restricted Subsidiary and the
rights (whether pursuant to charter, partnership certificate, agreement, statute
or otherwise), material licenses and franchises of the Company and each
Restricted Subsidiary; provided that the Company shall not be required to
preserve any such right, license or franchise, or the existence of any
Restricted Subsidiary (other than CompleTel Escrow B.V., so long as the Pledge
Agreement is in effect), if the maintenance or preservation thereof is no longer
desirable in the conduct of the business of the Company and its Restricted
Subsidiaries taken as a whole.
SECTION 4.14. Payment of Taxes and Other Claims. The Company will
---------------------------------
pay or discharge and shall cause each of its Restricted Subsidiaries to pay or
discharge, or cause to be paid or discharged, before the same shall become
delinquent (i) all material taxes, assessments and governmental charges levied
or imposed upon (a) the Company or any such Restricted Subsidi-
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ary, (b) the income or profits of any such Restricted Subsidiary which is a
corporation or (c) the property of the Company or any such Restricted
Subsidiaries and (ii) all material lawful claims for labor, materials and
supplies that, if unpaid, might by law become a lien upon the property of the
Company or any such Restricted Subsidiary; provided that the Company shall not
be required to pay or discharge, or cause to be paid or discharged, any such
tax, assessment, charge or claim the amount, applicability or validity of which
is being contested in good faith by appropriate proceedings and for which
adequate reserves have been established.
SECTION 4.15. Maintenance of Properties and Insurance. The Company
---------------------------------------
will cause all properties used or useful in the conduct of its business or the
business of any of its Restricted Subsidiaries, to be maintained and kept in
good condition, repair and working order and supplied with all necessary
equipment and will cause to be made all necessary repairs, renewals,
replacements, betterments and improvements thereof, all as in the judgment of
the Company may be necessary so that the business carried on in connection
therewith may be properly conducted at all times; provided that nothing in this
Section 4.15 shall prevent the Company or any such Restricted Subsidiary from
discontinuing the use, operation or maintenance of any of such properties or
disposing of any of them, if such discontinuance or disposal is, in the judgment
of the Company, desirable in the conduct of the business of the Company or such
Restricted Subsidiary.
The Company will provide or cause to be provided, for itself and its
Restricted Subsidiaries, insurance (including appropriate self-insurance)
against loss or damage of the kinds customarily insured against by corporations
similarly situated and owning like properties, with reputable insurers, in such
amounts, with such deductibles and by such methods as shall be customary for
businesses similarly situated in the industry in which the Company or such
Restricted Subsidiary, as the case may be, is then conducting business.
SECTION 4.16. Notice of Defaults. In the event that the Company
------------------
becomes aware of any Default or Event of Default the Company, promptly after it
becomes aware thereof, will give written notice thereof to the Trustee.
SECTION 4.17. Compliance Certificates. (a) The Company shall
-----------------------
deliver to the Trustee, within 90 days after the end of the last fiscal quarter
of each year, an Officers' Certificate stating whether or not the signers know
of any Default or Event of Default that occurred during such fiscal quarter.
Such certificate shall contain a certification from the principal executive
officer, principal financial officer or principal
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accounting officer that a review has been conducted of the activities of the
Company and its Restricted Subsidiaries and the Company's and its Restricted
Subsidiaries' performance under this Indenture and that, to the knowledge of
such Officers, the Company has complied with all conditions and covenants under
this Indenture and, so long as the Pledge Agreement is in effect, the Pledge
Agreement. For purposes of this Section 4.17, such compliance shall be
determined without regard to any period of grace or requirement of notice
provided under this Indenture and, so long as the Pledge Agreement is in effect,
the Pledge Agreement. If they do know of such a Default or Event of Default, the
certificate shall describe any such Default or Event of Default and its status.
The first certificate to be delivered pursuant to this Section 4.17(a) shall be
for the first fiscal quarter beginning after the execution of this Indenture.
(b) So long as (and to the extent) not prohibited by the then current
recommendations of the American Institute of Certified Public Accountants, the
Company shall deliver to the Trustee, within 90 days after the end of the
Company's fiscal year, a certificate signed by the Company's independent
certified public accountants stating (i) that their audit examination has
included a review of the terms of this Indenture and the Notes as they relate to
accounting matters, (ii) that they have read the most recent Officers'
Certificate delivered to the Trustee pursuant to paragraph (a) of this Section
4.17 and (iii) whether, in connection with their audit examination, anything
came to their attention that caused them to believe that the Company was not in
compliance with any of the terms, covenants, provisions or conditions of Article
Four and Section 5.01 of this Indenture as they pertain to accounting matters
and, if any Default or Event of Default has come to their attention, specifying
the nature and period of existence thereof; provided that such independent
certified public accountants shall not be liable in respect of such statement by
reason of any failure to obtain knowledge of any such Default or Event of
Default that would not come to the attention of such accountants in the course
of an audit examination conducted in accordance with generally accepted auditing
standards in effect at the date of such examination.
(c) Within 90 days of the end of each of the Company's fiscal years,
the Company shall deliver to the Trustee a list of all Significant Subsidiaries.
The Trustee shall have no duty with respect to any such list except to keep it
on file and available for inspection by the Holders.
SECTION 4.18. Commission Reports and Reports to Holders. For so
-----------------------------------------
long as the Commission shall accept such reports and whether or not the Company
is then required to file
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reports with the Commission, the Company shall file with the Commission all such
reports and other information as it would be required to file with the
Commission by Sections 13(a) or 15(d) under the Exchange Act if it were subject
thereto. The Company shall supply the Trustee and each Holder or shall supply to
the Trustee for forwarding to each Holder, without cost to any Holder, copies of
such reports and other information. In addition, at all times prior to the date
of the Registration, the Company shall, at its cost, deliver to each Holder of
the Notes quarterly and annual reports substantially equivalent to those which
would be required by the Exchange Act. In addition, at all times prior to the
Registration, upon the request of any Holder or any prospective purchaser of the
Notes designated by a Holder, the Company shall supply to such Holder or such
prospective purchaser the information required under Rule 144A under the
Securities Act.
SECTION 4.19. Waiver of Stay, Extension or Usury Laws. The Company
---------------------------------------
covenants (to the extent that it may lawfully do so) that it will not at any
time insist upon, or plead, or in any manner whatsoever claim or take the
benefit or advantage of, any stay or extension law or any usury law or other law
that would prohibit or forgive the Company from paying all or any portion of the
principal of, premium, if any, or interest on the Notes as contemplated herein,
wherever enacted, now or at any time hereafter in force, or that may affect the
covenants or the performance of this Indenture; and (to the extent that it may
lawfully do so) the Company hereby expressly waives all benefit or advantage of
any such law and covenants that it will not hinder, delay or impede the
execution of any power herein granted to the Trustee, but will suffer and permit
the execution of every such power as though no such law had been enacted.
SECTION 4.20. Payment of Additional Amounts. (a) All payments
-----------------------------
made by the Company and any Subsidiary Guarantor under or with respect to the
Notes (including payments in respect of Special Interest, if any) will be made
free and clear of, and without withholding or deduction for or on account of,
any present or future tax, duty, levy, impost, assessment or other government
charge (including penalties, interest or other liabilities related thereto)
imposed or levied by or on behalf of the government of the Netherlands or any
political subdivision or taxing authority or agency thereof or therein or any
other jurisdiction in which the Company is organized or engaged in business for
tax purposes ("Taxes"), unless the Company or any such Subsidiary Guarantor, as
the case may be, is required to withhold or deduct Taxes by law or by the
interpretation or administration thereof. If the Company or any such Subsidiary
Guarantor, as the case may be, is required to withhold or deduct any amount for
or on account of Taxes, from any payment
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made under or with respect to the Notes, the Company or any such Subsidiary
Guarantor, as the case may be, will pay such additional amounts ("Additional
Amounts") as may be necessary so that the net amount received by each Holder of
Notes (including Additional Amounts) after such withholding or deduction will
not be less than the amount the Holder would have received if such Taxes had not
been withheld or deducted; provided that the foregoing obligation to pay
Additional Amounts does not apply to (a) any Taxes that would not have been so
imposed but for the existence of any present or former connection between the
relevant Holder (or between a fiduciary, settlor, beneficiary, member or
shareholder of, or possessor of power over, the relevant holder, if the relevant
holder is an estate, nominee, trust or corporation) and the Netherlands or any
political subdivision or taxing authority or agency thereof or therein or any
other jurisdiction in which the Company is organized or engaged in business for
tax purposes (other than the mere receipt of such payment or the ownership or
holding outside of the Netherlands or such other jurisdiction of such Note or
fulfillment of any certification, identification or other reporting requirements
referred to in clause (d) of this Section 4.20(a)); (b) any estate, inheritance,
gift, sales, transfer, personal property tax or similar tax, assessment or
governmental charge; (c) any Taxes payable otherwise than by deduction or
withholding from payments of principal of (or premium, if any, on) or interest
on such Note or (d) any Taxes that would not have been imposed but for the
failure of the holders to satisfy any certification, identification or any other
reporting requirement whether imposed by statute, treaty, regulation or
administrative practice, provided that the Company has delivered a request to
the holders to comply with such requirement at least 30 days prior to the date
such compliance is required; nor will Additional Amounts be paid (i) if the
payment could have been made without such deduction or withholding if the
beneficiary of the payment had presented the Note for payment within 30 days
after the date on which such payment or such Note became due and payable or the
date on which payment thereof is duly provided for, whichever is later (except
to the extent that the Holder would have been entitled to Additional Amounts had
the Note been presented on the last day of such 30 day period), or (ii) with
respect to any payment of principal of (or premium, if any, on) or interest on
such Note to any Holder who is a fiduciary or partnership or any person other
than the sole beneficial owner of such payment, to the extent that a beneficiary
or settlor with respect to such fiduciary, a member of such a partnership or the
beneficial owner of such payment would not have been entitled to the Additional
Amounts had such beneficiary, settlor, member or beneficial owner been the
actual Holder of such Note. If the Company conducts business in any jurisdiction
(the "Taxing Jurisdiction") other than the Netherlands in a manner which causes
Holders to be liable
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for taxes on payments under the Notes for which they would not have been so
liable but for such conduct of business in the Taxing Jurisdiction, "Taxes"
shall include taxes imposed by way of deduction or withholding by such Taxing
Jurisdiction and the Company's and any Subsidiary Guarantor's obligations to pay
Additional Amounts shall apply without regard to whether Holders or beneficial
owners have a present or former connection with such Taxing Jurisdiction or any
prefecture or territory thereof.
(b) The foregoing provisions of this Section 4.20 shall survive any
termination or discharge of this Indenture and shall apply mutatis mutandis to
any jurisdiction in which any successor Person to the Company is organized or
any political subdivision or taxing authority or agency thereof or therein.
(c) The Company or any Subsidiary Guarantor will also (i) make such
withholding or deduction and (ii) remit the full amount deducted or withheld to
the relevant authority in accordance with applicable law. The Company or any
Subsidiary Guarantor will furnish to the Holders of the Notes, within 30 days
after the date the payment of any Taxes so deducted or withheld is due pursuant
to applicable law, certified copies of tax receipts evidencing such payment by
the Company, CompleTel Escrow B.V. or any Subsidiary Guarantor.
(d) At least 30 days prior to each date on which any payment under or
with respect to the Notes is due and payable unless such obligation to pay
Additional Amounts arises after the 30th day prior to such date, in which case
it shall be promptly paid thereafter, if the Company or any Subsidiary
Guarantor, as the case may be, will be obligated to pay Additional Amounts with
respect to such payment, the Company or any Subsidiary Guarantor will deliver to
the Trustee and the Principal Paying Agent an Officers' Certificate stating the
fact that such Additional Amounts will be payable and the amounts so payable and
will set forth such other information necessary to enable the Trustee and the
Principal Paying Agent to pay such Additional Amounts to Holders of Notes on the
payment date. Each Officers' Certificate shall be relied upon until receipt of a
further Officers' Certificate addressing such matters. The Company will cause a
copy of such notice to be published in a daily newspaper with general
circulation in Luxembourg (which is expected to be the Luxemburger Wort).
(e) Whenever in this Indenture there is mentioned, in any context,
the payment of principal, premium, if any, interest or of any other amount
payable under or with respect to any Note, such mention shall be deemed to
include mention of the payment of Additional Amounts to the extent that, in such
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context, Additional Amounts are, were or would be payable in respect thereof.
The foregoing obligations relating to Additional Amounts shall survive any
termination, defeasance or discharge of this Indenture.
(f) The Company will not take any voluntary action that results in
its obligation to pay Additional Amounts.
SECTION 4.21. Escrow Account. The Company shall, and shall cause
--------------
CompleTel Escrow B.V., to enter into the Pledge Agreement and establish the
Escrow Account in accordance with the terms of the Pledge Agreement for the
benefit of the Holders and the Trustee. In the event that the Company issues
additional Initial Notes under this Indenture subsequent to the Issue Date, the
Company shall, and shall cause CompleTel Escrow B.V. to, enter into a pledge
agreement substantially in the form of the Pledge Agreement executed in the
Issue Date in order to cause the amount of euro-denominated Government
Securities in the Escrow Account to be increased in such amount as will be
sufficient to pay in full all scheduled interest on all of the Notes issued
under this Indenture through the last of the First Six Scheduled Interest
Payments on the Notes issued on the date hereof and the Company shall cause the
transactions contemplated by such pledge agreement to be consummated by the
Company and CompleTel Escrow B.V. in accordance with the terms of such pledge
agreement.
ARTICLE FIVE
SUCCESSOR CORPORATION
SECTION 5.01. When Company May Merge, Etc. The Company shall not
---------------------------
(i) consolidate or combine with, merge with or into, or sell, convey, transfer,
lease or otherwise dispose of all or substantially all of its property and
assets (as an entirety or substantially an entirety in one transaction or a
series of related transactions) or (ii) permit any of the Restricted
Subsidiaries to enter into any such transaction or series of transactions if it
would result in the disposition of all or substantially all of the properties
and assets of the Company and the Restricted Subsidiaries on a consolidated
basis, unless:
(i) the Company shall be the continuing Person, or the Person (if
other than the Company) formed by such consolidation or into which the
Company is merged or that acquired or leased such property and assets of
the Company shall be a corporation organized and validly existing under the
laws of an Approved Jurisdiction and shall ex-
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pressly assume, by a supplemental indenture, executed and delivered to the
Trustee, all of the obligations of the Company on all of the Notes and
under this Indenture and, so long as the Pledge Agreement is in effect the
Pledge Agreement;
(ii) immediately after giving effect to such transaction, no
Default shall have occurred and be continuing;
(iii) the Company delivers to the Trustee an Opinion of Counsel to
the effect that the transaction will not result in the surviving entity
being required to make any deduction or withholding in amounts greater than
that the Company would otherwise be required to make on account of
Netherlands taxes, from any payments in respect of the Notes or otherwise
which would adversely affect Holders of the Notes from the standpoint of
the enforceability of the Notes or this Indenture or service of process
against the Company;
(iv) immediately after giving effect to such transaction on a pro
forma basis the Company, or any Person becoming the successor obligor of
the Notes, as the case may be, could Incur at least (Euro)1.00 of
Indebtedness under the first paragraph of Section 4.03; provided that this
clause (iv) shall not apply to a consolidation, combination, merger or sale
of all or substantially all of the assets of the Company if immediately
after giving effect to such transaction on a pro forma basis, the Company
or any Person becoming the successor obligor of the Notes shall have a
Consolidated Leverage Ratio equal to or less than the Consolidated Leverage
Ratio of the Company immediately prior to such transaction or to a
transaction that is a merger of the Company and one or more of its Wholly
Owned Subsidiaries; and
(v) the Company delivers to the Trustee an Officers' Certificate
(attaching the arithmetic computations to demonstrate compliance with
clause (iv) above) and Opinion of Counsel, in each case stating that such
consolidation, combination, merger or transfer and such supplemental
indenture complies with this provision and that all conditions precedent
provided for herein relating to such transaction have been complied with;
provided, that clause (iv) above does not apply if, in the good faith
determination of the Board of Directors of the Company, whose determination
shall be evidenced by a board resolution, the principal purpose of such
transaction is to change the jurisdiction of incorporation of the Company; and
provided fur-
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ther that any such transaction shall not have as one of its purposes
the evasion of the foregoing limitations.
SECTION 5.02. Successor Substituted. Upon any consolidation or
---------------------
merger, combination or any transfer of all or substantially all of the assets of
the Company in accordance with Section 5.01 of this Indenture, in which the
Company or the Restricted Subsidiary, as the case may be, is not the continuing
corporation, the successor corporation formed by such consolidation or
combination or into which the Company or such Restricted Subsidiary is merged or
to which such transfer is made shall succeed to, and be substituted for, and may
exercise every right and power of, the Company under this Indenture and, so long
as the Pledge Agreement is in effect, the Pledge Agreement with the same effect
as if such successor Person had been named as the Company herein; provided that
solely for the purposes of computing Cumulative Available Cash Flow and
cumulative Consolidated Interest Expense for purposes of clause (C)(1) of the
first paragraph of Section 4.04, the Cumulative Available Cash Flow and
cumulative Consolidated Interest Expense of any Persons other than the Company
and the Restricted Subsidiaries (determined prior to the effective time of such
consolidation, merger or transfer of all or substantially all of the assets of
the Company) shall only be included for periods subsequent to the effective time
of such merger, consolidation, combination or transfer of assets.
ARTICLE SIX
DEFAULT AND REMEDIES
SECTION 6.01. Events of Default. The following events are Events
-----------------
of Default under the Notes and this Indenture:
(a) defaults in the payment of principal of (or premium, if any, on)
any Note when the same becomes due and payable at maturity, upon
acceleration, upon an optional redemption or otherwise;
(b) defaults in the payment of Additional Amounts or interest on any
Note when the same becomes due and payable, and such default continues for
a period of 30 days, provided that the failure to make any of the first six
scheduled interest payments on the Notes in a timely manner will constitute
an Event of Default with no grace or cure period;
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(c) defaults in the performance or breach of the provisions of this
Indenture applicable to mergers, consolidations and transfers of all or
substantially all of the assets of the Company or the failure to make or
consummate an Offer to Purchase in accordance with Section 4.10 or Section
4.12;
(d) defaults in the performance of or breaches any other covenant or
agreement of the Company in this Indenture or under the Notes, so long as
the Pledge Agreement is in effect, or in the Pledge Agreement (other than a
default specified in clause (a), (b) or (c) above) and such default or
breach continues for a period of 30 consecutive days after written notice
by the Trustee or the Holders of 25% or more in aggregate principal amount
of the Notes;
(e) there occurs with respect to any issue or issues of Indebtedness
of the Company or any Restricted Subsidiary having an outstanding principal
amount of (Euro)11 million (or, to the extent non-euro denominated the Euro
Equivalent thereof) or more in the aggregate for all such issues of all
such Persons, whether such Indebtedness now exists or shall hereafter be
created, (I) an event of default that has caused the holder thereof to
declare such Indebtedness to be due and payable prior to its Stated
Maturity and such Indebtedness has not been discharged in full or such
acceleration has not been rescinded or annulled within 30 days of such
acceleration and/or (II) the failure to make a principal payment at the
Stated Maturity and such defaulted payment shall not have been made, waived
or extended within 30 days of such payment default;
(f) any final judgment or order (not covered by insurance) for the
payment of money in excess of (Euro)11 million (or, to the extent non-euro
denominated, the Euro Equivalent thereof) in the aggregate for all such
final judgments or orders against all such Persons (treating any
deductibles, self-insurance or retention as not so covered) shall be
rendered against the Company or any Restricted Subsidiary and shall not be
paid or discharged, and there shall be any period of 30 consecutive days
following entry of the final judgment or order that causes the aggregate
amount for all such final judgments or orders outstanding and not paid or
discharged against all such Persons to exceed (Euro)11 million (or, to the
extent non-euro denominated the Euro Equivalent thereof) during which a
stay of enforcement of such final judgment or order, by reason of a pending
appeal or otherwise, shall not be in effect;
(g) a court having jurisdiction in the premises enters a decree or
order for (A) relief in respect of the
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Company or any Significant Subsidiary in an involuntary case under any
applicable bankruptcy, insolvency or other similar law now or hereafter in
effect, (B) appointment of a receiver, liquidator, assignee, custodian,
trustee, sequestrator or similar official of the Company or any Significant
Subsidiary or for all or substantially all of the property and assets of
the Company or any Significant Subsidiary or (C) the winding up or
liquidation of the affairs of the Company or any Significant Subsidiary
and, in each case, such decree or order shall remain unstayed and in effect
for a period of 30 consecutive days;
(h) the Company or any Significant Subsidiary (A) commences a
voluntary case under any applicable bankruptcy, insolvency or other similar
law now or hereafter in effect, or consents to the entry of an order for
relief in an involuntary case under any such law, (B) consents to the
appointment of or taking possession by a receiver, liquidator, assignee,
custodian, trustee, sequestrator or similar official of the Company or any
Significant Subsidiary or for all or substantially all of the property and
assets of the Company or any Significant Subsidiary or (C) effects any
general assignment for the benefit of creditors;
(i) the Company or CompleTel Escrow B.V. shall, so long as the Pledge
Agreement is in effect, assert or acknowledge in writing that the Pledge
Agreement is invalid or unenforceable or the Pledge Agreement ceases to
give the Trustee the liens, rights, powers, privileges and security
interests purported to be created thereby; or
(j) any material agreement or material License which provides the
authority for the Company and/or any Significant Subsidiary to operate the
Telecommunications Business it operates on the date hereof in France or
Germany shall be revoked (after all due process expressly provided under
applicable law with respect to the revocation of any such License) or shall
no longer be in effect or shall not be renewed without the obtaining of a
replacement.
SECTION 6.02. Acceleration. If an Event of Default (other than an
------------
Event of Default specified in clause (g) or (h) of Section 6.01 that occurs with
respect to the Company) occurs and is continuing under this Indenture, the
Trustee may or the Holders of at least 25% in aggregate principal amount of the
Notes, then outstanding, by written notice to the Company (and to the Trustee if
such notice is given by the Holders), may, and the Trustee at the request of
such Holders shall, declare the principal amount of, premium, if any, and
accrued interest on the Notes to be immediately due and payable. Upon a
decla-
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ration of acceleration, such principal amount of, premium, if any, and accrued
interest shall be immediately due and payable. Notwithstanding anything to the
contrary in this Indenture, in the event of a declaration of acceleration
because an Event of Default set forth in clause (e) of Section 6.01 has occurred
and is continuing, such declaration of acceleration shall be automatically
rescinded and annulled if the event of default triggering such Event of Default
pursuant to clause (e) shall be remedied or cured by the Company or the relevant
Restricted Subsidiary or waived by the holders of the relevant Indebtedness
within 60 days after the declaration of acceleration with respect thereto. If an
Event of Default specified in clause (g) or (h) of Section 6.01 occurs with
respect to the Company, the principal amount of, premium, if any, and accrued
interest on the Notes then outstanding shall ipso facto become and be
immediately due and payable without any declaration or other act on the part of
the Trustee or any Holder.
At any time after such a declaration of acceleration, but before a
judgment or decree for the payment of the money due has been obtained by the
Trustee, the Holders of at least a majority in principal amount of the
outstanding Notes by written notice to the Company and to the Trustee, may waive
all past Defaults and rescind and annul such declaration of acceleration and its
consequences if (i) all existing Events of Default, other than the non-payment
of the principal amount of, premium, if any, and accrued interest on the Notes
that have become due solely by such declaration of acceleration, have been cured
or waived and (ii) the rescission would not conflict with any judgment or decree
of a court of competent jurisdiction.
SECTION 6.03. Other Remedies. If an Event of Default occurs and is
--------------
continuing, the Trustee may pursue any available remedy by proceeding at law or
in equity to collect the payment of principal of, premium, if any, or 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.
SECTION 6.04. Waiver of Past Defaults. Subject to Sections 6.02,
-----------------------
6.07 and 9.02, the Holders of at least a majority in principal amount of the
outstanding Notes, by notice to the Trustee, may waive an existing Default or
Event of Default and its consequences, except a Default in the payment of
principal of, premium, if any, or interest on any Note as specified in clause
(a) or (b) of Section 6.01 or in respect of a covenant or provision of this
Indenture which cannot be modified or
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amended without the consent of the holder of each outstanding Note affected.
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 Event of Default or impair any right consequent thereto.
SECTION 6.05. Control by Majority. The Holders of at least a
-------------------
majority in aggregate principal amount of the outstanding Notes may direct the
time, method and place of conducting any proceeding for any remedy available to
the Trustee or exercising a trust or power conferred on the Trustee. However,
the Trustee may refuse to follow any direction that conflicts with law or this
Indenture or, so long as the Pledge Agreement is in effect, the Pledge
Agreement, that may involve the Trustee in personal liability, or that the
Trustee determines in good faith may be unduly prejudicial to the rights of
Holders of Notes not joining in the giving of such direction and may take any
other action it deems proper that is not inconsistent with any such direction
received from Holders of Notes.
SECTION 6.06. Limitation on Suits. A Holder may not pursue any
-------------------
proceeding, judicial or otherwise, with respect to this Indenture or the Notes,
or for the appointment of a receiver or trustee, or for any other remedy
hereunder unless:
(i) the Holder gives the Trustee written notice of a continuing
Event of Default;
(ii) the Holders of at least 25% in aggregate principal amount of
outstanding Notes make a written request to the Trustee to pursue the
remedy;
(iii) such Holder or Holders offer the Trustee indemnity
satisfactory to the Trustee against any costs, liability or expense;
(iv) the Trustee does not comply with the request within 60 days
after receipt of the request and the offer of indemnity; and
(v) during such 60-day period, the Holders of a majority in
aggregate principal amount of the outstanding Notes do not give the Trustee
a direction that is inconsistent with the request.
For purposes of Section 6.05 of this Indenture and this Section 6.06,
the Trustee shall comply with TIA Section 316(a) in making any determination of
whether the Holders of
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the required aggregate principal amount of outstanding Notes have concurred in
any request or direction of the Trustee to pursue any remedy available to the
Trustee or the Holders with respect to this Indenture or the Notes or otherwise
under the law.
A Holder may not use this Indenture to prejudice the rights of another
Holder or to obtain a preference or priority over such other Holder.
SECTION 6.07. Rights of Holders To Receive Payment.
------------------------------------
Notwithstanding any other provision of this Indenture or, so long as the Pledge
Agreement is in effect, the Pledge Agreement, the right of any Holder of a Note
to receive payment of the principal amount of, premium, if any, or interest on,
such Note or to bring suit for the enforcement of any such payment, on or after
the due date expressed in the Notes, shall not be impaired or affected without
the consent of such Holder.
SECTION 6.08. Collection Suit by Trustee. If an Event of Default
--------------------------
in payment of principal, premium or interest specified in clause (a), (b) or (c)
of Section 6.01 occurs and is continuing, the Trustee may recover judgment in
its own name and as trustee of an express trust against the Company or any other
obligor of the Notes for the whole amount of principal, premium, if any, and
accrued interest remaining unpaid, together with interest on overdue principal,
premium, if any, and, to the extent that payment of such interest is lawful,
interest on overdue installments of interest, in each case at the rate specified
in the Notes, and such further amount as shall be sufficient to cover the costs
and expenses of collection, including the reasonable compensation, expenses,
disbursements and advances of the Trustee, its agents and counsel.
SECTION 6.09. Trustee May File Proofs of Claim. The Trustee may
--------------------------------
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 any other amounts due the Trustee under
Section 7.07) and the Holders allowed in any judicial proceedings relative to
the Company (or any other obligor of the Notes), its creditors or its property
and shall be entitled and empowered to collect and receive any monies,
securities or other property payable or deliverable upon conversion or exchange
of the Notes or upon any such claims and to distribute the same, and any
custodian, receiver, assignee, trustee, liquidator, sequestrator or other
similar official in any such judicial proceeding is hereby authorized by each
Holder to make such payments to the Trustee and, in the event that the Trustee
shall consent to the making of such payments directly
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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 agent and
counsel, and any other amounts due the Trustee under Section 7.07. Nothing
herein contained shall be deemed to empower the Trustee to authorize or consent
to, or accept or adopt on behalf of any Holder, any plan of reorganization,
arrangement, adjustment or composition affecting the Notes or the rights of any
Holder thereof, or to authorize the Trustee to vote in respect of the claim of
any Holder in any such proceeding.
SECTION 6.10. Priorities. If the Trustee collects any money
----------
pursuant to this Article Six, including, so long as the Pledge Agreement is in
effect, such amounts held pursuant to the Pledge Agreement it shall pay out the
money in the following order:
First: to the Trustee for all amounts due under Section 7.07;
Second: to Holders for amounts then due and unpaid for principal of,
premium, if any, and interest on the Notes in respect of which or for the
benefit of which such money has been collected, ratably, without preference
or priority of any kind, according to the amounts due and payable on such
Notes for principal, premium, if any, and interest, respectively; and
Third: to any other obligors of the Notes, as their interests may
appear, or as a court of competent jurisdiction may direct.
The Trustee, upon prior written notice to the Company, may fix a
record date and payment date for any payment to Holders 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 Trustee, a court may
require any party litigant in such suit to file an undertaking to pay the costs
of the suit, and the court may assess reasonable costs, including reasonable
attorneys' fees and expenses, 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 pursuant to Section 6.07 of this Indenture, or a suit by Holders of
more than 10% in principal amount of the outstanding Notes.
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SECTION 6.12. Restoration of Rights and Remedies. If the Trustee
----------------------------------
or any Holder has instituted any proceeding to enforce any right or remedy under
this Indenture and such proceeding has been discontinued or abandoned for any
reason, or has been determined adversely to the Trustee or to such Holder, then,
and in every such case, subject to any determination in such proceeding, the
Company, the Trustee and the Holders shall be restored severally and
respectively to their former positions hereunder and thereafter all rights and
remedies of the Company, Trustee and the Holders shall continue as though no
such proceeding had been instituted.
SECTION 6.13. Rights and Remedies Cumulative. Except as otherwise
------------------------------
provided with respect to the replacement or payment of mutilated, destroyed,
lost or wrongfully taken Notes in Section 2.09, no right or remedy herein
conferred upon or reserved to the Trustee or to the Holders is intended to be
exclusive of any other right or remedy, and every right and remedy shall, to the
extent permitted by law, be cumulative and in addition to every other right and
remedy given hereunder or now or hereafter existing at law or in equity or
otherwise. The assertion or employment of any right or remedy hereunder, or
otherwise, shall not prevent the concurrent assertion or employment of any other
appropriate right or remedy.
SECTION 6.14. Delay or Omission Not Waiver. No delay or omission
----------------------------
of the Trustee or of any Holder to exercise an right or remedy accruing upon any
Event of Default shall impair any such right or remedy or constitute a waiver of
any such Event of Default or an acquiescence therein. Every right and remedy
given by this Article Six or by law to the Trustee or to the Holders may be
exercised from time to time, and as often as may be deemed expedient, by the
Trustee or by the Holders, as the case may be.
ARTICLE SEVEN
TRUSTEE
SECTION 7.01. General. The duties and responsibilities of the
-------
Trustee shall be as provided by the TIA and as set forth herein.
Notwithstanding the foregoing, no provision of this Indenture shall require the
Trustee to expend or risk its own funds or otherwise incur any financial
liability in the performance of any of its duties hereunder, or in the exercise
of any of its rights or powers, if it shall have reasonable grounds for
believing that repayment of such funds or indemnity satisfactory to it against
such risk or liability is not reasonably assured to it. Whether or not therein
expressly so
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provided, every provision of this Indenture relating to the conduct or affecting
the liability of or affording protection to the Trustee shall be subject to the
provisions of this Article Seven.
SECTION 7.02. Certain Rights of Trustee. Subject to TIA Sections
-------------------------
315(a) through (d):
(i) the Trustee may conclusively rely and shall be protected in
acting or refraining from acting upon any resolution, certificate,
statement, instrument, opinion, report, notice, request, direction,
consent, order, bond, debenture, note, other evidence of indebtedness or
other paper or document (whether in its original or facsimile form)
believed by it to be genuine and to have been signed or presented by the
proper person. The Trustee need not investigate any fact or matter stated
in the document;
(ii) before the Trustee acts or refrains from acting, it may
require an Officers' Certificate and/or an Opinion of Counsel, which shall
conform to the certificate or opinion described in Section 11.03 or Section
11.04, as the case may be. The Trustee shall not be liable for any action
it takes or omits to take in good faith in reliance on such certificate or
opinion;
(iii) the Trustee may act through attorneys and agents of its
selection and the advice of such attorneys and agents shall be full and
complete authorization and protection in respect of any action taken,
suffered or omitted by it hereunder in good faith and in reliance thereon.
The Trustee shall not be responsible for the misconduct or negligence of
any agent appointed with due care;
(iv) the Trustee shall be under no obligation to exercise any of
the rights or powers vested in it by this Indenture at the request or
direction of any of the Holders, unless such Holders shall have offered to
the Trustee reasonable 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;
(v) 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 its
rights or powers or for any action it takes or omits to take in accordance
with the direction of the Holders of a majority in principal amount of the
outstanding Notes relating to the time, method and place of conducting any
proceeding for any remedy available to the Trustee, or exercising any trust
or power con-
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ferred upon the Trustee, under this Indenture; provided that the Trustee's
conduct does not constitute gross negligence or bad faith;
(vi) whenever in the administration of this Indenture the Trustee
shall deem it desirable that a matter be proved or established prior to
taking, suffering or omitting any action hereunder, the Trustee (unless
other evidence be herein specifically prescribed) may, in the absence of
bad faith on its part, conclusively rely upon an Officer's Certificate or
an Opinion of Counsel, or both; and
(vii) the Trustee shall not be bound to make any investigation
into the facts or matters stated in any resolution, certificate, statement,
instrument, opinion, report, notice, request, direction, consent, order,
bond, debenture, note, other evidence of indebtedness or other paper or
document, but the Trustee, in its discretion, may make such further inquiry
or investigation into such facts or matters as it may see fit, and, if the
Trustee shall determine to make such further inquiry or investigation, it
shall be entitled to examine the books, records and premises of the Company
personally or by agent or attorney at the sole cost of the Company and
shall incur no liability or additional liability of any kind by reason of
such inquiry or investigation.
(viii) the Trustee shall have no duty to inquire as to the
performance of the Company's covenants in Article Four. In addition, the
Trustee shall not be deemed to have knowledge of any Default or Event of
Default except any Default or Event of Default of which the Trustee shall
have received written notification, or obtained actual knowledge.
SECTION 7.03. Individual Rights of Trustee. The Trustee, in its
----------------------------
individual or any other capacity, may become the owner or pledgee of Notes and
may otherwise deal with the Company or its Affiliates with the same rights it
would have if it were not the Trustee. Any Agent may do the same with like
rights. However, the Trustee is subject to TIA Sections 310(b) and 311.
SECTION 7.04. Trustee's Disclaimer. The Trustee (i) makes no
--------------------
representation as to the validity or adequacy of this Indenture or the Notes,
(ii) shall not be accountable for the Company's use or application of the
proceeds from the Notes and (iii) shall not be responsible for any statement in
the Notes other than its certificate of authentication.
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SECTION 7.05. Notice of Default. If any Default or any Event of
-----------------
Default occurs and is continuing and if such Default or Event of Default is
actually known to a Responsible Officer of the Trustee, the Trustee shall mail
to each Holder in the manner and to the extent provided in TIA Section 313(c)
notice of the Default or Event of Default within 45 days after it occurs, unless
such Default or Event of Default has been cured; provided, however, that, except
in the case of a default in the payment of the principal of, premium, if any, or
interest on any Note, the Trustee shall be protected in withholding such notice
if and so long as the Board of Directors, the executive committee or a trust
committee of directors and/or Responsible Officers of the Trustee in good faith
determine that the withholding of such notice is in the interest of the Holders.
SECTION 7.06. Reports by Trustee to Holders. Within 60 days after
-----------------------------
each October 15, beginning with October 15, 2000, the Trustee shall mail to each
Holder as provided in TIA Section 313(c) a brief report dated as of such October
15, if required by TIA Section 313(a).
SECTION 7.07. Compensation and Indemnity. The Company shall pay to
--------------------------
the Trustee such compensation as shall be agreed upon in writing for its
services. The compensation of the Trustee shall not be limited by any law on
compensation of a trustee of an express trust. The Company shall reimburse the
Trustee upon request for all reasonable out-of-pocket expenses and advances
incurred or made by the Trustee in each of its capacities hereunder. Such
expenses shall include the reasonable compensation and expenses of the Trustee's
agents and counsel.
The Company shall indemnify each of the Trustee, in each of its
capacities hereunder, and any predecessor Trustee, in each of its capacities
hereunder, for, and hold it harmless against, any and all claim, damage, loss or
liability or expense, including taxes (other than taxes based upon, measured by
or determined by the income of the Trustee) incurred by it without negligence or
bad faith on its part in connection with the acceptance or administration of
this Indenture and its duties under this Indenture and the Notes, including the
costs and expenses of defending itself against any claim or liability and of
complying with any process served upon it or any of its officers in connection
with the exercise or performance of any of its powers or duties under this
Indenture and the Notes.
To secure the Company's payment obligations in this Section 7.07, the
Trustee shall have a lien prior to the Notes on all money or property held or
collected by the Trustee, in its capacity as Trustee, except money or property
held in trust
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to pay principal of, premium, if any, and interest on particular Notes.
If the Trustee incurs expenses or renders services after the
occurrence of an Event of Default specified in clause (g) or (h) of Section
6.01, the expenses and the compensation for the services will be intended to
constitute expenses of administration under Title 11 of the United States
Bankruptcy Code or any applicable foreign, federal or state law for the relief
of debtors.
The provisions of this Section 7.07 shall survive the termination of
this Indenture.
SECTION 7.08. Replacement of Trustee. A resignation or removal of
----------------------
the Trustee and appointment of a successor Trustee shall become effective only
upon the successor Trustee's acceptance of appointment as provided in this
Section 7.08.
The Trustee may resign at any time by so notifying the Company in
writing at least 30 days prior to the date of the proposed resignation. The
Holders of a majority in principal amount of the outstanding Notes may remove
the Trustee by so notifying the Trustee in writing and may appoint a successor
Trustee with the consent of the Company. The Company may remove the Trustee if:
(i) the Trustee is no longer eligible under Section 7.10; (ii) the Trustee is
adjudged a bankrupt or an insolvent; (iii) a receiver or other public officer
takes charge of the Trustee or its property; or (iv) the Trustee becomes
incapable of acting.
If the Trustee resigns or is removed, or if a vacancy exists in the
office of Trustee for any reason, the Company shall promptly appoint a successor
Trustee. Within one year after the successor Trustee takes office, the Holders
of a majority in principal amount of the outstanding Notes may appoint a
successor Trustee to replace the successor Trustee appointed by the Company. If
the successor Trustee does not deliver its written acceptance required by the
next succeeding paragraph of this Section 7.08 within 30 days after the retiring
Trustee resigns or is removed, the retiring Trustee, the Company or the Holders
of a majority in principal amount of the outstanding Notes may, at the expense
of the Company, petition, at the expense of the Company, any court of competent
jurisdiction for the appointment of a successor Trustee.
A successor Trustee shall deliver a written acceptance of its
appointment to the retiring Trustee and to the Company. Immediately after the
delivery of such written acceptance, subject to the lien provided in Section
7.07, (i) the retiring Trustee shall transfer all property held by it as
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Trustee to the successor Trustee, (ii) the resignation or removal of the
retiring Trustee shall become effective and (iii) the successor Trustee shall
have all the rights, powers and duties of the Trustee under this Indenture. A
successor Trustee shall mail notice of its succession to each Holder.
If the Trustee is no longer eligible under Section 7.10, any Holder
who satisfies the requirements of TIA Section 310(b) may petition any court of
competent jurisdiction for the removal of the Trustee and the appointment of a
successor Trustee.
The Company shall give notice of any resignation and any removal of
the Trustee and each appointment of a successor Trustee to all Holders. Each
notice shall include the name of the successor Trustee and the address of its
Corporate Trust Office.
Notwithstanding replacement of the Trustee pursuant to this Section
7.08, the Company's obligation under Section 7.07 shall continue for the benefit
of the retiring Trustee.
SECTION 7.09. Successor Trustee by Merger, Etc. If the Trustee
--------------------------------
consolidates with, merges or converts into, or transfers all or substantially
all of its corporate trust business to, another corporation or national banking
association, the resulting, surviving or transferee corporation or national
banking association without any further act shall be the successor Trustee with
the same effect as if the successor Trustee had been named as the Trustee
herein.
SECTION 7.10. Eligibility. This Indenture shall always have a
-----------
Trustee who satisfies the requirements of TIA Section 310(a)(1). The Trustee
shall have a combined capital and surplus of at least $25,000,000 as set forth
in its most recent published annual report of condition.
SECTION 7.11. Money Held in Trust. 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 and except for
money held in trust under Article Eight of this Indenture.
SECTION 7.12. Withholding Taxes. The Trustee, as agent for the
-----------------
Company, shall exclude and withhold from each payment of principal and interest
and other amounts due hereunder or under the Notes any and all withholding taxes
applicable thereto as required by law, as directed in writing by the Company.
The Trustee agrees to act as such withholding
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agent and, in connection therewith, whenever any present or future taxes or
similar charges are required to be withheld with respect to any amounts payable
in respect of the Notes, to withhold such amounts, as directed in writing by the
Company and timely pay the same to the appropriate authority, as directed in
writing by the Company in the name of and on behalf of the Holders of the Notes,
that it will file any necessary withholding tax returns or statements when due.
The Company or the Trustee shall, as promptly as possible after the payment of
the taxes described above, deliver to each holder of a Note documentation in
form satisfactory to the Company showing the payment thereof, together with such
additional documentary evidence as such holders may reasonably request from time
to time.
ARTICLE EIGHT
DISCHARGE OF INDENTURE
SECTION 8.01. Termination of Company's Obligations. Except as
------------------------------------
otherwise provided in this Section 8.01, the Company may terminate its
obligations under the Notes and this Indenture if:
(i) all Notes previously authenticated and delivered (other than
destroyed, lost or stolen Notes that have been replaced or Notes that are
paid pursuant to Section 4.01 or Notes for whose payment money or
securities have theretofore been held in trust and thereafter repaid to the
Company, as provided in Section 8.05) have been delivered to the Trustee
for cancellation and the Company has paid all sums payable by it hereunder;
or
(ii) (A) the Notes mature within one year or all of them are to be
called for redemption within one year under arrangements satisfactory to
the Trustee for giving the notice of redemption, (B) the Company
irrevocably deposits in trust with the Trustee during such one-year period,
under the terms of an irrevocable trust agreement in form and substance
satisfactory to the Trustee, as trust funds solely for the benefit of the
Holders for that purpose, money or Government Securities sufficient (in the
opinion of a nationally recognized firm of independent public accountants,
in the United States, expressed in a written certification thereof
delivered to the Trustee), without consideration of any reinvestment of any
interest thereon, to pay principal, premium, if, any, and interest on the
Notes to maturity or redemption, as the case may be, and to pay all other
sums payable by it hereunder, (C) no Default or Event of Default with
respect to the Notes shall
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have occurred and be continuing on the date of such deposit, (D) such
deposit will not result in a breach or violation of, or constitute a
default under, this Indenture or any other agreement or instrument to which
the Company is a party or by which it is bound and (E) the Company has
delivered to the Trustee an Officers' Certificate and an Opinion of
Counsel, in each case stating that all conditions precedent provided for
herein relating to the satisfaction and discharge of this Indenture have
been complied with.
With respect to the foregoing clause (i), the Company's obligations
under Section 7.07 shall survive. With respect to the foregoing clause (ii),
the Company's obligations in Sections 2.02, 2.03, 2.04, 2.05, 2.06, 2.07, 2.08,
2.09, 2.14, 4.01, 4.02, 7.07, 7.08, 8.04, 8.05 and 8.06 shall survive until the
Notes are no longer outstanding. Thereafter, only the Company's obligations in
Sections 7.07, 8.05 and 8.06 shall survive. After any such irrevocable deposit,
the Trustee upon written request of the Company shall acknowledge in writing the
discharge of the Company's obligations under the Notes and this Indenture except
for those surviving obligations specified above.
SECTION 8.02. Defeasance and Discharge of Indenture. The Company
-------------------------------------
will be deemed to have paid and will be discharged from any and all obligations
in respect of the Notes on the 92nd day after the date of the deposit referred
to in clause (A) of this Section 8.02, and the provisions of this Indenture will
no longer be in effect with respect to the Notes, and the Trustee, at the
expense of the Company, shall execute proper instruments acknowledging the same,
except as to (i) rights of registration of transfer and exchange, (ii)
substitution of apparently mutilated, defaced, destroyed, lost or stolen Notes,
(iii) rights of Holders to receive payments of principal thereof and interest
thereon, (iv) the Company's obligations under Section 4.02, (v) the rights,
obligations and immunities of the Trustee hereunder and (vi) the rights of the
Holders as beneficiaries of this Indenture with respect to the property so
deposited with the Trustee payable to all or any of them; provided that the
following conditions shall have been satisfied:
(A) with reference to this Section 8.02, the Company has irrevocably
deposited or caused to be irrevocably deposited with the Trustee (or
another trustee satisfying the requirements of Section 7.10 of this
Indenture) and conveyed all right, title and interest for the benefit
of the Holders, under the terms of an irrevocable trust agreement in
form and substance satisfactory to the Trustee as trust funds in
trust, specifically pledged to the Trustee for the benefit
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of the Holders as security for payment of the principal of, premium,
if any, and interest, if any, on the Notes, and dedicated solely to
the benefit of the Holders, in and to (1) money in an amount, (2)
Government Securities that, through the payment of interest, premium,
if any, and principal in respect thereof in accordance with their
terms, will provide, not later than one day before the due date of any
payment referred to in this clause (A), money in an amount or (3) a
combination thereof in an amount sufficient, in the opinion of a
nationally recognized firm of independent public accountants, in the
United States, expressed in a written certification thereof delivered
to the Trustee, to pay and discharge, without consideration of the
reinvestment of such interest and after payment of all foreign,
federal, state and local taxes or other charges and assessments in
respect thereof payable by the Trustee, the principal of, premium, if
any, and accrued interest on the outstanding Notes at the Stated
Maturity of such principal or interest; provided that the Trustee
shall have been irrevocably instructed to apply such money or the
proceeds of such Government Securities to the payment of such
principal, premium, if any, and interest with respect to the Notes;
(B) such deposit will not result in a breach or violation of, or
constitute a Default under, this Indenture or any other agreement or
instrument 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;
(C) immediately after giving effect to such deposit on a pro forma basis,
no Default shall have occurred and be continuing on the date of such
deposit or during the period ending on the 92nd day after such date of
deposit;
(D) the Company shall have delivered to the Trustee (1) either (x) a
ruling directed to the Trustee received from the Internal Revenue
Service to the effect that the Holders will not recognize income, gain
or loss for federal income tax purposes as a result of the Company's
exercise of its option under this Section 8.02 and will be subject to
U.S. federal income tax on the same amount and in the same manner and
at the same times as would have been the case if such option had not
been exercised or (y) an Opinion of Counsel to the same effect as the
ruling described in clause (x) above accompanied by a ruling to that
ef-
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fect published by the Internal Revenue Service, unless there has been
a change in the applicable U.S. federal income tax law since the date
of this Indenture such that a ruling from the Internal Revenue Service
is no longer required, (2) an Opinion of Counsel in the Netherlands
and the U.S., as applicable, to the effect that (x) the creation of
the defeasance trust does not violate the Investment Company Act of
1940, (y) the deposit of the trust funds will not constitute a
fraudulent conveyance or preferential transfer under any applicable
bankruptcy, insolvency, reorganization or similar law affecting
creditors' rights generally under any Netherlands or U.S. Federal or
state law, and that the Trustee has a perfected security interest in
such trust fund for the ratable benefit of the Holders of the Notes
and (z) payments from the defeasance trust will be free and exempt
from any and all withholding and other income taxes of whatever nature
imposed or levied by or on behalf of the Netherlands or any political
subdivision thereof or therein having the power to tax; and
(E) the Company has delivered to the Trustee an Officers' Certificate and
an Opinion of Counsel, in each case stating that all conditions
precedent provided for herein relating to the defeasance contemplated
by this Section 8.02 have been complied with.
Subsequent to the end of such 92nd day period with respect to this
Section 8.02, the Company's obligations in Sections 2.02, 2.03, 2.04, 2.05,
2.06, 2.07, 2.08, 2.09, 2.14, 4.01, 4.02, 7.07, 7.08, 8.05 and 8.06 shall
survive until the Notes are no longer outstanding. Thereafter, only the
Company's obligations in Sections 7.07, 8.05 and 8.06 shall survive. If and
when a ruling from the Internal Revenue Service or an Opinion of Counsel
referred to in clause (D)(1) of this Section 8.02 is able to be provided
specifically without regard to, and not in reliance upon, the continuance of the
Company's obligations under Section 4.01, then the Company's obligations under
such Section 4.01 shall cease upon delivery to the Trustee of such ruling or
Opinion of Counsel and compliance with the other conditions precedent provided
for herein relating to the defeasance contemplated by this Section 8.02.
After any such irrevocable deposit, the Trustee upon request shall
acknowledge in writing the discharge of the Company's obligations under the
Notes and this Indenture except for those surviving obligations in the
immediately preceding paragraph.
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SECTION 8.03. Defeasance of Certain Obligations. The Company may
---------------------------------
omit to comply with any term, provision or condition set forth in clause (iv)
under Section 5.01 and Sections 4.03 through 4.10, Section 4.12, and Section
4.20, clause (c) under Section 6.01 with respect to such clause (iv) under
Section 5.01, clause (d) under Section 6.01 and clauses (e) and (f) under
Section 6.01 shall be deemed not to be Events of Default, in each case with
respect to the outstanding Notes if:
(i) with reference to this Section 8.03, the Company has
irrevocably deposited or caused to be irrevocably deposited with the
Trustee (or another trustee satisfying the requirements of Section 7.10)
and conveyed all right, title and interest to the Trustee for the benefit
of the Holders, under the terms of an irrevocable trust agreement in form
and substance satisfactory to the Trustee as trust funds in trust,
specifically pledged to the Trustee for the benefit of the Holders as
security for payment of the principal or premium, if any, and interest, if
any, on the Notes, and dedicated solely to the benefit of the Holders, in
and to (A) money in an amount, (B) Government Securities that, through the
payment of interest and principal in respect thereof in accordance with
their terms, will provide, not later than one day before the due date of
any payment referred to in this clause (i), money in an amount or (C) a
combination thereof in an amount sufficient, in the opinion of an
internationally recognized firm of independent public accountants expressed
in a written certification thereof delivered to the Trustee, to pay and
discharge, without consideration of the reinvestment of such interest and
after payment of all federal, state and local taxes or other charges and
assessments in respect thereof payable by the Trustee, the principal of,
premium, if any, and interest on the outstanding Notes on the Stated
Maturity of such principal or interest; provided that the Trustee shall
have been irrevocably instructed to apply such money or the proceeds of
such Government Securities to the payment of such principal, premium, if
any, and interest with respect to the Notes;
(ii) such deposit will not result in a breach or violation of, or
constitute a default under, this Indenture or any other agreement or
instrument to which the Company is a party or by which it is bound;
(iii) no Default or Event of Default shall have occurred and be
continuing on the date of such deposit;
(iv) the Company has delivered to the Trustee an Opinion of
Counsel, in the Netherlands and the U.S., as applicable, to the effect that
(A) the creation of the de-
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feasance trust does not violate the Investment Company Act of 1940, (B) the
deposit of the trust funds will not constitute a fraudulent conveyance or
preferential transfer under any applicable bankruptcy, insolvency,
reorganization or similar law affecting creditors' rights generally under
any Netherlands or U.S. Federal or state law or the laws of any other
applicable jurisdiction, and that the Trustee has a perfected security
interest in such trust fund for the ratable benefit of the Holders of the
Notes, (C) payments from the defeasance trust will be free and exempt from
any and all withholding and other income taxes of whatever nature imposed
or levied by or on behalf of the Netherlands or any political subdivision
thereof or therein having the power to tax; (D) the Holders will not
recognize income, gain or loss for U.S. federal income tax purposes as a
result of such deposit and defeasance of certain obligations and will be
subject to federal income tax on the same amount and in the same manner and
at the same times as would have been the case if such deposit and
defeasance had not occurred;
(v) if the Notes are then listed on a national securities exchange,
including the Luxembourg Exchange, the Company shall have delivered to the
Trustee an Opinion of Counsel to the effect that such deposit defeasance
and discharge will not cause the Notes to be delisted; and
(vi) the Company has delivered to the Trustee an Officers'
Certificate and an Opinion of Counsel, in each case stating that all
conditions precedent provided for herein relating to the defeasance
contemplated by this Section 8.03 have been complied with.
SECTION 8.04. Application of Trust Money. Subject to Section 8.06,
--------------------------
the Trustee or Principal Paying Agent shall hold in trust money or Government
Securities deposited with it pursuant to Section 8.01, 8.02 or 8.03, as the case
may be, and shall apply the deposited money and the money from Government
Securities in accordance with the Notes and this Indenture to the payment of
principal of, premium, if any, and interest on the Notes; but such money need
not be segregated from other funds except to the extent required by law.
SECTION 8.05. Repayment to Company. Subject to Sections 7.07,
--------------------
8.01, 8.02 and 8.03, the Trustee and the Principal Paying Agent shall promptly
pay to the Company upon request set forth in an Officers' Certificate any excess
money held by them at any time and thereupon shall be relieved from all
liability with respect to such money. The Trustee and the Principal Paying
Agent shall pay to the Company upon request any money held by them for the
payment of principal, premium, if any, or in-
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terest that remains unclaimed for two years; provided that the Trustee or such
Principal Paying Agent before being required to make any payment shall cause to
be published at the expense of the Company once in a newspaper of general
circulation in the City of New York and the Trustee or such Principal Paying
Agent will cause a copy of such notice to be published in a daily newspaper with
general circulation in Luxembourg (which is expected to be the Luxemburger Wort)
or mail to each Holder entitled to such money at such Holder's address (as set
forth in the Security Register) notice that such money remains unclaimed and
that after a date specified therein (which shall be at least 30 days from the
date of such publication or mailing) any unclaimed balance of such money then
remaining will be repaid to the Company. After payment to the Company, Holders
entitled to such money must look to the Company for payment as general creditors
unless an applicable law designates another Person, and all liability of the
Trustee and such Principal Paying Agent with respect to such money shall cease.
SECTION 8.06. Reinstatement. If the Trustee or Principal Paying
-------------
Agent is unable to apply any money or Government Securities in accordance with
Section 8.01, 8.02 or 8.03, as the case may be, 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 no deposit had occurred pursuant to Section 8.01, 8.02 or
8.03, as the case may be, until such time as the Trustee or Principal Paying
Agent is permitted to apply all such money or Government Securities in
accordance with Section 8.01, 8.02 or 8.03, as the case may be; provided that,
if the Company has made any payment of principal of, premium, if any, or
interest on any Notes because of the reinstatement of its obligations, the
Company shall be subrogated to the rights of the Holders of such Notes to
receive such payment from the money or Government Securities held by the Trustee
or Principal Paying Agent.
ARTICLE NINE
AMENDMENTS, SUPPLEMENTS AND WAIVERS
SECTION 9.01. Without Consent of Holders. The Company, when
--------------------------
authorized by a resolution of its Board of Directors, and the Trustee may amend
or supplement this Indenture or the Notes without notice to or the consent of
any Holder:
(1) to cure any ambiguity, omission defect or inconsistency in this
Indenture; provided that such amendments
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or supplements shall not adversely affect the interests of the Holders in
any material respect;
(2) to comply with Section 5.02;
(3) to comply with any requirements of the Commission in connection
with the qualification of this Indenture under the TIA;
(4) to evidence and provide for the acceptance of appointment
hereunder by a successor Trustee; or
(5) to provide for the assumption of the Indenture by a successor
corporation as provided in Section 5.01;
(6) to add Guaranties in accordance with Section 4.07;
(7) to make any change that, in the good faith opinion of the Board
of Directors as evidenced by a Board Resolution, does not materially and
adversely affect the rights of any Holder.
(8) to further secure the Notes in accordance with Section 4.09 and
Section 4.21;
(9) to add covenants of the Company for the benefit of the Holders;
or
(10) to surrender any right or power conferred upon the Company.
This Section 9.01 is subject to Section 9.05.
SECTION 9.02. With Consent of Holders. Subject to Sections 6.04
-----------------------
and 6.07 and without prior notice to the Holders, the Company, when authorized
by its Board of Directors (as evidenced by a Board Resolution), and the Trustee
may amend this Indenture and the Notes with the written consent of the Holders
of a majority in aggregate principal amount of the Notes then outstanding, and
the Holders of a majority in aggregate principal amount of the Notes then
outstanding by written notice to the Trustee may waive future compliance by the
Company with any provision of this Indenture or the Notes.
Notwithstanding the provisions of this Section 9.02, without the
consent of each Holder affected, an amendment or waiver, including a waiver
pursuant to Section 6.04, may not:
(i) change the Stated Maturity of the principal of, or any
installment of interest on, any Note,
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(ii) reduce the principal amount of, or premium, if any, or
interest on, any Note,
(iii) change the place or currency of payment of principal of, or
premium, if any, or interest on, any Note,
(iv) impair the right to institute suit for the enforcement of any
payment on or after the Stated Maturity (or, in the case of a redemption,
on or after the Redemption Date) of any Note,
(v) reduce the above-stated percentage of outstanding Notes the
consent of whose Holders is necessary to modify or amend this Indenture,
(vi) waive a Default in the payment of principal of, premium, if
any, or interest on the Notes,
(vii) modify any of the provisions of this Section 9.02, except to
increase any such 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,
(viii) reduce the percentage or aggregate principal amount of
outstanding Notes which are required to consent to a waiver of compliance
with certain provisions of this Indenture or for waiver of certain
defaults,
(ix) make any change that would result in the Company or any
Restricted Subsidiary being required to make any deduction or withholding
from payments in respect of the Notes,
(x) release any Subsidiary Guarantor from any of its obligations
under its Subsidiary Guaranty or this Indenture other than in accordance
with the terms of this Indenture and the Subsidiary Guaranty,
(xi) release any Lien securing the Notes, other than in accordance
with the terms of this Indenture and the Pledge Agreement,
(xii) affect the ranking of the Notes in a manner adverse to the
Holders of the Notes,
(xiii) subordinate, in right of payment, the notes in a manner
adverse to the Holders of the Notes to any other Indebtedness of the
Company, or
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(xiv) make any change to this Indenture that would adversely
affect the rights of all Holders to receive Additional Amounts as described
under Section 4.20.
It shall not be necessary for the consent of the Holders under this
Section 9.02 to approve the particular form of any proposed amendment,
supplement 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 affected thereby a
notice briefly describing the amendment, supplement or waiver. The Company will
mail supplemental indentures to Holders upon request. Any failure of the
Company to mail such notice, or any defect therein, shall not, however, in any
way impair or affect the validity of any such supplemental indenture or waiver.
This Section 9.02 is subject to Section 9.05.
SECTION 9.03. Revocation and Effect of Consent. Until an amendment
--------------------------------
or waiver becomes effective, a consent to it by a Holder is a continuing consent
by the Holder and every subsequent Holder of a Note or portion of a Note that
evidences the same debt as the Note of the consenting Holder, even if notation
of the consent is not made on any Note. However, any such Holder or subsequent
Holder may revoke the consent as to its Note or portion of its Note. Such
revocation shall be effective only if the Trustee receives the notice of
revocation before the date the amendment, supplement or waiver becomes
effective. An amendment, supplement or waiver shall become effective on receipt
by the Trustee of written consents from the Holders of the requisite percentage
in principal amount of the outstanding Notes.
The Company may, but shall not be obligated to, fix a record date for
the purpose of determining the Holders entitled to consent to any amendment,
supplement or waiver. If a record date is fixed, then, notwithstanding the last
two sentences of the immediately preceding paragraph, those persons who were
Holders at such record date (or their duly designated proxies) and only those
persons shall be entitled to consent to such amendment, supplement or waiver or
to revoke any consent previously given, whether or not such persons continue to
be Holders after such record date. No such consent shall be valid or effective
for more than 90 days after such record date.
After an amendment, supplement or waiver becomes effective, it shall
bind every Holder unless it is of the type described in any of clauses (i)
through (xii) of Section 9.02. In case of an amendment or waiver of the type
described in
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clauses (i) through (xii) of Section 9.02, the amendment or waiver shall bind
each Holder who has consented to it and every subsequent Holder of a Note that
evidences the same indebtedness as the Note of the consenting Holder.
SECTION 9.04. Notation on or Exchange of Notes. If an amendment,
--------------------------------
supplement or waiver changes the terms of a Note, the Trustee may require the
Holder to deliver it to the Trustee. The Trustee will, if directed in writing
by the Company, place an appropriate notation on the Note about the changed
terms and return it to the Holder and the Trustee will, if directed in writing
by the Company, may place an appropriate notation on any Note thereafter
authenticated. Alternatively, if the Company so determines, the Company in
exchange for the Note shall issue and the Trustee upon the Company's written
direction in the form of an Authentication Order shall authenticate a new note
that reflects the changed terms.
SECTION 9.05. Trustee to Sign Amendments, Etc. The Trustee shall
-------------------------------
be entitled to receive, and shall be fully protected in relying upon, an Opinion
of Counsel stating that the execution of any amendment, supplement or waiver
authorized pursuant to this Article Nine is authorized and permitted by this
Indenture (and otherwise in form and substance satisfactory to the Trustee).
Subject to the preceding sentence, the Trustee shall sign such amendment,
supplement or waiver if the same does not adversely affect the rights, duties,
liabilities or immunities of the Trustee. The Trustee may, but shall not be
obligated to, execute any such amendment, supplement or waiver that affects the
Trustee's own rights, duties or immunities under this Indenture or otherwise.
SECTION 9.06. Conformity with Trust Indenture Act. Every
-----------------------------------
supplemental indenture executed pursuant to this Article Nine shall conform to
the requirement of the TIA as then in effect.
ARTICLE TEN
COLLATERAL AND SECURITY
SECTION 10.01. Pledge Agreement. The obligations under the Notes
----------------
and this Indenture to pay in full the First Six Scheduled Interest Payments (as
defined in the Pledge Agreement), and, in the event that the Notes become due
and payable prior to such time as the First Six Scheduled Interest Payments
shall have been paid, to repay the principal, premium, if any, and interest
(whether accrued before or after the commencement of a bankruptcy, insolvency or
other similar proceeding regard-
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less of whether or not a claim therefor is allowed or allowable in any such
proceeding) on and any other sum whatsoever owing in respect of the Notes and
this Indenture, and to perform all other covenants and undertakings required in
accordance with the terms of the Notes and/or the Indenture shall be secured as
provided in the Pledge Agreement. Each Holder, by its acceptance of a Note,
consents and agrees to the terms of the Pledge Agreement (including, without
limitation, the provisions providing for foreclosure and disbursement of
Collateral (as defined in the Pledge Agreement)) as the same may be in effect or
may be amended from time to time in accordance with its terms and authorizes and
directs the Escrow Agent and the Trustee to enter into the Pledge Agreement and
to perform its obligations and exercise its rights thereunder in accordance
therewith. The Company shall, and shall cause CompleTel Escrow B.V. to deliver
to the Trustee copies of the Pledge Agreement, and shall do or cause to be done
all such acts and things as may be necessary or proper, or as may be required by
the provisions of the Pledge Agreement, to assure and confirm to the Trustee the
security interest in the Collateral contemplated by the Pledge Agreement, so as
to render the same available for the security and benefit of this Indenture with
respect to, and of, the Notes, according to the intent and purposes expressed in
the Pledge Agreement. The Company shall, and shall cause CompleTel Escrow B.V.
to take any and all actions required to cause the Pledge Agreement to create and
maintain (to the extent possible under applicable law), as security for the
obligations of the Company hereunder, a valid and enforceable perfected first
priority Lien in and on all the Collateral, in favor of the Trustee for the
benefit of the Trustee, predecessor trustees, and the Holders, superior to and
prior to the rights of all third persons and subject to no other Liens. The
Trustee shall be entitled to take all necessary action to preserve and protect
the security interest in the Collateral and for filing any instrument, document
or notice in any public office at any time or times. The Trustee shall be
entitled to take all necessary action, including entering into any Pledge
Agreement, after the date hereof for the purposes of accomplishing and
preserving all provisions in this Section 10.01 and in Section 4.21 hereof. For
the avoidance of doubt, references in this Section 10.01 and throughout this
Indenture to the Pledge Agreement, unless the context indicates otherwise, shall
include any Pledge Agreement entered into in accordance with Section 4.21 or
this Indenture.
SECTION 10.02. Recording and Opinions. At the Trustee's request,
----------------------
the Company shall, and shall cause CompleTel Escrow B.V. to furnish to the
Trustee promptly after the execution and delivery of this Indenture (but in no
event later than five Business Days after the Issue Date) an Opinion of Counsel
stating that in the opinion of such counsel the Pledge Agree-
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ment creates a valid security interest in favor of the Trustee for the benefit
of the Beneficiaries (as defined in the Pledge Agreement) in all right, title
and interest of CompleTel Escrow B.V. in and to the Collateral; upon execution
of the Securities Account Control Agreement in the form of Exhibit A to the
Pledge Agreement, such Securities Account Control Agreement will create a
perfected security interest in favor of the Trustee for the benefit of the
Beneficiaries in all right, title and interest of CompleTel Escrow B.V. in and
to all Pledged Securities deposited in, and carried in, the Securities Account
(as defined in such Securities Account Control Agreement).
SECTION 10.03. Release of Collateral. (a) Subject to subsections
---------------------
(b), (c) and (d) of this Section 10.03, Collateral may be released from the Lien
and security interest created by the Pledge Agreement only in accordance with
the provisions of the Pledge Agreement.
(b) No Collateral shall be released from the Lien and security
interest created by the Pledge Agreement pursuant to the provisions of the
Pledge Agreement, other than to the Holders pursuant to the terms thereof.
(c) At any time when a Default shall have occurred and be continuing
and the maturity of the Notes issued on the Issue Date shall have been
accelerated (whether by declaration or otherwise), no Collateral shall be
released pursuant to the provisions of the Pledge Agreement, and no release of
Collateral in contravention of this Section 10.03(c) shall be effective as
against the Holders, except pursuant to the Pledge Agreement.
(d) To the extent applicable, the Company shall, and shall cause
CompleTel Escrow B.V. to cause TIA (S) 314(d) relating to the release of
property or securities from the Lien and security interest of the Pledge
Agreement to be complied with. Any certificate or opinion required by TIA (S)
314(d) may be made by an officer of the Company except in cases where TIA (S)
314(d) requires that such certificate or opinion be made by an independent
person, which person shall be an independent expert selected or approved by the
Trustee in the exercise of reasonable care.
SECTION 10.04. Authorization of Actions To Be Taken by the Trustee
---------------------------------------------------
Under the Pledge Agreement. Subject to the provisions of Section 6.02, the
- --------------------------
Trustee may, without the consent of the Holders, on behalf of the Holders, take
all actions it deems necessary or appropriate in order to (a) enforce any of the
terms of the Pledge Agreement, (b) collect and receive any and all amounts
payable in respect of the obligations of the Company hereunder and (c) enter
into a Pledge Agreement in ac-
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cordance with Section 4.21 hereof. The Trustee shall have power to institute and
maintain such suits and proceedings as it may deem expedient to prevent any
impairment of the Collateral by any acts that may be unlawful or in violation of
the Pledge Agreement or this Indenture, and such suits and proceedings as the
Trustee may deem expedient to preserve or protect its interests and the
interests of the Holders in the Collateral (including power to institute and
maintain suits or proceedings to restrain the enforcement of or compliance with
any legislative or other governmental enactment, rule or order that may be
unconstitutional or otherwise invalid if the enforcement of, or compliance with,
such enactment, rule or order would impair the security interest hereunder or be
prejudicial to the interests of the Holders or of the Trustee).
SECTION 10.05. Authorization of Receipt of Funds by the Trustee Under
------------------------------------------------------
the Pledge Agreement. The Trustee is authorized to receive any funds for the
- --------------------
benefit of the Holders disbursed under the Pledge Agreement, and to make further
distributions of such funds to the Holders according to the provisions of this
Indenture.
ARTICLE ELEVEN
MISCELLANEOUS
SECTION 11.01. Trust Indenture Act of 1939. Prior to the
---------------------------
effectiveness of the Registration Statement, this Indenture shall incorporate
and be governed by the provisions of the TIA that are required to be part of and
to govern indentures qualified under the TIA. After the effectiveness of the
Registration Statement, this Indenture shall be subject to the provisions of the
TIA that are required to be a part of this Indenture and shall, to the extent
applicable, be governed by such provisions.
SECTION 11.02. Notices : Any notice or communication shall be
-------
sufficiently given if in writing and delivered in person or mailed by first
class mail addressed as follows:
if to the Company:
CompleTel Europe N.V.
Kruisweg 609
2132 NA Hoofdorp
The Netherlands
Attention: Chief Financial Officer
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with a copy to:
ING Trust (Netherlands) B.V.
P.O. Box 2838
1000 CV Amsterdam, The Netherlands
Attention: Paul van Wittereen
and, with a copy to:
Prinses Drenstraat 61
1077 WV Amsterdam, The Netherlands
Attention: Managing Director
and with a copy to:
Holme Roberts & Owen LLP
1700 Lincoln, Suite 4100
Denver, Colorado 80203
Attention: W. Dean Salter
if to the Trustee:
The Chase Manhattan Bank
Global Trust Services
450 W.33rd Street
15th Floor
New York, NY 10001
Attention: Global Trust Services
The Company or the Trustee by notice to the other may designate
additional or different addresses for subsequent notices or communications.
Any notice or communication mailed to a Holder shall be mailed to him
at his address as it appears on the Security Register by first class mail and
shall be sufficiently given to him if so mailed within the time prescribed.
Copies of any such communication or notice to a Holder shall also be mailed to
the Trustee and each Agent at the same time.
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. Except for a
notice to the Trustee, which is deemed given only when received, and except as
otherwise provided in this Indenture, if a notice or communication is mailed in
the manner provided in this Section 11.02, it is duly given, whether or not the
addressee receives it.
Where this Indenture provides for notice in any manner, such notice
may be waived in writing by the Person entitled to receive such notice, either
before or after the event,
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and such waiver shall be the equivalent of such notice. Waivers of notice by
Holders shall be filed with the Trustee, but such filing shall not be a
condition precedent to the validity of any action taken in reliance upon such
waiver.
In case by reason of the suspension of regular mail service or by
reason of any other cause it shall be impracticable to give such notice by mail,
then such notification as shall be made with the approval of the Trustee shall
constitute a sufficient notification for every purpose hereunder.
In addition, all notices required hereunder shall be published (so
long as the Notes are listed on the Luxembourg Stock Exchange and the rules of
such exchange so require) in a daily newspaper of general circulation in
Luxembourg (which is expected to be the Luxemberger Wort).
SECTION 11.03. Certificate and Opinion as to Conditions Precedent.
--------------------------------------------------
Upon any request or application by the Company to the Trustee to take any action
under this Indenture, the Company shall furnish to the Trustee:
(i) an Officers' Certificate, upon which the Trustee may
conclusively rely, stating that, in the opinion of the signers, all
conditions precedent, if any, provided for in this Indenture relating to
the proposed action have been complied with; and
(ii) an Opinion of Counsel, upon which the Trustee may conclusively
rely, in form and substance reasonably satisfactory to the Trustee stating
that, in the opinion of such counsel, all such conditions precedent have
been complied with; provided, however, that, with respect to matters of
fact, an Opinion of Counsel may rely on an Officers' Certificate or
certificates of public officials.
SECTION 11.04. Statements Required in Certificate. Each
----------------------------------
certificate with respect to compliance with a condition or covenant provided for
in this Indenture shall include:
(i) a statement that each person signing such certificate has read
such covenant or condition and the definitions herein relating thereto;
(ii) a brief statement as to the nature and scope of the
examination or investigation upon which the statements contained in such
certificate are based;
(iii) a statement that, in the opinion of each such person, he has
made such examination or investigation as is necessary to enable him to
express an informed opinion
97
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as to whether or not such covenant or condition has been complied with; and
(iv) a statement as to whether or not, in the opinion of each such
person, such condition or covenant has been complied with.
SECTION 11.05. Rules by Trustee, Principal Paying Agent or Registrar
-----------------------------------------------------
. The Trustee may make reasonable rules for action by or at a meeting of
Holders. The Principal Paying Agent or Registrar may make reasonable rules for
its functions.
SECTION 11.06. Payment Date Other Than a Business Day. If an
--------------------------------------
Interest Payment Date, Redemption Date, Payment Date, Stated Maturity or date of
maturity of any Note shall not be a Business Day, then payment of principal of,
premium, if any, or interest on such Note, as the case may be, need not be made
on such date, but may be made on the next succeeding Business Day with the same
force and effect as if made on the Interest Payment Date, Payment Date, or
Redemption Date, or at the Stated Maturity or date of maturity of such Note;
provided that no interest shall accrue for the period from and after such
Interest Payment Date, Payment Date, Redemption Date, Stated Maturity or date of
maturity, as the case may be.
SECTION 11.07. Governing Law. The laws of the State of New York
-------------
shall govern this Indenture and the Notes without giving effect to applicable
principles of conflicts of laws to the extent that the application of the law of
another jurisdiction would be required thereby. The Trustee, the Company and
the Holders agree to submit to the jurisdiction of the courts of the State of
New York in any action or proceeding arising out of or relating to this
Indenture or the Notes.
SECTION 11.08. No Adverse Interpretation of Other Agreements. This
---------------------------------------------
Indenture may not be used to interpret another Indenture, loan or debt agreement
of the Company or any Subsidiary of the Company. Any such indenture, loan or
debt agreement may not be used to interpret this Indenture.
SECTION 11.09. No Recourse Against Others. No recourse for the
--------------------------
payment of the principal of, premium, if any, or interest on any of the Notes,
or for any claim based thereon or otherwise in respect thereof, and no recourse
under or upon any obligation, covenant or agreement of the Company or the
Parent contained in this Indenture, in any of the Notes, or because of the
creation of any Indebtedness represented thereby, shall be had against any
incorporator or against any past, present or future partner, shareholder, other
equityholder, officer, director, employee, management board member, supervisory
board member or controlling person, as such, of the Company, the Par-
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<PAGE>
ent or of any successor Person, either directly or through the Company or any
successor Person, whether by virtue of any constitution, statute or rule of law,
or by the enforcement of any assessment or penalty or otherwise; it being
expressly understood that all such liability is hereby expressly waived and
released as a condition of, and as a consideration for, the execution of this
Indenture and the issue of the Notes.
SECTION 11.10. Successors. All agreements of the Company in this
----------
Indenture and the Notes shall bind its successors. All agreements of the
Trustee of this Indenture shall bind its successor.
SECTION 11.11. Duplicate 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 11.12. Separability. 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 11.13. Table of Contents, Headings, Etc. The Table of
--------------------------------
Contents, Cross-Reference Table and headings of the Articles and Sections of
this Indenture have been inserted for convenience of reference only, are not to
be considered a part hereof and shall in no way modify or restrict any of the
terms and provisions hereof.
SECTION 11.14. Agent for Service; Submission to Jurisdiction; Waiver
-----------------------------------------------------
of Immunities. By the execution and delivery of this Agreement, the Company
- -------------
(i) acknowledges that it has, by separate written instrument, designated and
appointed CT Corporation System (the "Process Agent"), 111 Eighth Avenue, New
York, New York 10011, United States, as its authorized agent upon which process
may be served in any suit, action or proceeding arising out of or relating to
the Notes or this Indenture that may be instituted in any Federal or state court
in the State of New York, The City of New York, the Borough of Manhattan, or
brought under Federal or state securities laws or brought by the Trustee
(whether in its individual capacity or in its capacity as Trustee hereunder),
and acknowledges that the Process Agent has accepted such designation, (ii)
submits to the jurisdiction of any such court in any such suit, action or
proceeding and (iii) agrees that service of process upon the Process Agent and
written notice of said service to it at its principal office in accordance with
11.02 hereof), shall be deemed in every respect effective service of process
upon it in any such suit or proceeding. The Company further agrees to
99
<PAGE>
take any and all action, including the execution and filing of any and all such
documents and instruments as may be necessary to continue such designation and
appointment of the Process Agent in full force and effect so long as the Notes
or Exchange Notes shall be outstanding; provided that the Company may (and
shall, to the extent the Process Agent ceases to be able to be served on the
basis contemplated herein) by written notice to the Trustee, designate such
additional or alternative agents for service of process under this Section 11.14
that (i) maintains an office located in the Borough of Manhattan, The City of
New York in the State of New York, (ii) are either (x) counsel for the Issuer or
(y) a corporate service company which acts as agent for service of process for
other Persons in the ordinary course of its business and (iii) agrees to act as
agent for service of process in accordance with this Section 11.14. Such notice
shall identify the name of such agent for process and the address of such agent
for process in the Borough of Manhattan, The City of New York, State of New
York. Notwithstanding the foregoing, there shall, at all times, be at least one
agent for service of process for the Company appointed and acting in accordance
with this Section 11.14.
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 notice, attachment prior to judgment, attachment in aid of
execution, execution or otherwise) with respect to itself or its property, it
hereby irrevocably waives such immunity in respect of its obligations under the
above-referenced documents, to the extent permitted by law.
SECTION 11.15. Judgment Currency. The Company hereby agrees to
-----------------
indemnify the Trustee and each Holder against any loss incurred by any of them
as a result of any judgment or order being given or made for any amount due
under this Indenture or the Notes and such judgment or order being expressed and
paid in a currency (the "Judgment Currency") other than euro and as result of
any variation as between (i) the rate of exchange at which the euro 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 any such
person on the date of payment of such judgment or order is able to purchase euro
with the amount of the Judgment Currency actually received by such person. 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, euro.
100
<PAGE>
SIGNATURES
IN WITNESS WHEREOF, the parties hereto have caused this Indenture to
be duly executed, all as of the date first written above.
COMPLETEL EUROPE N.V.
By: /s/ William H. Pearson
------------------------
Name: William H. Pearson
Title: Managing Director
THE CHASE MANHATTAN BANK,
as Trustee
By: /s/ Catherine Donahue
-----------------------
Name: /Catherine Donahue
Title:
101
<PAGE>
COMPLETEL EUROPE N.V.
By: /s/ James Dovey
----------------------------
Name: James Dovey
Title:
INDIVIDUAL ACKNOWLEDGEMENT
STATE OF COLORADO)
: ss.:
COUNTY OF ARAPAHOE)
On this 12TH day of April, 2000, before me personally appeared James
E. Dovey personally known to me to be the person that executed this instrument
and acknowledged to me that he/she executed the same.
WITNESS my hand and official seal.
Signature: /s/ Kathleen M. Hanlon (Seal)
-----------------------
<PAGE>
EXHIBIT A
---------
FACE OF NOTE
COMPLETEL EUROPE N.V.
14% Senior Note Due 2010
(Euro)
ISIN No.
No.
COMPLETEL EUROPE N.V., a Netherlands public company with limited
liability (incorporated with limited liability in The Netherlands and having its
statutory seat in Amsterdam), (the "Company," which term includes any successor
under the Indenture hereinafter referred to), for value received, promises to
pay to _______________, or its registered assigns, the principal sum of
Euro ((Euro) ) on April 15, 2010.
Interest Payment Dates: April 15 and October 15, commencing October
15, 2000.
Reference is hereby made to the further provisions of this Note set
forth on the reverse hereof, which further provisions shall for all purposes
have the same effect as if set forth at this place.
1
<PAGE>
IN WITNESS WHEREOF, the Company has caused this Note to be signed
manually by its duly authorized signatories.
COMPLETEL EUROPE N.V.
By:
---------------------------------
Name:
Title:
By:
---------------------------------
Name:
Title:
(Trustee's Certificate of Authentication)
This is one of the 14% Senior Notes due 2010 described in the within-
mentioned Indenture.
Date:
THE CHASE MANHATTAN BANK,
as Trustee
By:
-------------------------------------
Authorized Signatory
2
<PAGE>
REVERSE SIDE OF NOTE
COMPLETEL EUROPE N.V.
14% Senior Note due 2010
1. Principal and Interest.
----------------------
The Company will pay the principal of this Note on April 15, 2010.
The Company promises to pay interest on the principal amount of this
Note on each Interest Payment Date, as set forth below, at the rate per annum
shown above.
Interest will be payable semiannually (to the holders of record of the
Notes) at the close of business on April 1 or October 1 immediately preceding
the Interest Payment Date (the "Regular Record Date"), on each Interest Payment
Date, commencing October 15, 2000; provided that no interest shall accrue on the
principal amount of this Note prior to April 13, 2000.
Interest on the Notes will accrue from the most recent date to which
interest has been paid or, if no interest has been paid, from April 13, 2000.
Interest will be computed on the basis of a 360-day year of twelve 30-day
months.
The Company shall pay interest on overdue principal and premium, if
any, and interest on overdue installments of interest, to the extent lawful, at
a rate per annum that is the then applicable interest rate borne by the Notes.
2. Method of Payment.
-----------------
The Company will pay interest (except defaulted interest) on the
principal amount of the Notes as provided above on each April 15 and October 15
to the persons who are Holders (as reflected in the Security Register at the
close of business on the Regular Record Date), in each case, even if the Note is
canceled on registration of transfer or registration of exchange after such
record date; provided that, with respect to the payment of principal, the
Company will make payment to the Holder that surrenders this Note to a Principal
Paying Agent on or after April 15, 2010.
The Company will pay principal, premium, Additional Amounts if any,
and as provided above, interest in euro, in same day funds, that at the time of
payment is legal tender for payment of public and private debts. However, the
Company may
3
<PAGE>
pay principal, premium, if any, and interest by its check payable in such money.
It may mail an interest check to a Holder's registered address (as reflected in
the Security Register). If a payment date is a date other than a Business Day at
a place of payment, payment may be made at that place on the next succeeding day
that is a Business Day and no interest shall accrue for the intervening period.
3. Principal Paying Agent and Registrar.
------------------------------------
Initially, the Trustee will act as authenticating agent, Principal
Paying Agent and Registrar in the Borough of Manhattan, The City of New York and
London, England and Banque Internationale a Luxembourg S.A. will act as
Principal Paying Agent and Registrar in Luxembourg. The Company may change any
authenticating agent, Principal Paying Agent or Registrar without notice. The
Company, any Subsidiary or any Affiliate of any of them may act as Principal
Paying Agent, Registrar or co-Registrar.
4. Indenture; Limitations.
----------------------
The Company issued the Notes under an Indenture dated as of April 13,
2000 (the "Indenture"), between the Company and The Chase Manhattan Bank (the
"Trustee"). Capitalized terms herein are used as defined in the Indenture
unless otherwise indicated. The terms of the Notes include those stated in the
Indenture and those made part of the Indenture by reference to the Trust
Indenture Act. The Notes are subject to all such terms, and Holders are
referred to the Indenture and the Trust Indenture Act for a statement of all
such terms. To the extent permitted by applicable law, in the event of any
inconsistency between the terms of this Note and the terms of the Indenture, the
terms of the Indenture shall control. This is one of the Notes referred to in
the Indenture. The Initial Notes and the Exchange Notes are unsecured (except
to the limited extent provided in the Indenture and the Pledge Agreement) and
unsubordinated obligations of the Company limited in aggregate principal amount
not to exceed (Euro)300,000,000, as provided in the Indenture.
5. Additional Amounts.
------------------
The Company will pay to the Holders of Notes such Additional Amounts
as may become payable under Section 4.20 of the Indenture.
6. Redemption.
----------
(a) The Notes will be redeemable, at the Company's option, in whole
or in part, at any time or from time to time,
4
<PAGE>
on or after April 15, 2005 and prior to maturity, at the Redemption Prices
(expressed in percentages of principal amount) set forth below, plus accrued and
unpaid interest, if any, to the Redemption Date (subject to the right of Holders
of record on the relevant Regular Record Date that is on or prior to the
Redemption Date to receive interest due on an Interest Payment Date), if
redeemed during the 12-month period commencing on April 15 of the years set
forth below:
<TABLE>
<CAPTION>
Redemption
Year Price
- ---- ----------
<S> <C>
2005 107.000%
2006 104.667%
2007 102.333%
2008 and thereafter 100.000%
</TABLE>
(b) In addition, at any time on or prior to April 15, 2003 the
Company may redeem up to 35% of the principal amount of the Notes originally
issued with the proceeds of one or more Public Equity Offerings following which
there is a Public Market, at the Company's option, at any time or from time to
time in part, at a Redemption Price (expressed as a percentage of principal
amount on the Redemption Date) of 114.00% plus accrued and unpaid interest, if
any, to the Redemption Date; provided that (i) at least 65% of the aggregate
principal amount of Notes remains outstanding after each such redemption and
(ii) the Company mails a notice of such redemption within 60 days of receipt of
the Public Equity Offering proceeds to be so applied.
Notice of any optional redemption will be mailed at least 30 days but
not more than 60 days before the Redemption Date to each Holder of Notes to be
redeemed at his last address as it appears in the Security Register. So long as
the Notes are listed on the Luxembourg Stock Exchange and the rules of such
exchange so require, notice of redemption shall be published in a daily
newspaper of general circulation in Luxembourg (which is expect to be the
Luxemberger Wort). On and after the Redemption Date, interest ceases to accrue
on Notes or portions of Notes called for redemption, unless the Company defaults
in the payment of the Redemption Price. The Trustee may select for redemption
portions of the principal amount of the Notes that have denominations equal to
(Euro)1,000 integral multiples thereof, so long as no Holder holds Notes with
less than (Euro)50,000 principal amount after such redemption.
7. Redemption for Changes in Withholding Taxes.
-------------------------------------------
The Company may also have the option to redeem the Notes, in whole,
but not in part, in the event of certain changes in the tax laws such that the
Company would be required
5
<PAGE>
to pay Additional Amounts, subject to Section 3.01(c) of the Indenture.
8. Repurchase upon Change in Control.
---------------------------------
Upon the occurrence of an Change of Control, each Holder shall have
the right to require the repurchase of its Notes by the Company in cash pursuant
to the offer described in the Indenture at a purchase price equal to 101% of the
principal amount thereof plus accrued interest, if any, to the date of purchase
(the "Change of Control Payment").
A notice of such Change of Control will be mailed within 30 days after
any Change of Control occurs to each Holder at his last address as it appears in
the Security Register. On and after the Change of Control Payment Date,
interest ceases to accrue and the original issue discount ceases to accrete on
Notes or portions of Notes surrendered for purchase by the Company, unless the
Company defaults in the payment of the Change of Control Payment.
9. Denominations; Transfer; Exchange.
---------------------------------
The Notes are in registered form without coupons in denominations of
(Euro)50,000 of principal amount and multiples of (Euro)1,000 in excess thereof.
A Holder may register the transfer or exchange of Notes in accordance with the
Indenture. The Registrar may require a Holder, among other things, to furnish
appropriate endorsements and transfer documents and to pay any taxes and fees
required by law or permitted by the Indenture. The Registrar need not register
the transfer or exchange of any Notes selected for redemption. Also, it need not
register the transfer or exchange of any Notes for a period of 15 days before a
selection of Notes to be redeemed is made.
10. Persons Deemed Owners.
---------------------
A Holder shall be treated as the owner of a Note for all purposes.
11. Unclaimed Money.
---------------
If money for the payment of principal, premium, if any, or interest
remains unclaimed for two years, the Trustee and the Principal Paying Agent will
pay the money back to the Company at its request. After that, Holders entitled
to the money must look to the Company for payment, unless an abandoned property
law designates another Person, and all liability of the Trustee and such
Principal Paying Agent with respect to such money shall cease.
6
<PAGE>
12. Discharge Prior to Redemption or Maturity.
-----------------------------------------
If the Company deposits with the Trustee money or Government
Securities sufficient to pay the then outstanding principal of, premium, if any,
and accrued interest on the Notes (a) to redemption or maturity, the Company
will be discharged from this Indenture and the Notes, except in certain
circumstances for certain sections thereof, and (b) to the Stated Maturity, the
Company will be discharged from certain covenants set forth in the Indenture.
13. Legal Defeasance and Covenant Defeasance.
----------------------------------------
The Company may be discharged from its obligations under the Indenture
and the Notes except for certain provisions thereof, and may be discharged from
obligations to comply with certain covenants contained in the Indenture and the
Notes, in each case upon satisfaction of certain conditions specified in the
Indenture.
14. Amendment; Supplement; Waiver.
-----------------------------
Subject to certain exceptions, the Indenture or the Notes may be
amended or supplemented with the consent of the Holders of at least a majority
in principal amount of the Notes then outstanding, and any existing default or
compliance with any provision may be waived with the consent of the Holders of
at least a majority in principal amount of the Notes then outstanding. Without
notice to or the consent of any Holder, the parties thereto may amend or
supplement the Indenture or the Notes to, among other things, cure any
ambiguity, defect or inconsistency and make any change that does not adversely
affect the rights of any Holder in any material respect. Certain modifications
will require the consent of each Holder affected thereby.
15. Restrictive Covenants.
---------------------
The Indenture imposes certain limitations on the ability of the
Company and its Restricted Subsidiaries, among other things, to Incur additional
Indebtedness, make Restricted Payments, use the proceeds from Asset Sales,
engage in transactions with Affiliates or merge, consolidate or transfer
substantially all of its assets. Within 90 days after the end of each fiscal
quarter, the Company must report to the Trustee on compliance with such
limitations.
16. Successor Persons.
-----------------
When a successor person or other entity assumes all the obligations of
its predecessor under the Notes and the In-
7
<PAGE>
denture, the predecessor person will be released from those obligations.
17. Defaults and Remedies.
---------------------
If an Event of Default (other than an Event of Default specified in
clause (g) or (h) of Section 6.01 of the Indenture that occur with respect to
the Company) occurs and is continuing, the Trustee or the Holders of at least
25% in principal amount of the Notes may declare all the Notes to be due and
payable. If a bankruptcy or insolvency default with respect to the Company
occurs and is continuing, the Notes automatically become due and payable.
Holders may not enforce this Indenture or the Notes except as provided in the
Indenture. The Trustee may require indemnity satisfactory to it before it
enforces the Indenture or the Notes. Subject to certain limitations, Holders of
at least a majority in principal amount of the Notes then outstanding may direct
the Trustee in its exercise of any trust or power.
18. Trustee Dealings with Company.
-----------------------------
Subject to the Trust Indenture Act, the Trustee under the Indenture,
in its individual or any other capacity, may make loans to, accept deposits from
and perform services for the Company or its Affiliates and may otherwise deal
with the Company or its Affiliates as if it were not the Trustee.
19. No Recourse Against Others.
--------------------------
No incorporator or any past, present or future partner, shareholder,
other equity holder, officer, director, manager, employee, board member or
controlling person as such, of the Company or of any successor Person shall have
any liability for any obligations of the Company under the Notes or 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 the issuance of the Notes.
20. Authentication.
--------------
This Note shall not be valid until the Trustee or authenticating agent
signs the certificate of authentication on the other side of this Note.
21. Abbreviations.
-------------
Customary abbreviations may be used in the name of a Holder or an
assignee, such as: TEN COM (= tenants in common),
8
<PAGE>
TEN ENT (= tenants by the entireties), JT TEN (= joint tenants with right of
survivorship and not as tenants in common), CUST (= Custodian) and U/G/M/A (=
Uniform Gifts to Minors Act).
The Company will furnish to any Holder upon written request and
without charge a copy of the Indenture. Requests may be made to CompleTel
Europe N.V., Kruisweg 609, 2132 NA Hoofddorp, The Netherlands, Attention: Chief
Financial Officer.
22. Choice of Law.
-------------
The laws of the State of New York shall govern the Indenture and this
Note without giving effect to applicable principles of conflicts of laws to the
extent that the application of the law of another jurisdiction would be required
thereby.
9
<PAGE>
ASSIGNMENT FORM
I or we assign and transfer this Note to
- -------------------------------------------------------------------------------
- -------------------------------------------------------------------------------
(Print or type name, address and zip code of assignee or transferee)
- -------------------------------------------------------------------------------
(Insert Social Security or other identifying number of assignee or transferee)
and irrevocably appoint
-------------------------------------------------------
agent to transfer this Security on the books of the Company. The agent may
substitute another to act for him.
Dated:________________________ Signed: ______________________________________
(Signed exactly as name appears on the
other side of this Note)
Signature Guarantee:
-----------------------------------------------------------
Participant in a recognized Signature Guarantee Medallion
Program (or other signature guarantor program reasonably
acceptable to the Trustee)
10
<PAGE>
OPTION OF HOLDER TO ELECT PURCHASE
If you wish to have this Note purchased by the Company pursuant to
Section 4.10 or Section 4.12 of this Indenture, check the Box: [ ]
If you wish to have a portion of this Note purchased by the Company
pursuant to Section 4.10 or Section 4.12 of the Indenture, state the amount (in
principal amount): (Euro)_________.
Date: _________________
Your Signature:
- --------------------------------------------------------------------------------
(Sign exactly as your name appears on the other side of this Note)
Signature Guarantee:____________________________
11
<PAGE>
EXHIBIT B
---------
CERTIFICATE TO BE DELIVERED UPON EXCHANGE
OR REGISTRATION OF TRANSFER OF NOTES
THE CHASE MANHATTAN BANK
c/o Global Trust Services
450 West 33rd Street
15th Floor
New York, NY 10001
Re: 14% Senior Notes due 2010
(the "Notes"), of CompleTel Europe N.V.
--------------------------------------
This Certificate relates to (Euro)_______ principal amount of Notes
held in the form of* ___ a beneficial interest in a Global Note or* _______
Physical Notes by (the "Transferor").
The Transferor:*
[_] has requested by written order that the Registrar deliver in exchange
for its Physical Note or Physical Notes an equal principal of Physical Notes of
other authorized denominations; or
[_] has requested that the Registrar by written order to exchange or
register the transfer of the Notes.
In connection with such request and in respect of each such Note, the
Transferor does hereby certify that the Transferor is familiar with the
Indenture relating to the above captioned Notes and the restrictions on
transfers thereof as provided in Section 2.08 of such Indenture, and that the
transfer of the Notes does not require registration under the Notes Act of 1933,
as amended (the "Act"), because*:
[_] Such Note is being acquired for the Transferor's own account, without
transfer (in satisfaction of Section 2.06 of the Indenture).
[_] Such Note is being transferred to a "qualified institutional buyer"
(as defined in Rule 144A under the Act), in reliance on Rule 144A.
[_] Such Note is being transferred to an institutional "accredited
investor" (within the meaning of subparagraph (a)(1), (2), (3) or (7) of Rule
501 under the Act). An opinion of counsel to the effect that such transfer does
not
B-1
<PAGE>
require registration under the Notes Act accompanies this certification.
[_] Such Note is being transferred in reliance on Regulation S under the
Act. An opinion of counsel to the effect that such transfer does not require
registration under the Notes Act accompanies this certification.
[_] Such Note is being transferred in reliance on Rule 144 under the Act.
An opinion of counsel to the effect that such transfer does not require
registration under the Notes Act accompanies this certification.
[_] Such Note is being transferred in reliance on and in compliance with
an exemption from the registration requirements of the Act other than Rule 144A
or Rule 144 or Regulation S under the Act to a person other than an
institutional "accredited investor." An opinion of counsel to the effect that
such transfer does not require registration under the Notes Act accompanies this
certification.
_________________________________
[INSERT NAME OF TRANSFEROR]
By:
------------------------------
[Authorized Signatory]
Date: _____________________
*Check applicable box.
B-2
<PAGE>
EXHIBIT C
---------
Form of Certificate to Be
Delivered in Connection with
Transfers to Institutional Accredited Investors
___________, ____
THE CHASE MANHATTAN BANK
c/o Global Trust Services
450 West 33rd Street
15th Floor
New York, NY 10001
Attention: Global Trust Services
Re: CompleTel Europe N.V. (the "Company")
14% Senior Notes due 2010 (the "Notes")
---------------------------------------
Dear Sirs:
In connection with our proposed purchase of (Euro)________ aggregate
principal amount of the Notes, we confirm that:
1. We understand that any subsequent transfer of the Notes is subject
to certain restrictions and conditions set forth in the Indenture dated as
of April 13, 2000 relating to the Notes (the "Indenture") and the
undersigned agrees to be bound by, and not to resell, pledge or otherwise
transfer the Notes except in compliance with, such restrictions and
conditions and the Securities Act of 1933, as amended (the "Securities
Act").
2. We understand that the offer and sale of the Notes have not been
registered under the Securities Act, and that the Notes may not be offered
or sold except as permitted in the following sentence. We agree, on our
own behalf and on behalf of any accounts for which we are acting as
hereinafter stated, that if we should sell any Notes, we will do so only
(A) to the Company or any subsidiary thereof, (B) in accordance with Rule
144A under the Securities Act to a "qualified institutional buyer" (as
defined therein), (C) to an institutional "accredited investor" (as defined
below) that, prior to such transfer, furnishes (or has furnished on its
behalf by a U.S. broker-dealer) to you and to the Company a signed letter
substantially in the form of this letter, (D) outside the United States in
accordance with Rule 904 of Regulation S under the Securities Act, (E)
pursuant to the exemption from registration provided by Rule 144 under the
Securi-
C-1
<PAGE>
ties Act, or (F) pursuant to an effective registration statement under the
Securities Act, and we further agree to provide to any person purchasing
any of the Notes from us a notice advising such purchaser that resales of
the Notes are restricted as stated herein.
3. We understand that, on any proposed resale of any Notes, we will
be required to furnish to you and the Company such certifications, legal
opinions and other information as you and the Company may reasonably
require to confirm that the proposed sale complies with the foregoing
restrictions. We further understand that the Notes purchased by us will
bear a legend to the foregoing effect.
4. We are an institutional "accredited investor" (as defined in Rule
501(a)(1), (2), (3) or (7) of Regulation D under the Securities Act) and
have such knowledge and experience in financial and business matters as to
be capable of evaluating the merits and risks of our investment in the
Notes, and we and any accounts for which we are acting are each able to
bear the economic risk of our or its investment.
5. We are acquiring the Notes purchased by us for our own account or
for one or more accounts (each of which is an institutional "accredited
investor") as to each of which we exercise sole investment discretion.
You and the Company are entitled to rely upon this letter and are
irrevocably authorized to produce this letter or a copy hereof to any interested
party in any administrative or legal proceedings or official inquiry with
respect to the matters covered hereby.
Very truly yours,
(Name of Transferee)
By:
------------------------------------
Authorized Signature
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<PAGE>
EXHIBIT D
---------
Form of Certificate to Be Delivered
in Connection with Transfers
Pursuant to Regulation S
THE CHASE MANHATTAN BANK
c/o Global Trust Services
450 West 33rd Street
15th Floor
New York, NY 10001
Attention: Global Trust Services
Re: CompleTel Europe N.V. (the "Company")
14% Senior Notes due 2010 (the "Notes")
---------------------------------------
Dear Sirs:
In connection with our proposed sale of (Euro)____________ aggregate
principal amount of the Notes, we confirm that such sale has been effected
pursuant to and in accordance with Regulation S under the Securities Act of
1933, as amended, and, accordingly, we represent that:
(1) the offer of the Notes was not made to a person in the United
States;
(2) at the time the buy order was originated, the transferee was
outside the United States or we and any person acting on our behalf
reasonably believed that the transferee was outside the United States;
(3) no directed selling efforts have been made by us in the United
States in contravention of the requirements of Rule 903(b) or Rule 904(b)
of Regulation S, as applicable; and
(4) the transaction is not part of a plan or scheme to evade the
registration requirements of the U.S. Securities Act of 1933.
D-1
<PAGE>
You and the Company are entitled to rely upon this letter and are
irrevocably authorized to produce this letter or a copy hereof to any interested
party in any administrative or legal proceedings or official inquiry with
respect to the matters covered hereby. Terms used in this certificate have the
meanings set forth in Regulation S.
Very truly yours,
(Name of Transferor)
By:
------------------------------------
Authorized Signature
D-2
<PAGE>
EXHIBIT E
---------
ARTICLE TWELVE
GUARANTY OF NOTES
SECTION 12.01 Definitions. For purposes of this Article Twelve:
-----------
(a) "Guarantied Obligations" means the principal of, premium, if any,
interest on, and Additional Amounts, if any, and all other amounts owing by
the Company with respect to (including its obligations to the Trustee under
Section 7.07 of this Indenture), the Notes under this Indenture and all
other indebtedness, liabilities and obligations of the Company at any time
and from time to time existing or arising under this Indenture.
(b) "Guarantied Parties" means all the persons who are now or who
hereafter become Holders and the Trustee under this Indenture.
SECTION 12.02 Guaranty. Subject to the provisions of this Article
--------
Twelve, each Subsidiary Guarantor hereby jointly and severally unconditionally
and irrevocably guarantees to each Holder of a Note authenticated and delivered
by a Trustee and to the Trustee and their successors, irrespective of the
validity and enforceability of this Indenture, the Notes or the obligations of
the Company or any other Subsidiary Guarantors to the Holders or the Trustee
hereunder or thereunder, that: (a) the principal of, premium, if any, and
interest on the Notes (and any Additional Amounts payable thereon) will be duly
and punctually paid in full when due, whether at maturity, by acceleration or
otherwise, and interest on the overdue principal and (to the extent permitted by
law) interest, if any, on the Notes and all other obligations of the Company or
the Subsidiary Guarantors to the Holders or the Trustee hereunder or thereunder
(including amounts due the Trustee under Section 7.07 hereof) and all other
obligations under the Indenture (the "Indenture Obligations") will be promptly
paid in full or performed, all in accordance with the terms hereof and thereof;
and (b) in case of any extension of time of payment or renewal of any Notes or
any of such other Indenture Obligations, the same will be promptly paid in full
when due or performed in accordance with the terms of the extension or renewal,
whether at the maturity date of the Notes, by acceleration or otherwise.
Failing payment when due of any amount so guarantied, or failing performance of
any other obligation of the Company to the Holders, for whatever reason, each
Subsidiary Guarantor will be obligated to pay, or to perform or cause the
perform-
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<PAGE>
ance of, the same immediately. An Event of Default under this Indenture or the
Notes shall constitute an event of default under this Subsidiary Guaranty, and
shall entitle the Holders of Notes to accelerate the obligations of the
Subsidiary Guarantors hereunder in the same manner and to the same extent as the
obligations of the Company.
Each of the Subsidiary Guarantors hereby agrees that its obligations
hereunder shall be unconditional, irrespective of the validity, regularity or
enforceability of the Notes or this Indenture, the absence of any action to
enforce the same, any waiver or consent by any holder of the Notes with respect
to any provisions hereof or thereof, any release of any other Subsidiary
Guarantor, the recovery of any judgment against the Company, any action to
enforce the same, whether or not a Subsidiary Guaranty is affixed to any
particular Note, or any other circumstance which might otherwise constitute a
legal or equitable discharge or defense of a Subsidiary Guarantor. Each of the
Subsidiary Guarantors hereby waives the benefit of diligence, presentment,
demand of payment, filing of claims with a court in the event of insolvency or
bankruptcy of the Company, any right to require a proceeding first against the
Company, protest, notice and all demands whatsoever and covenants that its
Subsidiary Guaranty will not be discharged except by complete performance of the
obligations contained in the Notes, this Indenture and this Subsidiary Guaranty.
This Subsidiary Guaranty is a guarantee of payment and not of collection. If
any Holder or the Trustee is required by any court or otherwise to return to the
Company or to any Subsidiary Guarantor, or any custodian, trustee, liquidator or
other similar official acting in relation to the Company or such Subsidiary
Guarantor, any amount paid by the Company or such Subsidiary Guarantor to the
Trustee or such Holder, this Subsidiary Guaranty, to the extent theretofore
discharged, shall be reinstated in full force and effect. Each Subsidiary
Guarantor further agrees that, as between it, on the one hand, and the Holders
of Notes and the Trustee, on the other hand, (a) subject to this Article Twelve,
the maturity of the obligations guaranteed hereby may be accelerated as provided
in Article Six hereof for the purposes of this Subsidiary Guaranty,
notwithstanding any stay, injunction or other prohibition preventing such
acceleration in respect of the obligations guaranteed hereby, and (b) in the
event of any acceleration of such obligations as provided in Article Six hereof,
such obligations (whether or not due and payable) shall forthwith become due and
payable by the Subsidiary Guarantors for the purpose of this Subsidiary
Guaranty.
No stockholder, officer, director, employee or incorporator, past,
present or future, or any Subsidiary Guarantor, as such, shall have any personal
liability under this Subsidi-
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<PAGE>
ary Guaranty by reason of his, her or its status as such stockholder, officer,
director, employee or incorporator.
The Subsidiary Guarantors shall have the right to seek contribution
from any non-paying Subsidiary Guarantor so long as the exercise of such right
does not impair the rights of the Holders under this Subsidiary Guaranty.
SECTION 12.03 Execution and Delivery of Subsidiary Guaranty. To
---------------------------------------------
further evidence the Subsidiary Guaranty set forth in Section 12.02, each
Subsidiary Guarantor hereby agrees that a notation of such Subsidiary Guaranty,
substantially in the form included in Exhibit F of this Indenture, shall be
endorsed on each Note authenticated and delivered by the Trustee after this
Article Twelve with respect to such Subsidiary Guarantor becomes effective in
accordance with Section 4.07 and such Subsidiary Guaranty shall be executed by
either manual or facsimile signature of an Officer of each Subsidiary Guarantor.
The validity and enforceability of any Subsidiary Guaranty shall not be affected
by the fact that it is not affixed to any particular Note.
Each of the Subsidiary Guarantors hereby agrees that its Subsidiary
Guaranty set forth in Section 12.02 shall remain in full force and effect
notwithstanding any failure to endorse on each Note a notation of such
Subsidiary Guaranty.
If an Officer of a Subsidiary Guarantor whose signature is on this
Indenture or a Subsidiary Guaranty no longer holds that office at the time a
Trustee authenticates the Note on which such Subsidiary Guaranty is endorsed or
at any time thereafter, such Guarantor's Subsidiary Guaranty of such Note shall
be valid nevertheless.
The delivery of any Note by a Trustee, after the authentication
thereof hereunder, shall constitute due delivery of any Subsidiary Guaranty set
forth in this Indenture on behalf of the Subsidiary Guarantor.
SECTION 12.04 Additional Subsidiary Guarantors. Any Person may
--------------------------------
become a Subsidiary Guarantor by executing and delivering to the Trustee (a) a
supplemental indenture in form satisfactory to the Trustee which subjects such
person to the provisions of this Indenture as a Subsidiary Guarantor, and (b) an
Opinion of Counsel to the effect that such supplemental indenture has been duly
authorized and executed by such person and constitutes the legal, valid, binding
and enforceable obligation of such person (subject to such customary exceptions
concerning bankruptcy, fraudulent conveyance, transaction at an undervalue and
preference laws, creditors' rights and equitable
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<PAGE>
principles as may be acceptable to the Trustee in their discretion).
SECTION 12.05 Release of a Subsidiary Guarantor. (a) Concurrently
---------------------------------
with any sale, exchange or transfer (by merger or otherwise) to any Person who
is not a Restricted Subsidiary by the Company or a Restricted Subsidiary of all
of the Company's and each Restricted Subsidiary's Capital Stock in, or all or
substantially all of the assets of, such Subsidiary Guarantor (which sale,
exchange or transfer is not prohibited by this Indenture), such Subsidiary
Guarantor will automatically and unconditionally be released and discharged from
all obligations under its Subsidiary Guaranty; provided that no Indebtedness
under any Debt Securities or Subordinated Indebtedness of such Subsidiary
Guarantor is being assumed by the Person to whom such sale or disposition is
made; provided, further, that the foregoing proviso shall not apply to the sale
or disposition of a Subsidiary Guarantor in a foreclosure to the extent that
such proviso would be inconsistent with applicable law. In addition, if no
Default exists or would exist under this Indenture, at the request of the
Company, a Subsidiary Guarantor that is not a Leveraged Subsidiary will be
released from all obligations under its Subsidiary Guaranty if the Subsidiary
Guarantors have been unconditionally released from their obligations under all
Debt Securities and Subordinated Indebtedness.
(b) The Trustee shall deliver an instrument, in form satisfactory to
the Company, evidencing the release of a Subsidiary Guarantor upon receipt of a
request of the Company accompanied by an Officers' Certificate and an Opinion of
Counsel certifying as to the compliance with this Section 12.05. Any Subsidiary
Guarantor not so released or the entity surviving such Subsidiary Guarantor, as
applicable, will remain or be liable under its Subsidiary Guaranty as provided
in this Article Twelve.
The Trustee shall execute any documents reasonably requested by the
Company or a Subsidiary Guarantor in order to evidence the release of such
Subsidiary Guarantor from its obligations under its Subsidiary Guaranty endorsed
on the Notes and under this Article Twelve.
Except as set forth in Articles Four and Five and this Section 12.05,
nothing contained in this Indenture or in any of the Notes shall prevent any
consolidation or merger of a Subsidiary Guarantor with or into the Company or
another Subsidiary Guarantor or shall prevent any sale or conveyance of the
property of a Subsidiary Guarantor as an entirety or substantially as an
entirety to the Company or another Subsidiary Guarantor.
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<PAGE>
SECTION 12.06 Waiver of Subrogation. Each Subsidiary Guarantor
---------------------
hereby irrevocably waives and agrees not to exercise any claim or other rights
which it may now or hereafter acquire against the Company or any other
Restricted Subsidiary that arise from the existence, payment, performance or
enforcement of the Company's obligations under the Notes or this Indenture and
such Subsidiary Guarantor's obligations under this Subsidiary Guaranty and this
Indenture, in any such instance including, without limitation, any right of
subrogation, reimbursement, exoneration, contribution, indemnification, and any
right to participate in any claim or remedy of the Guaranteed Parties against
the Company or any other Restricted Subsidiary, whether or not such claim,
remedy or right arises in equity, or under contract, statute or common law,
including, without limitation, the right to take or receive from the Company or
any other Restricted Subsidiary, directly or indirectly, in cash or other
property or by set-off or in any other manner, payment or security on account of
such claim or other rights. If any amount shall be paid to any Subsidiary
Guarantor in violation of the preceding sentence and any amounts owing to the
Trustee or the Holders of Notes under the Notes, this Indenture, or any other
document or instrument delivered under or in connection with such agreements or
instruments, shall not have been paid in full, such amount shall have been
deemed to have been paid to such Subsidiary Guarantor for the benefit of, and
held in trust for the benefit of, the Guaranteed Parties and shall forthwith be
paid to the Trustee for the benefit of such Holders to be credited and applied
to the obligations in favor of the Guaranteed Parties, whether matured or
unmatured, in accordance with the terms of this Indenture. Each Subsidiary
Guarantor acknowledges that it will receive direct and indirect benefits from
the financing arrangements contemplated by this Indenture and that the waiver
set forth in this Section 12.06 is knowingly made in contemplation of such
benefits.
SECTION 12.07 Immediate Payment. The Subsidiary Guarantor agrees to
-----------------
make immediate payment to the Trustee on behalf of the Guaranteed Parties of all
Guaranteed Obligations owing or payable to the respective Guaranteed Parties
upon receipt of a demand for payment therefor by the Trustee to the Subsidiary
Guarantor in writing.
SECTION 12.08 No Set-Off. Each payment to be made by the Subsidiary
----------
Guarantor hereunder in respect of the Guaranteed Obligations shall be payable in
the currency or currencies in which such Guaranteed Obligations are denominated,
and shall be made without set-off, counterclaim, reduction or diminution of any
kind or nature.
SECTION 12.09 Obligations Absolute. The obligations of the
--------------------
Subsidiary Guarantor hereunder are and shall be absolute
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<PAGE>
and unconditional and any monies or amounts expressed to be owing or payable by
the Subsidiary Guarantor hereunder which may not be recoverable from the
Subsidiary Guarantor on the basis of a guarantee shall be recoverable from the
Subsidiary Guarantor as a primary obligor and principal debtor in respect
thereof.
SECTION 12.10 Obligations Continuing. The obligations of the
----------------------
Subsidiary Guarantor hereunder shall be continuing and shall remain in full
force and effect until all the Guaranteed Obligations have been paid and
satisfied in full. The Subsidiary Guarantor agrees with the Trustee that it
will from time to time deliver to the Trustee suitable acknowledgments of this
continued liability hereunder and under any other instrument or instruments in
such form as counsel to the Trustee may advise and as will prevent any action
brought against it in respect of any default hereunder being barred by any
statute of limitations now or hereafter in force in the jurisdiction of
incorporation or organization of such Subsidiary Guarantor or elsewhere and, in
the event of the failure of the Subsidiary Guarantor so to do, it hereby
irrevocably appoints the Trustee and each of them the attorneys and agents of
the Subsidiary Guarantor to make, execute and deliver such written
acknowledgment or acknowledgments or other instruments as may from time to time
become necessary or advisable, in the judgment of the Trustee on the advice of
counsel, to fully maintain and keep in force the liability of the Subsidiary
Guarantor hereunder.
SECTION 12.11 Obligations Not Reduced. The obligations of the
-----------------------
Subsidiary Guarantor hereunder shall not be satisfied, reduced or discharged by
any intermediate payment or satisfaction of the whole or any part of the
principal, interest, fees and other monies or amounts which may at any time be
or become owing or payable under or by virtue of or otherwise in connection with
the Notes or this Indenture.
SECTION 12.12 Obligations Reinstated. The obligations of the
----------------------
Subsidiary Guarantor hereunder shall continue to be effective or shall be
reinstated, as the case may be, if at any time any payment which would otherwise
have reduced the obligations of the Subsidiary Guarantor hereunder (whether such
payment shall have been made by or on behalf of the Company or by or on behalf
of the Subsidiary Guarantor) is rescinded or reclaimed from any of the
Guaranteed Parties upon the insolvency, bankruptcy, liquidation or
reorganization of the Company or the Subsidiary Guarantor or otherwise, all as
though such payment had not been made. If demand for, or acceleration of the
time for, payment by the Company is stayed upon the insolvency, bankruptcy,
liquidation or reorganization of the Company, all such indebtedness otherwise
subject to demand for
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<PAGE>
payment or acceleration shall nonetheless be payable by the Subsidiary Guarantor
as provided herein.
SECTION 12.13 Obligations Not Affected. The obligations of the
------------------------
Subsidiary Guarantor hereunder shall not be affected, impaired or diminished in
any way by any act, omission, matter or thing whatsoever, occurring before, upon
or after any demand for payment hereunder (and whether or not known or consented
to by the Subsidiary Guarantor or any of the Guaranteed Parties) which, but for
this provision, might constitute a whole or partial defense to a claim against
the Subsidiary Guarantor hereunder or might operate to release or otherwise
exonerate the Subsidiary Guarantor from any of its obligations hereunder or
otherwise affect such obligations, whether occasioned by default of any of the
Guaranteed Parties or otherwise, including, without limitation:
(i) any limitation of status or power, disability, incapacity or
other circumstance relating to the Company or any other person, including
any insolvency, bankruptcy, liquidation, reorganization, readjustment,
composition, dissolution, winding-up or other proceeding involving or
affecting the Company or any other person;
(ii) any irregularity, defect, unenforceability or invalidity in
respect of any Indebtedness or other obligation of the Company or any other
person under this Indenture, the Notes or any other document or instrument;
(iii) any failure of the Company, whether or not without fault on
its part, to perform or comply with any of the provisions of this Indenture
or the Notes, or to give notice thereof to the Subsidiary Guarantor;
(iv) the taking or enforcing or exercising or the refusal or
neglect to take or enforce or exercise any right or remedy from or against
the Company or any other Person or their respective assets or the release
or discharge of any such right or remedy;
(v) the granting of time, renewals, extensions, compromises,
concessions, waivers, releases, discharges and other indulgences to the
Company or any other person;
(vi) any change in the time, manner or place of payment of, or in
any other term of, any of the Notes, or any other amendment, variation,
supplement, replacement or waiver of, or any consent to departure from, any
of the Notes or this Indenture, including, without limitation, any increase
or decrease in the principal amount of or premium, if any, or interest on
any of the Notes;
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<PAGE>
(vii) any change in the ownership, control, name, objects,
businesses, assets, capital structure or constitution of the Company or the
Subsidiary Guarantor;
(viii) any merger or amalgamation of the Company or the Subsidiary
Guarantor with any Person or Persons (subject to Section 12.05);
(ix) the occurrence of any change in the laws, rules, regulations
or ordinances of any jurisdiction by any present or future action of any
governmental authority or court amending, varying, reducing or otherwise
affecting, or purporting to amend, vary, reduce or otherwise affect, any of
the Guaranteed Obligations or the obligations of the Subsidiary Guarantor
under this Subsidiary Guarantee; and
(x) any other circumstance (other than by complete, irrevocable
payment) that might otherwise constitute a legal or equitable discharge or
defense of the Company under this Indenture or the Notes or of the
Subsidiary Guarantor in respect of its guarantee hereunder.
SECTION 12.14 Waiver. Without in any way limiting the provisions of
------
Section 7.01 of this Indenture, the Subsidiary Guarantor hereby waives notice of
acceptance hereof, notice of any liability of the Subsidiary Guarantor
hereunder, notice or proof of reliance by the Guaranteed Parties upon the
obligations of the Subsidiary Guarantor hereunder, and diligence, presentment,
demand for payment on the Company, protest, notice of dishonour or non-payment
of any of the Guaranteed Obligations, or other notice or formalities to the
Company or the Subsidiary Guarantor of any kind whatsoever.
SECTION 12.15 No Obligation to Take Action Against Company. Neither
--------------------------------------------
the Trustee nor any of the other Guarantied Parties shall have any obligation to
enforce or exhaust any rights or remedies or to take any other steps under any
security for the Guarantied Obligations or against the Company or any other
person or any property of the Company or any other person before the Trustee are
entitled to demand payment and performance by the Subsidiary Guarantor of its
liabilities and obligations under this Subsidiary Guaranty, and the Subsidiary
Guarantor hereby waives all benefit of discussion.
SECTION 12.16 Dealing with the Company and Others. The Guarantied
-----------------------------------
Parties, without releasing, discharging, limiting or otherwise affecting in
whole or in part the Subsidiary Guarantor's obligations and liabilities
hereunder and without the consent of or notice to the Subsidiary Guarantor, may
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<PAGE>
(i) grant time, renewals, extensions, compromises, concessions,
waivers, releases, discharges and other indulgences to the Company or any
other person;
(ii) take or abstain from taking security or collateral from the
Company or from perfecting security or collateral of the Company;
(iii) release, discharge, compromise, realize, enforce or
otherwise deal with or do any act or thing in respect of (with or without
consideration) any and all collateral, mortgages or other security given by
the Company or any third party with respect to the obligations or matters
contemplated by this Indenture or the Notes;
(iv) accept compromises or arrangements from the Company;
(v) apply all monies at any time received from the Company or from
any security upon such part of the Subsidiary Guarantied Obligations as the
Guaranteed Parties may see fit or change any such application in whole or
in part from time to time as the Guarantied Parties may see fit; and
(vi) otherwise deal with, or waive or modify their right to deal
with, the Company and all other persons and any security as the Guarantied
Parties or the Trustee may see fit.
SECTION 12.17 Default and Enforcement. (a) If the Subsidiary
-----------------------
Guarantor fails to pay in accordance with Section 12.07 hereof, the Trustee may
proceed in its name as trustee hereunder in the enforcement of the Subsidiary
Guaranty and the Guarantor's Obligations thereunder and hereunder by any remedy
provided by law, whether by legal proceedings or otherwise, and to recover from
the Subsidiary Guarantor the Guarantied Obligations.
(b) No Holder shall have the right to institute any suit, action or
proceeding against the Subsidiary Guarantor for any default hereunder except in
the manner and subject to the conditions set forth in Article Six of this
Indenture, it being understood and intended that no one or more Holders shall
have any right in any manner whatsoever to enforce any right hereunder by his or
their action except as aforesaid and that all powers and trusts hereunder shall
be exercised and all proceedings at law or in equity shall be instituted, had
and maintained by the Trustee, only as aforesaid and in any event for the
benefit of all Holders as provided in this Indenture.
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<PAGE>
SECTION 12.18 Notice. Any notice or demand to or upon the Subsidiary
------
Guarantor to be effective, shall be in writing and delivered in person or mailed
by first class mail and shall be addressed as follows:
[INSERT NAME OF RELEVANT SUBSIDIARY GUARANTOR]
Attention: Co-Chief Executive Officer
Telecopy:
Copy to:
Attention: Chief Financial Officer
Telecopy:
SECTION 12.19 Amendment, Etc. No amendment, modification or waiver
--------------
of any provision of this Indenture relating to the Subsidiary Guarantor or
consent to any departure by the Subsidiary Guarantor or any other person from
any such provision will in any event be effective unless it is signed by the
Subsidiary Guarantor and the Trustee.
SECTION 12.20 Acknowledgment. The Subsidiary Guarantor hereby
--------------
acknowledges communication of the terms of this Indenture and the Notes and
consents to and approves of the same.
SECTION 12.21 Costs and Expenses. The Subsidiary Guarantor shall pay
------------------
on demand by the Trustee any and all costs, fees and expenses (including,
without limitation, legal fees on a solicitor and client basis) incurred by the
Trustee or any of the Guaranteed Parties in enforcing any of their rights under
the Subsidiary Guaranty.
SECTION 12.22 No Merger or Waiver; Cumulative Remedies. The
----------------------------------------
Subsidiary Guaranty shall not operate by way of merger of any of the obligations
of the Subsidiary Guarantor under any other agreement, including, without
limitation, this Indenture. No failure to exercise and no delay in exercising,
on the part of the Trustee or the other Guarantied Parties, any right, remedy,
power or privilege hereunder or under this Indenture or the Notes, shall operate
as a waiver thereof; nor shall any single or partial exercise of any right,
remedy, power or privilege hereunder or under this Indenture or the
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<PAGE>
Notes preclude any other or further exercise thereof or the exercise of any
other right, remedy, power or privilege. The rights, remedies, powers and
privileges herein and under the Indenture, the Notes and any other document or
instrument between the Subsidiary Guarantor and/or the Company and the Trustee,
are cumulative and not exclusive of any rights, remedies, powers and privilege
provided by law.
SECTION 12.23 Survival of Obligations. Without prejudice to the
-----------------------
survival of any of the other obligations of the Subsidiary Guarantor hereunder,
the obligations of the Subsidiary Guarantor under Section 12.07 shall survive
the payment in full of the Guarantied Obligations and shall be enforceable
against the Subsidiary Guarantor without regard to and without giving effect to
any defense, right of offset or counterclaim available to or which may be
asserted by the Company or the Subsidiary Guarantor.
SECTION 12.24 Subsidiary Guaranty in Addition to Other Obligations.
----------------------------------------------------
The obligations of the Subsidiary Guarantor under the Subsidiary Guaranty and
this Indenture are in addition to and not in substitution for any other
obligations to the Trustee or to any of the Guaranteed Parties in relation to
this Indenture or the Notes and any guarantees or security at any time held by
or for the benefit of any of them.
SECTION 12.25 Severability. Any provision of this Article Eleven
------------
which is prohibited or unenforceable in any jurisdiction shall not invalidate
the remaining provisions and any such prohibition or unenforceability in any
jurisdiction shall not invalidate or render unenforceable such provision in any
other jurisdiction unless its removal would substantially defeat the basic
intent, spirit and purpose of this Indenture and this Article Twelve.
SECTION 12.26 Successors and Assigns. The Subsidiary Guaranty shall
----------------------
be binding upon and inure to the benefit of the Subsidiary Guarantor and the
Trustee and the other Guaranteed Parties and their respective successors and
permitted assigns, except that the Subsidiary Guarantor may not assign any of
its obligations hereunder or thereunder.
SECTION 12.27 Governing Law; Agent for Service; Submission to
-----------------------------------------------
Jurisdiction; Waiver of Immunities; Judgment Currency. Each Subsidiary
- -----------------------------------------------------
Guarantor hereby acknowledges and agrees to comply with and be bound by Section
11.07, Section 11.14 and Section 11.15 of this Indenture.
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<PAGE>
EXHIBIT F
---------
SUBSIDIARY GUARANTY
For value received, the undersigned hereby unconditionally guarantees
to the Holder of this Note the cash payments in euro of principal of, premium,
if any, and interest on this Note (and including Additional Amounts payable
thereon) in the amounts and at the time when due and interest on the overdue
principal, premium, if any, and interest, if any, of this Note, if lawful, and
the payment or performance of all other obligations of the Company under the
Indenture or the Notes, to the Holder of this Note and the Trustee, all in
accordance with and subject to the terms and limitations of this Note, Article
Twelve of the Indenture and this Subsidiary Guaranty. This Subsidiary Guaranty
will become effective in accordance with Article Twelve of the Indenture and its
terms shall be evidenced therein. The validity and enforceability of any
Subsidiary Guaranty shall not be affected by the fact that it is not affixed to
any particular Note. Capitalized terms used but not defined herein shall have
the meanings ascribed to them in the Indenture dated as of April 13, 2000, among
CompleTel Europe N.V. and The Chase Manhattan Bank, as Trustee, as amended or
supplemented (the "Indenture").
The obligations of the undersigned to the Holders of Notes and to the
Trustee pursuant to the Subsidiary Guaranty and the Indenture are expressly set
forth in Article Twelve of the Indenture and reference is hereby made to the
Indenture for the precise terms of the Subsidiary Guaranty and all of the other
provisions of the Indenture to which this Subsidiary Guaranty relates.
THIS SUBSIDIARY GUARANTY WILL BE GOVERNED BY AND CONSTRUED IN
ACCORDANCE WITH THE LAWS OF THE STATE OF NEW YORK WITHOUT GIVING EFFECT TO
APPLICABLE PRINCIPLES OF CONFLICTS OF LAWS TO THE EXTENT THAT THE APPLICATION OF
THE LAW OF ANOTHER JURISIDICTION WOULD BE REQUIRED THEREBY. THE SUBSIDIARY
GUARANTOR HEREUNDER AGREES TO SUBMIT TO THE JURISDICTION OF THE STATE OF NEW
YORK IN ANY ACTION OR PROCEEDING ARISING OUT OF OR RELATING TO THE INDENTURE,
THE NOTES OR THIS SUBSIDIARY GUARANTY.
F-1
<PAGE>
This Subsidiary Guaranty is subject to release upon the terms set
forth in the Indenture.
Date:
[NAME OF GUARANTOR],
as Guarantor
By:
-------------------------------------
Name:
Title:
F-2
<PAGE>
Exhibit 10.19
FIRST SUPPLEMENT TO
SECOND AMENDED AND RESTATED REGISTRATION AGREEMENT
--------------------------------------------------
THIS FIRST SUPPLEMENT TO SECOND AMENDED AND RESTATED REGISTRATION
AGREEMENT (this "Agreement") is made as of March 24, 2000, by and among
CompleTel Europe N.V. (the "Company") and the parties to the Second Amended
Agreement (as defined below) (including CompleTel LLC ("CompleTel LLC"), Madison
Dearborn Capital Partners II, L.P. ("MDCP"), DeGeorge Holdings Limited
Partnership ("DeGeorge Holdings"), Meritage Private Equity Fund, L.P.
("Meritage"), James C. Allen ("Allen"), Royce J. Holland ("Holland"), George T.
Laub ("Laub"), Reed E. Hundt ("Hundt"), Emile Karafiol ("Karafiol"), William S.
Kirsch ("Kirsch"), Northwestern University ("Northwestern"), Silver Cross
Investors LLC ("SCI"), Dovey Company LLC ("Dovey LLC"), William H. Pearson
("Pearson"), Haj LLC ("Pearson LLC #2"), Clevenger Company LLC ("Clevenger
LLC"), and David E. Lacey ("Lacey"), and the other holders of Registrable
Securities listed on the signature pages attached to the Second Amended
Agreement (as defined below)). MDCP, DeGeorge Holdings, Meritage, Allen,
Holland, Laub, Hundt, Karafiol, Kirsch, Northwestern, and SCI are referred to
herein collectively as the "Investors" and individually as an "Investor."
Capitalized terms used but not otherwise defined herein have the meanings set
forth in paragraph 8 hereof.
As of May 18, 1998, the Company and MDCP, Lawrence F. DeGeorge
("DeGeorge"), James E. Dovey ("Dovey"), Pearson, and Richard N. Clevenger
("Clevenger") entered into a Registration Agreement (the "Prior Agreement"). As
of January 28, 1999, the parties (other than the Company, Meritage, Pearson LLC
#2, Karafiol, Kirsch, Northwestern, and SCI) entered into a First Amended and
Restated Registration Agreement (the "First Amended Agreement"), amending and
restating the Prior Agreement in its entirety. As of November 23, 1999, the
parties (other than the Company) entered into a Second Amended and Restated
Registration Agreement (the "Second Amended Agreement"), amending and restating
the First Amended Agreement in its entirety.
The Company has filed a registration statement on Form F-1 with the
Securities and Exchange Commission covering the Company's proposed issuance of
its ordinary shares to the public (the "Proposed IPO"). The parties (other than
the Company) have entered into an Omnibus Amendment, to which this Agreement is
an exhibit (the "Omnibus Amendment"), in order to amend various transaction
documents described therein (including the Second Amended Agreement) effective
upon the consummation of the Proposed IPO. Pursuant to the terms and subject to
the conditions set forth in the Omnibus Amendment, the parties hereto desire
that, effective upon the consummation of the Proposed IPO, the Second Amended
Agreement will be amended and supplemented with the provisions set forth in this
Agreement, the provisions hereof will be incorporated into and become a part of
the Second Amended Agreement, and the provisions of this Agreement will be
valid, binding, and effective against the Company and each of the parties to the
Second Amended Agreement pursuant to the amendment provisions of Section 9(d)
thereof.
<PAGE>
NOW, THEREFORE, in consideration of the mutual promises made herein
and other good and valuable consideration, the receipt and sufficiency of which
are hereby acknowledged, the parties hereto, intending to be legally bound,
agree as follows:
1. Demand Registrations.
--------------------
(a) Requests for Registration. At any time after the date hereof, (i)
the holders of a majority of the MDCP Registrable Securities then outstanding
may request up to two registrations under the Securities Act of all or any
portion of their Registrable Securities on Form S-1 or any similar long-form
registration (each, a "Long-Form Registration"), (ii) the holders of a majority
of the DeGeorge Registrable Securities then outstanding may request one Long-
Form Registration, (iii) the holders of at least 10% of the Purchaser
Registrable Securities then outstanding may request registration under the
Securities Act of all or any portion of their Registrable Securities on Form S-3
or any similar short-form registration ("Short-Form Registrations") if
available, and (iv) the holders of a majority of the Meritage Registrable
Securities then outstanding may request one Short-Form Registration, if
available; provided that the aggregate offering value of the Registrable
Securities requested to be registered in any registration under this paragraph
1(a) (any "Demand Registration") must equal at least $15 million in any Long-
Form Registration, and at least $5 million in any Short-Form Registration; and
provided further that the right of the holders of Meritage Registrable
Securities under clause (iv) above will terminate at such time as Meritage and
its affiliates cease to hold in the aggregate at least 50% of the Meritage
Registrable Securities held by Meritage on the date hereof.
All requests for Demand Registrations shall be made by giving written
notice to the Company (the "Demand Notice"). Each Demand Notice shall specify
the approximate number of Registrable Securities requested to be registered and
the anticipated per share price range for such offering. Within ten days after
receipt of any Demand Notice, the Company shall give written notice of such
requested registration to all other holders of Registrable Securities and,
subject to the provisions of paragraph 1(d) below, shall include in such
registration all Registrable Securities with respect to which the Company has
received written requests for inclusion therein within 15 days after the receipt
of the Company's notice.
(b) Expenses; Withdrawal. The Company shall pay all Registration
Expenses of all holders of Registrable Securities in all Demand Registrations.
A registration shall not count as one of the permitted Long-Form Registrations
(or, in the case of a Short-Form Registration requested by the holders of
Meritage Registrable Securities, as the one permitted Short-Form Registration
under Section 1(a)(iv)) until both (i) it has become effective and (ii) the
holders of Registrable Securities initially requesting such registration are
able to register and sell at least 90% of the Registrable Securities requested
to be included in such registration; provided that the Company shall in any
event pay all Registration Expenses in connection with any registration
initiated as a Demand Registration whether or not it has become effective and
whether or not such registration has counted as one of the permitted Long-Form
Registrations (or, if applicable, as the one permitted Short-Form Registration
under Section 1(a)(iv)). All Long-Form Registrations shall be underwritten
registrations
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<PAGE>
unless otherwise requested by the holders of a majority of the Registrable
Securities included in the applicable Long-Form Registration.
(c) Short-Form Registrations. Demand Registrations shall be Short-
Form Registrations whenever the Company is permitted to use any applicable short
form. After the Company has become subject to the reporting requirements of the
Securities Exchange Act, the Company shall use its best efforts to make Short-
Form Registrations on Form S-3 (or any successor form) available for the sale of
Registrable Securities.
(d) Priority on Demand Registrations. The Company shall not include
in any Demand Registration any securities which are not Registrable Securities
without the prior written consent of the holders of a majority of the
Registrable Securities included in such registration. If a Demand Registration
is an underwritten offering and the managing underwriters advise the Company in
writing that in their opinion the number of Registrable Securities and, if
permitted hereunder, other securities requested to be included in such offering
exceeds the number of Registrable Securities and other securities, if any, which
can be sold in an orderly manner in such offering within a price range
acceptable to the holders of a majority of the Registrable Securities initially
requesting registration, the Company shall include in such registration the
number which can be so sold in the following order of priorities: (i) first,
the Purchaser Registrable Securities requested to be included in such
registration, pro rata among the holders of such Purchaser Registrable
Securities on the basis of the number of shares owned by each such holder, (ii)
second, the other Registrable Securities requested to be included in such
registration, pro rata among the holders of such Registrable Securities on the
basis of the number of shares owned by each such holder, and (ii) third, other
securities requested to be included in such registration.
(e) Restrictions on Long-Form Registrations. The Company shall not be
obligated to effect any Demand Registration which is a Long-Form Registration
within 180 days after the effective date of a previous Demand Registration which
was a Long-Form Registration or a previous registration in which the holders of
Registrable Securities were given piggyback rights pursuant to paragraph 2 and
in which such holders were able to register and sell at least 90% of the number
of Registrable Securities requested to be included therein. The Company may
preempt any request for a Demand Registration in order to effect an underwritten
primary registration on behalf of the Company, provided that (i) such preempting
underwritten primary registration must become effective within 90 days after the
date such preempted Demand Registration is requested, (ii) the holders of
Registrable Securities initially requesting the preempted Demand Registration
must have piggyback rights pursuant to paragraph 2 with respect to the
preempting primary registration and must be able to register and sell pursuant
to such piggyback rights in such primary registration at least 90% of the
Registrable Securities initially requested to be included in the preempted
Demand Registration, (iii) the Company shall pay all Registration Expenses in
connection with any such preempting primary registration, and (iv) the preempted
Demand Registration shall not count as one of the permitted Demand Registrations
hereunder. The Company may preempt a Demand Registration hereunder only once in
any 12-month period. The Company may postpone for up to 180 days the filing or
the effectiveness of a registration statement for a Demand Registration if the
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<PAGE>
Company's board of directors determines in its reasonable good faith judgment
that such Demand Registration would reasonably be expected to have a material
adverse effect on any proposal or plan by the Company or any of its direct or
indirect subsidiaries to engage in any acquisition of assets (other than in the
ordinary course of business) or any merger, consolidation, tender offer,
reorganization or similar transaction; provided that in such event, the holders
of Registrable Securities initially requesting such Demand Registration shall be
entitled to withdraw such request and, if such request is withdrawn, such Demand
Registration shall not count as one of the permitted Demand Registrations
hereunder and the Company shall pay all Registration Expenses in connection with
such withdrawn registration. The Company may delay a Demand Registration
hereunder only once in any twelve-month period.
(f) Selection of Underwriters. Subject to the approval rights granted
to the holders of Purchaser Registrable Securities under the Equity Purchase
Agreement, the Board shall select the investment banker(s) and manager(s) to
administer the offering.
(g) Other Registration Rights. Except as provided in this Agreement,
the Company shall not grant to any Persons the right to request the Company to
register any equity securities of the Company, or any securities convertible or
exchangeable into or exercisable for such securities, without the prior written
consent of the holders of a majority of the Purchaser Registrable Securities
(or, if none, the Registrable Securities) then outstanding; provided that the
Company may grant rights to other Persons to participate in Piggyback
Registrations so long as such rights are subordinate to the rights of the
holders of Registrable Securities with respect to such Piggyback Registrations;
and provided further that the Company may grant rights to other Persons to
request registrations so long as the holders of Registrable Securities are
entitled to participate in any such registrations with such Persons pro rata on
the basis of the number of shares owned by each such holder.
2. Piggyback Registrations.
-----------------------
(a) Right to Piggyback. Whenever the Company proposes to register any
of its securities under the Securities Act (other than pursuant to a Demand
Registration) and the registration form to be used may be used for the
registration of Registrable Securities (a "Piggyback Registration"), the Company
shall give prompt written notice (in any event within three business days after
its receipt of notice of any exercise of demand registration rights other than
under this Agreement) to all holders of Registrable Securities of its intention
to effect such a registration and shall, subject to the provisions of paragraph
2(c) below, include in such registration all Registrable Securities with respect
to which the Company has received written requests for inclusion therein within
20 days after the receipt of the Company's notice.
(b) Piggyback Expenses. The Registration Expenses of the holders of
Registrable Securities shall be paid by the Company in all Piggyback
Registrations.
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<PAGE>
(c) Priority on Primary Registrations. If a Piggyback Registration is
an underwritten primary registration on behalf of the Company, and the managing
underwriters advise the Company in writing that in their opinion the number of
securities requested to be included in such registration exceeds the number
which can be sold in an orderly manner in such offering within a price range
acceptable to the Company, the Company shall include in such registration (i)
first, the securities the Company proposes to sell, (ii) second, the Purchaser
Registrable Securities requested to be included in such registration, pro rata
among the holders of such Purchaser Registrable Securities on the basis of the
number of shares owned by each such holder, (iii) third, the other Registrable
Securities requested to be included in such registration, pro rata among the
holders of such Registrable Securities on the basis of the number of shares
owned by each such holder, and (iv) fourth, other securities requested to be
included in such registration.
(d) Priority on Secondary Registrations. If a Piggyback Registration
is an underwritten secondary registration on behalf of holders of the Company's
securities, and the managing underwriters advise the Company in writing that in
their opinion the number of securities requested to be included in such
registration exceeds the number which can be sold in an orderly manner in such
offering within a price range acceptable to the holders initially requesting
such registration, the Company shall include in such registration (i) first, the
securities requested to be included therein by the holders requesting such
registration and the Registrable Securities requested to be included in such
registration, pro rata among the holders of any such securities on the basis of
the number of securities so requested to be included therein owned by each such
holder, and (ii) second, other securities requested to be included in such
registration.
(e) Selection of Underwriters. If any Piggyback Registration is an
underwritten offering, subject to the approval rights granted to the holders of
Purchaser Registrable Securities under the Equity Purchase Agreement, the Board
shall select the investment banker(s) and manager(s) to administer the offering.
(f) Other Registrations. If the Company has previously filed a
registration statement with respect to Registrable Securities pursuant to
paragraph 1 or pursuant to this paragraph 2, and if such previous registration
has not been withdrawn or abandoned, the Company shall not file or cause to be
effected any other registration of any of its equity securities or securities
convert ible or exchangeable into or exercisable for its equity securities
under the Securities Act (except on Form S-8 or any successor form), whether on
its own behalf or at the request of any holder or holders of such securities,
until a period of at least 180 days has elapsed from the effective date of such
previous registration.
3. Holdback Agreements.
-------------------
(a) Holders of Registrable Securities. Each holder of Registrable
Securities shall not effect any public sale or distribution (including sales
pursuant to Rule 144) of equity securities of the Company, or any securities
convertible into or exchangeable or exercisable for such securities, during the
seven days prior to and the 180-day period beginning on the effective date of
any
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<PAGE>
underwritten Demand Registration or any underwritten Piggyback Registration
in which Registrable Securities are included (in each case, except as part of
such underwritten registration), unless in each case the underwriters managing
the registered public offering otherwise agree.
(b) The Company. The Company (i) shall not effect any public sale or
distribution of its equity securities, or any securities convertible into or
exchangeable or exercisable for such securities, during the seven days prior to
and during the 180-day period beginning on the effective date of any
underwritten Demand Registration or any underwritten Piggyback Registration
(except as part of such underwritten registration or pursuant to registrations
on Form S-8 or any successor form), unless the underwriters managing the
registered public offering otherwise agree, and (ii) shall cause each holder of
its Common Stock, or any securities convertible into or exchange able or
exercisable for Common Stock, purchased from the Company at any time after the
date of this Agreement (other than in a registered public offering or pursuant
to Rule 144) to agree not to effect any public sale or distribution (including
sales pursuant to Rule 144) of any such securities during such period (except as
part of such underwritten registration, if otherwise permitted), unless the
underwriters managing the registered public offering otherwise agree.
4. Registration Procedures. Whenever the holders of Registrable
Securities have requested that any Registrable Securities be registered pursuant
to this Agreement, the Company shall use its best efforts to effect the
registration and the sale of such Registrable Securities in accordance with the
intended method of disposition thereof, and pursuant thereto the Company shall
as expeditiously as possible:
(a) prepare and file with the Securities and Exchange Commission a
registration statement with respect to such Registrable Securities and use its
best efforts to cause such registration statement to become effective (provided
that before filing a registration statement or prospectus or any amendments or
supplements thereto, the Company shall furnish to the counsel selected by the
holders of a majority of the Registrable Securities covered by such registration
statement copies of all such documents proposed to be filed, which documents
shall be subject to the review and comment of such counsel);
(b) notify each holder of Registrable Securities of the effectiveness
of each registration statement filed hereunder and prepare and file with the
Securities and Exchange Commission such amendments and supplements to such
registration statement and the prospectus used in connection therewith as may be
necessary to keep such registration statement effective for a period of not less
than 180 days and comply with the provisions of the Securities Act with respect
to the disposition of all securities covered by such registration statement
during such period in accordance with the intended methods of disposition by the
sellers thereof set forth in such registration statement;
(c) furnish to each seller of Registrable Securities such number of
copies of such registration statement, each amendment and supplement thereto,
the prospectus included in such registration statement (including each
preliminary prospectus) and such other documents as such
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<PAGE>
seller may reasonably request in order to facilitate the disposition of the
Registrable Securities owned by such seller;
(d) use its best efforts to register or qualify such Registrable
Securities under such other securities or blue sky laws of such jurisdictions as
any seller reasonably requests and do any and all other acts and things which
may be reasonably necessary or advisable to enable such seller to consummate the
disposition in such jurisdictions of the Registrable Securities owned by such
seller (provided that the Company shall not be required to (i) qualify generally
to do business in any jurisdiction where it would not otherwise be required to
qualify but for this subparagraph, (ii) subject itself to taxation in any such
jurisdiction or (iii) consent to general service of process in any such
jurisdiction);
(e) notify each seller of such Registrable Securities, at any time
when a prospectus relating thereto is required to be delivered under the
Securities Act, of the happening of any event as a result of which the
prospectus included in such registration statement contains an untrue statement
of a material fact or omits any fact necessary to make the statements therein
not misleading, and, at the request of any such seller, the Company shall
prepare a supplement or amendment to such prospectus so that, as thereafter
delivered to the purchasers of such Registrable Securities, such prospectus
shall not contain an untrue statement of a material fact or omit to state any
fact necessary to make the statements therein not misleading;
(f) cause all such Registrable Securities to be listed on each
securities exchange on which similar securities issued by the Company are then
listed and, if not so listed, to be listed on the Nasdaq and, if listed on the
Nasdaq, use its best efforts to secure designation of all such Registrable
Securities covered by such registration statement as a Nasdaq "national market
system security" within the meaning of Rule 11Aa2-1 of the Securities and
Exchange Commission or, failing that, to secure Nasdaq authorization for such
Registrable Securities and, without limiting the generality of the foregoing, to
arrange for at least two market makers to register as such with respect to such
Registrable Securities with the National Association of Securities Dealers (the
"NASD");
(g) provide a transfer agent and registrar for all such Registrable
Securities not later than the effective date of such registration statement;
(h) enter into such customary agreements (including underwriting
agreements in customary form) and take all such other actions as the holders of
a majority of the Registrable Securities being sold or the underwriters, if any,
reasonably request in order to expedite or facilitate the disposition of such
Registrable Securities (including effecting a stock split, a combination of
shares, or other recapitalization);
(i) make available for inspection by any seller of Registrable
Securities, any underwriter participating in any disposition pursuant to such
registration statement and any attorney, accountant or other agent retained by
any such seller or underwriter, all financial and other records, pertinent
corporate documents and properties of the Company, and cause the Company's
officers,
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<PAGE>
directors, employees and independent accountants to supply all information
reasonably requested by any such seller, underwriter, attorney, accountant or
agent in connection with such registration statement;
(j) otherwise use its best efforts to comply with all applicable rules
and regulations of the Securities and Exchange Commission, and make available to
its security holders, as soon as reasonably practicable, an earnings statement
covering the period of at least twelve months beginning with the first day of
the Company's first full calendar quarter after the effective date of the
registration statement, which earnings statement shall satisfy the provisions of
Section 11(a) of the Securities Act and Rule 158 thereunder;
(k) permit any holder of Registrable Securities which holder, in its
sole and exclusive judgment, might be deemed to be an underwriter or a
controlling person of the Company, to participate in the preparation of such
registration or comparable statement and to require the insertion therein of
material, furnished to the Company in writing, which in the reasonable judgment
of such holder and its counsel should be included;
(l) in the event of the issuance of any stop order suspending the
effectiveness of a registration statement, or of any order suspending or
preventing the use of any related prospectus or suspending the qualification of
any Common Stock included in such registration statement for sale in any
jurisdiction, the Company shall use its best efforts promptly to obtain the
withdrawal of such order;
(m) obtain a cold comfort letter from the Company's independent public
accountants in customary form and covering the matters customarily covered by
cold comfort letters as the holders of a majority of the Registrable Securities
being sold reasonably request; and
(n) use its best efforts to cause such Registrable Securities covered
by such registration statement to be registered with or approved by such other
governmental agencies or authorities as may be necessary to enable the sellers
thereof to consummate the disposition of the Registrable Securities (including
using its best efforts to take all such actions as may be necessary to enable
the sellers of such Registrable Securities to trade such Registrable Securities
on all non-U.S. securities exchanges or markets on which Registrable Securities
may then be listed or traded, in accordance with all applicable securities laws
or regulations).
5. Registration Expenses.
---------------------
(a) Expenses. All expenses incident to the Company's performance of
or compliance with this Agreement, including without limitation all registration
and filing fees, fees and expenses of compliance with securities or blue sky
laws, printing expenses, messenger and delivery expenses, fees and disbursements
of custodians, and fees and disbursements of counsel for the Company and all
independent certified public accountants, underwriters (excluding discounts and
commissions) and other Persons retained by the Company (all such expenses being
herein called
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<PAGE>
"Registration Expenses"), shall be borne as provided in this Agreement, except
that the Company shall, in any event, pay its internal expenses (including,
without limitation, all salaries and expenses of its officers and employees
performing legal or accounting duties), the expense of any annual audit or
quarterly review, the expense of any liability insurance and the expenses and
fees for listing the securities to be registered on each securities exchange on
which similar securities issued by the Company are then listed or on the Nasdaq.
(b) Reimbursement of Counsel. In connection with each Demand
Registration and each Piggyback Registration, the Company shall reimburse the
holders of Registrable Securities included in such registration (i) for the
reasonable fees and disbursements (not to exceed $20,000 for any one
registration) of one counsel chosen by the holders of a majority of the
Purchaser Registrable Securities (or, if none, Registrable Securities) included
in such registration and (ii) for the reasonable fees and disbursements (not to
exceed $5,000 per additional counsel for any one registration) of each
additional counsel retained by any holder of Registrable Securities solely for
the purpose of rendering a legal opinion to underwriters on behalf of such
holder in connection with any underwritten Demand Registration or Piggyback
Registration.
(c) Payment of Certain Expenses by Holders of Registrable Securities.
Underwriting discounts and commissions and transfer taxes relating to the
Registrable Securities included in any registration hereunder, and all fees and
expenses of counsel for any holder of Registrable Securities (other than fees
and expenses to be reimbursed by the Company as set forth in paragraph (b)
above) shall be borne and paid by the holders of such Registrable Securities.
6. Indemnification.
---------------
(a) The Company agrees to indemnify, to the extent permitted by law,
each holder of Registrable Securities, its officers and directors and each
Person that controls such holder (within the meaning of the Securities Act)
against all losses, claims, damages, liabilities and expenses caused by any
untrue or alleged untrue statement of material fact contained in any
registration statement, prospectus or preliminary prospectus or any amendment
thereof or supplement thereto or any omission or alleged omission of a material
fact required to be stated therein or necessary to make the statements therein
not misleading, except insofar as the same are caused by or contained in any
information furnished in writing to the Company by such holder expressly for use
therein or by such holder's failure to deliver a copy of the registration
statement or prospectus or any amendments or supplements thereto after the
Company has furnished such holder with a sufficient number of copies of the
same. In connection with an underwritten offering, the Company shall indemnify
such underwriters, their officers and directors and each Person who controls
such underwriters (within the meaning of the Securities Act) to the same extent
as provided above with respect to the indemnification of the holders of
Registrable Securities.
(b) In connection with any registration statement in which a holder of
Registrable Securities is participating, each such holder shall furnish to the
Company in writing such information and affidavits as the Company reasonably
requests for use in connection with any such registration
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<PAGE>
statement or prospectus and, to the extent permitted by law, shall indemnify the
Company, its directors and officers and each Person who controls the Company
(within the meaning of the Securities Act) against any losses, claims, damages,
liabilities and expenses resulting from any untrue or alleged untrue statement
of material fact contained in the registration statement, prospectus or
preliminary prospectus or any amendment thereof or supplement thereto or any
omission or alleged omission of a material fact required to be stated therein or
necessary to make the statements therein not misleading, but only to the extent
that such untrue statement or omission is contained in any information or
affidavit so furnished in writing by such holder; provided that the obligation
to indemnify shall be individual, not joint and several, for each holder and
shall be limited to the net amount of proceeds received by such holder from the
sale of Registrable Securities pursuant to such registration statement.
(c) Any Person entitled to indemnification hereunder shall (i) give
prompt written notice to the indemnifying party of any claim with respect to
which it seeks indemnification (provided that the failure to give prompt notice
shall not impair any Person's right to indemnification hereunder to the extent
such failure has not prejudiced the indemnifying party) and (ii) unless in such
indemnified party's reasonable judgment a conflict of interest between such
indemnified and indemnifying parties may exist with respect to such claim,
permit such indemnifying party to assume the defense of such claim with counsel
reasonably satisfactory to the indemnified party. If such defense is assumed,
the indemnifying party shall not be subject to any liability for any settlement
made by the indemnified party without its consent (but such consent shall not be
unreasonably withheld). An indemnifying party who is not entitled to, or elects
not to, assume the defense of a claim shall not be obligated to pay the fees and
expenses of more than one counsel for all parties indemnified by such
indemnifying party with respect to such claim, unless in the reasonable judgment
of any indemnified party a conflict of interest may exist between such
indemnified party and any other of such indemnified parties with respect to such
claim.
(d) The indemnification provided for under this Agreement shall remain
in full force and effect regardless of any investigation made by or on behalf of
the indemnified party or any officer, director or controlling Person of such
indemnified party and shall survive the transfer of securities. The Company
also agrees to make such provisions, as are reasonably requested by any
indemnified party, for contribution to such party in the event the Company's
indemnification is unavailable for any reason such that such provisions provide
the same obligations and benefits to the indemnified party as those which would
have been applicable had the indemnification provisions in paragraphs 6(a) and
(b) been available taking into account all of the limitations set forth in
paragraphs 6(a) and (b).
7. Participation in Underwritten Registrations. No Person may
participate in any registration hereunder which is underwritten unless such
Person (i) agrees to sell such Person's securities on the basis provided in any
underwriting arrangements approved by the Person or Persons entitled hereunder
to approve such arrangements and (ii) completes and executes all questionnaires,
powers of attorney, indemnities, underwriting agreements and other documents
required under the terms of such underwriting arrangements; provided that no
holder of Registrable Securities included
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<PAGE>
in any underwritten registration shall be required to make any representations
or warranties to the Company or the underwriters (other than representations and
warranties regarding such holder and such holder's intended method of
distribution) or to undertake any indemnification obligations to the Company
with respect thereto, except as otherwise provided in paragraph 6(b) hereof, or
to the underwriters with respect thereto, except to the extent of the
indemnification being given to the Company and its controlling persons in
paragraph 6(a) hereof.
8. Definitions.
-----------
"Agreement" has the meaning set forth with respect thereto in the
preamble (it being understood that the term "Agreement" refers to this First
Supplement only for purposes of this First Supplement, and the term "Agreement"
as used in the Second Amended Agreement will continue to refer to the Second
Amended Agreement for purposes of all provisions of the Second Amended Agreement
(other than the supplementary provisions set forth in this First Supplement).
"Allen" has the meaning set forth with respect thereto in the
preamble.
"Board" means the board of management of the Company or, if the
Company is hereafter converted into another entity form, the board of directors
or comparable governing body of the Company.
"Clevenger" has the meaning set forth with respect thereto in the
preamble.
"Clevenger LLC" has the meaning set forth with respect thereto in the
preamble.
"Common Stock" means the Ordinary Shares and, in the event the Company
has hereafter converted into another entity form, the common stock or other
comparable common equity securities of the Company.
"Common Units" means the Common Units of CompleTel LLC, having the
rights and preferences set forth with respect thereto in the LLC Agreement.
"Company" has the meaning set forth with respect thereto in the
preamble (it being understood that the term "Company" refers to CompleTel Europe
N.V. only for purposes of this Agreement, and the term "Company" as used in the
Second Amended Agreement will continue to refer to CompleTel LLC for purposes of
all provisions of the Second Amended Agreement (other than the supplementary
provisions set forth in this Agreement).
"CompleTel LLC" has the meaning set forth with respect thereto in the
"DeGeorge" has the meaning set forth with respect thereto in the
preamble.
"DeGeorge Holdings" has the meaning set forth with respect thereto in
the preamble.
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<PAGE>
"DeGeorge Registrable Securities" means Registrable Securities derived
from or relating to the Preferred Units issued to DeGeorge under the Equity
Purchase Agreement.
"Demand Notice" has the meaning set forth with respect thereto in
Section 1(a).
"Demand Registration" has the meaning set forth with respect thereto
in Section 1(a).
"Dovey" has the meaning set forth with respect thereto in the
preamble.
"Dovey LLC" has the meaning set forth with respect thereto in the
preamble.
"Equity Purchase Agreement" means that certain Second Amended and
Restated Equity Purchase Agreement dated as of the date hereof, by and among
CompleTel LLC, the Investors, and the other Persons listed on the signature
pages thereto, as amended from time to time in accordance with its terms.
"Executive Securities Agreements" has the meaning set forth with
respect thereto in the Equity Purchase Agreement.
"First Amended Agreement" has the meaning set forth with respect
thereto in the preamble.
"Holland" has the meaning set forth with respect thereto in the
preamble.
"Hundt" has the meaning set forth with respect thereto in the
preamble.
"Investor" and "Investors" have the meaning set forth with respect
thereto in the preamble.
"Karafiol" has the meaning set forth with respect thereto in the
preamble.
"Kirsch" has the meaning set forth with respect thereto in the
preamble.
"Lacey" has the meaning set forth with respect thereto in the
preamble.
"Laub" has the meaning set forth with respect thereto in the preamble.
"LLC Agreement" means that certain limited liability company agreement
governing the affairs of CompleTel LLC, by and among the Investors and the other
holders of unit membership interests in CompleTel LLC, as amended from time to
time in accordance with its terms.
"Long-Form Registration" has the meaning set forth with respect
thereto in Section 1(a).
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<PAGE>
"MDCP" has the meaning set forth with respect thereto in the preamble.
"MDCP Registrable Securities" means Registrable Securities derived
from or relating to the Preferred Units issued to MDCP under the Equity Purchase
Agreement.
"Meritage" has the meaning set forth with respect thereto in the
preamble.
"Meritage Registrable Securities" means Registrable Securities derived
from or relating to the Preferred Units issued to Meritage under the Equity
Purchase Agreement.
"NASD" has the meaning set forth with respect thereto in Section 4(f).
"Northwestern" has the meaning set forth with respect thereto in the
preamble.
"Ordinary Shares" means the ordinary shares of the Company, euro .10
nominal value per share, having the rights and preferences set forth with
respect thereto in the articles of association of the Compnay.
"Pearson" has the meaning set forth with respect thereto in the
preamble.
"Pearson LLC #2" has the meaning set forth with respect thereto in the
preamble.
"Performance Vesting Agreement" means that certain Second Amended and
Restated Performance Vesting Agreement dated as of the date hereof, by and among
CompleTel LLC, the Investors, and the other Persons listed on the signature
pages thereto, as amended from time to time in accordance with its terms.
"Person" means an individual, a partnership, a corporation, a limited
liability company, an association, a joint stock company, a trust, a joint
venture, an unincorporated organization and a governmental entity or any
department, agency or political subdivision thereof.
"Piggyback Registration" has the meaning set forth with respect
thereto in Section 2(a).
"Preferred Units" means the Preferred Units of CompleTel LLC, having
the rights and preferences set forth with respect thereto in the LLC Agreement.
"Prior Agreement" has the meaning set forth with respect thereto in
the preamble.
"Purchaser Registrable Securities" means Registrable Securities
derived from or relating to the Preferred Units issued to the Investors and the
other purchasers under the Equity Purchase Agreement.
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<PAGE>
"Registrable Securities" means (i) Common Stock which as of the date
hereof is beneficially represented by any Preferred Units issued under the
Equity Purchase Agreement (or by any Common Units issued upon conversion of any
such Preferred Units), (ii) Common Stock which as of the date hereof is
beneficially represented by any Common Units issued under the Executive
Securities Agreements (other than any Un-Performance-Vested Securities), (iii)
any Common Stock issued or issuable with respect to the securities referred to
in clauses (i) and (ii) by way of a stock dividend or stock split or in
connection with a combination of shares, recapitalization, merger, consolidation
or other reorganization, or upon conversion or exercise of any such securities,
and (iv) any other Common Stock of the Company held by any holder of Registrable
Securities; provided that with respect to any Registrable Securities, such
securities shall cease to be Registrable Securities when they have been (A)
effectively registered under the Securities Act and disposed of in accordance
with the registration statement covering them, (B) distributed to the public
through a broker, dealer or market maker pursuant to Rule 144 under the
Securities Act (or any similar rule promulgated by the Securities and Exchange
Commission then in force), (C) distributed to a partner of MDCP or Meritage and
become eligible to be sold by such partner pursuant to Rule 144(k) of the
Securities Act (or any similar rule promulgated by the Securities and Exchange
Commission then in force), or (D) repurchased or otherwise acquired by the
Company (or its assignees). For purposes of this Agreement, a Person shall be
deemed to be the holder of Registrable Securities, and the Registrable
Securities shall be deemed to be outstanding and in existence, whenever such
Person has the right to acquire such Registrable Securities upon conversion of
preferred stock or similar securities held by such Person, or upon distribution
of such Registrable Securities in respect of securities held by such Person
which beneficially represent such Registrable Securities, whether or not such
acquisition has actually been effected, and such Person shall be entitled to
exercise the rights of a holder of such Registrable Securities hereunder.
"Registration Expenses" has the meaning set forth with respect thereto
in Section 5(a).
"SCI" has the meaning set forth with respect thereto in the preamble.
"Securities Act" means the Securities Act of 1933, as amended from
time to time.
"Securityholders Agreement" means that certain Second Amended and
Restated Securityholders Agreement dated as of the date hereof, by and between
CompleTel LLC and certain of its securityholders, as amended from time to time
in accordance with its terms.
"Short-Form Registrations" has the meaning set forth with respect
thereto in Section 1(a).
"Un-Performance-Vested Securities" means any CompleTel LLC securities
which are subject to performance vesting, but have not yet performance vested,
pursuant to the provisions of the Performance Vesting Agreement.
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<PAGE>
9. Miscellaneous.
-------------
(a) No Inconsistent Agreements. The Company shall not hereafter enter
into any agreement with respect to its securities which is inconsistent with or
violates the rights granted to the holders of Registrable Securities in this
Agreement.
(b) Adjustments Affecting Registrable Securities. The Company shall
not take any action, or permit any change to occur, with respect to its
securities which would materially and adversely affect the ability of the
holders of Registrable Securities to include such Registrable Securities in a
registration undertaken pursuant to this Agreement or which would materially and
adversely affect the marketability of such Registrable Securities in any such
registration (including, without limitation, effecting a stock split or a
combination of shares).
(c) Remedies. Any Person having rights under any provision of this
Agreement shall be entitled to enforce such rights specifically, to recover
damages caused by reason of any breach of any provision of this Agreement and to
exercise all other rights granted by law. The parties hereto agree and
acknowledge that money damages may not be an adequate remedy for any breach of
the provisions of this Agreement and that any party may in its sole discretion
apply to any court of law or equity of competent jurisdiction (without posting
any bond or other security) for specific performance and for other injunctive
relief in order to enforce or prevent violation of the provisions of this
Agreement.
(d) Effectiveness of this Agreement. This Agreement amending and
supplementing the Second Amended Agreement will be valid, binding, and effective
against the Company when it has been signed by the Company. This Agreement
amending and supplementing the Second Amended Agreement will be valid, binding,
and effective against each party to the Second Amended Agreement when such party
has executed the Omnibus Amendment. Pursuant to the provisions of Section 9(d)
of the Second Amended Agreement, this Agreement amending and supplementing the
Second Amended Agreement will be valid, binding, and effective against all
parties to the Second Amended Agreement when the Omnibus Amendment has been
signed by CompleTel LLC and the holders of a majority of the outstanding
Purchaser Registrable Securities. The effectiveness of this Agreement is subject
to the conditions thereto set forth in the Omnibus Amendment.
(e) Successors and Assigns. All covenants and agreements in this
Agreement by or on behalf of any of the parties hereto shall bind and inure to
the benefit of the respective successors and assigns of the parties hereto
whether so expressed or not. In addition, whether or not any express assignment
has been made, the provisions of this Agreement which are for the benefit of
purchasers or holders of Registrable Securities are also for the benefit of, and
enforceable by, any subsequent holder of Registrable Securities.
(f) Severability. Whenever possible, each provision of this Agreement
shall be interpreted in such manner as to be effective and valid under
applicable law, but if any provision of
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<PAGE>
this Agreement is held to be prohibited by or invalid under applicable law, such
provision shall be ineffective only to the extent of such prohibition or
invalidity, without invalidating the remainder of this Agreement.
(g) Counterparts. This Agreement may be executed simultaneously in
two or more counterparts, any one of which need not contain the signatures of
more than one party, but all such counterparts taken together shall constitute
one and the same Agreement. Any management or other key employee of the Company
or its subsidiaries who purchases securities pursuant to an Executive Securities
Agreement may at any time after the date hereof, with the written approval of
the Company, become a party to this Agreement by executing a counterpart to this
Agreement agreeing to be bound by the provisions hereof as if such Person were
an original signatory hereto (which joinder shall not constitute an amendment,
modification, or waiver hereof).
(h) Descriptive Headings; Interpretation; No Strict Construction. The
descriptive headings of this Agreement are inserted for convenience only and do
not constitute a substantive part of this Agreement. Whenever required by the
context, any pronoun used in this Agreement shall include the corresponding
masculine, feminine or neuter forms, and the singular forms of nouns, pronouns,
and verbs shall include the plural and vice versa. Reference to any agreement,
document, or instrument means such agreement, document, or instrument as amended
or otherwise modified from time to time in accordance with the terms thereof,
and if applicable hereof. The use of the words "include" or "including" in this
Agreement shall be by way of example rather than by limitation. The use of the
words "or," "either" or "any" shall not be exclusive. The parties hereto have
participated jointly in the negotiation and drafting of this Agreement. If an
ambiguity or question of intent or interpretation arises, this Agreement shall
be construed as if drafted jointly by the parties hereto, and no presumption or
burden of proof shall arise favoring or disfavoring any party by virtue of the
authorship of any of the provisions of this Agreement.
(i) Governing Law. All issues and questions concerning the
construction, validity, interpretation and enforcement of this Agreement and the
exhibits and schedules hereto shall be governed by, and construed in accordance
with, the laws of the State of Delaware, without giving effect to any choice of
law or conflict of law rules or provisions (whether of the State of Delaware or
any other jurisdiction) that would cause the application of the laws of any
jurisdiction other than the State of Delaware.
(j) Notices. All notices, demands or other communications to be given
or delivered under or by reason of the provisions of this Agreement shall be in
writing and shall be deemed to have been given when (a) delivered personally to
the recipient, (b) telecopied to the recipient (with hard copy sent to the
recipient by reputable overnight courier service (charges prepaid) that same
day) if telecopied before 5:00 p.m. Chicago, Illinois time on a business day,
and otherwise on the next business day, or (c) one business day after being sent
to the recipient by reputable overnight courier service (charges prepaid). Such
notices, demands and other communications shall be sent to CompleTel LLC at the
address set forth below, to the Company at the address therefor listed in
CompleTel LLC's records, and to any holder of Registrable Securities
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<PAGE>
at such address as indicated by the Company's records, or at such address or to
the attention of such other person as the recipient party has specified by prior
written notice to the sending party. CompleTel LLC's address is:
6300 Syracuse Way, Suite 355
Englewood, Colorado 80111
Attention: Chief Executive Officer
Telephone: (303) 741-4788
Telecopy: (303) 741-4823
(k) Business Days. If any time period for giving notice or taking
action hereunder expires on a day which is a Saturday, Sunday or legal holiday
in the State of Colorado, the Republic of France, or the jurisdiction in which
the Company's principal office is located, the time period shall automatically
be extended to the business day immediately following such Saturday, Sunday or
legal holiday.
(l) Delivery by Facsimile. This Agreement, the agreements referred to
herein, and each other agreement or instrument entered into in connection
herewith or therewith or contemplated hereby or thereby, and any amendments
hereto or thereto, to the extent signed and delivered by means of a facsimile
machine, shall be treated in all manner and respects as an original agreement or
instrument and shall be considered to have the same binding legal effect as if
it were the original signed version thereof delivered in person. At the request
of any party hereto or to any such agreement or instrument, each other party
hereto or thereto shall reexecute original forms thereof and deliver them to all
other parties. No party hereto or to any such agreement or instrument shall
raise the use of a facsimile machine to deliver a signature or the fact that any
signature or agreement or instrument was transmitted or communicated through the
use of a facsimile machine as a defense to the formation or enforceability of a
contract and each such party forever waives any such defense.
* * * * *
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<PAGE>
IN WITNESS WHEREOF, the undersigned has executed this First Supplement to
Second Amended and Restated Registration Agreement as of the date first written
above.
COMPLETEL EUROPE N.V.
By /s/ James E. Dovey
-------------------------------------------
James E. Dovey, its Managing Director
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<PAGE>
Exhibit 10.20
PLEDGE AGREEMENT
Dated as of April 13, 2000
By
COMPLETEL EUROPE N.V.,
COMPLETEL ESCROW B.V.
and
THE CHASE MANHATTAN BANK
as Trustee
and
THE CHASE MANHATTAN BANK
as Securities Intermediary
relating to 14% Senior Notes due 2010
<PAGE>
This PLEDGE AGREEMENT (this "Pledge Agreement") is dated as of April 13,
2000 by COMPLETEL EUROPE N.V., a limited liability company with its corporate
seat in Amsterdam, the Netherlands (the "Parent"), COMPLETEL ESCROW B.V., a
Netherlands private company with limited liability and a special purpose wholly-
owned subsidiary of the Parent with its corporate seat in Amsterdam, the
Netherlands (the "Pledgor"), The Chase Manhattan Bank, as securities
intermediary (in such capacity, the "Securities Intermediary", which may also be
referred to as the "Escrow Agent"), and The Chase Manhattan Bank, as trustee
under the Indenture (as defined herein) (in such capacity, the "Trustee").
RECITALS
WHEREAS, this Pledge Agreement is being entered into in connection with an
Indenture dated as of April 13, 2000 between the Parent, as issuer, and the
Trustee (the "Indenture", as such Indenture may be amended, supplemented or
replaced from time to time);
WHEREAS, the holders of the Initial Notes (as defined in the Indenture)
will be entitled to the benefits of the Notes Registration Rights Agreement (as
defined in the Indenture) ;
WHEREAS, on the Issue Date (as defined herein), the Parent will lend
approximately (Euro)78.0 million to the Pledgor, and the Pledgor will use such
amounts to purchase and pledge to the Trustee for the benefit of the holders of
the Notes six groups of Government Securities (as defined herein), denominated
in euro, each maturing one day prior to, or as nearly as possible prior to one
day prior to, the date of the first six scheduled interest payments in respect
of the Initial Notes issued on the Issue Date at the stated rate of 14% (the
"First Six Scheduled Interest Payments"), with such aggregate nominal amount
(the "Specified Amount") as will be sufficient, upon receipt of scheduled
interest and principal payments of such securities, to provide for payment in
full (except Additional Amounts (as defined in the Indenture) and Special
Interest (defined in the Notes Registration Rights Agreement), if any) of the
First Six Scheduled Interest Payments (the "Pledged Securities" which definition
includes any Substituted Securities substituted for any Pledged Securities
pursuant to the provisions of this Pledge Agreement);
WHEREAS, the Pledgor will establish, and the Parent will cause the Pledgor
to establish, on or prior to the Issue Date a Securities Account (as defined
herein, which may also be called an "Escrow Account") on the terms provided in
this Pledge Agreement;
WHEREAS, the Pledged Securities, all sums of money from time to time in the
Securities Account, including all interest owing thereon (the "Cash Collateral")
and the Securities Account will be pledged by the Pledgor to the Trustee for the
benefit of the holders of the Notes pursuant to this Pledge Agreement;
<PAGE>
-3-
WHEREAS, the security created by this Pledge Agreement secures the Secured
Obligations (as defined below, and including the First Six Scheduled Interest
Payments);
NOW, THEREFORE, in consideration of the promises herein contained and for
other good and valuable consideration, the Parent, the Pledgor, the Securities
Intermediary and the Trustee hereby agree, for the benefit of the Trustee, for
the ratable benefit of the holders of the Notes, on and subject to the terms and
provisions specified in the Indenture, as follows:
SECTION 1. Definitions.
-----------
1.1. Specific Definitions.
--------------------
Unless in any case the context requires otherwise, capitalized terms used
but not defined herein shall have the meanings assigned to them in the Indenture
and in addition thereto and to the terms defined elsewhere in this Pledge
Agreement:
"Additional Amounts" has the meaning set forth in the Indenture.
"Accountant's Opinion" has the meaning set forth in Section 4.3.
"Beneficiaries" has the meaning set forth in Section 2.2(a).
"Business Day" means any day except (i) Saturday, Sunday or any other day
on which commercial banks in The City of New York, London, England or the city
of the Corporate Trust Office (as defined in the Indenture) of the Trustee are
authorized by law to close or (ii) a day on which the Trans European Automated
Real Time Gross Settlement Express Transfer System does not operate.
"Cash Collateral" has the meaning set forth in the fifth Recital hereto.
"Collateral" means Pledged Securities, the Cash Collateral, the Securities
Account and any and all proceeds of the foregoing or certificates or instruments
representing the foregoing and all rights, title, benefit and interest of the
Pledgor in or to any of the foregoing which is or are the subject of the
security created by and pursuant to this Pledge Agreement, in each case whether
now owned or existing or hereafter acquired or created.
"CT Corporation System" has the meaning set forth in Section 16(a).
"Default" has the meaning set forth in the Indenture.
"Enforceability Limitations" has the meaning set forth in the Purchase
Agreement, dated as of April 6, 2000, among the Parent and the Initial
Purchasers named therein.
<PAGE>
-4-
"Euro Currency Country" means a country for which the euro is the lawful
currency.
"Event of Default" has the meaning set forth in the Indenture.
"First Six Scheduled Interest Payments" has the meaning set forth in third
Recital hereto.
"Government Securities" means direct and fully guaranteed or insured
obligations of the United States of America or any agency or instrumentally
thereof, the United Kingdom or any Euro Currency Country rated at least "A" by
S&P or "A" by Moody's or obligations guaranteed by the United States of America
or any agency or instrumentally thereof, the United Kingdom or any Euro Currency
Country rated at least "A" by S&P or "A" by Moody's and which, in each such
case, are denominated in euro and which have the remaining weighted average life
to maturity of not more than the day prior to the date of the interest payment
as to which such investment in the Government Security is intended to pay.
"Indenture" has the meaning set forth in the first Recital hereto.
"Interest Payment Date" has the meaning set forth in the Indenture.
"Issue Date" means the time and date of the first issuance of the Notes
under the Indenture.
"Judgment Currency" has the meaning set forth in Section 16(c).
"Lien" means any mortgage or deed of trust, lien (statutory or otherwise),
pledge, charge, security interest, assignment, deposit, easement, hypothecation,
claim, preference, priority or other encumbrance upon or with respect to
property of any kind (including any conditional sale, capital lease or other
title retention agreement, any leases in the nature thereof and any agreement to
give any security interest), real or personal, movable or immovable, now owned
or hereafter acquired.
"Moody's" means Moody's Investor Services, Inc. and its successors.
"Notes" has the meaning set forth in the Indenture.
"Notes Registration Rights Agreement" has the meaning set forth in the
second Recital hereto.
"Officer's Certificate" has the meaning set forth in the Indenture.
"Opinion of Counsel" has the meaning set forth in the Indenture.
<PAGE>
-5-
"Parent" has the meaning set forth in introductory paragraph hereto.
"Person" means an individual, a corporation, a partnership, a limited
liability company, an association, a trust or any other entity or organization,
including a government or political subdivision or an agency or instrumentality
thereof.
"Pledge Agreement" has the meaning set forth in the introductory paragraph
hereto.
"Pledged Securities" has the meaning set forth in third Recital hereto.
"Pledgor" has the meaning set forth in the introductory paragraph hereto.
"Principal Paying Agent" means The Chase Manhattan Bank acting as paying
agent and any successors.
"Revised UCC" has the meaning set forth in Section 2.2(b).
"S&P" means Standard & Poor's Ratings Services and its successors.
"Secured Obligations" means the Pledgor's obligations to pay in full the
First Six Scheduled Interest Payments, and, in the event that the Notes become
due and payable prior to such time as the First Six Scheduled Interest Payments
shall have been paid, to repay the principal, premium, if any, and interest
(whether accrued before or after the commencement of a bankruptcy, insolvency or
other similar proceeding regardless of whether or not a claim therefor is
allowed or allowable in any such proceeding) on and any other sum whatsoever
owing in respect of the Notes and the Indenture, and to perform all other
covenants and undertakings required in accordance with the terms of the Notes
and/or the Indenture.
"Securities Account" or "Escrow Account" has the meaning set forth in
Section 2.2(a).
"Securities Account Control Agreement" has the meaning set forth in Section
2.2(a).
"Securities Intermediary" or "Escrow Agent" has the meaning set forth in
the introductory paragraph hereto.
"Special Interest" has the meaning set forth in the Notes Registration
Rights Agreement.
"Specified Amount" has the meaning set forth in the third Recital hereto.
"Substituted Securities" has the meaning set forth in Section 4.3.
"TIA" has the meaning set forth in Section 3.3(h).
<PAGE>
-6-
"Trustee" shall mean the party named as the "Trustee" in the first
paragraph of this Pledge Agreement and includes its successors.
1.2. General Interpretation.
----------------------
(a) The words "hereof," "herein" and "hereunder" and other words of similar
import used in this Pledge Agreement refer to this Pledge Agreement as a whole
and not to any particular part of this Pledge Agreement.
(b) Where the context so requires, in this Pledge Agreement words importing
the singular only shall also include the plural and vice versa.
(c) Reference herein to any applicable law or any document, instrument or
agreement means such applicable law or such document, instrument or agreement as
originally implemented or executed or as modified, amended or supplemented from
time to time.
(d) Reference herein to any Person include its successors in title and
permitted assigns.
(e) Unless otherwise specifically stated, references herein to any Recital
or Section is a reference to such Recital or Section of this Pledge Agreement.
SECTION 2. Securities Account; Securities Intermediary.
-------------------------------------------
2.1. Appointment of Securities Intermediary. The Parent, the Pledgor and
--------------------------------------
the Trustee hereby appoint the Securities Intermediary, and the Securities
Intermediary hereby accepts such appointment, as securities intermediary, under
the terms and conditions of this Pledge Agreement.
2.2. Establishment of Securities Account.
-----------------------------------
(a) On the Issue Date, the Securities Intermediary shall establish a
securities account entitled the "Securities Account pledged by CompleTel Escrow
B.V. to The Chase Manhattan Bank, as Trustee, pursuant to the Pledge Agreement
dated as of April 13, 2000" (such account, the "Securities Account" or "Escrow
Account"). The Securities Account shall be established and maintained by the
Securities Intermediary, and each of the Securities Intermediary, the Trustee
and the Pledgor shall enter into an agreement on the date hereof, substantially
in the form of Exhibit A annexed hereto, that, when executed, will be deemed to
have been made a part hereof (the "Securities Account Control Agreement"). All
Collateral accepted by the Securities Intermediary pursuant to this Pledge
Agreement shall be held for the exclusive benefit of the Trustee or any
successor Trustee, as a secured party hereunder as contemplated by Section 3, on
behalf of the holders of the Notes (collectively, the "Benefici-
<PAGE>
-7-
aries"). All such Collateral shall be held in the Securities Account until
disbursed or paid in accordance with the terms hereof. The Collateral shall be
held by the Securities Intermediary, for the benefit of the Beneficiaries, in
the form and in such a manner as will result in the security interests
contemplated by Section 3.
(b) The Securities Intermediary hereby confirms that (i) the Securities
Intermediary has established the Securities Account for the benefit of the
Beneficiaries, (ii) the Securities Account is a "securities account" as such
term is defined in Section 8-501(a) of the 1994 Official Text of Article 8 of
the Uniform Commercial Code with conforming amendments to Article 9 (the
"Revised UCC") maintained on the books of The Chase Manhattan Bank registered in
the name of the Trustee and (iii) the Securities Intermediary will not change
the name or account number of the Securities Account without the prior written
consent of the Trustee and the Pledgor.
(c) On the Issue Date, the Pledgor shall deposit or cause to be deposited
the Pledged Securities in the Specified Amount in the Securities Account.
2.3. Securities Intermediary Compensation. The Pledgor shall pay to the
------------------------------------
Securities Intermediary such compensation for services to be performed by it
under this Agreement as the Pledgor and the Securities Intermediary may agree in
writing from time to time. The Securities Intermediary shall be paid any
compensation owed to it directly by the Pledgor and shall not disburse from the
Securities Account any such amounts.
The Pledgor shall reimburse the Securities Intermediary upon request for
all reasonable out of pocket expenses, disbursements and advances incurred or
made by the Securities Intermediary in implementing any of the provisions of
this Pledge Agreement, including the reasonable expenses and disbursements of
its counsel. The Securities Intermediary shall be paid any such expenses owed
to it directly by the Pledgor and shall not disburse from the Securities Account
any such amounts.
2.4. Substitution of Securities Intermediary. The Securities Intermediary
---------------------------------------
may resign by giving no less than 30 days' prior written notice to the Parent,
the Pledgor and the Trustee. Such resignation shall take effect upon the later
to occur of (i) delivery of all Collateral maintained by the Securities
Intermediary hereunder and copies of all books, records, plans and other
documents in the Securities Intermediary's possession relating to Collateral or
this Pledge Agreement to a successor securities intermediary mutually approved
by the Parent, the Pledgor and the Trustee (which approvals shall not be
unreasonably withheld or delayed) and (ii) the Parent, the Pledgor, the Trustee
and such successor securities intermediary entering into this Pledge Agreement
or any written successor agreement no less favorable to the interests of the
holders of the Notes or the Trustee than this Pledge Agreement; and the
Securities Intermediary shall thereupon be discharged of all obligations under
this Pledge Agree-
<PAGE>
-8-
ment and shall have no further duties, obligations or responsibilities in
connection herewith, except as set forth Section 10. If a successor securities
intermediary has not been appointed or has not accepted such appointment within
20 Business Days after notice of resignation is given by the Securities
Intermediary, the Parent, the Pledgor, the Trustee or the Securities
Intermediary may apply to a court of competent jurisdiction for the appointment
of a successor securities intermediary.
SECTION 3. Pledge; Covenant to Pay; Secured Obligations.
--------------------------------------------
3.1. Pledge and Grant of Security Interest. The Pledgor, as continuing
-------------------------------------
security for the due and punctual performance and payment of the Secured
Obligations, hereby irrevocably grants a first priority security interest in and
lien on, and pledges, assigns and sets over to the Trustee for the benefit of
the Beneficiaries, all of the Pledgor's right, title and interest in the
Collateral.
3.2. Covenant to Pay. The Pledgor agrees and undertakes to, and the
---------------
Parent agrees and undertakes to cause the Pledgor to, comply and cooperate with
all terms herein in order for the Securities Intermediary and Trustee to pay all
sums owing in respect of the Secured Obligations as and when the same shall
become due.
3.3. Secured Obligations. (a) This Pledge Agreement, in accordance with
-------------------
its terms, creates continuing security for the due and punctual performance of
the Secured Obligations in favor of the Trustee for the ratable benefit of the
holders of the Notes on and subject to the terms and provisions specified in the
Indenture. This Pledge Agreement and the security created under and pursuant
hereto shall be in addition and without prejudice to any rights created by or
pursuant to every other mortgage, charge, pledge or other form of security which
the Trustee may at any time hold as a security for all or any part of the
Secured Obligations and, subject to Section 15.5, this Pledge Agreement shall
remain in full (and not part only) force and effect until payment or other
discharge in full of the Secured Obligations to the satisfaction of the Trustee,
notwithstanding the receivership, liquidation, bankruptcy, insolvency or
reorganization of the Pledgor or any other fact or contingency whatsoever.
(b) The Pledgor and the Trustee hereby irrevocably instruct the Securities
Intermediary to, and the Securities Intermediary shall: (i) (A) maintain sole
dominion and control over the Collateral in the Securities Account for the
benefit of the Trustee to the extent specifically required herein, (B) maintain,
or cause its agent within the State of New York to maintain, possession of all
certificated Pledged Securities purchased or held hereunder that are physically
possessed by the Securities Intermediary in order for the Trustee to enjoy a
continuous perfected first priority security interest therein under the laws of
the State of New York to the extent required to do so, (C) take all steps
specified by the Pledgor to cause the Trustee to enjoy a continuous perfected
first priority security interest under any applicable
<PAGE>
-9-
Federal and State of New York law in all Pledged Securities purchased or held
hereunder that are not certificated and (D) maintain the Collateral free and
clear of all liens, security interests, safekeeping or other charges, demands
and claims against the Securities Intermediary of any nature now or hereafter
existing in favor of anyone other than the Beneficiaries; (ii) promptly notify
the Trustee if the Securities Intermediary receives written notice that any
Person other than the Trustee has a Lien or security interest upon any portion
of the Collateral; and (iii) in addition to disbursing amounts held in escrow
pursuant to any Payment Notice and Disbursement Requests given to it by the
Trustee pursuant to Section 5, upon receipt of written notice from the Trustee
of the acceleration of the maturity of the Notes, and upon the direction of the
Trustee, as promptly as practicable, disburse all amounts held in the Securities
Account to the Trustee and transfer title to all Pledged Securities held by the
Securities Intermediary hereunder to the Trustee. The lien and security interest
provided for by this Section 3 shall automatically terminate and cease as to,
and shall not extend or apply to, and the Trustee shall have no security
interest in, any amounts disbursed by the Securities Intermediary to the Pledgor
pursuant to this Pledge Agreement to the extent not inconsistent with the terms
hereof. Notwithstanding any other provision contained in this Pledge Agreement,
the Securities Intermediary shall act solely as the Trustee's agent in
connection with its duties under this Section 3 and any other duties herein
relating to the Securities Account or any amounts or Pledged Securities held
thereunder. The Securities Intermediary shall not have any right to receive
compensation from the Trustee and shall have no authority to obligate the
Trustee or to compromise or pledge its security interest hereunder. Accordingly,
the Securities Intermediary is hereby directed to cooperate with the Trustee in
the exercise of its rights in the Collateral provided for herein.
(c) Any amounts and securities collected by the Trustee pursuant to Section
3.3(b) shall be applied as provided in the Indenture.
(d) Upon demand, the Pledgor and Parent will execute and deliver to the
Trustee such instruments and documents as the Trustee may deem necessary or
advisable (acting reasonably) to confirm or perfect the rights of the Trustee
under this Pledge Agreement and the Trustee's interest in the Collateral. The
Trustee shall be entitled to take all necessary action to preserve and protect
the security interest created hereby as a lien upon the Collateral.
(e) The Pledgor hereby appoints the Trustee as its attorney-in-fact with
full power of substitution to do any act which the Pledgor is obligated
hereunder to do or which is advisable to do to accomplish the purposes of this
Pledge Agreement, and the Trustee may exercise such rights as the Pledgor might
exercise with respect to the Collateral and take any action in the Pledgor's
name or in its name to protect the Trustee's security interest hereunder. The
Trustee's authority under this Section 3.3 shall, without limitation, include
the authority to endorse and negotiate any checks or instruments representing
proceeds of the Collateral in the name of the Pledgor; execute and give receipt
of any certificate of ownership of any document
<PAGE>
-10-
constituting any Collateral; transfer title to any item of Collateral; sign the
name of the Pledgor on any documents deemed necessary or appropriate by the
Trustee to preserve, protect or perfect the security interest in the Collateral
and to file the same; prepare, file and sign the Pledgor's name on any notice of
any Lien and take any other action arising from or incident to the powers
granted to the Trustee in this Pledge Agreement.
(f) In addition to the rights provided under this Pledge Agreement, upon an
Event of Default (as defined in the Indenture) and for so long as such Event of
Default continues, the Trustee may exercise in respect of the Collateral, in
addition to any other rights and remedies provided for herein or otherwise
available to it, all the rights and remedies of a secured party under the
Revised UCC or other applicable law, and the Trustee may also, upon obtaining
possession of the Collateral as set forth herein, without notice to the Pledgor
or Parent except as specified below, sell the Collateral or any part thereof in
one or more parcels at public or private sale, at any exchange or broker's
board, at any of the Trustee's offices or elsewhere, for cash, on credit or for
future delivery, and upon such other terms as the Trustee may deem commercially
reasonable. The Pledgor acknowledges and agrees that any such private sale may
result in prices and other terms less favorable to the seller than if such sale
were a public sale. The Pledgor agrees that, to the extent notice of sale shall
be required by law, at least ten (10) days' notice to the Pledgor of the time
and place of any public sale or the time after which any private sale is to be
made shall constitute reasonable notification. The Trustee shall not be
obligated to make any sale regardless of notice of sale having been given. The
Trustee may adjourn any public or private sale from time to time by announcement
at the time and place fixed therefor, and such sale may, without further notice,
be made at the time and place to which it was so adjourned.
(g) Nothing contained in any provision of this Pledge Agreement shall give
rise to any rights of the Pledgor with respect to the Collateral other than as
the beneficial owner of the Collateral pledged to and subject to the exclusive
direction and control of the Trustee.
(h) On the Issue Date, and on each anniversary of the Issue Date thereafter
until the date on which this Pledge Agreement shall terminate, each of the
Trustee and the Securities Intermediary shall receive an Opinion of Counsel to
the Parent and the Pledgor, dated each such date as applicable, with respect to
the security interest created hereby and substantially in the form described in
Section 10.02 of the Indenture and which shall, to the extent required, meet the
requirements of Section 314(b) of the Trust Indenture Act of 1939, as amended
(the "TIA") and shall comply with the Indenture.
SECTION 4. Conduct of the Securities Account; Specified Amount.
---------------------------------------------------
4.1. Maintaining the Securities Account. Subject to Section 15.5, so long
----------------------------------
as any Secured Obligation shall remain unpaid:
<PAGE>
-11-
(a) the Pledgor will maintain the Securities Account with the Securities
Intermediary,
and
(b) it shall be a term and condition of the Securities Account,
notwithstanding any term or condition to the contrary in any other agreement
relating to the Securities Account, and except as specifically otherwise
provided herein (including in Section 4.3 hereof), that no amount (including
interest on or proceeds of the Collateral) shall be paid or released to or for
the account of, or withdrawn by or for the account of, the Pledgor or any other
Person other than the Trustee or its designated agent in accordance with the
terms of this Pledge Agreement.
4.2. Specified Amount. The Pledgor will procure that the Pledged
----------------
Securities have, at all times as and from the Issue Date and at any time while
this Pledge Agreement is in force, an aggregate nominal amount at least equal to
the Specified Amount (as appropriate based on the remaining interest payments in
the First Six Scheduled Interest Payments).
4.3. Substitution of Pledged Securities. The Pledgor may request of the
-----------------------------------
Securities Intermediary not more than once during the term of this Pledge
Agreement that alternative Government Securities be substituted for the Pledged
Securities or any part thereof. The Securities Intermediary will consent to
such request for substitution (without being responsible for any loss occasioned
thereby without its gross negligence or willful misconduct), but only if (i) no
Event of Default shall have occurred and be continuing, (ii) the securities so
substituted ("Substituted Securities") are of at least the Specified Amount (as
appropriate based on the remaining interest payments in the First Six Scheduled
Interest Payments), (iii) upon such substitution the Securities Intermediary
shall have received (a) an accountant's opinion of an internationally recognized
firm of independent public accountants selected by the Pledgor (an "Accountants'
Opinion") stating that the Pledged Securities are of at least the principal
amount (based on generally accepted accounting principles in the United States)
of such Specified Amount, (b) an Opinion of Counsel in form and substance
satisfactory to the Securities Intermediary, confirming that the Beneficiaries
have a first priority security interest in all right, title and interest in and
to the Collateral and a perfected security interest in all right, title and
interest in and to all Pledged Securities deposited in, and carried in, the
Securities Account, and (c) such Officer's Certificate as the Securities
Intermediary may reasonably request and (iv) such other steps are taken and
matters are satisfied as the Securities Intermediary may specify.
4.4. Delivery of Pledged Securities; Registration of Pledged Securities.
------------------------------------------------------------------
The Pledged Securities shall be delivered to the Securities Account through
action by Morgan Guaranty Trust Company of New York, Brussels office, as
operator of the Euroclear system,
<PAGE>
-12-
Euroclear or Clearstream or another securities intermediary approved by the
Securities Intermediary. All Pledged Securities shall be registered in the name
of "The Chase Manhattan Bank as Securities Intermediary for the Securities
Account of CompleTel Escrow B.V."
4.5. Interest. All interest, if any, earned on the Collateral in the
--------
Securities Account shall remain deposited in the Securities Account as
additional Collateral for the exclusive benefit of the Beneficiaries and shall
be required to be disbursed in accordance with the terms hereof.
SECTION 5. Disbursements of Collateral.
---------------------------
(a) Payment Notice and Disbursement Request; Disbursements. The Trustee
------------------------------------------------------
shall, at least five Business Days prior to the Interest Payment Date (as
defined in the Indenture) for any of the First Six Scheduled Interest Payments,
submit to the Securities Intermediary a completed Payment Notice and
Disbursement Request substantially in the form of Exhibit B hereto.
The Securities Intermediary's disbursement pursuant to any Payment Notice
and Disbursement Request shall be subject to the satisfaction of the applicable
conditions set forth in Section 3(b). Provided such Payment Notice and
Disbursement Request is not rejected by it, the Securities Intermediary, as soon
as reasonably practicable, but in no event later than 9:00 a.m. (New York City
time) one day preceding the applicable Interest Payment Date, shall disburse the
amounts requested in such Payment Notice and Disbursement Request by wire or
book-entry transfer of immediately available amounts to the to the Principal
Paying Agent who will disburse the amounts requested in such Payment Notice and
Disbursement Request for the benefit of the holders of the Notes in accordance
with the terms of the Indenture. The Securities Intermediary will take such
action, including the release of cash and/or the liquidation of Pledged
Securities in order to have adequate amounts to satisfy the amount requested in
the Payment Notice and Disbursement Request. Such action may be taken by the
Securities Intermediary at any time after the completed Payment Notice and
Disbursement Request is delivered to the Securities Intermediary. The
Securities Intermediary shall notify the Trustee as soon as reasonably possible
(but not later than two (2) Business Days from the date of receipt of the
Payment Notice and Disbursement Request) if any Payment Notice and Disbursement
Request is rejected and the reason(s) therefor. In the event such rejection is
based upon nonsatisfaction of the condition in Section 5(b)(i) below, the
Trustee shall thereupon resubmit the Payment Notice and Disbursement Request
with appropriate changes.
(b) Conditions Precedent to Disbursement. The Securities Intermediary's
------------------------------------
payment of any disbursement shall be made only if: (i) the Trustee shall have
submitted, in accordance with the provisions of Section 5(a) herein, a completed
Payment Notice and Disbursement Request to the Securities Intermediary
substantially in the form of Exhibit B with blanks ap-
<PAGE>
-13-
propriately filled in and (ii) the Securities Intermediary shall not have
received any notice from the Trustee that as a result of an Event of Default the
indebtedness represented by the Securities has been accelerated and has become
due and payable (in which event the Securities Intermediary shall apply all
Available Funds as required by Section 3.3(b)(iii)).
(c) Retired Notes. In the event a portion of the Notes has been retired by
-------------
the Parent and submitted to the Trustee for cancellation and there is no Default
or Event of Default under the Indenture, the lesser of (A) any amounts remaining
in the Securities Account that are in excess of the amount sufficient to pay
interest through and including the First Six Scheduled Interest Payments on the
Notes not so retired and (B) the interest payments which have not previously
been made on such retired Notes for each Interest Payment Date through the First
Six Scheduled Interest Payments shall, upon the written request of the Pledgor
to the Securities Intermediary and the Trustee, be paid to the Pledgor upon
compliance with the release of collateral provisions of the TIA and upon receipt
by the Securities Intermediary of a notice relating thereto from the Trustee.
SECTION 6. Representations and Warranties. The Parent and the Pledgor
------------------------------
hereby represent and warrant, as of the date hereof and as of the date on which
any Substituted Securities first form the whole or any part of the Pledged
Securities, that:
(a) The execution and delivery by the Parent and the Pledgor of and the
performance by the Parent and the Pledgor of their respective obligations under
this Pledge Agreement have been duly authorized by all necessary corporate or
other applicable action and will not contravene or constitute a default under
(i) any provision of applicable law, (ii) either the Parent's or the Pledgor's
articles of association (or other similar organizational documents), (iii) any
material agreement or other instrument binding upon the Parent or the Pledgor or
any of their respective subsidiaries or (iv) any judgment, order or decree
binding on the Parent or the Pledgor or their respective subsidiaries of any
governmental or regulatory body, agency or court having jurisdiction over the
Parent or the Pledgor or any of their respective subsidiaries, or result in the
creation or imposition of a Lien on any assets of the Parent or the Pledgor
except for the security interests granted under this Pledge Agreement; no
consent, approval, authorization or order of, or qualification with, any
governmental body or agency is required (i) for the performance by the Parent or
the Pledgor of their respective obligations under this Pledge Agreement, (ii)
for the creation of the security by the Parent and the Pledgor pursuant hereto,
or (iii) for the exercise by the Trustee of the rights or the remedies provided
for in this Pledge Agreement in respect of the Collateral.
(b) The Securities Account is, and the Pledged Securities and the Cash
Collateral will be, beneficially owned by the Pledgor, free and clear of any
Lien or claims of any Person (except for the security interest granted to the
Beneficiaries).
<PAGE>
-14-
(c) This Pledge Agreement has been validly executed and delivered by the
Parent and the Pledgor and (assuming the due authorization and valid execution
and delivery of this Pledge Agreement by the Securities Intermediary and the
Trustee and enforceability of the Pledge Agreement against the Securities
Intermediary and the Trustee in accordance with its terms) constitutes valid and
binding obligations of the Parent and the Pledgor, enforceable against the
Parent and the Pledgor in accordance with its terms, except that the enforcement
thereof may be limited by the Enforceability Limitations.
(d) Upon the transfer and pledge to the Securities Intermediary for the
benefit of the Beneficiaries of the Collateral in accordance with the provisions
of this Pledge Agreement, the security created under and pursuant hereto will be
a first priority perfected security interest in the Collateral and each part
thereof, enforceable as such against all creditors of the Parent and the Pledgor
and any Persons purporting to purchase any of the Collateral from the Parent or
the Pledgor, except in each case as enforcement may be affected by general
equitable principles.
(e) There are no legal or governmental proceedings pending or, to the best
of the Parent's and the Pledgor's knowledge and belief, threatened to which the
Parent or the Pledgor or any of their respective subsidiaries is a party or to
which any of the property or assets of the Parent or the Pledgor or any of their
respective subsidiaries is subject that would materially adversely affect the
power or ability of the Parent or the Pledgor to perform their respective
obligations under this Pledge Agreement or the transactions contemplated hereby.
(f) The creation of security over the Collateral under and pursuant to this
Pledge Agreement is not prohibited by law or governmental regulation applicable
to the Pledgor.
(g) No Default or Event of Default exists.
(h) The Pledgor has full rights and title in and to the Collateral
sufficient to enable the Pledgor to grant the Liens on and securities interests
in such Collateral to the extent provided herein.
SECTION 7. Further Assurance. The Pledgor will, promptly upon request by
-----------------
the Securities Intermediary or the Trustee (which request the Trustee may submit
in its discretion or at the direction of the holders of a majority in principal
amount of the Notes then outstanding), execute and deliver or cause to be
executed and delivered, or use its reasonable best efforts to procure, all
assignments, instruments and other documents, deliver any instruments to the
Securities Intermediary or the Trustee, as applicable, and take any other
actions that are necessary or desirable to perfect, continue the perfection of,
or protect the first priority of the Beneficiaries' security interest in and to
the Collateral, to protect the Collateral against the rights, claims, or
interests of third Persons (other than any such rights, claims or interest
cre-
<PAGE>
-15-
ated by or arising through the Trustee), or to enable the Trustee to exercise
and enforce its rights and remedies hereunder with respect to any Collateral or
to otherwise effect the purposes of this Pledge Agreement. Each of the Parent
and the Pledgor also agree, whether or not requested by the Trustee, to use its
reasonable best efforts to take all action necessary to perfect or continue the
perfection of, or to protect the first priority of, the Beneficiaries' security
interest in and to the Collateral and to protect the Collateral against the
rights, claims or interests of third Persons (other than any such rights, claims
or interests created by or arising through the Trustee). The Parent and the
Pledgor further agree to notify the Trustee of any notice or claim sent by a
third Person relating to or affecting or likely to affect the Pledged Securities
and produce the same.
SECTION 8. Covenants. The Parent and the Pledgor covenant and agree with
---------
the Trustee for the benefit of the Beneficiaries that from and after the date of
this Pledge Agreement until the payment in full of the Secured Obligations:
(a) (i) the Pledgor will not (and will not purport to) sell, assign or
otherwise dispose of, or grant any option or warrant with respect to, any of the
Collateral and (ii) the Pledgor will not create or permit to exist any Lien upon
or with respect to any of the Collateral (except for the security interests
granted under this Pledge Agreement for the Beneficiaries and any Lien created
by or arising through the Trustee) and at all times will be the sole beneficial
owner of the Collateral; and
(b) the Pledgor will not (i) enter into any agreement or understanding that
restricts or inhibits or purports to restrict or inhibit the Beneficiaries'
rights or remedies hereunder, including, without limitation, the Beneficiaries'
right to sell or otherwise dispose of the Collateral or (ii) fail to pay or
discharge any tax, assessment or levy of any nature with respect to the
Collateral.
SECTION 9. The Trustee May Perform. Without limiting the authority
-----------------------
granted under Section 3.3(e), if the Pledgor fails to perform any agreement
contained herein, the Trustee may, but shall not be obligated to, itself
perform, or cause performance of, such agreement, and the expenses of the
Trustee incurred in connection therewith shall be payable by the Pledgor and
shall form part of the Secured Obligations.
SECTION 10. Securities Intermediary.
-----------------------
(a) Limitation of the Securities Intermediary's Liability; Responsibilities
-----------------------------------------------------------------------
of the Securities Intermediary. The Securities Intermediary's responsibility
- -------------------------------
and liability under this Pledge Agreement shall be limited as follows: (i) the
Securities Intermediary does not represent, warrant or guaranty to the holders
of the Notes from time to time the performance of the Parent or the Pledgor;
(ii) the Securities Intermediary shall have no responsibility to the Parent
<PAGE>
-16-
or the Pledgor or the holders of the Notes or the Trustee from time to time as a
consequence of performance or non-performance by the Securities Intermediary
hereunder, other than as a result of any gross negligence or willful misconduct
of the Securities Intermediary; (iii) the Parent and the Pledgor shall remain
solely responsible for all aspects of their business and conduct; and (iv) the
Securities Intermediary is not obligated to supervise, inspect or inform the
Parent, the Pledgor or any third party of any matter referred to above. In no
event shall the Securities Intermediary be liable (A) for acting in accordance
with or relying upon any instruction, deemed notice, notice, demand, certificate
or document from the Parent, the Pledgor or any entity acting on behalf of the
Parent or the Pledgor, (B) for any consequential, punitive or special damages,
(C) for the acts or omissions of its correspondents, designees, subagents or
subcustodians chosen in due care, including the Securities Intermediary or (D)
by reason of any occurrence beyond the control of the Securities Intermediary.
No implied covenants or obligations shall be inferred from this Pledge
Agreement against the Securities Intermediary, nor shall the Securities
Intermediary be bound by the provisions of any agreement beyond the specific
terms hereof. Specifically and without limiting the foregoing, the Securities
Intermediary shall in no event have any liability in connection with its
investment or liquidation, in good faith and in accordance with the terms
hereof, of any amounts or Pledged Securities held by it hereunder, including
without limitation any liability for any delay not resulting from gross
negligence or willful misconduct in such investment or liquidation, or for any
loss of principal or income incident to any such delay.
The Securities Intermediary and its agents shall be entitled to rely upon
any judicial order or judgment, upon any Opinion of Counsel or upon any
certification, instruction, notice, or other writing delivered to it by the
Parent, the Pledgor or the Trustee in compliance with the provisions of this
Pledge Agreement without being required to determine the authenticity or the
correctness of any fact stated therein or the propriety or validity of service
thereof. The Securities Intermediary may act in reliance upon any instrument
comporting with the provisions of this Pledge Agreement or signature believed by
it to be genuine and may assume that any Person purporting to give notice or
receipt or advice or make any statement or execute any document in connection
with the provisions hereof has been duly authorized to do so.
At the expense of the Pledgor, the Securities Intermediary may act pursuant
to the advice of counsel chosen by it with respect to any matter relating to
this Agreement and (subject to clause (ii) of the first paragraph of this
Section 10) shall not be liable for any action taken or omitted in accordance
with such advice.
The Securities Intermediary shall not be called upon to advise any party as
to selling or retaining, or taking or refraining from taking any action with
respect to, any securities or other property deposited hereunder.
<PAGE>
-17-
In the event of any ambiguity in the provisions of this Pledge Agreement
with respect to any amounts or property deposited hereunder, the Securities
Intermediary shall be entitled to refuse to comply with any and all claims,
demands or instructions with respect to such amounts or property, and the
Securities Intermediary shall not be or become liable for its failure or refusal
to comply with conflicting claims, demands or instructions. The Securities
Intermediary shall be entitled to refuse to act until either any conflicting or
adverse claims or demands shall have been finally determined by a court of
competent jurisdiction or settled by agreement between the Securities
Intermediary sufficient to save the Securities Intermediary harmless from and
against any and all loss, liability or expense that the Securities Intermediary
may incur by reason of its acting. The Securities Intermediary may, in
addition, elect in its sole option to commence an interpleader action or seek
other judicial relief or orders as the Securities Intermediary may deem
necessary. The costs and expenses incurred in connection with such proceedings
shall be paid by and shall be deemed an obligation of the Pledgor.
No provision of this Pledge Agreement shall require the Securities
Intermediary to expend or risk its own funds or otherwise incur any financial
liability in the performance of any of its duties hereunder.
SECTION 11. Indemnity. The Parent and the Pledgor shall indemnify and
---------
hold harmless the Securities Intermediary and its directors, officers, agents,
employees, and controlling Persons from and against any and all claims, actions,
obligations, liabilities and expenses, including reasonable costs and expenses,
investigative fees and costs, legal fees and expenses and claims for damages,
arising from the Securities Intermediary's performance or non-performance, or in
connection with its acceptance or appointment as Securities Intermediary under
this Pledge Agreement, except to the extent that such liability, expense,
action, obligation or claim is directly attributable to the gross negligence or
willful misconduct of any of the foregoing Persons. To the extent that the
undertaking to indemnify, pay and hold harmless set forth in the preceding
sentence may be unenforceable because it is violative of the law or public
policy, the Parent and the Pledgor shall contribute the maximum amount that it
is permitted under applicable law to the payment and satisfaction of all
indemnified liabilities incurred by any of the Persons indemnified hereunder.
The provisions of this Section 11 shall survive any termination, satisfaction or
discharge of this Pledge Agreement as well as the resignation or removal of the
Securities Intermediary.
SECTION 12. Remedies.
--------
(a) The Trustee and the holders of the Notes shall have, in addition to all
other rights given by law or by this Pledge Agreement or the Indenture, all of
the rights and remedies with respect to the Collateral of a secured party under
applicable law.
<PAGE>
-18-
(b) The Parent and the Pledgor further agree to use their reasonable best
efforts to do or cause to be done all such other acts as may be necessary to
make such sale or sales of all or any portion of the Collateral pursuant to this
Pledge Agreement valid and binding and in compliance with any and all applicable
requirements of law.
SECTION 13.
13.1. Expenses. The Pledgor will upon demand pay, and the Parent will
--------
guarantee payment, to the Securities Intermediary the amount of any and all
reasonable out of pocket expenses, including without limitation, the reasonable
fees, expenses and disbursements of its counsel and any experts or agents
retained by the Securities Intermediary, or which the Trustee may incur in
connection with (a) the custody or preservation of, the sale of and collection
from, or any other realisation upon, any of the Collateral, (b) the exercise or
enforcement of any of the rights of the Trustee and the holders of the Notes
hereunder or (c) the failure by the Parent or the Pledgor to perform or observe
any of the provisions hereof.
13.2. Stamp Duty and Taxes. The Pledgor shall pay promptly, and the
--------------------
Parent shall guarantee payment, and in any event before any penalty becomes
payable, all stamp, documentary and similar taxes, if any, payable in connection
with the entry into, the performance of, the enforcement of or admissibility in
evidence of this Pledge Agreement or any other document referred to herein, and
shall indemnify the Trustee against any liability with respect to or resulting
from any delay in paying or omission to pay, any such tax.
SECTION 14. Security Interest Absolute. All rights of the Trustee and the
--------------------------
holders of the Notes and the security interests hereunder, and all obligations
of the Pledgor hereunder, shall be absolute and unconditional irrespective of:
(a) any lack of validity or enforceability of the Indenture or any other
agreement or instrument relating thereto;
(b) any change in the time, manner or place of payment of, or in any term
of, all or any of the Secured Obligations, or any other amendment or waiver of
or any consent to any departure from the Indenture;
(c) any exchange, surrender, release or non-perfection of any Liens on any
Collateral for all or any of the Secured Obligations; or
(d) to the extent permitted by applicable law, any other circumstance which
might otherwise constitute a defense available to, or a discharge of, the
Pledgor in respect of the Secured Obligations or of this Pledge Agreement.
<PAGE>
-19-
SECTION 15. Miscellaneous.
-------------
15.1. Notices. Any notice or communication shall be sufficiently given if
-------
in writing and delivered in person or sent by commercial courier service or
telecopier communication, addressed as follows:
if to the Parent or the Pledgor:
c/o CompleTel Europe N.V.
Kruisweg 609
2132 NA Hoofdorp
The Netherlands
Attention: Chief Financial Officer
with a copy to:
ING Trust (Netherlands) B.V.
P.O. Box 2838
1000 CV Amsterdam, The Netherlands
Attention: Paul van Wittereen
and with a copy to:
Prinses Drenstraat 61
1077 WV Amsterdam, The Netherlands
Attention: Managing Director
and with a copy to:
Holme Roberts & Owen LLP
1700 Lincoln, Suite 4100
Denver, Colorado 80203
Attention: W. Dean Salter
if to the Trustee:
The Chase Manhattan Bank
450 W. 33rd Street
15th Floor
New York, NY 10001
Attention: Global Trust Services
<PAGE>
-20-
The Parent, the Pledgor and the Trustee may designate additional or
different addresses for notices or communications from time to time.
15.2. Severability. The provision of this Pledge Agreement are severable,
------------
and if any clause or provision shall be held invalid, illegal or unenforceable
in whole or in part in any jurisdiction, then such invalidity or
unenforceability shall have affect only in such jurisdiction and only on such
clause or provisions, or part thereof, and shall not in any manner affect such
clause or provisions in any other jurisdiction or any other clause or provision
of this Pledge Agreement in any jurisdiction.
15.3. Headings. The headings in this Pledge Agreement have been inserted
--------
for convenience of reference only, are not to be considered a part thereof and
shall in no way modify or restrict any of the terms or provisions hereof.
15.4. Counterparts. This Pledge Agreement may be signed in two or more
------------
counterparts, each of which shall be deemed an original, but all of which shall
together constitute one and the same agreement.
15.5. Termination. This Pledge Agreement shall terminate automatically
-----------
ten (10) days following payment of the First Six Scheduled Interest Payments in
accordance with the terms hereof (including the Pledged Securities), unless
sooner terminated by agreement of the parties hereto (in accordance with the
terms hereof and not in violation of the Indenture; provided, that the Trustee
--------
may not agree to terminate this Pledge Agreement prior to the full disbursement
of the First Six Scheduled Interest Payments unless it has received the consent
of 100% of the holders of all of the Notes outstanding); provided, however, that
-------- -------
the obligations of the Pledgor and the Parent under Section 2.3, Sections 11 and
13 (and any existing claims thereunder) shall survive termination of this Pledge
Agreement and the resignation of the Securities Intermediary; provided, further,
-------- -------
however, that until such tenth day, the Parent will cause this Pledge Agreement
- -------
(or any permitted successor agreement) to remain in effect and will cause there
to be a securities intermediary (including any permitted successor to the
Securities Intermediary) acting hereunder (or under any such permitted successor
agreement).
15.6. Waiver. Any party hereto may specifically waive any breach of this
------
Pledge Agreement by any other party, but no such waiver shall be deemed to have
been given unless such waiver is in writing, signed by the waiving party and
specifically designating the breach waived, nor shall any such waiver constitute
a continuing waiver of similar or other breaches.
<PAGE>
-21-
15.7. Assignment. This Pledge Agreement is personal to the parties
----------
hereto, and the rights and duties of any party hereunder shall not be assignable
except with the prior written consent of the other parties. Notwithstanding the
foregoing, this Pledge Agreement shall inure to and be binding upon the parties
and their successors and permitted assigns.
15.8. Benefit. The parties hereto and their successors and permitted
-------
assigns, but no others, shall be bound hereby and entitled to the benefits
hereof; provided, however, that the Beneficiaries and their assigns shall be
-------- -------
entitled to the benefits hereof and to enforce this Pledge Agreement.
15.9. Certain Survival Provisions. All representations, warranties and
---------------------------
covenants of the Parent and the Pledgor contained herein shall survive the
execution and delivery of this Pledge Agreement, and shall terminate only upon
the termination of this Pledge Agreement.
15.10. Authority of the Trustee. (a) The Trustee shall have and be
------------------------
entitled to exercise all powers hereunder that are specifically granted to the
Trustee by the terms hereof, together with such powers as are reasonably
incident thereto. The Trustee may perform any of its duties hereunder or in
connection with the Collateral by or through agents or employees and shall be
entitled to retain counsel and to act in reliance upon the advice of counsel
concerning all such matters. Except as otherwise expressly provided in this
Pledge Agreement or the Indenture, neither the Trustee nor any director,
officer, employee, attorney or agent of the Trustee shall be liable to the
Parent or the Pledgor for any action taken or omitted to be taken by the
Trustee, in its capacity as Trustee hereunder, except for its own bad faith,
gross negligence or willful misconduct, and the Trustee shall not be responsible
for the validity, effectiveness, sufficiency or priority hereof or of any
document or security furnished pursuant hereto. The Trustee and its directors,
officers, employees, attorneys and agents shall be entitled to rely on any
communication, instrument or document believed by it or them to be genuine and
correct and to have been signed or sent by the proper Person or Persons.
(b) The Parent and the Pledgor acknowledge that the rights and
responsibilities of the Securities Intermediary under this Pledge Agreement with
respect to any action taken by the Trustee or the exercise or non-exercise by
the Trustee of any option, right, request, judgment or other right or remedy
provided for herein or resulting or arising out of this Pledge Agreement, as
between the Trustee and the holder of the Notes, be governed by the Indenture
and by such other agreements with respect thereto as may exist from time to time
among them but, as between the Trustee and the Parent and the Pledgor, the
Trustee shall be conclusively presumed to be acting as agent for the holders of
the Notes with full and valid authority so to act or refrain from acting, and
neither the Parent nor the Pledgor shall not be obligated or entitled to make
any inquiry respecting such authority.
<PAGE>
-22-
15.11. Time. Time is of the essence with respect to each provision of
----
this Pledge Agreement.
15.12. Entire Agreement; Amendments. This Pledge Agreement and the
----------------------------
Indenture contain the entire agreement among the parties with respect to the
subject matter hereof and supersede any and all prior agreements, understandings
and commitments, whether oral or written. This Pledge Agreement may be amended
only in accordance with Article Nine of the Indenture (with references therein
to the Indenture also deemed to be references to this Pledge Agreement) and
further by a writing signed by a duly authorized representative of each party
hereto.
SECTION 16. Agent for Service; Submission to Jurisdiction. (a) By the
---------------------------------------------
execution and delivery of this Agreement, each of the Parent and the Pledgor (i)
acknowledges that it has, by separate written instrument, designated and
appointed CT Corporation System, 1633 Broadway, New York, NY 10019 ("CT
Corporation System") (and any successor entity), as its authorized agent upon
which process may be served in any suit or proceeding arising out of or relating
to this Pledge Agreement that may be instituted in any federal or state court in
The City of New York, Borough of Manhattan, State of New York, and acknowledge
that CT Corporation System has accepted such designation, (ii) submits to the
jurisdiction of any such court in any such suit or proceeding and (iii) agrees
that service of process upon CT Corporation System and written notice of said
service to each of the Parent and the Pledgor in accordance with Section 15.1
shall be deemed in every respect effective service of process upon each of the
Parent and the Pledgor in any such suit or proceeding. Each of the Parent and
the Pledgor further agrees to take any and all action, including the execution
and filing of any and all documents and instruments as may be necessary to
continue such designation and appointment of CT Corporation System in full force
and effect so long as this Pledge Agreement is not terminated pursuant to
Section 15.5 hereof; provided that each of the Parent and the Pledgor may, and
--------
to the extent CT Corporation System ceases to be able to be served on the basis
contemplated herein shall, by written notice to the Securities Intermediary and
Trustee, designate such additional or alternative agent for service of process
under this Section 16 that (i) maintains an office located in the Borough of
Manhattan, City of New York, State of New York and (ii) is either (x) counsel
for the Parent or the Pledgor, as applicable, or (y) a corporate service company
which acts as agent for service of process for other Persons in the ordinary
course of its business. Such written notice shall identify the name of such
agent for service of process and the address of the office of such agent for
service of process in the Borough of Manhattan, City of New York, State of New
York.
(b) Applicable Law. The existence, validity, construction, operation and
--------------
effect of any and all terms and provisions of this Pledge Agreement shall be
determined in accordance with and governed by the laws of the State of New York,
without giving effect to applicable
<PAGE>
-23-
principles of conflicts of laws to the extent that the application of the law of
another jurisdiction would be required thereby.
(c) Judgment Currency. The Parent and the Pledgor each hereby agree to
-----------------
indemnify each Beneficiary against any loss incurred by such party as a result
of any judgment or order being given or made for any amount due under this
Pledge Agreement and such judgment or order being expressed and paid in a
currency (the "Judgment Currency") other than euro and as a result of any
variation as between (i) the rate of exchange at which the euro amount 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 euro 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, euro.
(d) Waiver of Immunity. To the extent that the Parent or the Pledgor has
------------------
or hereafter may acquire any immunity (sovereign or otherwise) from any legal
action, suit or proceeding, from jurisdiction of any court or any legal process
(whether service or notice, attachment in aid of execution or otherwise) with
respect to itself or any of its property, the Parent or the Pledgor, as
applicable, hereby irrevocably waives and agrees not to plead or claim such
immunity in respect of its obligations under this Pledge Agreement.
<PAGE>
-24-
IN WITNESS whereof the parties hereto have caused this Pledge Agreement to
be executed and delivered on the day and year first above written.
CompleTel Europe N.V.
By: /s/ William H. Pearson
-------------------------
Name: William H. Pearson
Title: Managing Director
CompleTel Escrow B.V.
By: /s/ James E. Dovey
-------------------------
Name: James E. Dovey
Title: Power of Attorney
<PAGE>
THE CHASE MANHATTAN BANK,
as Securities Intermediary
By: /s/ Catherine Donahue
------------------------
Name: Catherine Donahue
Title:
THE CHASE MANHATTAN BANK,
as Trustee
By: /s/ Catherine Donahue
------------------------
Name: Catherine Donahue
Title:
<PAGE>
COMPLETEL EUROPE N.V.
By: /s/ James Dovey
------------------
Name: James Dovey
Title:
INDIVIDUAL ACKNOWLEDGEMENT
STATE OF COLORADO)
: ss.:
COUNTY OF ARAPAHOE)
On this 12th day of April, 2000, before me personally appeared James E.
Dovey personally known to me to be the person that executed this instrument and
acknowledged to me that he/she executed the same.
WITNESS my hand and official seal.
Signature: /s/ Kathleen M. Hanlon (Seal)
-----------------------
<PAGE>
EXHIBIT A
---------
SECURITIES ACCOUNT CONTROL AGREEMENT
------------------------------------
This Securities Account Control Agreement dated as of April 13, 2000 among
CompleTel Escrow B.V., a Netherlands private company with limited liability,
with its corporate seat in Amsterdam, the Netherlands (the "Debtor"), The Chase
Manhattan Bank, as trustee under the Indenture between CompleTel Europe N.V., a
Netherlands limited liability company, and The Chase Manhattan Bank (the
"Indenture") dated as of April 13, 2000 (the "Secured Party"), on behalf of
itself and the other Beneficiaries (as defined in the Pledge Agreement (as
defined below)), and The Chase Manhattan Bank in its capacity as securities
intermediary (the "Securities Intermediary") under the Pledge Agreement (the
"Pledge Agreement") dated as of April 13, 2000 among CompleTel Europe N.V.,
CompleTel Escrow B.V., The Chase Manhattan Bank, as Trustee and the Securities
Intermediary. Capitalized terms used but not defined herein shall have the
meanings assigned in the Pledge Agreement.
Section 1. Establishment of Securities Account. The Securities
-----------------------------------
Intermediary hereby confirms that (i) the Securities Intermediary has
established account number 22320 in the name "Securities Account pledged by
CompleTel Escrow B.V. to The Chase Manhattan Bank, as Trustee, pursuant to the
Pledge Agreement dated as of April 13, 2000" (such account and any successor
account the "Securities Account"), (ii) the Securities Account is an account to
which a financial asset is or may be credited in accordance with this Agreement
and the Pledge Agreement, (iii) the Securities Intermediary shall, subject to
the terms of this Agreement, treat the Secured Party as entitled to exercise the
rights that comprise any financial asset credited to the Securities Account,
(iv) all property (including, without limitation, the Pledged Securities)
delivered to the Securities Intermediary pursuant to the Pledge Agreement will
be promptly credited to the Securities Account, (v) the Securities Intermediary
hereby agrees that any item of property (whether Pledged Securities, investment
property, financial asset, security, instrument or cash, as each such term is
defined in the Revised UCC (as defined below)) credited to the Securities
Account shall be treated as a financial asset (within the meaning of Section 8-
102(a)(9) of the 1994 Official Text of Article 8 of the Uniform Commercial Code
with conforming amendments to Article 9 (the "Revised UCC")), (vi) all
securities or other property underlying any financial assets credited to the
Securities Account shall be registered in the name of the Securities
Intermediary or endorsed to the Securities Intermediary and in no case will any
financial asset credited to the Securities Account be registered in the name of
the Debtor, payable to the order of the Debtor or specially endorsed to the
Debtor, except to the extent that the foregoing shall have been specially
endorsed to the Securities Intermediary or in blank, (vii) for the purposes
hereof "financial assets" shall include uninvested cash and Government
Obligations (as defined in the Pledge Agreement) and (viii) the Securities
Account is a "securities account" as such term is defined in Section 8-501(a) of
the Revised UCC maintained on the books of The Chase Manhattan Bank in the name
of the Trustee.
<PAGE>
-2-
Section 2. Entitlement Orders. If at any time the Securities Intermediary
------------------
shall receive any instruction or order issued by the Secured Party directing the
transfer or redemption of a financial asset or otherwise and relating to the
Securities Account, the Securities Intermediary shall comply with such
instruction or order without further consent by the Debtor or any other Person.
Section 3. Choice of Law. Both this Agreement and the Securities Account
-------------
(as well as the Security Entitlements related thereto) shall be governed by the
laws of the State of New York, without giving effect to applicable principles of
conflicts of laws to the extent that the application of the law of another
jurisdiction would be required thereby. Without limiting the foregoing, the
"Securities Intermediary's Jurisdiction" within the meaning of Section 8-110(e)
and Section 9-103(6)(d) of the Revised UCC is and shall continue to be the State
of New York.
Section 4. Conflict with Other Agreements. There are no other agreements
------------------------------
entered into between the Securities Intermediary, in its capacity as such, and
the Debtor or the Secured Party with respect to the Securities Account. In the
event of any conflict between this Agreement (or any portion thereof) and any
other agreement now existing or hereafter entered into, the terms of this
Agreement shall prevail.
Section 5. Amendments. No amendment or modification of this Agreement or
----------
waiver of any right hereunder shall be binding on any parties hereto unless it
is in writing and is signed by all of the parties hereto.
Section 6. Successors. The terms of this Agreement shall be binding upon,
----------
and shall inure to the benefit of, the parties hereto and their respective
corporate successors or heirs and personal representatives.
Section 7. Notices. Any notice, request or other communication required
-------
or permitted to be given under this Agreement shall be in writing and deemed to
have been properly given when delivered in person, or when sent by telecopy or
other electronic means and electronic confirmation of error free receipt is
received or two days after being sent by certified or registered United States
mail, return receipt requested, postage prepaid, addressed to the party at the
address set forth below.
Debtor: CompleTel Escrow B.V.
c/o CompleTel Europe N.V.
Kruisweg 609
2132 NA Hoofdorp
The Netherlands
<PAGE>
-3-
with a copy to:
ING Trust (Netherlands) B.V.
P.O. Box 2838
1000 CV Amsterdam, The Netherlands
Attention: Paul van Wittereen
and with a copy to:
Prinses Drenstraat 61
1077 WV Amsterdam, The Netherlands
Attention: Managing Director
and with a copy to:
Holme Roberts & Owen LLP
1700 Lincoln, Suite 4100
Denver, Colorado 80203
Attention: W. Dean Salter
Secured Party: The Chase Manhattan Bank
450 W. 33rd Street
15th Floor
New York, NY 10001
Attention: Global Trust Services
with a copy to
Milbank, Tweed, Hadley & McCloy LLP
1 Chase Manhattan Plaze
New York, NY 10005
Securities Intermediary: The Chase Manhattan Bank
450 W. 33rd Street
15th Floor
New York, NY 10001
Attention: Global Trust Services
with a copy to
Milbank, Tweed, Hadley & McCloy LLP
1 Chase Manhattan Plaze
New York, NY 10005
<PAGE>
-4-
Any party may change its address for notices in the manner set forth above.
Section 8. Termination. The rights and powers granted herein to the
-----------
Secured Party have been granted in order to perfect its security interests in
the Securities Account, are powers coupled with an interest and will neither be
affected by the bankruptcy of Debtor nor by the lapse of time. The obligations
of the Securities Intermediary hereunder shall continue in effect until the
security interest of the Secured Party in the Securities Account has been
terminated pursuant to the terms of the Pledge Agreement and the Secured Party
has notified the Securities Intermediary of such termination in writing.
Section 9. Counterparts. This Agreement may be executed in any number of
------------
counterparts, all of which shall constitute one and the same instrument, and any
party hereto may execute this Agreement by signing and delivering one or more
counterparts.
<PAGE>
-5-
COMPLETEL ESCROW B.V.,
AS DEBTOR
By:_____________________________
Name:
Title:
<PAGE>
-6-
THE CHASE MANHATTAN BANK,
AS TRUSTEE
By:_____________________________
Name:
Title: Trust Officer
THE CHASE MANHATTAN BANK,
AS SECURITIES INTERMEDIARY
By:_____________________________
Name:
Title: Trust Officer
<PAGE>
EXHIBIT B
---------
Form of Payment Notice and Disbursement Request
[Letterhead of the Trustee]
[Date]
The Chase Manhattan Bank
450 W. 33rd Street
15th Floor
New York, NY 10001
Attention: Global Trust Services
Re: Disbursement Request No. ____
[indicate whether revised]
Ladies and Gentlemen:
We refer to the Pledge Agreement, dated as of April 13, 2000 (the "Pledge
Agreement") among you (the "Securities Intermediary" which may also be referred
to as the "Escrow Agent"), the undersigned as Trustee, CompleTel Europe N.V.
(the "Parent") and CompleTel Escrow B.V. (the "Pledgor"). Capitalized terms
used herein shall have the meaning given in the Pledge Agreement.
This letter constitutes a Payment Notice and Disbursement Request under the
Pledge Agreement.
[choose one of the following, as applicable]
[The undersigned hereby notifies you that a scheduled interest payment in
the amount of (Euro)_______ is due and payable on ____________, ____ and
requests a disbursement of amounts contained in the Securities Account in such
amount to the Trustee.]
[The undersigned hereby notifies you that there has been an acceleration of
the maturity of the Notes. Accordingly, you are hereby requested to disburse
all remaining amounts contained in the Securities Account to the Trustee such
that the balance in the Securities Account is reduced to zero.]
In connection with the requested disbursement, the undersigned hereby
notifies you that:
<PAGE>
-2-
1. [The Notes have not, as a result of an Event of Default (as defined in
the Indenture), been accelerated and become due and payable.]
2. All prior disbursements from the Securities Account have been applied.
3. [add wire instructions]
The Securities Intermediary is entitled to rely on the foregoing in
disbursing amounts relating to this Payment Notice and Disbursement Request.
THE CHASE MANHATTAN BANK, as Trustee
By:
---------------------------------
Name:
Title:
<PAGE>
Exhibit 10.21
CompleTel Europe N.V.
14% Senior Notes due 2010
Exchange and Registration Rights Agreement
------------------------------------------
April 13, 2000
Goldman Sachs International
Paribas
Barclays Bank PLC
Merrill Lynch International
Salomon Brothers International Limited
c/o Goldman Sachs International
Peterborough Court
133 Fleet Street
London EC4A 2BB
England
Ladies and Gentlemen:
CompleTel Europe N.V., a limited liability company (inaamloze
vennootschap, or N.V.) incorporated under Dutch law, with its corporate seat in
Amsterdam, The Netherlands (the "Company"), proposes to issue and sell to the
Purchasers (as defined herein) upon the terms set forth in the Purchase
Agreement (as defined herein) its 200,000,000 14% Senior Notes due 2010,
which are unconditionally guaranteed on a senior unsecured basis by CompleTel
LLC, a Delaware limited liability company. As an inducement to the Purchasers
to enter into the Purchase Agreement and in satisfaction of a condition to the
obligations of the Purchasers thereunder, the Company agrees with the Purchasers
for the benefit of holders (as defined herein) from time to time of the
Registrable Securities (as defined herein) as follows:
1. Certain Definitions. For purposes of this Exchange and Registration Rights
Agreement, the following terms shall have the following respective meanings:
"Base Interest" shall mean the interest that would otherwise accrue on
the Securities under the terms thereof and the Indenture, without giving
effect to the provisions of this Agreement.
The term "broker-dealer" shall mean any broker or dealer registered
with the Commission under the Exchange Act.
<PAGE>
"Closing Date" shall mean April 14, 2000.
"Commission" shall mean the United States Securities and Exchange
Commission, or any other federal agency at the time administering the
Exchange Act or the Securities Act, whichever is the relevant statute for
the particular purpose.
"Effective Time," in the case of (i) an Exchange Registration, shall
mean the time and date as of which the Commission declares the Exchange
Registration Statement effective or as of which the Exchange Registration
Statement otherwise becomes effective and (ii) a Shelf Registration, shall
mean the time and date as of which the Commission declares the Shelf
Registration Statement effective or as of which the Shelf Registration
Statement otherwise becomes effective.
"Electing Holder" shall mean any holder of Registrable Securities that
has returned a completed and signed Notice and Questionnaire to the Company
in accordance with Section 3(d)(ii) or 3(d)(iii) hereof.
"Exchange Act" shall mean the Securities Exchange Act of 1934, or any
successor thereto, as the same shall be amended from time to time.
"Exchange Offer" shall have the meaning assigned thereto in Section
2(a) hereof.
"Exchange Registration" shall have the meaning assigned thereto in
Section 3(c) hereof.
"Exchange Registration Statement" shall have the meaning assigned
thereto in Section 2(a) hereof.
"Exchange Securities" shall have the meaning assigned thereto in
Section 2(a) hereof.
The term "holder" shall mean each of the Purchasers and other persons
who acquire Registrable Securities from time to time (including any
successors or assigns), in each case for so long as such person owns any
Registrable Securities.
"Indenture" shall mean the Indenture, dated as of April 13, 2000,
between the Company and The Chase Manhattan Bank, as Trustee, as the same
shall be amended from time to time.
"Notice and Questionnaire" means a Notice of Registration Statement
and Selling Securityholder Questionnaire substantially in the form of
Exhibit A hereto.
2
<PAGE>
The term "person" shall mean a corporation, limited liability company,
closed-company with limited liability, association, partnership,
organization, business, individual, government or political subdivision
thereof or governmental agency.
"Purchase Agreement" shall mean the Purchase Agreement, dated as of
April 6, 2000, between the Purchasers and the Company, relating to the
Securities.
"Purchasers" shall mean the Purchasers named in Schedule I to the
Purchase Agreement.
"Registrable Securities" shall mean the Securities; provided, however,
that a Security shall cease to be a Registrable Security when (i) in the
circumstances contemplated by Section 2(a) hereof, the Security has been
exchanged for an Exchange Security in an Exchange Offer as contemplated in
Section 2(a) hereof (provided that any Exchange Security that, pursuant to
the last two sentences of the first paragraph of Section 2(a), is included
in a prospectus for use in connection with resales by broker-dealers shall
be deemed to be a Registrable Security with respect to Sections 5, 6 and 9
until resale of such Registrable Security has been effected within the 180-
day period referred to in the penultimate sentence of the first paragraph
of Section 2(a); (ii) in the circumstances contemplated by Section 2(b)
hereof, a Shelf Registration Statement registering such Security under the
Securities Act has been declared or becomes effective and such Security has
been sold or otherwise transferred by the holder thereof pursuant to and in
a manner contemplated by such effective Shelf Registration Statement; (iii)
such Security is sold pursuant to Rule 144 under circumstances in which any
legend borne by such Security relating to restrictions on transferability
thereof, under the Securities Act or otherwise, is removed by the Company
in accordance with the Indenture; (iv) such Security is eligible to be sold
pursuant to paragraph (k) of Rule 144; or (v) such Security shall cease to
be outstanding.
"Registration Default" shall have the meaning assigned thereto in
Section 2(c) hereof.
"Registration Expenses" shall have the meaning assigned thereto in
Section 4 hereof.
"Resale Period" shall have the meaning assigned thereto in Section
2(a) hereof.
"Restricted Holder" shall mean (i) a holder that is an affiliate of
the Company within the meaning of Rule 405, (ii) a holder who acquires
Exchange Securities outside the ordinary course of such holder's business,
(iii) a holder who has arrangements or understandings with any person to
participate in the Exchange Offer for the purpose of distributing Exchange
Securities and (iv) a holder that is a broker-dealer, but only with respect
to Exchange Securities received by such broker-dealer pursuant
3
<PAGE>
to an Exchange Offer in exchange for Registrable Securities acquired by the
broker-dealer directly from the Company.
"Rule 144," "Rule 405" and "Rule 415" shall mean, in each case, such
rule promulgated under the Securities Act (or any successor provision), as
the same shall be amended from time to time.
"Securities" shall mean, collectively, the 200,000,000 14% Senior
Notes due 2010 of the Company to be issued and sold to the Purchasers, and
securities issued in exchange therefor or in lieu thereof pursuant to the
Indenture. Each Security is entitled to the benefit of the guarantee
provided for in the guarantee of CompleTel LLC (the "Guarantee") to the
extent provided therein and the pledge provided for in the Pledge
Agreement, date as of the date hereof, among the Company, CompleTel Escrow,
B.V., The Chase Manhattan Bank, as trustee, and The Chase Manhattan Bank,
as escrow agent. Unless the context otherwise requires, any reference
herein to "Security," an "Exchange Security" or a "Registrable Security"
shall include a reference to the related Guarantee, to the extent in effect
in accordance with the terms of the Guarantee.
"Securities Act" shall mean the Securities Act of 1933, or any
successor thereto, as the same shall be amended from time to time.
"Shelf Registration" shall have the meaning assigned thereto in
Section 2(b) hereof.
"Shelf Registration Statement" shall have the meaning assigned thereto
in Section 2(b) hereof.
"Special Interest" shall have the meaning assigned thereto in Section
2(c) hereof.
"Trust Indenture Act" shall mean the Trust Indenture Act of 1939, or
any successor thereto, and the rules, regulations and forms promulgated
thereunder, all as the same shall be amended from time to time.
Unless the context otherwise requires, any reference herein to a
"Section" or "clause" refers to a Section or clause, as the case may be, of this
Exchange and Registration Rights Agreement, and the words "herein," "hereof" and
"hereunder" and other words of similar import refer to this Exchange and
Registration Rights Agreement as a whole and not to any particular Section or
other subdivision.
2. Registration Under the Securities Act.
(a) Except as set forth in Section 2(b) below, the Company agrees to
file under the Securities Act, as soon as practicable, but no later than 90 days
after the Closing
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Date, a registration statement relating to an offer to exchange (such
registration statement, the "Exchange Registration Statement", and such offer,
the "Exchange Offer") any and all of the Securities for a like aggregate
principal amount of debt securities issued by the Company, which debt securities
are identical in all material respects, including but not limited to the minimum
denomination requirements set forth in Section 2.03 of the Indenture, to the
Securities (and are entitled to the benefits of a trust indenture which is
identical in all material respects to the Indenture or is the Indenture and
which has been qualified under the Trust Indenture Act), except that they have
been registered pursuant to an effective registration statement under the
Securities Act and do not contain provisions for the additional interest
contemplated in Section 2(c) below (such new debt securities hereinafter called
"Exchange Securities"). The Company agrees to use its best efforts to cause the
Exchange Registration Statement to become effective under the Securities Act as
soon as practicable, but no later than 150 days after the Closing Date, and to
use its best efforts to keep the Exchange Registration Statement effective until
the Exchange Offer is complete. The Exchange Offer will be registered under the
Securities Act on the appropriate form and will comply with all applicable
tender offer rules and regulations under the Exchange Act. The Company further
agrees to use its best efforts to complete the Exchange Offer promptly, but no
later than 180 days after the Closing Date, hold the Exchange Offer open for at
least 30 days (or longer if required by applicable law) after the date notice of
the Exchange Offer is mailed to holders of the Securities and exchange Exchange
Securities for all Registrable Securities that have been properly tendered and
not withdrawn on or prior to the expiration of the Exchange Offer. The Exchange
Offer will be deemed to have been "completed" only if the debt securities
received by holders other than Restricted Holders in the Exchange Offer for
Registrable Securities are, upon receipt, transferable by each such holder
without restriction under the Securities Act and the Exchange Act and without
material restrictions under the blue sky or securities laws of a substantial
majority of the States of the United States of America. The Exchange Offer shall
be deemed to have been completed upon the earlier to occur of (i) the Company
having exchanged the Exchange Securities for all outstanding Registrable
Securities pursuant to the Exchange Offer and (ii) the Company having exchanged,
pursuant to the Exchange Offer, Exchange Securities for all Registrable
Securities that have been properly tendered and not withdrawn before the
expiration of the Exchange Offer, which shall be on a date that is at least 30
days following the commencement of the Exchange Offer. The Company agrees (x) to
include in the Exchange Registration Statement a prospectus for use in any
resales by any holder of Exchange Securities that is a broker-dealer and (y) to
keep such Exchange Registration Statement effective for a period (the "Resale
Period") beginning when Exchange Securities are first issued in the Exchange
Offer and ending upon the earlier of the expiration of the 180th day after the
Exchange Offer has been completed or such time as such broker-dealers no longer
own any Registrable Securities and take any such other action as provided in
Section 3. With respect to such Exchange Registration Statement, such holders
shall have the benefit of the rights of indemnification and contribution set
forth in Sections 6(a), (c), (d) and (e) hereof.
Each holder that participates in the exchange Securities in the
Exchange Offer will be required, as a condition to its participation in the
Exchange Offer, to represent to
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<PAGE>
the Company in writing (which may be contained in the applicable letter of
transmittal) (i) that such holder is not an affiliate of the Company within the
meaning of the Securities Act or a broker-dealer tendering Securities acquired
directly from the Company for its own account, (ii) that any Exchange Securities
to be received by it will be acquired in the ordinary course of its business,
(iii) that at the time of the commencement of the Exchange Offer such holder
will have no arrangement or understanding with any person to participate in the
distribution (within the meaning of the Securities Act) of the Exchange
Securities in violation of the provisions of the Securities Act and (iv) that
such holder is not acting on behalf of a person who could not make the foregoing
representations.
(b) If (i) on or prior to the time the Exchange Offer is completed
existing laws, rules or Commission interpretations are changed such that the
Company is not permitted to consummate the Exchange Offer or the debt securities
received or to be received by any Electing Holder other than any Restricted
Holder in the Exchange Offer for Registrable Securities are not or would not be,
upon receipt, transferable by each such holder without restriction under the
Securities Act, (ii) the Exchange Offer has not been completed within 180 days
following the Closing Date, (iii) any of the Purchasers so requests if such
Purchaser holds Securities acquired as part of an unsold allotment or as to
which such Purchaser does not believe it would receive freely transferable
securities if it exchanged its Securities in the Exchange Offer or (iv) any
holder of Registrable Securities so requests if such holder is not permitted,
because of a change in applicable laws, rules or Commission interpretations, to
participate in the Exchange Offer, the Company shall, in lieu of (or, in the
case of clause (iv), in addition to) conducting the Exchange Offer contemplated
by Section 2(a), file under the Securities Act as soon as practicable, but no
later than 60 days after the time such obligation to file arises (upon the
earliest to occur of (i) through (iv) above), a "shelf" registration statement
providing for the registration of, and the sale on a continuous or delayed basis
by the holders of, all of the Registrable Securities, pursuant to Rule 415 or
any similar rule that may be adopted by the Commission (such filing, the "Shelf
Registration" and such registration statement, the "Shelf Registration
Statement"). The Company agrees to use its best efforts (x) to cause the Shelf
Registration Statement to become or be declared effective by the 60th day after
such Shelf Registration Statement is filed but in no event later than 210 days
after the Closing Date and to keep such Shelf Registration Statement
continuously effective for a period ending on the earlier of the second
anniversary of the Effective Time or such time as there are no longer any
Registrable Securities outstanding, provided, however, that no holder shall be
entitled to be named as a selling securityholder in the Shelf Registration
Statement or to use the prospectus forming a part thereof for resales of
Registrable Securities unless such holder is an Electing Holder, and (y) after
the Effective Time of the Shelf Registration Statement, promptly upon the
request of any holder of Registrable Securities that is not then an Electing
Holder, to take any action reasonably necessary to enable such holder to use the
prospectus forming a part thereof for resales of Registrable Securities,
including, without limitation, any action necessary to identify such holder as a
selling securityholder in the Shelf Registration Statement, provided, however,
that nothing in this clause (y) shall relieve any such holder of the obligation
to return a completed and signed Notice and Questionnaire to the Company in
accordance with Section 3(d)(iii) hereof.
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<PAGE>
The Company further agrees to supplement or make amendments to the Shelf
Registration Statement, as and when required by the rules, regulations or
instructions applicable to the registration form used by the Company for such
Shelf Registration Statement or by the Securities Act or rules and regulations
thereunder for shelf registration, and the Company agrees to furnish to each
Electing Holder copies of any such supplement or amendment prior to its being
used or promptly following its filing with the Commission.
(c) In the event that (i) the Company has not filed the Exchange
Registration Statement or Shelf Registration Statement on or before the date on
which such registration statement is required to be filed pursuant to Section
2(a) or 2(b), respectively, (ii) such Exchange Registration Statement or Shelf
Registration Statement has not become effective or been declared effective by
the Commission on or before the date on which such registration statement is
required to become or be declared effective pursuant to Section 2(a) or 2(b),
respectively, (iii) the Exchange Offer has not been completed on or prior to the
180th day following the Closing Date (if the Exchange Offer is then required to
be made) or (iv) any Exchange Registration Statement required by 2(a) or Shelf
Registration Statement required by Section 2(b) is declared effective but shall
thereafter either be withdrawn by the Company, become unusable or become subject
to an effective stop order issued pursuant to Section 8(d) of the Securities Act
suspending the effectiveness of such registration statement such that it is not
effective for the period required by Section 2(a) or Section 2(b), without, in
the case of a Shelf Registration Statement, an additional shelf registration
statement being declared effective, for more than 45 days in the aggregate in
any 12-month period (each such event referred to in clauses (i) through (iv), a
"Registration Default"), then, as liquidated damages for such Registration
Default, subject to the provisions of Section 9(b), special interest ("Special
Interest"), in addition to the Base Interest, shall accrue on the aggregate
principal amount of the outstanding Securities at a per annum rate of 0.25% upon
the occurrence of each Registration Default, which Special Interest rate will
increase by an additional per annum rate of 0.25% each 90-day period that such
Registration Default continues under any such circumstances, with an aggregate
maximum per annum Special Interest rate of 2.0%. All accrued Special Interest
shall be paid in cash by the Company on each Interest Payment Date (as defined
in the Indenture). Following the cure of all Registration Defaults, the accrual
of Special Interest will cease. Upon any Registration Default, so long as the
Securities are listed in the Luxembourg Stock Exchange or another exchange and
the rules of such exchange so require, the Company shall provide a notice in a
publication with circulation in Luxembourg describing such event giving rise to
the obligation to pay Special Interest.
(d) The Company shall take all actions necessary or advisable to be
taken by it to ensure that the transactions contemplated herein are effected as
so contemplated, including all actions necessary or desirable to register the
Guarantee under the Registration Statement contemplated in Section 2(a) or 2(b)
hereof, as applicable, to the extent the Guarantee, by its terms, requires the
maintenance of the Guarantee at such time.
(e) Any reference herein to a registration statement as of any time
shall be deemed to include any document incorporated, or deemed to be
incorporated, therein by
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<PAGE>
reference as of such time and any reference herein to any post-effective
amendment to a registration statement as of any time shall be deemed to include
any document incorporated, or deemed to be incorporated, therein by reference as
of such time.
3. Registration Procedures.
If the Company files a registration statement pursuant to Section 2(a)
or Section 2(b), the following provisions shall apply:
(a) At or before the Effective Time of the Exchange Offer or the Shelf
Registration, as the case may be, the Company shall qualify the Indenture under
the Trust Indenture Act of 1939.
(b) In the event that such qualification would require the appointment
of a new trustee under the Indenture, the Company shall appoint a new trustee
thereunder pursuant to the applicable provisions of the Indenture.
(c) In connection with the Company's obligations with respect to the
registration of Exchange Securities as contemplated by Section 2(a) (the
"Exchange Registration"), if applicable, the Company shall, as soon as
practicable (or as otherwise specified):
(i) prepare and file with the Commission, as soon as practicable but
no later than 90 days after the Closing Date, an Exchange Registration
Statement on any form which may be utilized by the Company and which shall
permit the Exchange Offer and resales of Exchange Securities by broker-
dealers during the Resale Period to be effected as contemplated by Section
2(a), and use its best efforts to cause such Exchange Registration
Statement to become effective as soon as practicable thereafter, but no
later than 150 days after the Closing Date;
(ii) as soon as practicable prepare and file with the Commission such
amendments and supplements to such Exchange Registration Statement and the
prospectus included therein as may be necessary to effect and maintain the
effectiveness of such Exchange Registration Statement for the periods and
purposes contemplated in Section 2(a) hereof and as may be required by the
applicable rules and regulations of the Commission and the instructions
applicable to the form of such Exchange Registration Statement, and
promptly provide each broker-dealer holding Exchange Securities with such
number of copies of the prospectus included therein (as then amended or
supplemented), in conformity in all material respects with the requirements
of the Securities Act and the Trust Indenture Act and the rules and
regulations of the Commission thereunder, as such broker-dealer reasonably
may request prior to the expiration of the Resale Period, for use in
connection with resales of Exchange Securities;
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<PAGE>
(iii) promptly notify each broker-dealer that has requested or
received copies of the prospectus included in such registration statement,
and confirm such advice in writing, (A) when such Exchange Registration
Statement or the prospectus included therein or any prospectus amendment or
supplement or post-effective amendment has been filed, and, with respect to
such Exchange Registration Statement or any post-effective amendment, when
the same has become effective, (B) of any comments by the Commission and by
the blue sky or securities commissioner or regulator of any state with
respect thereto or any request by the Commission for amendments or
supplements to such Exchange Registration Statement or prospectus or for
additional information, (C) of the issuance by the Commission of any stop
order suspending the effectiveness of such Exchange Registration Statement
or the initiation or threatening of any proceedings for that purpose, (D)
if at any time the representations and warranties of the Company
contemplated by Section 5 cease to be true and correct in all material
respects, (E) of the receipt by the Company of any notification with
respect to the suspension of the qualification of the Exchange Securities
for sale in any jurisdiction or the initiation or threatening of any
proceeding for such purpose, or (F) at any time during the Resale Period
when a prospectus is required to be delivered under the Securities Act,
that such Exchange Registration Statement, prospectus, prospectus amendment
or supplement or post-effective amendment does not conform in all material
respects to the applicable requirements of the Securities Act and the Trust
Indenture Act and the rules and regulations of the Commission thereunder or
contains an untrue statement of a material fact or omits to state any
material fact required to be stated therein or necessary to make the
statements therein not misleading in light of the circumstances then
existing;
(iv) in the event that the Company would be required, pursuant to
Section 3(c)(iii)(F) above, to notify any broker-dealers holding Exchange
Securities, without delay prepare and furnish to each such holder a
reasonable number of copies of a prospectus supplemented or amended so
that, as thereafter delivered to purchasers of such Exchange Securities
during the Resale Period, such prospectus shall conform in all material
respects to the applicable requirements of the Securities Act and the Trust
Indenture Act and the rules and regulations of the Commission thereunder
and shall not contain an untrue statement of a material fact or omit to
state a material fact required to be stated therein or necessary to make
the statements therein not misleading in light of the circumstances then
existing;
(v) use its best efforts to obtain the withdrawal of any order
suspending the effectiveness of such Exchange Registration Statement or any
post-effective amendment thereto at the earliest practicable date;
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<PAGE>
(vi) use its best efforts to (A) register or qualify the Exchange
Securities under the securities laws or blue sky laws of such jurisdictions
as are contemplated by Section 2(a) no later than the commencement of the
Exchange Offer, (B) keep such registrations or qualifications in effect and
comply with such laws so as to permit the continuance of offers, sales and
dealings in such jurisdictions until the expiration of the Resale Period
and (C) take any and all other actions as may be reasonably necessary or
advisable to enable each broker-dealer holding Exchange Securities to
consummate the disposition thereof in such jurisdictions; provided,
however, that the Company shall not be required for any such purpose to (1)
qualify as a foreign corporation in any jurisdiction wherein it would not
otherwise be required to qualify but for the requirements of this Section
3(c)(vi), (2) consent to general service of process in any such
jurisdiction or (3) make any changes to its articles of association or
other constituent documents or any agreement between it and its
stockholders;
(vii) use its best efforts to obtain the consent or approval of each
governmental agency or authority, whether federal, state or local, which
may be required to effect the Exchange Registration, the Exchange Offer and
the offering and sale of Exchange Securities by broker-dealers during the
Resale Period;
(viii) provide a CUSIP number for all Exchange Securities, not later
than the applicable Effective Time;
(ix) so long as the Securities are listed on the Luxembourg Stock
Exchange or another exchange, and the rules of such exchange so require,
prior to the Exchange Offer, provide a notice in a leading newspaper having
general circulation in Luxembourg (which is expected to be the Luxemburger
Wort) indicating the proceedings to be followed in connection with the
Exchange Offer; and
(x) comply with all applicable rules and regulations of the
Commission, and make generally available to its securityholders as soon as
practicable but no later than eighteen months after the effective date of
such Exchange Registration Statement, an earning statement of the Company
and its subsidiaries complying with Section 11(a) of the Securities Act
(including, at the option of the Company, Rule 158 thereunder).
(d) In connection with the Company's obligations with respect to the
Shelf Registration, if applicable, the Company shall, as soon as practicable (or
as otherwise specified):
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(i) prepare and file with the Commission, as soon as practicable but
in any case within the time periods specified in Section 2(b), a Shelf
Registration Statement on any form which may be utilized by the Company and
which shall register all of the Registrable Securities for resale by the
holders thereof in accordance with such method or methods of disposition as
may be specified by such of the holders as, from time to time, may be
Electing Holders and use its best efforts to cause such Shelf Registration
Statement to become effective as soon as practicable but in any case within
the time periods specified in Section 2(b);
(ii) not less than 30 calendar days prior to the Effective Time of the
Shelf Registration Statement, mail the Notice and Questionnaire to the
holders of Registrable Securities; no holder shall be entitled to be named
as a selling securityholder in the Shelf Registration Statement as of the
Effective Time, and no holder shall be entitled to use the prospectus
forming a part thereof for resales of Registrable Securities at any time,
unless such holder has returned a completed and signed Notice and
Questionnaire to the Company by the deadline for response set forth
therein; provided, however, that holders of Registrable Securities shall
have at least 28 calendar days from the date on which the Notice and
Questionnaire is first mailed to such holders to return a completed and
signed Notice and Questionnaire to the Company;
(iii) after the Effective Time of the Shelf Registration Statement,
upon the request of any holder of Registrable Securities that is not then
an Electing Holder, promptly send a Notice and Questionnaire to such
holder; provided that the Company shall not be required to take any action
to name such holder as a selling securityholder in the Shelf Registration
Statement or to enable such holder to use the prospectus forming a part
thereof for resales of Registrable Securities until such holder has
returned a completed and signed Notice and Questionnaire to the Company;
(iv) as soon as practicable prepare and file with the Commission such
amendments and supplements to such Shelf Registration Statement and the
prospectus included therein as may be necessary to effect and maintain the
effectiveness of such Shelf Registration Statement for the period specified
in Section 2(b) hereof and as may be required by the applicable rules and
regulations of the Commission and the instructions applicable to the form
of such Shelf Registration Statement, and furnish to the Electing Holders
copies of any such supplement or amendment simultaneously with or prior to
its being used or filed with the Commission;
(v) comply with the provisions of the Securities Act with respect to
the disposition of all of the Registrable Securities covered by such Shelf
Registra-
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<PAGE>
tion Statement in accordance with the intended methods of disposition by
the Electing Holders provided for in such Shelf Registration Statement;
(vi) provide (A) the Electing Holders, (B) the underwriters (which
term, for purposes of this Exchange and Registration Rights Agreement,
shall include a person deemed to be an underwriter within the meaning of
Section 2(a)(11) of the Securities Act), if any, thereof, (C) any sales or
placement agent therefor, (D) counsel for any such underwriter or agent and
(E) not more than one counsel (in addition to local counsel) for all the
Electing Holders the opportunity to participate in the preparation of such
Shelf Registration Statement, each prospectus included therein or filed
with the Commission and each amendment or supplement thereto;
(vii) for a reasonable period prior to the filing of such Shelf
Registration Statement, and throughout the period specified in Section
2(b), make available at reasonable times at the Company's principal place
of business or such other reasonable place for inspection by the persons
referred to in Section 3(d)(vi) such financial and other information and
books and records of the Company, and cause the officers, employees,
counsel and independent certified public accountants of the Company to
respond to such inquiries, as shall be reasonably necessary, in the
judgment of the respective counsel referred to in such Section, to conduct
a reasonable investigation within the meaning of Section 11 of the
Securities Act; provided, however, that each such party shall be required
to maintain in confidence and not to disclose to any other person any
information or records reasonably designated by the Company as being
confidential, until such time as (A) such information becomes a matter of
public record (whether by virtue of its inclusion in such registration
statement or otherwise), (B) such person shall be required so to disclose
such information pursuant to a subpoena or order of any court or other
governmental agency or body having jurisdiction over the matter (subject to
the requirements of such order, and only after such person shall have given
the Company prompt prior written notice of such requirement), or (C) such
information is required to be set forth in such Shelf Registration
Statement or the prospectus included therein or in an amendment to such
Shelf Registration Statement or an amendment or supplement to such
prospectus in order that such Shelf Registration Statement, prospectus,
amendment or supplement, as the case may be, complies with applicable
requirements of the federal securities laws and the rules and regulations
of the Commission and does not contain an untrue statement of a material
fact or omit to state therein a material fact required to be stated therein
or necessary to make the statements therein not misleading in light of the
circumstances then existing;
(viii) promptly notify each of the Electing Holders, any sales or
placement agent therefor and any underwriter thereof (which notification
may be
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<PAGE>
made through any managing underwriter that is a representative of such
underwriter for such purpose) and confirm such advice in writing, (A) when
such Shelf Registration Statement or the prospectus included therein or any
prospectus amendment or supplement or post-effective amendment has been
filed, and, with respect to such Shelf Registration Statement or any post-
effective amendment, when the same has become effective, (B) of any
comments by the Commission and by the blue sky or securities commissioner
or regulator of any state with respect thereto or any request by the
Commission for amendments or supplements to such Shelf Registration
Statement or prospectus or for additional information, (C) of the issuance
by the Commission of any stop order suspending the effectiveness of such
Shelf Registration Statement or the initiation or threatening of any
proceedings for that purpose, (D) if at any time the representations and
warranties of the Company contemplated by Section 3(d)(xvii) or Section 5
cease to be true and correct in all material respects, (E) of the receipt
by the Company of any notification with respect to the suspension of the
qualification of the Registrable Securities for sale in any jurisdiction or
the initiation or threatening of any proceeding for such purpose, or (F) if
at any time when a prospectus is required to be delivered under the
Securities Act, that such Shelf Registration Statement, prospectus,
prospectus amendment or supplement or post-effective amendment does not
conform in all material respects to the applicable requirements of the
Securities Act and the Trust Indenture Act and the rules and regulations of
the Commission thereunder or contains an untrue statement of a material
fact or omits to state any material fact required to be stated therein or
necessary to make the statements therein not misleading in light of the
circumstances then existing;
(ix) use its best efforts to obtain the withdrawal of any order
suspending the effectiveness of such registration statement or any post-
effective amendment thereto at the earliest practicable date;
(x) if requested by any managing underwriter or underwriters, any
placement or sales agent or any Electing Holder, promptly incorporate in a
prospectus supplement or post-effective amendment such information as is
required by the applicable rules and regulations of the Commission and as
such managing underwriter or underwriters, such agent or such Electing
Holder specifies should be included therein relating to the terms of the
sale of such Registrable Securities, including information with respect to
the principal amount of Registrable Securities being sold by such Electing
Holder or agent or to any underwriters, the name and description of such
Electing Holder, agent or underwriter, the offering price of such
Registrable Securities and any discount, commission or other compensation
payable in respect thereof, the purchase price being paid therefor by such
underwriters and with respect to any other terms of the offering of the
Registrable Securities to be sold by such
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<PAGE>
Electing Holder or agent or to such underwriters; and make all required
filings of such prospectus supplement or post-effective amendment promptly
after notification of the matters to be incorporated in such prospectus
supplement or post-effective amendment;
(xi) furnish to each Electing Holder, each placement or sales agent,
if any, therefor, each underwriter, if any, thereof and the respective
counsel referred to in Section 3(d)(vi) an executed copy (or, in the case
of an Electing Holder, a conformed copy) of such Shelf Registration
Statement, each such amendment and supplement thereto (in each case
including all exhibits thereto (in the case of an Electing Holder of
Registrable Securities, upon request) and documents incorporated by
reference therein) and such number of copies of such Shelf Registration
Statement (excluding exhibits thereto and documents incorporated by
reference therein unless specifically so requested by such Electing Holder,
agent or underwriter, as the case may be) and of the prospectus included in
such Shelf Registration Statement (including each preliminary prospectus
and any summary prospectus), in conformity in all material respects with
the applicable requirements of the Securities Act and the Trust Indenture
Act and the rules and regulations of the Commission thereunder, and such
other documents as such Electing Holder, agent, if any, and underwriter, if
any, may reasonably request in order to facilitate the offering and
disposition of the Registrable Securities owned by such Electing Holder,
offered or sold by such agent or underwritten by such underwriter and to
permit such Electing Holder, agent and underwriter to satisfy the
prospectus delivery requirements of the Securities Act; and the Company
hereby consents to the use of such prospectus (including such preliminary
and summary prospectus) and any amendment or supplement thereto by each
such Electing Holder and by any such agent and underwriter, in each case in
the form most recently provided to such person by the Company, in
connection with the offering and sale of the Registrable Securities covered
by the prospectus (including such preliminary and summary prospectus) or
any supplement or amendment thereto;
(xii) use best efforts to (A) register or qualify the Registrable
Securities to be included in such Shelf Registration Statement under such
securities laws or blue sky laws of such jurisdictions as any Electing
Holder and each placement or sales agent, if any, therefor and underwriter,
if any, thereof shall reasonably request, (B) keep such registrations or
qualifications in effect and comply with such laws so as to permit the
continuance of offers, sales and dealings therein in such jurisdictions
during the period the Shelf Registration is required to remain effective
under Section 2(b) above and for so long as may be necessary to enable any
such Electing Holder, agent or underwriter to complete its distribution of
Securities pursuant to such Shelf Registration Statement and (C) take any
and all other actions as may be reasonably nec-
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<PAGE>
essary or advisable to enable each such Electing Holder, agent, if any, and
underwriter, if any, to consummate the disposition in such jurisdictions of
such Registrable Securities; provided, however, that the Company shall not
be required for any such purpose to (1) qualify as a foreign corporation in
any jurisdiction wherein it would not otherwise be required to qualify but
for the requirements of this Section 3(d)(xii), (2) consent to general
service of process in any such jurisdiction or (3) make any changes to its
articles of association or other constituent documents or any agreement
between it and its stockholders;
(xiii) use its best efforts to obtain the consent or approval of each
governmental agency or authority, whether federal, state or local, which
may be required to effect the Shelf Registration or the offering or sale in
connection therewith or to enable the selling holder or holders to offer,
or to consummate the disposition of, their Registrable Securities;
(xiv) Unless any Registrable Securities shall be in book-entry only
form, cooperate with the Electing Holders and the managing underwriters, if
any, to facilitate the timely preparation and delivery of certificates
representing Registrable Securities to be sold, which certificates, if so
required by any securities exchange upon which any Registrable Securities
are listed, shall be penned, lithographed or engraved, or produced by any
combination of such methods, on steel engraved borders, and which
certificates shall not bear any restrictive legends; and, in the case of an
underwritten offering, enable such Registrable Securities to be in such
denominations and registered in such names as the managing underwriters may
request, including but not limited to the minimum denomination requirements
set forth in Section 2.03 of the Indenture, at least two business days
prior to any sale of the Registrable Securities;
(xv) provide a CUSIP number for all Registrable Securities, not later
than the applicable Effective Time;
(xvi) enter into one or more underwriting agreements, engagement
letters, agency agreements, "best efforts" underwriting agreements or
similar agreements, as appropriate, including customary provisions relating
to indemnification and contribution, and take such other actions in
connection therewith as any Electing Holders aggregating at least 20% in
aggregate principal amount of the Registrable Securities held at such time
by all Electing Holders shall request in order to expedite or facilitate
the disposition of such Registrable Securities;
(xvii) whether or not an agreement of the type referred to in Section
3(d)(xvi) hereof is entered into and whether or not any portion of the
offering
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<PAGE>
contemplated by the Shelf Registration is an underwritten offering or is
made through a placement or sales agent or any other entity, (A) make such
representations and warranties to the Electing Holders and the placement or
sales agent, if any, therefor and the underwriters, if any, thereof in
form, substance and scope as are customarily made in connection with an
offering of debt securities pursuant to any appropriate agreement or to a
registration statement filed on the form applicable to the Shelf
Registration; (B) obtain such opinions of counsel to the Company (including
that of local counsel) in customary form and covering such matters, of the
type customarily covered by such opinions, as the managing underwriters, if
any, or as any Electing Holders of at least 20% in aggregate principal
amount of the Registrable Securities held at such time by all Electing
Holders may reasonably request, addressed to such Electing Holder or
Electing Holders and the placement or sales agent, if any, therefor and the
underwriters, if any, thereof and dated the effective date of such Shelf
Registration Statement (and if such Shelf Registration Statement
contemplates an underwritten offering of a part or all of the Registrable
Securities, dated the date of the closing under the underwriting agreement
relating thereto) (it being agreed that the matters to be covered by such
opinions shall include the due incorporation or organization, as the case
may be, and good standing of the Company and its subsidiaries; the
qualification of the Company and its subsidiaries to transact business as
foreign corporations to the extent the Company is to be so qualified; the
due authorization, execution and delivery of the relevant agreement of the
type referred to in Section 3(d)(xvi) hereof; the due authorization,
execution, authentication and issuance, and the validity and
enforceability, of the Securities; the absence of material legal or
governmental proceedings involving the Company; the absence of a breach by
the Company or any of its subsidiaries of, or a default under, material
agreements binding upon the Company or any subsidiary of the Company; the
absence of governmental approvals required to be obtained in connection
with the Shelf Registration, the offering and sale of the Registrable
Securities, this Exchange and Registration Rights Agreement or any
agreement of the type referred to in Section 3(d)(xvi) hereof, except such
approvals as may be required under state securities or blue sky laws; the
material compliance as to form of such Shelf Registration Statement and any
documents incorporated by reference therein and of the Indenture with the
requirements of the Securities Act and the Trust Indenture Act and the
rules and regulations of the Commission thereunder, respectively; and, as
of the date of any such opinion and of the Shelf Registration Statement or
most recent post-effective amendment thereto, as the case may be, the
absence from such Shelf Registration Statement and the prospectus included
therein, as then amended or supplemented, and from the documents
incorporated by reference therein (in each case other than the financial
statements and other financial information contained therein) of an untrue
statement of a material fact or the omission to state therein a material
fact necessary to make the statements therein not
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misleading (in the case of such documents, in the light of the
circumstances existing at the time that such documents were filed with the
Commission under the Exchange Act)); (C) obtain a "cold comfort" letter or
letters from the independent certified public accountants of the Company
addressed to the selling Electing Holders, the placement or sales agent, if
any, therefor or the underwriters, if any, thereof, dated (i) the effective
date of such Shelf Registration Statement and (ii) the effective date of
any prospectus supplement to the prospectus included in such Shelf
Registration Statement or post-effective amendment to such Shelf
Registration Statement which includes unaudited or audited financial
statements as of a date or for a period subsequent to that of the latest
such statements included in such prospectus (and, if such Shelf
Registration Statement contemplates an underwritten offering pursuant to
any prospectus supplement to the prospectus included in such Shelf
Registration Statement or post-effective amendment to such Shelf
Registration Statement which includes unaudited or audited financial
statements as of a date or for a period subsequent to that of the latest
such statements included in such prospectus, dated the date of the closing
under the underwriting agreement relating thereto), such letter or letters
to be in customary form and covering such matters of the type customarily
covered by letters of such type; (D) deliver such documents and
certificates, including officers' certificates, as may be reasonably
requested by any Electing Holders of at least 20% in aggregate principal
amount of the Registrable Securities held at such time by all Electing
Holders or the placement or sales agent, if any, therefor and the managing
underwriters, if any, thereof to evidence the accuracy of the
representations and warranties made pursuant to clause (A) above or those
contained in Section 5(a) hereof and the compliance with or satisfaction of
any agreements or conditions contained in the underwriting agreement or
other agreement entered into by the Company; and (E) undertake such
obligations relating to expense reimbursement, indemnification and
contribution as are provided in Section 6 hereof;
(xviii) notify in writing each holder of Registrable Securities of any
proposal by the Company to amend or waive any provision of this Exchange
and Registration Rights Agreement pursuant to Section 9(h) hereof and of
any amendment or waiver effected pursuant thereto, each of which notices
shall contain the text of the amendment or waiver proposed or effected, as
the case may be;
(xix) in the event that any broker-dealer registered under the Exchange
Act shall underwrite any Registrable Securities or participate as a member
of an underwriting syndicate or selling group or "assist in the
distribution" (within the meaning of the Conduct Rules (the "Conduct Rules)
of the National Association of Securities Dealers, Inc. ("NASD") or any
successor thereto, as amended from time to time) thereof, whether as a
holder of such Registrable
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Securities or as an underwriter, a placement or sales agent or a broker or
dealer in respect thereof, or otherwise, assist such broker-dealer in
complying with the requirements of such Conduct Rules, including by (A) if
such Conduct Rules shall so require, engaging a "qualified independent
underwriter" (as defined in such Conduct Rules) to participate in the
preparation of the Shelf Registration Statement relating to such
Registrable Securities, to exercise usual standards of due diligence in
respect thereto and, if any portion of the offering contemplated by such
Shelf Registration Statement is an underwritten offering or is made through
a placement or sales agent, to recommend the yield of such Registrable
Securities, (B) indemnifying any such qualified independent underwriter to
the extent of the indemnification of underwriters provided in Section 6
hereof (or to such other customary extent as may be requested by such
underwriter), and (C) providing such information to such broker-dealer as
may be required in order for such broker-dealer to comply with the
requirements of the Conduct Rules; and
(xx) comply with all applicable rules and regulations of the Commission,
and make generally available to its securityholders as soon as practicable
but in any event not later than eighteen months after the Effective Tate of
such Shelf Registration Statement, an earning statement of the Company and
its subsidiaries complying with Section 11(a) of the Securities Act
(including, at the option of the Company, Rule 158 thereunder).
(e) In the event that the Company would be required, pursuant to Section
3(d)(viii)(F) above, to notify the Electing Holders, the placement or sales
agent, if any, therefor and the managing underwriters, if any, thereof, the
Company shall without delay prepare and furnish to each of the Electing Holders,
to each placement or sales agent, if any, and to each such underwriter, if any,
a reasonable number of copies of a prospectus supplemented or amended so that,
as thereafter delivered to purchasers of Registrable Securities, such prospectus
shall conform in all material respects to the applicable requirements of the
Securities Act and the Trust Indenture Act and the rules and regulations of the
Commission thereunder and shall not contain an untrue statement of a material
fact or omit to state a material fact required to be stated therein or necessary
to make the statements therein not misleading in light of the circumstances then
existing. Each Electing Holder agrees that upon receipt of any notice from the
Company pursuant to Section 3(d)(viii)(F) hereof, such Electing Holder shall
forthwith discontinue the disposition of Registrable Securities pursuant to the
Shelf Registration Statement applicable to such Registrable Securities until
such Electing Holder shall have received copies of such amended or supplemented
prospectus, and if so directed by the Company, such Electing Holder shall
deliver to the Company (at the Company's expense) all copies, other than
permanent file copies, then in such Electing Holder's possession of the
prospectus covering such Registrable Securities at the time of receipt of such
notice.
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<PAGE>
(f) In the event of a Shelf Registration, in addition to the information
required to be provided by each Electing Holder in its Notice Questionnaire, the
Company may require such Electing Holder to furnish to the Company such
additional information regarding such Electing Holder and such Electing Holder's
intended method of distribution of Registrable Securities as may be required in
order to comply with the Securities Act. Each such Electing Holder agrees to
notify the Company as promptly as practicable of any inaccuracy or change in
information previously furnished by such Electing Holder to the Company or of
the occurrence of any event in either case as a result of which any prospectus
relating to such Shelf Registration contains or would contain an untrue
statement of a material fact regarding such Electing Holder or such Electing
Holder's intended method of disposition of such Registrable Securities or omits
to state any material fact regarding such Electing Holder or such Electing
Holder's intended method of disposition of such Registrable Securities required
to be stated therein or necessary to make the statements therein not misleading
in light of the circumstances then existing, and promptly to furnish to the
Company any additional information required to correct and update any previously
furnished information or required so that such prospectus shall not contain,
with respect to such Electing Holder or the disposition of such Registrable
Securities, an untrue statement of a material fact or omit to state a material
fact required to be stated therein or necessary to make the statements therein
not misleading in light of the circumstances then existing.
(g) Until the expiration of three years after the Closing Date, the
Company will not, and will not permit any of its "affiliates" (as defined in
Rule 144) to, resell any of the Securities that have been reacquired by any of
them except pursuant to an effective registration statement under the Securities
Act.
(h) The Company shall cause the Exchange Securities to be listed on the
Luxembourg Stock Exchange.
4. Registration Expenses.
The Company agrees to bear and to pay or cause to be paid promptly all
expenses incident to the Company's performance of or compliance with this
Exchange and Registration Rights Agreement, including (a) all Commission and any
NASD registration, filing and review fees and expenses including fees and
disbursements of counsel for the placement or sales agent or underwriters in
connection with such registration, filing and review, (b) all fees and expenses
in connection with the qualification of the Securities for offering and sale
under the State securities and blue sky laws referred to in Section 3(d)(xii)
hereof and determination of their eligibility for investment under the laws of
such jurisdictions as any managing underwriters or the Electing Holders may
designate, including any fees and disbursements of counsel for the Electing
Holders or underwriters in connection with such qualification and determination,
(c) all expenses relating to the preparation, printing, production, distribution
and reproduction of each registration statement required to be filed hereunder,
each prospectus included therein or prepared for distribution pursuant hereto,
each amendment or supplement to the foregoing, the expenses of preparing the
Securities
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for delivery and the expenses of printing or producing any underwriting
agreements, agreements among underwriters, selling agreements and blue sky or
legal investment memoranda and all other documents in connection with the
offering, sale or delivery of Securities to be disposed of (including
certificates representing the Securities), (d) messenger, telephone and delivery
expenses relating to the offering, sale or delivery of Securities and the
preparation of documents referred in clause (c) above, (e) fees and expenses of
the Trustee under the Indenture, any agent of the Trustee and any counsel for
the Trustee and of any collateral agent or custodian, (f) internal expenses
(including all salaries and expenses of the Company's officers and employees
performing legal or accounting duties), (g) fees, disbursements and expenses of
counsel and independent certified public accountants of the Company (including
the expenses of any opinions or "cold comfort" letters required by or incident
to such performance and compliance), (h) fees, disbursements and expenses of any
"qualified independent underwriter" engaged pursuant to Section 3(d)(xix)
hereof, (i) fees, disbursements and expenses of one counsel (in addition to
local counsel) for the Electing Holders retained in connection with a Shelf
Registration, as selected by the Electing Holders of at least a majority in
aggregate principal amount of the Registrable Securities held by Electing
Holders (which counsel shall be reasonably satisfactory to the Company), (j) any
fees charged by securities rating services for rating the Securities, (k) fees,
expenses and disbursements of any other persons, including special experts,
retained by the Company in connection with such registration and (l) fees and
expenses incurred in connection with the listing of the Securities or Exchange
Securities on any securities exchange, including the listing on the Luxembourg
Stock Exchange (collectively, the "Registration Expenses"). To the extent that
any Registration Expenses are incurred, assumed or paid by any holder of
Registrable Securities or any placement or sales agent therefor or underwriter
thereof, the Company shall reimburse such person for the full amount of the
Registration Expenses so incurred, assumed or paid promptly after receipt of a
request therefor. Notwithstanding the foregoing, the holders of the Registrable
Securities being registered shall pay all agency fees and commissions and
underwriting discounts and commissions attributable to the sale of such
Registrable Securities and the fees and disbursements of any counsel or other
advisors or experts retained by such holders (severally or jointly), other than
the counsel and experts specifically referred to above.
5. Representations and Warranties.
The Company represents and warrants to, and agrees with, each Purchaser
and each of the holders from time to time of Registrable Securities that:
(a) Each registration statement covering Registrable Securities and each
prospectus (including any preliminary or summary prospectus) contained therein
or furnished pursuant to Section 3(d) or Section 3(c) hereof and any further
amendments or supplements to any such registration statement or prospectus, when
it becomes effective or is filed with the Commission, as the case may be, and,
in the case of an underwritten offering of Registrable Securities, at the time
of the closing under the underwriting agreement relating thereto, will conform
in all material respects to the requirements of the Securities Act and the Trust
20
<PAGE>
Indenture Act and the rules and regulations of the Commission thereunder and
will not contain an untrue statement of a material fact or omit to state a
material fact required to be stated therein or necessary to make the statements
therein not misleading; and at all times subsequent to the Effective Time when a
prospectus would be required to be delivered under the Securities Act, other
than from (i) such time as a notice has been given to holders of Registrable
Securities pursuant to Section 3(d)(viii)(F) or Section 3(c)(iii)(F) hereof
until (ii) such time as the Company furnishes an amended or supplemented
prospectus pursuant to Section 3(e) or Section 3(c)(iv) hereof, each such
registration statement, and each prospectus (including any summary prospectus)
contained therein or furnished pursuant to Section 3(d) or Section 3(c) hereof,
as then amended or supplemented, will conform in all material respects to the
requirements of the Securities Act and the Trust Indenture Act and the rules and
regulations of the Commission thereunder and will not contain an untrue
statement of a material fact or omit to state a material fact required to be
stated therein or necessary to make the statements therein not misleading in the
light of the circumstances then existing; provided, however, that this
representation and warranty shall not apply to any statements or omissions made
in reliance upon and in conformity with information furnished in writing to the
Company by a holder of Registrable Securities relating to such holder expressly
for use therein.
(b) Any documents incorporated by reference in any prospectus referred
to in Section 5(a) hereof, when they become or became effective or are or were
filed with the Commission, as the case may be, will conform or conformed in all
material respects to the requirements of the Securities Act or the Exchange Act,
as applicable, and none of such documents will contain or contained an untrue
statement of a material fact or will omit or omitted to state a material fact
required to be stated therein or necessary to make the statements therein not
misleading; provided, however, that this representation and warranty shall not
apply to any statements or omissions made in reliance upon and in conformity
with information furnished in writing to the Company by a holder of Registrable
Securities expressly for use therein.
(c) The compliance by the Company with all of the provisions of this
Exchange and Registration Rights Agreement and the consummation of the
transactions herein contemplated will not conflict with or result in a breach of
any of the terms or provisions of, or constitute a default under, any indenture,
mortgage, deed of trust, loan agreement, lease, license, permit or other
material agreement or instrument to which the Company or any subsidiary of the
Company is a party or by which the Company or any subsidiary of the Company is
bound or to which any of the property or assets of the Company or any subsidiary
of the Company is subject, nor will such action result in any violation of the
provisions of the articles of association or other constituent documents, as
amended, of the Company or any statute or any order, rule or regulation of any
court or governmental agency or body having jurisdiction over the Company or any
subsidiary of the Company or any of their properties; and no consent, approval,
authorization, order, registration or qualification of or with any such court or
governmental agency or body is required for the consummation by the Company of
the transactions contemplated by this Exchange and Registration Rights
Agreement,
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<PAGE>
except the registration under the Securities Act of the Securities,
qualification of the Indenture under the Trust Indenture Act and such consents,
approvals, authorizations, registrations or qualifications as may be required
under State securities or blue sky laws in connection with the offering and
distribution of the Securities.
(d) This Exchange and Registration Rights Agreement has been duly
authorized, executed and delivered by the Company.
6. Indemnification.
(a) Indemnification by the Company. The Company will indemnify and hold
harmless each of the holders of Registrable Securities included in an Exchange
Registration Statement, each of the Electing Holders of Registrable Securities
included in a Shelf Registration Statement and each person who participates as a
placement or sales agent or as an underwriter in any offering or sale of such
Registrable Securities against any losses, claims, damages or liabilities, joint
or several, to which such holder, agent or underwriter may become subject under
the Securities Act or otherwise, insofar as such losses, claims, damages or
liabilities (or actions in respect thereof) arise out of or are based upon an
untrue statement or alleged untrue statement of a material fact contained in any
Exchange Registration Statement or Shelf Registration Statement, as the case may
be, under which such Registrable Securities were registered under the Securities
Act, or any preliminary, final or summary prospectus contained therein or
furnished by the Company to any such holder, Electing Holder, agent or
underwriter, or any amendment 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 not
misleading, and will reimburse such holder, such Electing Holder, such agent and
such underwriter for any legal or other expenses reasonably incurred by them in
connection with investigating or defending any such action or claim as such
expenses are incurred; provided, however, that the Company shall not be liable
to any such person in any such case to the extent that any such loss, claim,
damage or liability arises out of or is based upon an untrue statement or
alleged untrue statement or omission or alleged omission made in such
registration statement, or preliminary, final or summary prospectus, or
amendment or supplement thereto, in reliance upon and in conformity with written
information furnished to the Company by such person expressly for use therein.
(b) Indemnification by the Holders and any Agents and Underwriters. The
Company may require, as a condition to including any Registrable Securities in
any registration statement filed pursuant to Section 2(b) hereof and to entering
into any underwriting agreement with respect thereto, that the Company shall
have received an undertaking reasonably satisfactory to it from each Electing
Holder of such Registrable Securities and from each underwriter named in any
such underwriting agreement, severally and not jointly, to (i) indemnify and
hold harmless the Company and all other holders of Registrable Securities
against any losses, claims, damages or liabilities to which the Company or such
other holders of Registrable Securities may become subject, under the Securities
Act or otherwise, in-
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<PAGE>
sofar as such losses, claims, damages or liabilities (or actions in respect
thereof) arise out of or are based upon an untrue statement or alleged untrue
statement of a material fact contained in such registration statement, or any
preliminary, final or summary prospectus contained therein or furnished by the
Company to any such Electing Holder, agent or underwriter, or any amendment 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 not misleading, in each case to the
extent, but only to the extent, that such untrue statement or alleged untrue
statement or omission or alleged omission was made in reliance upon and in
conformity with written information furnished to the Company by such Electing
Holder relating to such holder or underwriter expressly for use therein, and
(ii) reimburse the Company for any legal or other expenses reasonably incurred
by the Company in connection with investigating or defending any such action or
claim as such expenses are incurred; provided, however, that no such Electing
Holder shall be required to undertake liability to any person under this Section
6(b) for any amounts in excess of the amount of the proceeds to be received by
such Electing Holder from the sale of such Electing Holder's Registrable
Securities pursuant to such registration.
(c) Notices of Claims, Etc. Promptly after receipt by an indemnified
party under subsection (a) or (b) above of written notice of the commencement of
any action, such indemnified party shall, if a claim in respect thereof is to be
made against an indemnifying party pursuant to the indemnification provisions of
or contemplated by this Section 6, notify such indemnifying party in writing of
the commencement of such action; but the omission so to notify the indemnifying
party shall not relieve it from any liability which it may have to any
indemnified party otherwise than under the indemnification provisions of or
contemplated by Section 6(a) or 6(b) hereof. In case any such action shall be
brought against any indemnified party and it shall notify an indemnifying party
of the commencement thereof, such indemnifying party shall be entitled to
participate therein and, to the extent that it shall wish, jointly with any
other indemnifying party similarly notified, to assume the defense thereof, with
counsel reasonably satisfactory to such indemnified party (who shall not, except
with the consent of the indemnified party, be counsel to the indemnifying
party), and, after notice from the indemnifying party to such indemnified party
of its election so to assume the defense thereof, such indemnifying party shall
not be liable to such indemnified party for any legal expenses of other counsel
or any other expenses, in each case subsequently incurred by such indemnified
party, in connection with the defense thereof other than reasonable costs of
investigation. No indemnifying party shall, without the written consent of the
indemnified party, effect the settlement or compromise of, or consent to the
entry of any judgment with respect to, any pending or threatened action or claim
in respect of which indemnification or contribution may be sought hereunder
(whether or not the indemnified party is an actual or potential party to such
action or claim) unless such settlement, compromise or judgment (i) includes an
unconditional release of the indemnified party from all liability arising out of
such action or claim and (ii) does not include a statement as to or an admission
of fault, culpability or a failure to act by or on behalf of any indemnified
party.
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(d) Contribution. If for any reason the indemnification provisions
contemplated by Section 6(a) or Section 6(b) are unavailable to or insufficient
to hold harmless an indemnified party in respect of any losses, claims, damages
or liabilities (or actions in respect thereof) referred to therein, then each
indemnifying party shall contribute to the amount paid or payable by such
indemnified party as a result of such losses, claims, damages or liabilities (or
actions in respect thereof) in such proportion as is appropriate to reflect the
relative fault of the indemnifying party and the indemnified party in connection
with the statements or omissions which resulted in such losses, claims, damages
or liabilities (or actions in respect thereof), as well as any other relevant
equitable considerations. The relative fault of such indemnifying party and
indemnified party shall be determined by reference to, among other things,
whether the untrue or alleged untrue statement of a material fact or omission or
alleged omission to state a material fact relates to information supplied by
such indemnifying party or by such indemnified party, and the parties' relative
intent, knowledge, access to information and opportunity to correct or prevent
such statement or omission. The parties hereto agree that it would not be just
and equitable if contributions pursuant to this Section 6(d) were determined by
pro rata allocation (even if the holders or any agents or underwriters or all of
them were treated as one entity for such purpose) or by any other method of
allocation which does not take account of the equitable considerations referred
to in this Section 6(d). The amount paid or payable by an indemnified party as a
result of the losses, claims, damages, or liabilities (or actions in respect
thereof) referred to above shall be deemed to include any legal or other fees or
expenses reasonably incurred by such indemnified party in connection with
investigating or defending any such action or claim. Notwithstanding the
provisions of this Section 6(d), no holder shall be required to contribute any
amount in excess of the amount by which the amount of the proceeds received by
such holder from the sale of any Registrable Securities (after deducting any
fees, discounts and commissions applicable thereto) exceeds the amount of any
damages which such holder has otherwise been required to pay by reason of such
untrue or alleged untrue statement or omission or alleged omission, and no
underwriter shall be required to contribute any amount in excess of the amount
by which the total price at which the Registrable Securities underwritten by it
and distributed to the public were offered to the public exceeds the amount of
any damages which such underwriter has otherwise been required to pay by reason
of such untrue or alleged untrue statement or omission or alleged omission. No
person guilty of fraudulent misrepresentation (within the meaning of Section
11(f) of the Securities Act) shall be entitled to contribution from any person
who was not guilty of such fraudulent misrepresentation. The holders' and any
underwriters' obligations in this Section 6(d) to contribute shall be several in
proportion to the principal amount of Registrable Securities registered or
underwritten, as the case may be, by them and not joint.
(e) The obligations of the Company under this Section 6 shall be in
addition to any liability which the Company may otherwise have and shall extend,
upon the same terms and conditions, to each officer, director and partner of
each holder, agent and underwriter and each person, if any, who controls any
holder, agent or underwriter within the meaning of the Securities Act; and the
obligations of the holders and any agents or underwriters contemplated by this
Section 6 shall be in addition to any liability which the respective
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holder, agent or underwriter may otherwise have and shall extend, upon the same
terms and conditions, to each officer and director of the Company (including any
person who, with his consent, is named in any registration statement as about to
become a director of the Company) and to each person, if any, who controls the
Company within the meaning of the Securities Act.
7. Underwritten Offerings.
(a) Selection of Underwriters. If any of the Registrable Securities
covered by the Shelf Registration are to be sold pursuant to an underwritten
offering, the managing underwriter or underwriters thereof shall be designated
by Electing Holders holding at least a majority in aggregate principal amount of
the Registrable Securities to be included in such offering, provided that such
designated managing underwriter or underwriters is or are reasonably acceptable
to the Company.
(b) Participation by Holders. Each holder of Registrable Securities
hereby agrees with each other such holder that no such holder may participate in
any underwritten offering hereunder unless such holder (i) agrees to sell such
holder's Registrable Securities on the basis provided in any underwriting
arrangements approved by the persons entitled hereunder to approve such
arrangements and (ii) completes and executes all questionnaires, powers of
attorney, indemnities, underwriting agreements and other documents reasonably
required under the terms of such underwriting arrangements.
8. Rule 144.
The Company covenants to the holders of Registrable Securities that to
the extent it shall be required to do so under the Exchange Act, the Company
shall timely file the reports required to be filed by it under the Exchange Act
or the Securities Act (including the reports under Section 13 and 15(d) of the
Exchange Act referred to in subparagraph (c)(1) of Rule 144 adopted by the
Commission under the Securities Act) and the rules and regulations adopted by
the Commission thereunder, and shall take such further action as any holder of
Registrable Securities may reasonably request, all to the extent required from
time to time to enable such holder to sell Registrable Securities without
registration under the Securities Act within the limitations of the exemption
provided by Rule 144 under the Securities Act, as such Rule may be amended from
time to time, or any similar or successor rule or regulation hereafter adopted
by the Commission. Upon the request of any holder of Registrable Securities in
connection with that holder's sale pursuant to Rule 144, the Company shall
deliver to such holder a written statement as to whether it has complied with
such requirements.
9. Miscellaneous.
(a) No Inconsistent Agreements. The Company represents, warrants,
covenants and agrees that it has not granted, and shall not grant, registration
rights with respect to Registrable Securities or any other securities which
would be inconsistent with the terms contained in this Exchange and Registration
Rights Agreement.
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(b) Specific Performance. The parties hereto acknowledge that there
would be no adequate remedy at law if the Company fails to perform any of its
obligations hereunder and that the Purchasers and the holders from time to time
of the Registrable Securities may be irreparably harmed by any such failure, and
accordingly agree that the Purchasers and such holders, in addition to any other
remedy to which they may be entitled at law or in equity, shall be entitled to
compel specific performance of the obligations of the Company under this
Exchange and Registration Rights Agreement in accordance with the terms and
conditions of this Exchange and Registration Rights Agreement, in any court of
the United States or any State thereof having jurisdiction.
(c) Notices. All notices, requests, claims, demands, waivers and other
communications hereunder shall be in writing and shall be deemed to have been
duly given when delivered by hand, if delivered personally or by courier, or
three days after being deposited in the mail (registered or certified mail,
postage prepaid, return receipt requested) as follows: If to the Company, to it
at Kruisweg 609, 2132 NA Hoofdorp, The Netherlands; with a copy to: ING Trust
(Netherlands) B.V., P.O. Box 2838, 1000 CV Amsterdam, The Netherlands,
Attention: Paul van Wittereen; and with a copy to: Prinses Drenstraat 61, 1077
WV Amsterdam, The Netherlands, Attention: Managing Director; and with a copy to:
Holme Roberts & Owen LLP, 1700 Lincoln, Suite 4100, Denver, Colorado 80203,
Attention: W. Dean Salter and if to a holder, to the address of such holder set
forth in the security register or other records of the Company, or to such other
address as the Company or any such holder may have furnished to the other in
writing in accordance herewith, except that notices of change of address shall
be effective only upon receipt.
(d) Parties in Interest. All the terms and provisions of this Exchange
and Registration Rights Agreement shall be binding upon, shall inure to the
benefit of and shall be enforceable by the parties hereto and the holders from
time to time of the Registrable Securities and the respective successors and
assigns of the parties hereto and such holders. In the event that any transferee
of any holder of Registrable Securities shall acquire Registrable Securities, in
any manner, whether by gift, bequest, purchase, operation of law or otherwise,
such transferee shall, without any further writing or action of any kind, be
deemed a beneficiary hereof for all purposes and such Registrable Securities
shall be held subject to all of the terms of this Exchange and Registration
Rights Agreement, and by taking and holding such Registrable Securities such
transferee shall be entitled to receive the benefits of, and be conclusively
deemed to have agreed to be bound by all of the applicable terms and provisions
of this Exchange and Registration Rights Agreement. If the Company shall so
request, any such successor, assign or transferee shall agree in writing to
acquire and hold the Registrable Securities subject to all of the applicable
terms hereof.
(e) Survival. The respective indemnities, agreements, representations,
warranties and each other provision set forth in this Exchange and Registration
Rights Agreement or made pursuant hereto shall remain in full force and effect
regardless of any investigation (or statement as to the results thereof) made by
or on behalf of any holder of Registrable Securities, any director, officer or
partner of such holder, any agent or under-
26
<PAGE>
writer or any director, officer or partner thereof, or any controlling person of
any of the foregoing, and shall survive delivery of and payment for the
Registrable Securities pursuant to the Purchase Agreement and the transfer and
registration of Registrable Securities by such holder and the consummation of an
Exchange Offer.
(f) Governing Law. This Exchange and Registration Rights Agreement shall
be governed by and construed in accordance with the laws of the State of New
York, without giving effect to applicable principles of conflicts of laws to the
extent that the application of the law of another jurisdiction would be required
thereby.
(g) Headings. The descriptive headings of the several Sections and
paragraphs of this Exchange and Registration Rights Agreement are inserted for
convenience only, do not constitute a part of this Exchange and Registration
Rights Agreement and shall not affect in any way the meaning or interpretation
of this Exchange and Registration Rights Agreement.
(h) Entire Agreement; Amendments. This Exchange and Registration Rights
Agreement and the other writings referred to herein (including the Indenture and
the form of Securities) or delivered pursuant hereto which form a part hereof
contain the entire understanding of the parties with respect to its subject
matter. This Exchange and Registration Rights Agreement supersedes all prior
agreements and understandings between the parties with respect to its subject
matter. This Exchange and Registration Rights Agreement may be amended and the
observance of any term of this Exchange and Registration Rights Agreement may be
waived (either generally or in a particular instance and either retroactively or
prospectively) only by a written instrument duly executed by the Company and the
holders of at least a majority in aggregate principal amount of the Registrable
Securities at the time outstanding. Each holder of any Registrable Securities at
the time or thereafter outstanding shall be bound by any amendment or waiver
effected pursuant to this Section 9(h), whether or not any notice, writing or
marking indicating such amendment or waiver appears on such Registrable
Securities or is delivered to such holder.
(i) Inspection. For so long as this Exchange and Registration Rights
Agreement shall be in effect, this Exchange and Registration Rights Agreement
and a complete list of the names and addresses of all the holders of Registrable
Securities shall be made available for inspection and copying on any business
day by any holder of Registrable Securities for proper purposes only (which
shall include any purpose related to the rights of the holders of Registrable
Securities under the Securities, the Indenture and this Agreement) at the
offices of the Company at the address thereof set forth in Section 9(c) above
and at the office of the Trustee under the Indenture.
(j) Jurisdiction; Immunity. By the execution and delivery of this
Exchange and Registration Rights Agreement, the Company (i) acknowledges that it
has, by separate written instrument, designated and appointed CT Corporation
System (the "Process Agent"), 1633 Broadway, New York, New York 10019, United
-------------
States, as its authorized agent upon
27
<PAGE>
which process may be served in any suit, action or proceeding arising out of or
relating to this Agreement that may be instituted in any Federal or state court
in the State of New York, The City of New York, the Borough of Manhattan, or
brought under Federal or state securities laws or brought by the holders of the
Securities or Exchange Securities, and acknowledges that the Process Agent has
accepted such designation, (ii) submits to the jurisdiction of any such court in
any such suit, action or proceeding and (iii) agrees that service of process
upon the Process Agent and written notice of said service to it at its principal
office in accordance with Section 9(c), shall be deemed in every respect
effective service of process upon it in any such suit or proceeding. The Company
further agrees to take any and all action, including the execution and filing of
any and all such documents and instruments as may be necessary to continue such
designation and appointment of the Process Agent in full force and effect so
long as the Securities or Exchange Securities shall be outstanding; provided
that the Company may (and shall, to the extent the Process Agent ceases to be
able to be served on the basis contemplated herein) by written notice to the
Trustee, designate such additional or alternative agents for service of process
under this Section 9(j) that (i) maintain an office located in the Borough of
Manhattan, The City of New York in the State of New York, (ii) are either (x)
counsel for the Company or (y) a corporate service company which acts as agent
for service of process for other Persons in the ordinary course of its business
and (iii) agree to act as agent for service of process in accordance with this
Section 9(j). Such notice shall identify the name of such agent for process and
the address of such agent for process in the Borough of Manhattan, The City of
New York, State of New York. Notwithstanding the foregoing, there shall, at all
times, be at least one agent for service of process for the Company appointed
and acting in accordance with this Section 9(j).
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 notice, attachment prior to judgment, attachment in aid of
execution, execution or otherwise) with respect to itself or its property, it
hereby irrevocably waives such immunity in respect of its obligations under the
above-referenced documents, to the extent permitted by law.
(k) Currency. Each reference in this Exchange and Registration Rights
Agreement to any payment, indemnification or contribution obligation refers
to amounts in euros (the "relevant currency") and is of the essence. To the
-----------------
fullest extent permitted by law, the obligations of the Company in respect of
any amount due under this Exchange and Registration Right Agreement will,
notwithstanding any payment in any other currency (whether pursuant to a
judgment or otherwise), be discharged only to the extent of the amount in the
relevant currency that the party entitled to receive such payment may, in
accordance with its normal procedures, purchase with the sum paid in such other
currency (after any premium and costs of exchange) on the business day
immediately following the day on which such party receives such payment. If the
amount in the relevant currency that may be so purchased for any reason falls
short of the amount originally due, the Company will pay such additional
amounts, in the relevant currency, as may be necessary to compensate for the
shortfall. If, alternatively, the amount in the relevant currency that may be so
purchased for any reason exceeds the amount originally due, the party entitled
to receive such original
28
<PAGE>
amount will return such excess amounts, in the relevant currency, to the
Company. Any obligation of the Company not discharged by such payment will, to
the fullest extent permitted by applicable law, be due as a separate and
independent obligation and, until discharged as provided herein, will continue
in full force and effect.
(l) Counterparts. This agreement may be executed by the parties in
counterparts, each of which shall be deemed to be an original, but all such
respective counterparts shall together constitute one and the same instrument.
29
<PAGE>
If the foregoing is in accordance with your understanding, please sign
and return to us seven counterparts hereof, and upon the acceptance hereof by
you, on behalf of each of the Purchasers, this letter and such acceptance hereof
shall constitute a binding agreement between each of the Purchasers and the
Company. It is understood that your acceptance of this letter on behalf of each
of the Purchasers is pursuant to the authority set forth in a form of Agreement
among Purchasers, the form of which shall be submitted to the Company for
examination upon request, but without warranty on your part as to the authority
of the signers thereof.
Very truly yours,
CompleTel Europe N.V.
By: /s/ William H. Pearson
----------------------
Name: William H. Pearson
Title: Managing Director
Accepted as of the date hereof:
GOLDMAN SACHS INTERNATIONAL
PARIBAS
BARCLAYS BANK PLC
MERRILL LYNCH INTERNATIONAL
SALOMON BROTHERS INTERNATIONAL LIMITED
By: GOLDMAN SACHS INTERNATIONAL
By: /s/ Angela Yeats
--------------------
Name: Angela Yeats
Title: Attorney-in-Fact
30
<PAGE>
COMPLETEL EUROPE N.V.
By: /s/ James E. Dovey
------------------------
Name: James E. Dovey
Title:
INDIVIDUAL ACKNOWLEDGEMENT
STATE OF COLORADO)
: ss.:
COUNTY OF ARAPAHOE)
On this 12th day of April, 2000, before me personally appeared James
E. Dovey personally known to me to be the person that executed this instrument
and acknowledged to me that he/she executed the same.
WITNESS my hand and official seal.
Signature: /s/ Kathleen M. Hanlon (Seal)
-----------------------
31
<PAGE>
Exhibit A
COMPLETEL EUROPE N.V.
INSTRUCTION TO EUROCLEAR OR CLEARSTREAM PARTICIPANTS
----------------------------------------------------
(Date of Mailing)
URGENT - IMMEDIATE ATTENTION REQUESTED
DEADLINE FOR RESPONSE: [DATE]/a/
------------------------------
Euroclear or Clearstream has identified you as a Euroclear or Clearstream
Participant through which beneficial interests in the CompleTel Europe N.V. (the
"Company") 14% Senior Notes due 2010 (the "Securities") are held.
The Company is in the process of registering the Securities under the Securities
Act of 1933 for resale by the beneficial owners thereof. In order to have their
Securities included in the registration statement, beneficial owners must
complete and return the enclosed Notice of Registration Statement and Selling
Securityholder Questionnaire.
It is important that beneficial owners of the Securities receive a copy of the
- ------------------------------------------------------------------------------
enclosed materials as soon as possible as their rights to have the Securities
- --------------------------------------
included in the registration statement depend upon their returning the Notice
and Questionnaire by [Deadline For Response]. Please forward a copy of the
enclosed documents to each beneficial owner that holds interests in the
Securities through you. If you require more copies of the enclosed materials or
have any questions pertaining to this matter, please contact CompleTel Europe
N.V. at Kruidweg 609, 2132 NA Hoofddorp, The Netherlands, telephone number 31-
20-666-1701.
- -------------------------
/a/ Not less than 28 calendar days from date of mailing.
A-1
<PAGE>
COMPLETEL EUROPE N.V.
Notice of Registration Statement
and
Selling Securityholder Questionnaire
------------------------------------
(Date)
Reference is hereby made to the Exchange and Registration Rights Agreement (the
"Exchange and Registration Rights Agreement") between CompleTel Europe N.V. (the
"Company") and the Purchasers named therein. Pursuant to the Exchange and
Registration Rights Agreement, the Company has filed with the United States
Securities and Exchange Commission (the "Commission") a registration statement
on Form [__] (the "Shelf Registration Statement") for the registration and
resale under Rule 415 of the Securities Act of 1933, as amended (the "Securities
Act"), of the Company's 14% Senior Notes due 2010 (the "Securities"). A copy of
the Exchange and Registration Rights Agreement is attached hereto. All
capitalized terms not otherwise defined herein shall have the meanings ascribed
thereto in the Exchange and Registration Rights Agreement.
Each beneficial owner of Registrable Securities is entitled to have the
Registrable Securities beneficially owned by it included in the Shelf
Registration Statement. In order to have Registrable Securities included in the
Shelf Registration Statement, this Notice of Registration Statement and Selling
Securityholder Questionnaire ("Notice and Questionnaire") must be completed,
executed and delivered to the Company's counsel at the address set forth herein
for receipt ON OR BEFORE [Deadline for Response]. Beneficial owners of
Registrable Securities who do not complete, execute and return this Notice and
Questionnaire by such date (i) will not be named as selling securityholders in
the Shelf Registration Statement and (ii) may not use the Prospectus forming a
part thereof for resales of Registrable Securities.
Certain legal consequences arise from being named as a selling securityholder in
the Shelf Registration Statement and related Prospectus. Accordingly, holders
and beneficial owners of Registrable Securities are advised to consult their own
securities law counsel regarding the consequences of being named or not being
named as a selling securityholder in the Shelf Registration Statement and
related Prospectus.
A-2
<PAGE>
ELECTION
The undersigned holder (the "Selling Securityholder") of Registrable Securities
hereby elects to include in the Shelf Registration Statement the Registrable
Securities beneficially owned by it and listed below in Item (3). The
undersigned, by signing and returning this Notice and Questionnaire, agrees to
be bound with respect to such Registrable Securities by the terms and conditions
of this Notice and Questionnaire and the Exchange and Registration Rights
Agreement, including, without limitation, Section 6 of the Exchange and
Registration Rights Agreement, as if the undersigned Selling Securityholder were
an original party thereto.
Upon any sale of Registrable Securities pursuant to the Shelf Registration
Statement, the Selling Securityholder will be required to deliver to the Company
and Trustee the Notice of Transfer set forth in Appendix A to the Prospectus and
as Exhibit B to the Exchange and Registration Rights Agreement.
The Selling Securityholder hereby provides the following information to the
Company and represents and warrants that such information is accurate and
complete:
A-3
<PAGE>
QUESTIONNAIRE
(1)(a) Full Legal Name of Selling Securityholder:
(b) Full Legal Name of Registered Holder (if not the same as in (a) above)
of Registrable Securities Listed in Item (3) below:
(c) Full Legal Name of Euroclear or Clearstream Participant (if applicable
and if not the same as (b) above) Through Which Registrable Securities
Listed in Item (3) below are Held:
(2) Address for Notices to Selling Securityholder:
---------------------------------
---------------------------------
---------------------------------
Telephone: ---------------------------------
Fax: ---------------------------------
Contact Person: ---------------------------------
(3) Beneficial Ownership of Securities:
Except as set forth below in this Item (3), the undersigned does not
beneficially own any Securities.
(a) Principal amount of Registrable Securities beneficially owned:
-------
CUSIP No(s). of such Registrable Securities:
---------------------------------------------------------------------
(b) Principal amount of Securities other than Registrable Securities
beneficially owned:
---------------------------------------------------------------------
CUSIP No(s). of such other Securities:
---------------------------------------------------------------------
(c) Principal amount of Registrable Securities which the undersigned
wishes to be included in the Shelf Registration Statement:
----------
CUSIP No(s). of such Registrable Securities to be included in the
Shelf Registration Statement:
(4) Beneficial Ownership of Other Securities of the Company:
A-4
<PAGE>
Except as set forth below in this Item (4), the undersigned Selling
Securityholder is not the beneficial or registered owner of any other
securities of the Company, other than the Securities listed above in Item
(3).
State any exceptions here:
(5) Relationships with the Company:
Except as set forth below, neither the Selling Securityholder nor any of
its affiliates, officers, directors or principal equity holders (5% or
more) has held any position or office or has had any other material
relationship with the Company (or its predecessors or affiliates) during
the past three years.
State any exceptions here:
(6) Plan of Distribution:
Except as set forth below, the undersigned Selling Securityholder intends
to distribute the Registrable Securities listed above in Item (3) only as
follows (if at all): Such Registrable Securities may be sold from time to
time directly by the undersigned Selling Securityholder or, alternatively,
through underwriters, broker-dealers or agents. Such Registrable
Securities may be sold in one or more transactions at fixed prices, at
prevailing market prices at the time of sale, at varying prices determined
at the time of sale, or at negotiated prices. Such sales may be effected
in transactions (which may involve crosses or block transactions) (i) on
any securities exchange or quotation service on which the Registered
Securities may be listed or quoted at the time of sale, (ii) in the over-
the-counter market, (iii) in transactions otherwise than on such exchanges
or services or in the over-the-counter market, or (iv) through the writing
of options. In connection with sales of the Registrable Securities or
otherwise, the Selling Securityholder may enter into hedging transactions
with broker-dealers, which may in turn engage in short sales of the
Registrable Securities in the course of hedging the positions they assume.
The Selling Securityholder may also sell Registrable Securities short and
deliver Registrable Securities to close out such short positions, or loan
or pledge Registrable Securities to broker-dealers that in turn may sell
such securities.
State any exceptions here:
By signing below, the Selling Securityholder acknowledges that it understands
its obligation to comply, and agrees that it will comply, with the provisions of
the Exchange Act and the rules and regulations thereunder, particularly
Regulation M.
In the event that the Selling Securityholder transfers all or any portion of the
Registrable Securities listed in Item (3) above after the date on which such
information is provided to the Company, the Selling Securityholder agrees to
notify the transferee(s) at the time of the
A-5
<PAGE>
transfer of its rights and obligations under this Notice and Questionnaire and
the Exchange and Registration Rights Agreement.
By signing below, the Selling Securityholder consents to the disclosure of the
information contained herein in its answers to Items (1) through (6) above and
the inclusion of such information in the Shelf Registration Statement and
related Prospectus. The Selling Securityholder understands that such
information will be relied upon by the Company in connection with the
preparation of the Shelf Registration Statement and related Prospectus.
In accordance with the Selling Securityholder's obligation under Section 3(d) of
the Exchange and Registration Rights Agreement to provide such information as
may be required by law for inclusion in the Shelf Registration Statement, the
Selling Securityholder agrees to promptly notify the Company of any inaccuracies
or changes in the information provided herein which may occur subsequent to the
date hereof at any time while the Shelf Registration Statement remains in
effect. All notices hereunder and pursuant to the Exchange and Registration
Rights Agreement shall be made in writing, by hand-delivery, first-class mail,
or air courier guaranteeing overnight delivery as follows:
(i) To the Company:
_________________________
_________________________
_________________________
_________________________
_________________________
(ii) With a copy to:
_________________________
_________________________
_________________________
_________________________
_________________________
Once this Notice and Questionnaire is executed by the Selling Securityholder and
received by the Company's counsel, the terms of this Notice and Questionnaire,
and the representations and warranties contained herein, shall be binding on,
shall inure to the benefit of and
A-6
<PAGE>
shall be enforceable by the respective successors, heirs, personal
representatives, and assigns of the Company and the Selling Securityholder (with
respect to the Registrable Securities beneficially owned by such Selling
Securityholder and listed in Item (3) above. This Agreement shall be governed in
all respects by the laws of the State of New York.
IN WITNESS WHEREOF, the undersigned, by authority duly given, has caused this
Notice and Questionnaire to be executed and delivered either in person or by its
duly authorized agent.
Dated:
----------------------------
---------------------------------------------------------------
Selling Securityholder
(Print/type full legal name of beneficial owner of Registrable
Securities)
By:
-----------------------------------------------------------
Name:
Title:
A-7
<PAGE>
PLEASE RETURN THE COMPLETED AND EXECUTED NOTICE AND QUESTIONNAIRE FOR RECEIPT ON
OR BEFORE [DEADLINE FOR RESPONSE] TO THE COMPANY'S COUNSEL AT:
_________________________
_________________________
_________________________
_________________________
_________________________
A-8
<PAGE>
Exhibit B
NOTICE OF TRANSFER PURSUANT TO REGISTRATION STATEMENT
[Name of Trustee]
CompleTel Europe N.V.
c/o [Name of Trustee]
[Address of Trustee]
Attention: Trust Officer
Re: COMPLETEL EUROPE N.V. (the "Company")
14% Senior Notes due 2010
Dear Sirs:
Please be advised that has transferred $ aggregate
-------------- -----------
principal amount of the above-referenced Notes pursuant to an effective
Registration Statement on Form [ ] (File No. 333- ) filed by the
---- -----
Company.
We hereby certify that the prospectus delivery requirements, if any, of the
Securities Act of 1933, as amended, have been satisfied and that the above-named
beneficial owner of the Notes is named as a "Selling Holder" in the Prospectus
dated [date] or in supplements thereto, and that the aggregate principal amount
of the Notes transferred are the Notes listed in such Prospectus opposite such
owner's name.
Dated:
Very truly yours,
-----------------------------------
(Name)
By:
-----------------------------------
(Authorized Signature)
B-1
<PAGE>
Exhibit 10.22
[COMPLETEL EUROPE LETTERHEAD]
GUARANTEE
FROM: COMPLETEL EUROPE N.V., a company whose registered office is at
Drentestaat 24, 1083 HK Amsterdam, the Netherlands, with an authorized number of
shares of 766,665,300 with a nominal value of Euros 0.1 per share, of which
153,333,060 shares are issued and outstanding (hereinafter referred to as the
"Guarantor")
TO: PARIBAS, 3 rue d'Antin, 75002 Paris (hereinafter referred to as the
"Beneficiary")
1. We refer to the credit facilities (hereinafter collectively referred to as
the "Facilities"):
- - in the amount of 567,000 Euros granted by the Beneficiary to Mr. Jerome de
Vitry pursuant to a credit agreement dated March 28., 2000,
- - in the amount of 567,000 Euros granted by Beneficiary to Mr and Mrs Jorg
Rieder pursuant to a credit agreement dated March 27., 2000,
- - in the amount of 309,000 Euros granted by the Beneficiary to Mr. Martin
Rushe pursuant to a credit agreement dated March 28., 2000,
- - in the amount of 103,000 granted by Beneficiary to Mrs. Anna Lascar pursuant
to a credit agreement dated March 28., 2000,
- - in the amount of 103,000 Euros granted by the Beneficiary to Mrs. Catherine
Blanchet pursuant to a credit agreement dated March 27., 2000,
- - in the amount of 154,000 Euros granted by the Beneficiary to Mr. and Mrs.
John Broach pursuant to a credit agreement dated March 27., 2000,
- - in the amount of 154,000 Euros granted by the Beneficiary to Mr. and Mrs.
Larry Beagley pursuant to a credit agreement dated March 27., 2000.
The borrowers under the above mentioned credit agreements (collectively the
"Credit Agreements" and individually a "Credit Agreement") are hereinafter
referred to as the "Borrowers" (individually a "Borrower").
We acknowledge to be fully aware of the Facilities the purpose of which is to
finance the acquisition of Completel shares by the Borrowers, and to approve all
the terms and conditions of the Credit Agreements.
2. Upon the Borrowers' requests, we hereby irrevocably undertake to pay to the
Beneficiary any sum or sums not exceeding an aggregate amount of 2,060,000 Euros
upon receipt by us of the Beneficiary's first demand in writing and its written
statements stating:
i) that a Borrower is in breach of its obligations under a Credit Agreement;
and
ii) the respect in which such Borrower is in breach.
<PAGE>
3. Any request for payment has to be sent to us by telex, facsimile or
registered mail at the address listed above, attention: Managing Director, Tel:
(31) 20.540.5824, Fax: (31) 20.644.7011 with a copy to : David Lacey and Anna
Lascar, CompleTel SAS, 9-11 allee de l'Arche, 92671 Courbevoie cedex, - Tel :
(33) 1.72.92.20.00 - Fax : (33) 1.72.92.26.13
4. This guarantee shall expire on December 29., 2001 and thereafter no payment
request shall be validly made.
5. All amounts to be paid by us pursuant to this guarantee shall be paid
without set-off and net of any taxes, duties or other charges or any nature
whatsoever.
6. We hereby declare:
- that we are a duly registered company in the Netherlands, with full
and complete capacity to sign the present guarantee in favour of the
Beneficiary;
- that the present guarantee is delivered pursuant to a power of
attorney from the Management Board of CompleTel Europe N.V. dated March
13, 2000 given to Anna Lascar, a copy of which is attached hereto,
- to have obtained all authorizations required for the validity and the
effectiveness of the present guarantee; and that its signature is not
contrary to any legal, regulatory or statutory provisions which are
binding upon us.
7. The present guarantee shall enure to the benefit of the Beneficiary and its
successors and assigns, and the obligations of the Guarantor hereunder shall be
binding on it and its successors in title notwithstanding any change in the
constitution or status of it or any of its successors in title.
<PAGE>
8. This guarantee is subject to the Uniform Rules for Demand Guarantees, I.C.C.
Publication n(degree)458. Any matter not settled by these rules shall be
governed by French law. Any dispute arising out of the validity, interpretation
or execution of this guarantee will be submitted to the jurisdiction of the
courts within the competence of the Court of Appeals of Paris. However, this
power of jurisdiction is stipulated in the sole favour of the Beneficiary that
is entitled to sue us before any other court that it may elect.
Made on March 30., 2000
/s/ Anna Lascar
COMPLETEL EUROPE N.V.
Represented by Anna Lascar
Title: Vice President Legal Affairs
<PAGE>
CLIFFORD
CHANCE
Exhibit 10.23
MEMBERS OF THE COMPLETEL GROUP
AS BORROWERS
GOLDMAN SACHS INTERNATIONAL
PARIBAS
AS LEAD ARRANGERS
PARIBAS
AS FACILITY AGENT
PARIBAS
AS SECURITY AGENT
AND
OTHERS
-------------------------------------------------
AMENDED AND RESTATED
(EURO)265,000,000
CREDIT AGREEMENT
-------------------------------------------------
<PAGE>
CONTENTS
Clause Page
1. Definitions And Interpretation........................................ 1
2. The Facilities........................................................ 26
3. Utilisation Of The Tranche A Term Facility............................ 28
4. Interest Periods For Term Advances.................................... 31
5. Payment And Calculation Of Interest On Term Advances.................. 32
6. Utilisation Of The Revolving Facility................................. 33
7. Payment And Calculation Of Interest On Revolving Advances............. 36
8. Conversion And Working Capital Facility............................... 37
9. Market Disruption And Alternative Interest Rates...................... 38
10. Notification.......................................................... 39
11. Repayment Of The Term Facilities...................................... 39
12. Repayment Of The Revolving Facility................................... 40
13. Cancellation And Prepayment........................................... 40
14. Mandatory Prepayment.................................................. 43
15. Taxes................................................................. 45
16. Tax Receipts.......................................................... 46
17. Increased Costs....................................................... 48
18. Illegality............................................................ 49
19. Mitigation............................................................ 50
20. Representations....................................................... 50
21. Financial And Other Information....................................... 56
22. Financial Condition................................................... 59
23. Covenants............................................................. 63
24. Events Of Default..................................................... 70
25. Guarantee And Indemnity............................................... 74
26. Commitment Commission And Fees........................................ 78
27. Costs And Expenses.................................................... 79
28. Default Interest And Break Costs...................................... 80
29. Parent's Indemnities.................................................. 81
30. Currency Of Account And Payment....................................... 82
<PAGE>
31. Payments............................................................... 82
32. Set-Off................................................................ 84
33. Sharing................................................................ 85
34. The Facility Agent, The Lead Arrangers And The Participants............ 86
35. Assignments And Transfers.............................................. 91
36. Additional Borrowers................................................... 95
37. Additional Guarantors.................................................. 95
38. Calculations And Evidence Of Debt...................................... 96
39. Remedies And Waivers, Partial Invalidity............................... 97
40. Notices................................................................ 98
41. Counterparts........................................................... 99
42. Amendments............................................................. 99
43. Governing Law..........................................................101
44. Jurisdiction...........................................................101
45. EIF Risk Participation.................................................102
Schedule 1 The Original Parties............................................103
Part A.................................................................103
Part B.................................................................103
Part C.................................................................105
Schedule 2 Form Of Transfer Certificate....................................106
Schedule 3 Conditions Precedent............................................109
Schedule 4 Notice Of Drawdown..............................................114
Schedule 5 Existing Encumbrances, Guarantees And Indemnities...............116
Part A Existing Encumbrances..........................................116
Part B Guarantees And Indemnities.....................................121
Schedule 6 Form Of Compliance Certificate..................................123
Schedule 7 Original Shareholders...........................................125
Schedule 8 Form Of Borrower And Guarantor Accession Memorandum.............126
Part A Memorandum.....................................................126
Part B Form Of Guarantor Accession Memorandum.........................128
Schedule 9 Additional Conditions Precedent.................................130
Schedule 10 Material Agreements............................................132
Schedule 11 Mandatory Costs................................................133
<PAGE>
Schedule 12 Margin Adjustment............................................. 135
Schedule 13 Existing Bank Accounts........................................ 137
Schedule 14 Form Of Charge Over Business (Nantissement De Fonds
De Commerce) To Be Executed By Completel Services
S.A.S. In Accordance With Clause 23.11.3...................... 139
<PAGE>
THIS AGREEMENT originally dated 6 January 2000 and set out below as amended and
restated as of the Effective Date, is made on 17 March 2000
BETWEEN
(1) COMPLETEL EUROPE N.V. (the "Parent");
(2) COMPLETEL S.A.S. in its capacity as the obligors' agent (the "Obligors'
Agent");
(3) THE COMPANIES listed in Part A of Schedule 1 as, and in their capacity as,
borrowers hereunder (the "Original Borrowers");
(4) THE COMPANIES listed in Part B of Schedule 1 as, and in their capacity as,
original guarantors hereunder (the "Original Guarantors");
(5) GOLDMAN SACHS INTERNATIONAL and PARIBAS as lead arrangers of the Facilities
(the "Lead Arrangers");
(6) PARIBAS as facility agent for the Participants (the "Facility Agent");
(7) PARIBAS as security agent for the Banks (the "Security Agent");
(8) EUROPEAN INVESTMENT FUND as risk participant (the "EIF"); and
(9) THE BANKS (as defined below).
IT IS AGREED as follows.
1. DEFINITIONS AND INTERPRETATION
1.1 Definitions
In this Agreement:
"AART" shall have the meaning as set out in Clause 22 (Financial Condition);
and for the purpose of sub-clause 6.2.5(ii), as varied therein.
"Additional Borrower" means any company which has become an additional
borrower in accordance with Clause 36 (Additional Borrowers).
"Additional Guarantor" means any company which has become an additional
guarantor in accordance with Clause 37 (Additional Guarantors).
"Additional Obligor" means an Additional Borrower or Additional Guarantor.
"Advance" means a Revolving Advance or a Term Advance.
"Agents" means the Facility Agent and the Security Agent; and "Agent" means
any one of them.
"Amendment Agreement" means the Supplemental Deed dated 17 March 2000
pursuant to which the parties thereto agreed to amend this Agreement and the
Subordination, Security Agency and Intercreditor Deed.
<PAGE>
"Annualised EBITDA" shall have the meaning as set out in Clause 22
(Financial Condition).
"Annualised Direct Client Revenues" shall have the meaning as set out in
Clause 22 (Financial Condition).
"Annualised Net Revenue" means, on any date of determination, the aggregate
of Direct Client Revenues and Indirect Client Revenues calculated from the
aggregate of such revenues as indicated in the three most recently delivered
monthly management statements delivered pursuant to Clause 21.3 (Monthly
Management Statements) and multiplied by four.
"Applicable Interest Rate" means, in relation to any Advance, the Taux
Effectif Global, as defined by Art. L313-1 of the French Code de la
Consommation applicable to such Advance, as determined by the Facility Agent
three Business Days prior to the proposed day for such Advance.
"Applicable Margin" means:
(a) in relation to the Tranche A Term Facility, 3.75 per cent. per annum
subject to Schedule 12 (Margin Adjustment); and
(b) in relation to the Revolving Facility and the Tranche B Term Facility,
3.00 per cent. per annum subject to Schedule 12 (Margin Adjustment).
"ART" means the Autorite de Regulation des Telecommunications (or any
successor entity).
"Authorised Signatory" means, in relation to an Obligor or proposed Obligor,
any person (I) who is duly authorised (in such manner as may be reasonably
acceptable to the Facility Agent); and (II) in respect of whom the Facility
Agent has received a certificate either (a) delivered pursuant to paragraph
A1(c) of Schedule 3 (Conditions Precedent); or (b) signed by a director or
another Authorised Signatory of such Obligor or proposed Obligor setting out
the name and signature of such person and confirming such person's authority
to act.
"Available Commitment" means, in relation to a Bank at any time, the
aggregate of its Available Tranche A Term Commitment and Available Revolving
Commitment.
"Available Revolving Commitment" means, in relation to a Bank at any time
and save as otherwise provided herein, its Revolving Commitment at such time
less its share of the Revolving Advances which are then outstanding and not
due for repayment, provided that such amount shall not be less than zero.
"Available Revolving Facility" means, at any time, the aggregate amount of
the Available Revolving Commitments adjusted, in the case of any proposed
drawdown, so as to take into account:
<PAGE>
(a) any reduction in the Revolving Commitment of a Bank pursuant to the
terms hereof;
(b) any Revolving Advance which, pursuant to any other drawdown, is to be
made; and
(c) any Revolving Advance which is due to be repaid,
on or before the proposed drawdown date.
"Available Tranche A Term Commitment" means, in relation to a Bank at any
time and save as otherwise provided herein, its Tranche A Term Commitment at
such time less the aggregate of its share of the Tranche A Term Advances
which are then outstanding.
"Available Tranche A Term Facility" means, at any time, the aggregate amount
of the Available Tranche A Term Commitments adjusted, in the case of any
proposed drawdown, so as to take into account any reduction in the Tranche A
Term Commitment of a Bank on or before the proposed drawdown date pursuant
to the terms hereof.
"Bank" means any financial institution:
(a) named in Part C of Schedule 1 (The Banks); or
(b) which has become a party hereto in accordance with Clause 35.4
(Assignments by Banks) or Clause 35.5 (Transfers by Participants), and
which has not ceased to be a party hereto in accordance with the terms
hereof.
"Bank Accounts" means all accounts maintained by the Obligor Group with any
financial institution (other than those accounts which are the subject of a
Permitted Encumbrance).
"Borrower Accession Memorandum" means a memorandum substantially in the form
set out in Part A of Schedule 8 (Form of Borrower and Guarantor Accession
Memorandum).
"Borrowers" means the Original Borrowers and any Additional Borrowers.
"Business Day" means:
(a) a day (other than a Saturday or Sunday) which is not a public holiday
and on which banks generally are open for business in Frankfurt, Paris
and London; and
(b) (in relation to any date for payment or purchase of a sum denominated
in euro) the Trans-European Automated Real-Time Gross Settlement
Express Transfer System (TARGET), or any successor thereto, is
operating credit and transfer instructions in respect of payments in
euro.
<PAGE>
"Business Plan" means the annual management base case for the Group
delivered to the Facility Agent pursuant to Clause 2.3 (Conditions
Precedent) as set out in Appendix 1 to the Information Memorandum.
"Business Plan Report" the report prepared by Analysys Inc. dated 12
November 1999 on the Business Plan for the Group and addressed to Goldman
Sachs and Paribas.
"Capital Expenditure" means any expenditure or obligations as determined in
accordance with US GAAP.
"Cash Equivalent Investments" means:
(a) debt securities denominated in sterling, in dollars or in euros ("Other
Currency") issued by the United Kingdom, the United States of America
or any Participating Member State which are not convertible into any
other form of security;
(b) debt securities denominated in sterling or any Other Currency which are
not convertible into any other form of security, rated P-1 (Moody's
Investor Services Inc.) or A-1 (Standard & Poors' Corporation) (or any
equivalent successor rating) which are not issued or guaranteed by any
member of the Group;
(c) certificates of deposit denominated in sterling or any Other Currency
issued by, and acceptances by, banking institutions authorised under
applicable legislation of any Participating Member State which at the
time of making such issue or acceptances, have outstanding debt
securities rated as provided in paragraph (b) above; and
(d) such other securities (if any) as are approved in writing by the
Facility Agent.
"CECC" means CompleTel ECC B.V..
"Charge over High Yield Account" means the charge agreement in respect of
the High Yield Account dated on or about the date hereof in the agreed form.
"Commitment" means, in relation to a Bank at any time, the aggregate of its
Tranche A Term Commitment and its Revolving Commitment.
"Compliance Certificate" means a certificate substantially in the form set
out in Schedule 6 (Form of Compliance Certificate).
"Computer System" means any computer hardware or software or any equipment
operated by electronic means with embedded software.
"Constructed" means, in relation to MAN-Network, that such fibre network has
been installed in duct either leased by or owned by the Group and that such
wireless transmission network has been installed as part of the French
Network or the German Network; and in relation to any Leased Capacity
therein, that the Lease Agreement
<PAGE>
under which such duct, capacity or line is leased has come into full force
and effect (and all conditions (if any) therein have been satisfied in all
material respects).
"Conversion Available Amount" means 141,000,000.
"Converted Amount" means the amount as defined in Clause 8.2 (Conversion and
the Tranche B Term Facility).
"Conversion Date" means 30 December 2002.
"Credit Facility Documents" means the Finance Documents and the Intercompany
CECC Facility Agreement.
"Customer" means any person who has entered into a contract to use the MAN-
Network in Germany or France and any other person using the services of any
member of the Group pursuant to a contract including, without limitation,
information or internet services.
"Debt Service Coverage Ratio" shall have the meaning as set out in Clause 22
(Financial Condition).
"Direct Client Revenues" means the aggregate of revenues (net of allowance
for bad debts) of each member of the Group from Customers (other than
Indirect Client Revenues).
"Dispute" means any dispute referred to in Clause 44 (Jurisdiction).
"Due Diligence Reports" means the legal due diligence report prepared by
Norton Rose (as counsel to the Group) in relation to factual matters, other
than regulatory matters, concerning CompleTel SAS, CompleTel Services SAS
and Acces Solutions Internet dated 6 December 1999; and the due diligence
report prepared by Clifford Chance in relation to factual matters, other
than regulatory matters, concerning CompleTel GmbH dated 31 December 1999,
each addressed to the Lead Arrangers, the Agents and the Banks.
"EBITDA" shall have the meaning as set out in Clause 22 (Financial
Condition).
"Effective Date" shall have the meaning given to this term in the Amendment
Agreement.
"Effective Global Rate" shall have the meaning set out in sub-clause 2.7.1
of Clause 2.7 (French Borrowers: Effective Global Rate of Return).
"EMU" means Economic and Monetary Union as contemplated in the Treaty on
European Union.
"EMU Legislation" means legislative measures of the European Union for the
introduction of, changeover to or operation of the euro in one or more
member states, being in part legislative measures to implement EMU.
<PAGE>
"Encumbrance" means (a) a mortgage, charge, pledge, lien or other
encumbrance securing any obligation of any person, (b) any arrangement with
a financial institution under which money or claims to, or the benefit of,
an account with such institution may be applied, set off or made subject to
a combination of accounts so as to effect discharge of any sum owed or
payable to such institution or (c) any other type of preferential
arrangement (including any title transfer and retention arrangement) having
a similar effect.
"Environmental Claim" means any claim, proceeding or investigation by any
person pursuant to any Environmental Law.
"Environmental Law" means any law applicable to the Telecoms Business
undertaken by the Group which relates to the pollution or protection of the
environment or harm to or the protection of human health or the health of
animals or plants.
"Environmental Permits" means any permit, licence, consent, approval and
other authorisation and the filing of any notification, report or assessment
required under any Environmental Law for the operation of the Telecoms
Business undertaken by the Group.
"EURIBOR" means, in relation to any amount to be advanced to, or owing by,
an Obligor under the Finance Documents in euro on which interest for a given
period is to accrue:
(a) the percentage rate per annum equal to the offered quotation which
appears on the page of the Telerate Screen which displays the rate of
the Banking Federation of the European Union for euro (being currently
page 248) for such period as of 11.00 a.m. (Brussels time) on the
Quotation Date for such period or, if such page or such service shall
cease to be available, such other page or such other service for the
purpose of displaying an average rate of the Banking Federation of the
European Union as the Facility Agent, after consultation with the Banks
and the Obligors' Agent, shall reasonably select; or
(b) if no quotation for euro for the relevant period is displayed and the
Facility Agent has not selected an alternative service on which a
quotation is displayed, the arithmetic mean (rounded upwards to four
decimal places) of the rates (as notified to the Facility Agent) at
which each of the Reference Banks was offering to prime banks in the
European interbank market deposits in euro of an equivalent amount and
for such period as of 11.00 a.m. (Brussels time) on the Quotation Date.
"Event of Default" means any circumstance described as such in Clause 24
(Events of Default).
"Excess Cash Flow" means, in respect of any financial year of the Parent,
EBITDA for such financial year of the Group less:
<PAGE>
(a) Capital Expenditure incurred by any member of the Group during such
period;
(b) any amount actually paid or due and payable in respect of taxes by any
member of the Group during such period; and
(c) any payments made by any member of the Group in respect of principal,
interest and other charges on Permitted Indebtedness during such
period,
plus or, as the case may be, minus (i) any decrease or increase in the
aggregate working capital of the Group or (ii) any amounts paid or received
in respect of extraordinary or exceptional items.
"Existing Bank Accounts" means each of the accounts set out in Schedule 13
(Existing Bank Accounts).
"Exposure" means, at any time:
(a) in relation to a Bank, the aggregate of its Available Commitment and
its share of the Loan at such time less, in the case of a Participating
Lender, the aggregate of the Participated Portions of such aggregate
amount at such time; and
(b) in relation to the EIF, the aggregate of the amount of the Participated
Portions of all Participating Lenders. "Facilities" means the Term
Facilities and the Revolving Facility, and "Facility" means any one of
them.
"Facility Office" means, in relation to the Facility Agent, the office
identified with its signature below or such other office as it may select by
notice and, in relation to any Participant, the office notified by it to the
Facility Agent in writing prior to the date hereof (or, in the case of a
Transferee, at the end of the Transfer Certificate to which it is a party as
Transferee) or such other office as it may from time to time select by
notice to the Facility Agent provided that such Participant shall not be
entitled to receive (i) any payment under Clause 15 (Taxes); or (ii) any
greater payment under Clause 17 (Increased Costs) as a result of such change
in office.
"Finance Documents" means this Agreement, the Amendment Agreement, the
Intercreditor Agreement, the Security Documents, any Borrower Accession
Memorandum, any Guarantor Accession Memorandum, any fee letter delivered
pursuant to Clause 26 (Commitment Commission and Fees), any Hedging
Agreement and any other document designated as such by the Facility Agent
and the Obligors' Agent.
"Finance Parties" means the Agents, the Lead Arrangers and the Banks.
"Financial Indebtedness" means (without double counting) any indebtedness
for or in respect of:
<PAGE>
(a) moneys borrowed;
(b) any amount raised by acceptance under any acceptance credit facility;
(c) any amount raised pursuant to any note purchase facility or the issue
of bonds, notes, debentures, loan stock or any similar instrument;
(d) any amount raised pursuant to any issue of shares which are expressed
to be redeemable;
(e) the amount of any liability in respect of any lease or hire purchase
contract which would, in accordance with US GAAP, be treated as a
finance or capital lease;
(f) any amount raised under any other transaction (including any forward
sale or purchase agreement) having the commercial effect of a
borrowing;
(g) any documentary or standby letter of credit facility or performance
bond facility other than in respect of a trading liability;
(h) any interest rate swap, currency swap, forward foreign exchange
transaction, cap, floor, collar or option transaction or any other
treasury transaction or any combination thereof or any other
transaction entered into in connection with protection against or
benefit from fluctuation in any rate or price (and the amount of the
Financial Indebtedness in relation to any such transaction shall be
calculated by reference to the mark-to-market valuation of such
transaction at the relevant time);
(i) the amount of any liability which is deferred for a period of 180 days
or more after the relevant asset or service was supplied pursuant to
any deferred purchase agreement;
(j) receivables sold or discounted (other than on a non-recourse basis);
(k) any agreement or option to re-acquire an asset if one of the primary
reasons for entering into such agreement or option is to raise finance;
and
(l) any guarantee, underwriting or indemnity for any of the items referred
to in paragraphs (a) to (k) above.
"Financial Quarter" means, in relation to the Group, those periods ending on
31 March, 30 June, 30 September and 31 December in the financial year of the
Parent.
"France" means the Republic of France.
"France Accounts" means all Bank Accounts held with account banks in France.
"French Borrower" means CompleTel Services S.A.S. or CompleTel S.A.S..
"French Network" means the telecoms networks comprising MAN-Network of the
Group installed in accordance with the relevant licences relating thereto in
each of the
<PAGE>
following markets of France: Paris, Lyon, Marseille, Lille, Toulouse,
Grenoble and Nice (and any other city agreed to be considered part of the
network in accordance with sub-Clause 6.2.3).
"German Network" means the telecoms networks comprising MAN-Network of the
Group installed in accordance with the relevant licences relating thereto in
each of the following markets of Germany: Munich, Nuremberg, Berlin and
Essen (and any other city agreed to be considered part of the network in
accordance with sub-Clause 6.2.3).
"Germany" means the Federal Republic of Germany.
"Group" means the Parent and its subsidiaries from time to time and
CompleTel SPC II until such time as it ceases to be an Obligor pursuant to
provisions of Clause 37.3 (Resignation of CompleTel SPC II as an Original
Guarantor).
"Guarantors" means each of the Original Guarantors and each Additional
Guarantor.
"Guarantor Accession Memorandum" means a memorandum substantially in the
form set out in Part B of Schedule 8 (Form of Borrower and Guarantor
Accession Memorandum).
"Hedge Counterparty" means any Bank party to this Agreement from time to
time or any affiliate of such a Bank.
"Hedging Agreement" means each of the agreements entered into or to be
entered into between a Borrower and a Hedge Counterparty for the purposes of
hedging interest rate liabilities in accordance with Clause 23.12 (Hedging
Programme).
"High Yield Bonds" means the $147,500,000 14 per cent. senior discount notes
due 2009 of the Parent.
"High Yield Account" shall have the meaning given to this term in the Charge
over High Yield Account.
"Indirect Client Revenues" means the aggregate of revenues (net of allowance
for bad debts) of each member of the Group derived from resale without a
direct connection.
"Information Memorandum" means the document concerning the Original Obligors
which was prepared in relation to this transaction and which the Parent
authorised to be distributed by the Lead Arrangers to selected banks during
November 1999; updated, as the case may be, by further information delivered
on or after the date thereof to the Facility Agent and identified as
supplemental.
"Instructing Group" means a Participant or Participants whose Exposures
amount in aggregate to more than sixty-six and two thirds per cent. of the
Total Exposures.
"Intellectual Property" means all patents, trade marks, service marks,
designs, business names, copyrights, design rights, moral rights,
inventions, confidential information, knowhow and other intellectual
property rights and interests, whether
<PAGE>
registered or unregistered, and the benefit of all licences, applications,
rights to use now or hereafter belonging to the any member of the Group and
required for the Telecoms Business undertaken by the Group.
"Intercompany CECC Facility Agreement" means, in relation to a French
Borrower, an intercompany loan agreement dated on or around the date hereof
and made between CECC and such French Borrower in the agreed form.
"Intercompany Loan Security Agreement" means the agreement delivered
pursuant to paragraph 22 of Schedule 3 (Condition Precedent).
"Interconnection Agreements" means the interconnection agreements set out in
Schedule 10 (Material Agreements).
"Intercreditor Agreement" means the subordination, security agency and
intercreditor deed in the agreed form dated on or around the date hereof and
made between the Original Borrowers, the Original Guarantors, the Facility
Agent, the Security Agent and others.
"Interest Period" means, save as otherwise provided herein:
(a) any of those periods mentioned in Clause 4.1 (Interest Periods); and
(b) in relation to an Unpaid Sum, any of those periods mentioned in Clause
28.1 (Default Interest Periods).
"Invested Capital" shall have the meaning as set out in Clause 22 (Financial
Condition).
"IPO" means an initial public offering of shares by the Parent or any
holding company of the Parent.
"Lease Agreement" means any lease agreement entered into by a member of the
Group in respect of Leased Capacity.
"Leased Capacity" means capacity or lines comprising the French Network or
German Network and leased to a member of the Group pursuant to a lease
agreement (for the purposes of sub-clause 22.1.6 only, other than capacity
or lines leased for the purpose of providing of digital subscriber lines).
"Licences" means relevant French and German fixed or wireless telecoms
licences issued by any governmental or Regulatory Authority or
authorisations of any governmental or Regulatory Authority necessary in
connection with the carrying on of the Telecoms Business undertaken by the
Group including, without limitation, as at the date hereof the licences
delivered by the ART under articles L.33-1 and L.34-1 of the Code de Postes
et Telecommunications, and the licences granted by the RegTP under sections
6 para. (1) no. 1 and 2 of the Telekommunikationsgesetz and "Licence" means
any of them.
<PAGE>
"Loan" means, at any time, the aggregate of the Term Loans and the Revolving
Loan.
"Long Term" means, in relation to a Lease Agreement, a Lease Agreement where
the lease thereunder is for a period of at least five years.
"Mandatory Cost Rate" means the rate determined in accordance with Schedule
11 (Mandatory Costs).
"MAN-Network" means the network comprising duct, fibre optic cable (in each
case, for the purposes of sub-clause 22.1.6 only, other than digital
subscriber lines), Leased Capacity and wireless path route owned or
controlled by a member of the Group used in the assembly of its transmission
network of the French Network and German Network.
"Material Adverse Change" means a material and adverse change in either (a)
the financial condition or business of the Obligor Group (taken as a whole);
or (b) the ability of the Obligor Group (taken as a whole) to perform its
payment and other material obligations under the Credit Facility Documents.
"Material Adverse Effect" means a material adverse effect on (a) the
financial condition or business of the Obligor Group (taken as a whole); (b)
the ability of the Obligor Group (taken as a whole) to perform its payment
and other material obligations under the Credit Facility Documents; or (c)
the legality, validity or binding effect of the Credit Facility Documents.
"Material Agreement" means each Interconnection Agreement, Long Term Lease
Agreement in relation to fibre and Supply and Operational Agreement.
"Material Subsidiary" means, at any time, a subsidiary of the Parent which:
(a) is an Original Obligor (other than CompleTel SPC II if at such time it
is not an Obligor pursuant to Clause 37.3 (Resignation of Completel SPC
II as an Original Guarantor);
(b) has revenues representing 5 per cent. or more of the consolidated
revenues of the Group;
(c) has book assets representing 5 per cent. or more of the consolidated
book assets of the Group; or
(d) any Additional Borrower,
in each of paragraphs (b) and (c) above calculated on a consolidated basis.
Compliance with the conditions set out in paragraphs (b) and (c) shall be
determined by reference to the most recent Compliance Certificate supplied
by the Parent and the most recently delivered quarterly financial statements
pursuant to Clause 21.2 (Quarterly Management Statements).
<PAGE>
"Necessary Authorisations" means all approvals, authorisations and licences
from, all rights granted by and all filings, registrations and agreements
with any person including, without limitation, any government or other
regulatory authority or third party necessary for the construction,
maintenance and operation of the Telecoms Business undertaken by the Group
(other than Licences and Material Agreements).
"Net Cash Proceeds" means, with respect to any disposal, lease or other
transfer of any asset an amount equal to the gross proceeds in cash and cash
equivalents of such disposal, lease or asset transfer net (to the extent
applicable) of:
(a) legal fees, accountant's fees, consultant and other customary fees and
other costs and expenses actually and reasonably incurred in connection
with such disposal, lease or asset transfer;
(b) any income, capital gains, value-added or other taxes paid or
reasonably estimated to be payable as a result thereof; and
(c) any Financial Indebtedness which is required to be repaid out of, or as
a result of, such disposal and any amount required to establish, in
accordance with market practice, a reasonable reserve for any
indemnities in respect of such disposal.
"Notice of Drawdown" means a notice substantially in the form set out in
Schedule 4 (Notice of Drawdown).
"Obligor Group" means the group comprising the Obligors from time to time.
"Obligors" means the Borrowers and the Guarantors; and "Obligor" means any
of them.
"Official Rate" means, in relation to any Advance, the taux de l'usure
calculated by the Banque de France (as provided in Article L.313-3 of the
French Code de la Consommation and implementing laws) and published in the
Journal Officiel of the French Republic applicable to floating rate loans
made for an initial duration exceeding two years for the quarter preceding
that in which such Advance is proposed to be made.
"Operational" means, in relation to a market, the commercial launch to the
public in France or, as the case may be, Germany.
"Original Financial Statements" means the audited consolidated financial
statements of the Parent for its financial year ended 31 December 1998.
"Original Obligors" means the Original Borrowers and the Original
Guarantors.
"Original Shareholders" means certain indirect shareholders of the Parent as
set out in Schedule 7 (Original Shareholders).
"Participants" means the Banks and the EIF.
<PAGE>
"Participated Portion" means, in relation to a Participating Lender, such
Participating Lender's Available Commitment and/or share of the Loan for the
time being benefiting from the risk participation assumed by the EIF
pursuant to the Participation Agreement.
"Participating Lender" means Paribas in its capacity as grantor of a risk
participation to the EIF and/or any other Bank which has become a party to
the Participation Agreement in accordance with Clause 35.5 (Transfers by
Participants).
"Participating Member State" means any member state which has adopted the
euro as its lawful currency at the relevant time.
"Participation Agreement" means the participation agreement dated on or
about the date of the Amendment Agreement and entered into between Paribas
as Participating Lender, the EIF and the Facility Agent, and any other Bank
which has become a party to the Participation Agreement in accordance with
Clause 35.5 (Transfers by Participants).
"Permitted Acquisition" means:
(a) the purchase, subscription or acquisition of any shares of a member of
the Group by a member of the Obligor Group provided that immediately
upon the purchase, subscription or acquisition thereof, such shares are
secured substantially on the terms of the relevant Security Document
applicable to such shares prior to such purchase, subscription or
acquisition;
(b) any purchase or acquisition of assets (other than of shares) of a
member of the Group by a member of the Obligor Group, provided that
immediately upon the purchase or acquisition thereof, (i) where such
asset was secured under the terms of a Security Document, such asset
continues to be secured substantially in the terms of the relevant
Security Document applicable to such asset prior to such purchase or
acquisition; and (ii) where such asset was not so secured, security
thereover is granted to the extent that can be required pursuant to
Clause 23.11 (Security);
(c) any acquisition of a new Licence (including for the purposes of this
paragraph Licences that also may be desirable, in addition to those
that are necessary, in connection with the carrying on of such Telecoms
Business) or extension of any existing Licence (including for the
purposes of this paragraph Licences that also may be desirable, in
addition to those that are necessary, in connection with the carrying
on of such Telecoms Business) in connection with the business of the
Group;
(d) the acquisition of OK-Cable GmbH provided that the consideration paid
in respect of such acquisition does not exceed $175,000 and further
provided that on or before 24 March 2000, the shares of OK-Cable GmbH
are secured, to the extent legally possible and commercially
practicable, in favour of the
<PAGE>
Finance Parties to secure all or any obligations of the Obligors under
the Credit Facility Documents; and
(e) with the prior consent of an Instructing Group.
"Permitted Disposal" means (i) any disposal of shares in an Obligor or
Material Subsidiary insofar as permitted by Clause 23.17 (Mergers); and (ii)
any disposal (other than a disposal of the shares in an Obligor or Material
Subsidiary insofar as not permitted by Clause 23.17 (Mergers)):
(a) by a member of the Group to a member of the Obligor Group provided that
immediately upon the purchase or acquisition thereof, where such asset
was secured under the terms of a Security Document, such asset
continues to be secured substantially in the terms of the relevant
Security Document applicable to such asset prior to such purchase or
acquisition (whether directly or indirectly by way of share pledge);
(b) on arm's length terms in the ordinary course of business;
(c) on arm's length terms of any surplus, worn out or obsolete assets or
assets not otherwise required for the efficient operation of the
business of any member of the Group;
(d) with the prior consent of an Instructing Group;
(e) which constitutes a Permitted Distribution or a Permitted Encumbrance;
(f) the application of cash in payments which are not otherwise restricted
by the terms of the Finance Documents; and
(g) disposals other than those referred to in the above paragraphs of this
definition for a consideration in aggregate for the Group not exceeding
1,000,000 in any financial year.
"Permitted Distribution" means any payment to the Parent to be applied by
the Parent towards:
(a) any interest payments falling due in respect of the High Yield Bonds
and due on or after 15 February 2004 or in respect of any other
Permitted Indebtedness specified in paragraph (g) of the definition of
Permitted Indebtedness of the Parent provided that in each case such
payment is made directly into the High Yield Account;
(b) within a reasonable period of receipt, corporate, accounting, audit and
other similar expenses actually incurred by the Parent up to an
aggregate annual amount to be received by the Parent equal to the
aggregate amount of such expenses assumed for the purpose of the
Business Plan;
<PAGE>
(c) payment of management fees (including to CableTel Management Inc. of
management fees of 105% of all allocated costs, expenses, charges and
disbursements) incurred to the extent set out in the Business Plan;
(d) tax liabilities of the Parent; and
(e) with the prior consent of an Instructing Group.
"Permitted Encumbrance" means (other than any Encumbrance over any shares in
an Obligor or a Material Subsidiary):
(a) any Encumbrance specified in Part A to Schedule 5 (Existing
Encumbrances, Guarantees and Indemnities), if the principal amount
thereby secured is not increased;
(b) any Encumbrance over or affecting any asset acquired by a member of the
Group after the date hereof and subject to which such asset is
acquired, if:
(i) such Encumbrance was not created in contemplation of the
acquisition of such asset by a member of the Group; and
(ii) the amount thereby secured has not been increased in
contemplation of, or since the date of, the acquisition of such
asset by a member of the Group;
(c) any Encumbrance imposed by any taxation or governmental authority in
respect of amounts which are being contested in good faith and not yet
payable and for which adequate reserves have been set aside in the
books of the Group in respect of the same in accordance with US GAAP;
(d) any Encumbrance over or affecting any asset of any company which
becomes a member of the Group after the date hereof, where such
Encumbrance is created prior to the date on which such company becomes
a member of the Group, if:
(i) such Encumbrance was not created in contemplation of the
acquisition of such company; and
(ii) the amount thereby secured has not been increased in
contemplation of, or since the date of, the acquisition of such
company;
(e) any Encumbrance arising under or evidenced by a Security Document;
(f) any Encumbrance arising with the prior consent of an Instructing Group;
(g) any netting or set-off arrangement entered into by any member of the
Group in the normal course of its banking arrangements for the purpose
of netting debit and credit balances;
<PAGE>
(h) any title transfer or retention of title arrangement entered into by
any member of the Group in the normal course of its trading activities
on the counterparty's standard or usual terms including, for the
avoidance of doubt, any such arrangement arising pursuant to the Supply
and Operational Agreements;
(i) any lien arising by operation of law and in the normal course of
business;
(j) any Encumbrances arising from any finance or capital leases in respect
of indefeasible rights of use comprising MAN-Network;
(k) any Encumbrance created by a member of the Group in substitution for an
existing Encumbrance which is a Permitted Encumbrance; and
(l) any Encumbrance not included within any of the above paragraphs of this
definition and securing indebtedness in aggregate not exceeding
3,000,000.
"Permitted Guarantees" means any guarantees or indemnities:
(a) arising under the Finance Documents;
(b) constituting Permitted Indebtedness or given by a member of the Group
in respect of Permitted Indebtedness of any member of the Obligor Group
(other than the Parent) (other than under paragraphs (f) or (g) of the
definition thereof);
(c) granted, other than in respect of Financial Indebtedness, in the
ordinary course of business on arm's length terms;
(d) with the prior consent of an Instructing Group; and
(e) specified in Part B to Schedule 5 (Existing Encumbrances, Guarantees
and Indemnities), to the extent the amount guaranteed or indemnified
thereby is not increased.
"Permitted Indebtedness" means any Financial Indebtedness incurred or to be
incurred:
(a) under the Finance Documents;
(b) by any Obligor and owing to another member of the Obligor Group,
provided that the proceeds of any such Financial Indebtedness incurred
by the Parent are directly or indirectly credited to the High Yield
Account;
(c) in respect of trade indebtedness and accrued expenses incurred in the
ordinary course of business;
(d) under any Subordinated High Yield Loans, Subordinated Shareholder Loans
or Subordinated Parent Loans;
<PAGE>
(e) under hedging agreements between a Borrower and any of the Banks
entered into in order to hedge interest rate risks under the Facilities
and permitted in accordance with Clause 23.12 (Hedging Programme);
(f) under the High Yield Bonds;
(g) under further issues of high yield notes by the Parent on terms
satisfactory to the Participants provided that (i) the maximum
aggregate gross amount at any time shall not exceed $350,000,000 or, if
a minimum of $50,000,000 (in aggregate) of further equity is paid to
members of the Obligor Group (other than the Parent) other than from
other members of the Obligor Group (other than the Parent) for
investment in the Telecoms Business of the Obligor Group (other than
the Parent), $450,000,000; (ii) the net proceeds thereof are
downstreamed to the Obligor Group (other than the Parent) by way of
Subordinated High Yield Loans; (iii) at the time of issue the financial
covenants set out in Clause 22 (Financial Condition) are being, and
will immediately following the issue continue to be, met; and (iv) at
the time of issue no Potential Event of Default or Event of Default has
occurred and is continuing or would result from the issue of such high
yield notes;
(h) with the prior consent of an Instructing Group;
(i) in respect of any non-speculative hedging arrangements entered into in
the ordinary course of business for the genuine hedging of the relevant
underlying transaction, provided that, in the case of any such
arrangements in relation to other Permitted Indebtedness, such
arrangements are subject to the terms of the Intercreditor Agreement;
(j) any deposits or prepayments received by a member of the Group from a
Customer in respect of its services;
(k) permitted pursuant to Clause 23.15 (Loans and Guarantees); or under an
Intercompany CECC Facility Agreement; or under finance or capital
leases in respect of indefeasible rights of use comprising MAN-Network;
and
(l) up to a maximum of 7,000,000 or its equivalent in other currencies and
not included in paragraphs (a) to (k) above.
"Permitted Investments" means investments:
(a) in Cash Equivalent Investments in an aggregate amount not at any time
exceeding 5,000,000;
(b) in Cash Equivalent Investments of the proceeds of any IPO, or a high
yield issue permitted pursuant to paragraph (g) of the definition of
"Permitted Indebtedness" in Cash Equivalent Investments; and
(c) with the prior consent of an Instructing Group.
<PAGE>
"Permitted Loans" means:
(a) loans from one member of the Obligor Group to another member of the
Obligor Group, provided that the proceeds of any such loans to the
Parent are directly or indirectly credited to the High Yield Account;
(b) loans to employees or directors of members of the Group in an aggregate
maximum amount at any time outstanding of 2,000,000; and
(c) with the prior consent of an Instructing Group.
"Potential Event of Default" means any event which will become (with the
passage of time, the giving of notice or any combination thereof in each
case as set out in Clause 24 (Events of Default)) an Event of Default.
"Prepayment Account" means an account bearing interest at market rates for
such an amount in the name of the relevant Obligor with the Security Agent
(or such other person as the Facility Agent may reasonably require) which is
pledged, charged or assigned to the Security Agent pursuant to the Security
Documents to secure all amounts due under the Credit Facility Documents and
from which the only withdrawals which may be made by the relevant Obligor
are to repay amounts due to the Finance Parties under this Agreement or
otherwise permitted under this Agreement.
"Proportion" means, in relation to a Participant, the proportion borne by
its Exposure to the Total Exposures (or, if the Total Exposures are then
zero, by its Exposure to the Total Exposures immediately prior to their
reduction to zero).
"Qualifying Bank" means a person, being a bank or Bank, which is:
(a) a French credit institution authorised to carry out banking services by
the French Credit Institutions Committee (Comite des Etablissements de
Credit et des Entreprises d'Investissement); or
(b) a foreign credit institution authorised by the French Credit
Institutions Committee to open a branch in France for the provision of
banking services; or
(c) a credit institution or financial institution having its registered
head office (siege social) in a member state of the European Economic
Area ("EEA") which either has a branch in France for the provision of
banking services or provides such services in France directly from its
home jurisdiction (libre prestation de services) following notification
of the intention of such credit institution or financial institution to
do so sent by the central banking authority of the relevant EEA member
state to the Banque de France and the acknowledgement thereof by the
Banque de France; or
(d) a credit institution or financial institution not falling within
paragraphs (a) to (c) above and which does not conduct banking
operations on a habitual basis in France as set out in French Law No
84.46 of 24 January 1984.
<PAGE>
"Quotation Date" means, in relation to any period for which an interest rate
is to be determined under the Finance Documents, the day on which quotations
would ordinarily be given by prime banks in the European interbank market
for deposits in euro (or the currency of any Unpaid Sum) for delivery on the
first day of that period, provided that, if, for any such period, quotations
would ordinarily be given on more than one date, the Quotation Date for that
period shall be the last of those dates.
"Reference Banks" means the principal Paris offices of Barclays Bank PLC,
Citibank N.A. and Credit Lyonnais or such banks as may be appointed as such
by the Facility Agent with the consent of Obligors' Agent (such consent not
to be unreasonably withheld).
"Relevant Laws" means the French Code des Postes et Telecommuncations and
all decrees (decrets) and ordinances (arretes) issued pursuant thereto, the
German Telekommunikationsgesetz and all ordinances (Verordnungen) issued
pursuant thereto, those laws of France or Germany that relate to the
regulation of competition or antitrust in so far as they apply to Telecoms
Business undertaken by the Group or the operation of the French Network or
the German Network, each as amended or replaced from time to time, and all
other laws of France or Germany now or in the future relating to Telecoms
Business carried on by the Group or relating to telecommunications and
applicable to the Group.
"Regulatory Authorities" means the regulatory agencies of France and Germany
responsible for the monitoring, supervising or regulation of Telecoms
Business, including, without limitation, the ART and the Reg TP including
their successors and assignors.
"Reg TP" means the Regulierungsbehorde fur Telecommunikation und Post (or
any successor entity).
"Renewed Advance" means a Revolving Advance which is used to refinance a
maturing Revolving Advance and which is not more than the amount of such
maturing Revolving Advance and is to be drawn on the day such maturing
Revolving Advance is to be repaid.
"Repayment Date" means, in relation to any Revolving Advance, save as
otherwise provided herein, the last day of the Term thereof.
"Repeated Representations" means each of the representations set out in
Clause 20.1 (Status) to 20.6 (Audited Financial Statements), and 20.22
(Intellectual Property) to 20.24 (Good Title to Assets) and 20.26 (Dutch
Obligors).
"Revolving Advance" means an advance made or to be made by the Banks under
the Revolving Facility.
"Revolving Commitment" means, in relation to a Bank at any time and save as
otherwise provided herein, the amount set opposite its name under the
heading "Revolving Commitment" in Part C of Schedule 1 (The Banks).
<PAGE>
"Revolving Facility" means:
(a) until the Conversion Date, the Tranche B Revolving Facility; and
(b) thereafter, the Working Capital Facility.
"Revolving Loan" means, at any time, the aggregate principal amount of the
outstanding Revolving Advances.
"Revolving Termination Date" means 31 December 2006.
"Route km" means the kilometres of the telecommunications path over which
MAN-Network is installed as part of the French Network and German Network,
and for the purposes of determining the Route km of the wireless path route
owned or controlled by a member of the Group, means the kilometre path as
measured by the line of sight between the transmitter transmitting and that
receiving the relevant signal.
"SAS Account" means the account number 30026/00350/0000715634J/11 maintained
by CompleTel S.A.S. with the Security Agent.
"Security Documents" means each of the security documents set out under
Section C. of Schedule 3 (Conditions Precedent) together with any other
document entered into by any member of the Group creating or evidencing
security for all or any part of the obligations of the Obligors or any of
them under any of the Credit Facility Documents whether by way of personal
covenant, charge, security interest, mortgage, pledge or otherwise.
"Senior Debt Leverage Ratio" shall have the meaning as set out in Clause 22
(Financial Condition).
"Senior Interest Coverage Ratio" shall have the meaning as set out in Clause
22 (Financial Condition).
"Subordinated Parent Loans" means any loan made to the Parent by its direct
or indirect shareholders on subordinated terms reasonably satisfactory to an
Instructing Group.
"Subordinated Shareholder Loans" means any loans made by the Parent (funded
by the Parent from equity contributions to the Parent or Subordinated Parent
Loans) to any of the Borrowers, and (i) subordinated under the terms of the
Intercreditor Agreement; and (ii) the rights of the Parent in relation
thereto assigned in favour of the Security Agent on the terms of an
Intercompany Loan Security Agreement.
"Subordinated High Yield Loans" means any loans made by the Parent (funded
by the Parent by way of a high yield issue) to any of the Borrowers, and (i)
subordinated under the terms of the Intercreditor Agreement; and (ii) the
rights of the Parent in relation thereto assigned in favour of the Security
Agent on the terms of an Intercompany Loan Security Agreement.
<PAGE>
"Supply and Operational Agreements" means each agreement specified as such
in Schedule 10 (Material Agreements) and any replacement thereof.
"Syndication Date" means the day specified by the Lead Arrangers as the day
on which primary syndication of the Facilities is completed.
"Telecoms Business" means the development, ownership or operation of one or
more telephone, telecommunications or information systems or the provision
of telephony, telecommunication or information or internet services and any
related, ancillary or complementary business.
"Term" means, save as otherwise provided herein, in relation to any
Revolving Advance, the period for which such Revolving Advance is borrowed,
as specified in the Notice of Drawdown relating thereto.
"Term Advance" means a Tranche A Term Advance and/or a Tranche B Term
Advance.
"Term Facilities" means the Tranche A Term Facility and the Tranche B Term
Facility and "Term Facility" means any one of them.
"Term Loans" means the Tranche A Term Loan and the Tranche B Term Loan and
"Term Loan" means any one of them.
"Term Repayment Date" means each of the dates specified in Clause 11.1 (Term
Repayment Instalments), provided that if such date is not a Business Day, it
shall be deemed to be the next succeeding Business Day in the calendar month
or, if none, it shall be deemed to be the immediately preceding Business
Day.
"Total Exposures" means, at any time, the aggregate of the Participants'
Exposures.
"Total Interest Coverage Ratio" shall have the meaning as set out in Clause
22 (Financial Condition).
"Total Senior Debt" shall have the meaning as set out in Clause 22
(Financial Condition).
"Tranche A Term Advance" means an advance (as from time to time
consolidated, divided or reduced by repayment) made or to be made by the
Banks under the Tranche A Term Facility.
"Tranche A Term Availability Period" means, in relation to the Tranche A
Term Facility, the period from and including the date hereof to and
including the earlier of (a) 31 December 2000 and (b) the first Business Day
on which the Available Tranche A Term Commitment of each of the Banks is
zero.
"Tranche A Term Commitment" means, in relation to a Bank at any time and
save as otherwise provided herein, the amount set opposite its name under
the heading "Tranche A Term Commitment" in Part C of Schedule 1 (The Banks).
<PAGE>
"Tranche A Term Facility" means the euro term loan facility granted to the
Borrowers under sub-clause 2.1.1 of Clause 2.1 (Grant of the Facilities).
"Tranche A Term Loan" means, at any time, the aggregate principal amount of
outstanding Tranche A Term Advances.
"Tranche B Revolving Facility" means the euro revolving loan facility
granted to the Borrowers under paragraph (a) of sub-clause 2.1.2 of Clause
2.1 (Grant of the Facilities).
"Tranche B Term Advance" means an advance (as from time to time
consolidated, divided or reduced by repayment) made or to be made by the
Banks under the Tranche B Term Facility.
"Tranche B Term Facility" means the euro term loan facility granted to the
Borrowers under paragraph (b)(ii) of sub-clause 2.1.2 of Clause 2.1 (Grant
of the Facilities).
"Tranche B Term Loan" means, at any time, the principal amount of the
outstanding Tranche B Term Advances.
"Transfer Certificate" means a certificate substantially in the form set out
in Schedule 2 (Form of Transfer Certificate) signed by a Participant, a
Transferee and, in the case of the EIF, the Participating Lender under
which:
(a) such Participant seeks to procure the transfer to such Transferee of
all or a part of such Participant's rights, benefits and obligations
under the Finance Documents and, in the case of a Participating Lender
or the EIF, the Participation Agreement upon and subject to the terms
and conditions set out in Clause 35.3 (Assignment and Transfers by
Participants); and
(b) such Transferee undertakes to perform the obligations it will assume as
a result of delivery of such certificate to the Facility Agent as
contemplated in Clause 35.5 (Transfers by Participants).
"Transfer Date" means, in relation to any Transfer Certificate, the date for
the making of the transfer as specified in such Transfer Certificate.
"Transferee" means a person to which a Participant seeks to transfer by
novation all or part of such Participant's rights, benefits and obligations
under the Finance Documents and, in the case of a Participating Lender or
the EIF, under the Participation Agreement pursuant to Clause 35.3
(Assignment and Transfers by Participants).
"Treaty on European Union" means the Treaty of Rome of 25 March 1957, as
amended by the Single European Act 1986 and the Maastricht Treaty (which was
signed at Maastricht on 7 February 1992 and came into force on 1 November
1993).
"Unpaid Sum" means the unpaid balance of any of the sums referred to in
Clause 28.1 (Default Interest Periods).
<PAGE>
"US GAAP" means generally accepted accounting principles and practices in
the USA.
"Working Capital Facility" means the euro revolving loan facility granted to
the Borrowers under paragraph (b)(i) of sub-clause 2.1.2 of Clause 2.1
(Grant of the Facilities).
"Year 2000 Compliant" means, in relation to any Computer System, that any
reference to or use of a date before, on or after 31 December 1999 in the
operation of that Computer System will not have an adverse effect on the use
of that Computer System.
1.2 Interpretation
Any reference in this Agreement to:
an "affiliate" of any person shall be construed as a reference to the
ultimate holding company of that person or an entity of which that person or
its ultimate holding company (a) has direct or indirect control or (b) owns
directly or indirectly more than twenty per cent. (20%) of the share capital
or similar rights of ownership;
a document in an "agreed form", is a reference to such document either (i)
in a form previously agreed in writing by or on behalf of the Obligors'
Agent and the Facility Agent or (ii) otherwise in form and substance
satisfactory to an Instructing Group acting reasonably;
an "Agent", a "Lead Arranger", any "Bank", any "Participating Lender" or any
"Participant" shall be construed so as to include its and any subsequent
successors and permitted transferees in accordance with their respective
interests;
a transaction between a person and another person being on "arm's length
terms" shall be construed as a reference to a transaction on terms that are
fair and reasonable to and in the best interest of the first-mentioned
person;
a "change of control" shall be construed as:
(a) prior to the IPO, when the Original Shareholders taken together cease
to own or control directly or indirectly 51 per cent. of the issued
share capital of the Parent; and
(b) thereafter, when:
(i) a person or group of persons (acting together) each of which are
not Original Shareholders, own or control in aggregate 30 per
cent. or more of the issued share capital of the Parent unless
at such time the Original Shareholders together own or control
directly or indirectly in aggregate a greater proportion of the
issued share capital of the Parent; or
(ii) during any period of two consecutive calendar years, individuals
who, at the beginning of such period, constituted the board of
directors of the Parent (together with any new directors whose
election was approved by
<PAGE>
a vote of 51 per cent. of the directors then in office), cease,
for any reason, to constitute a majority of such board of
directors then in office;
"continuing", in relation to an Event of Default, shall be construed as a
reference to an Event of Default which has not been waived and, in relation
to a Potential Event of Default, one which has not been remedied within the
relevant grace period or waived;
the "date hereof" or the "date of this Agreement" shall be construed as a
reference to 6 January 2000;
the "equivalent" on any date in one currency (the "first currency") of an
amount denominated in another currency (the "second currency") is a
reference to the amount of the first currency which could be purchased with
the amount of the second currency at the spot rate of exchange quoted by the
Facility Agent at or about 11:00 a.m. on such date for the purchase of the
first currency with the second currency;
a "holding company" of a company or corporation shall be construed as a
reference to any company or corporation of which the first-mentioned company
or corporation is a subsidiary;
"indebtedness" shall be construed so as to include any obligation (whether
incurred as principal or as surety) for the payment or repayment of money,
whether present or future, actual or contingent;
a "law" shall be construed as any law (including common or customary law),
statute, constitution, decree, judgment, treaty, regulation, directive, bye-
law, order or any other legislative measure of any government,
supranational, local government, statutory or regulatory body or court;
a "member state" shall be construed as a reference to a member state of the
European Union;
a "month" is a reference to a period starting on one day in a calendar month
and ending on the numerically corresponding day in the next succeeding
calendar month save that:
(a) if any such numerically corresponding day is not a Business Day, such
period shall end on the immediately succeeding Business Day to occur in
that next succeeding calendar month or, if none, it shall end on the
immediately preceding Business Day; and
(b) if there is no numerically corresponding day in that next succeeding
calendar month, that period shall end on the last Business Day in that
next succeeding calendar month,
(and references to "months" shall be construed accordingly);
"novate" or "novation" shall be construed as an assignment of rights and an
assumption of obligations;
<PAGE>
a "person" shall be construed as a reference to any person, firm, company,
corporation, government, state or agency of a state or any association or
partnership (whether or not having separate legal personality) of two or
more of the foregoing;
"repay" (or any derivative form thereof) shall, subject to any contrary
indication, be construed to include "prepay" (or, as the case may be, the
corresponding derivative form thereof);
a "subsidiary" of a company or corporation shall be construed as a reference
to any company or corporation:
(a) more than half the issued share capital of which is beneficially owned,
directly or indirectly, by the first-mentioned company or corporation;
or
(b) which is a subsidiary of another subsidiary of the first-mentioned
company or corporation;
a "successor" shall be construed so as to include a permitted assignee or
successor in title of such party and any person who under the laws of its
jurisdiction of incorporation or domicile has assumed the rights and
obligations of such party under this Agreement or to which, under such laws,
such rights and obligations have been transferred;
"tax" shall be construed so as to include any tax, levy, impost, deduction,
duty or other charge of a similar nature (including any penalty or interest
payable in connection with any failure to pay or any delay in paying any of
the same);
"VAT" shall be construed as a reference to value added tax including any
similar tax which may be imposed in place thereof from time to time;
a "wholly-owned subsidiary" of a company or corporation shall be construed
as a reference to any company or corporation which has no other shareholders
or members except that other company or corporation and that other company's
or corporation's wholly-owned subsidiaries or persons acting on behalf of
that other company or corporation or its wholly-owned subsidiaries; and
the "winding-up", "dissolution" or "administration" of a company or
corporation shall be construed so as to include any equivalent or analogous
proceedings under the law of the jurisdiction in which such company or
corporation is incorporated or any jurisdiction in which such company or
corporation carries on business including the seeking of liquidation,
winding-up, reorganisation, dissolution, administration, arrangement,
adjustment, protection or relief of debtors.
1.3 Currency Symbols and Definitions
1.3.1 "$" and "dollars" denote lawful currency of the United States of
America.
1.3.2 "EURO" or "euro" means the single currency unit of the European Union
as constituted by the Treaty on European Union as referred to in EMU
<PAGE>
Legislation and "euro unit" means the currency unit of the euro as
defined in EMU Legislation.
1.3.3 "(Pounds)" or "sterling" denote lawful currency of the United
Kingdom.
1.4 Agreements and Statutes
Any reference in this Agreement to:
1.4.1 this Agreement or any other agreement or document shall be
construed as a reference to this Agreement or, as the case may be,
such other agreement or document as the same may have been, or may
from time to time be, amended, varied, novated or supplemented,
including for the avoidance of doubt as amended pursuant to the
Amendment Agreement; and
1.4.2 a statute or treaty shall be construed as a reference to such
statute or treaty as the same may have been, or may from time to
time be, amended or, in the case of a statute, re-enacted.
1.5 Headings
Clause and Schedule headings are for ease of reference only.
1.6 Time
Any reference in this Agreement to a time of day shall, unless a contrary
indication appears, be a reference to London time.
2. THE FACILITIES
2.1 Grant of the Facilities
The Banks grant to the Borrowers, upon the terms and subject to the
conditions hereof:
2.1.1 Tranche A Term Facility: a euro term loan facility in an aggregate
amount of (Euro) 105,000,000; and
2.1.2 (a) Tranche B Revolving Facility: a euro revolving loan facility
in an aggregate amount of (Euro) 160,000,000 until the
Conversion Date; and
(b) thereafter:
(i) Working Capital Facility: a euro revolving loan
facility in an aggregate amount of (Euro) 19,000,000;
and
(ii) Tranche B Term Facility: a euro term loan facility,
subject to Clause 8.2 (Conversion and Tranche B Term
Facility), up to an aggregate amount of (Euro)
141,000,000.
2.2 Purpose and Application
The Facilities are intended for the financing of the development of the
Telecoms Business of the Group in France and Germany in accordance with the
Business Plan and, accordingly, each Borrower shall apply all amounts raised
by it hereunder in or
<PAGE>
towards satisfaction of such requirements and none of the Finance Parties or
the EIF shall be obliged to concern themselves with such application.
2.3 Conditions Precedent
Save as the Participants may otherwise agree, none of the Borrowers may
deliver any Notice of Drawdown unless the Facility Agent has confirmed to
the Obligors' Agent and the Participants that it has received all of the
documents and other evidence listed in Schedule 3 (Conditions Precedent) and
that each is, in form and substance, satisfactory to the Facility Agent
(acting reasonably).
2.4 Participants' Obligations Several
The obligations of each Participant are several and the failure by a
Participant to perform its obligations hereunder shall not affect the
obligations of an Obligor towards any other party hereto nor shall any other
party be liable for the failure by such Participant to perform its
obligations hereunder.
2.5 Participants' Rights Several
The rights of each Participant are several and any debt arising hereunder at
any time from an Obligor to any of the other parties hereto shall be a
separate and independent debt. Each such party shall be entitled to protect
and enforce its individual rights arising out of this Agreement
independently of any other party (so that it shall not be necessary for any
party hereto to be joined as an additional party in any proceedings for this
purpose).
2.6 Nature of Obligors' rights and obligations hereunder
2.6.1 CompleTel S.A.S. as Obligors' Agent: Each Obligor (other than
CompleTel S.A.S.) by its execution of this Agreement or a Borrower
Accession Memorandum or a Guarantor Accession Memorandum irrevocably
appoints CompleTel S.A.S. to act on its behalf as its agent in
relation to the Finance Documents and irrevocably authorises (i)
CompleTel S.A.S. on its behalf to supply all information concerning
itself contemplated by this Agreement or the Amendment Agreement to
the Finance Parties and the EIF and to give all notices and
instructions (including, in the case of a Borrower, Notices of
Drawdown), to execute on its behalf any Borrower Accession Memorandum
or Guarantor Accession Memorandum and to make such agreements capable
of being given or made by any Obligor notwithstanding that they may
affect such Obligor, without further reference to or the consent of
such Obligor and (ii) each Finance Party and the EIF to give any
notice, demand or other communication to such Obligor pursuant to the
Credit Facility Documents to CompleTel S.A.S. on its behalf, and in
each case such Obligor shall be bound thereby as though such Obligor
itself had given such notices and instructions (including, without
limitation, any Notices of Drawdown) or executed or made such
agreements or received any such notice, demand or other
communication.
2.6.2 Obligors' Agent's acts binding: Every act, omission, agreement,
undertaking, settlement, waiver, notice or other communication given
or made by the
<PAGE>
Obligors' Agent or given to the Obligors' Agent under this Agreement
or the Amendment Agreement, or in connection with this Agreement or
the Amendment Agreement (whether or not known to any other Obligor
and whether occurring before or after such other Obligor became an
Obligor under this Agreement or the Amendment Agreement) shall be
binding for all purposes on all other Obligors as if the other
Obligors had expressly made, given or concurred with the same. In the
event of any conflict between any notices or other communications of
the Obligors' Agent and any other Obligor, those of the Obligors'
Agent shall prevail.
2.6.3 Resignation of Obligors' Agent: An Obligors' Agent may resign its
appointment hereunder by giving not less than ten Business Days'
prior written notice to that effect to the Facility Agent, provided
that no such resignation shall be effective until a successor
consents in writing to the Facility Agent to be appointed.
2.7 French Borrowers: Effective Global Rate of Return
2.7.1 For the purposes of Articles L.313-1 to L.313-6 of the French Code de
la Consommation, the parties hereto acknowledge that, as a result of
(i) the variation of the rate of interest and in the Mandatory Costs
Rate during the period of utilisation and repayment of the
Facilities; and (ii) the selection by the Borrower of floating
interest rates and the fluctuation of such rates, it is not possible
at the date hereof to determine the actual percentage rate of
interest (Taux Effectif Global) (the "Effective Global Rate") within
the meaning of the said Articles.
2.7.2 For the purpose of application of articles L 313-1, R 313-1 and R
313-2 of the Code de la Consommation, it is specified for indicative
purposes that, for a full utilisation of the Facilities as per
schedule in Clause 3.2.3 for each Financial Quarter, for Interest
Periods or Terms (as applicable) of three months, and taking into
account the rate of three-month EURIBOR on 3 January 2000 of 3.338%
per year, the Effective Global Rate of the Facilities would, at such
date, be 7.39% per year, and the periodic interest rate (taux de
periode) would be 1.8474%. Such indicative rates include EURIBOR plus
the Applicable Margin (calculated on the assumption that the
Mandatory Costs Rate is zero, and that no adjustment will be made
pursuant to Schedule 12 (Margin Adjustment), as well as any fees,
costs and other expenses (including legal expenses) due by any
Borrower in respect of this Agreement which the Code de la
Consommation, as interpreted on the date hereof, require to be taken
into account.
3. UTILISATION OF THE TRANCHE A TERM FACILITY
3.1 Drawdown Conditions for Tranche A Term Advances
A Tranche A Term Advance will be made by the Banks to a Borrower if:
<PAGE>
3.1.1 not more than ten nor less than four Business Days before 11:00 a.m.
Paris time on the proposed date for the making of such Tranche A Term
Advance, the Facility Agent has received a completed Notice of Drawdown
from such Borrower;
3.1.2 the proposed date for the making of such Tranche A Term Advance is a
Business Day within the Tranche A Term Availability Period;
3.1.3 the proposed date for the making of such Tranche A Term Advance is not
less than ten Business Days after the date upon which the previous
Tranche A Term Advance (if any) was made;
3.1.4 the proposed amount of such Tranche A Term Advance is (a) (if less than
the Available Tranche A Term Facility) a minimum amount of (Euro)
5,000,000 and an integral multiple of (Euro) 1,000,000 or (b) equal to
the amount of the Available Tranche A Term Facility;
3.1.5 the conditions set out in Clause 3.2 (Tranche A Term Facility
Availability Tests) are satisfied;
3.1.6 the Repeated Representations are true in all material respects on and as
of the proposed date for the making of such Tranche A Term Advance before
and after giving effect to such and to the application of the proceeds
therefrom, as though made on and as of such date unless such Repeated
Representation refers specifically to an earlier date;
3.1.7 no Event of Default or Potential Event of Default has occurred and is
continuing or would result from the making of such Tranche A Term
Advance;
3.1.8 the making of such Tranche A Term Advance would not result in more than
15 Term Advances being outstanding as of the proposed date for making
such Tranche A Term Advance; and
3.1.9 each Advance requested by a French Borrower shall also be requested
jointly by CECC and if, on the proposed date for the making of such
Advance:
(a) the Official Rate is greater than or equal to the Applicable
Interest Rate, the Advance shall be made to that French Borrower and
not to CECC; or
(b) the Official Rate is less than the Applicable Interest Rate,
(i) the Advance shall be made to CECC and not to that French
Borrower;
<PAGE>
(ii) that French Borrower will be deemed to have requested an amount
equal to the Advance to be disbursed to it under the
Intercompany CECC Facility Agreement by CECC on the proposed
date for the making of such Advance;
(iii) CECC shall on such date be obliged to advance an amount equal to
such Advance to that French Borrower under the Intercompany CECC
Facility Agreement; and
(iv) accordingly CECC shall direct the Facility Agent to make the
Advance directly to the French Borrower in satisfaction of its
obligation under the Intercompany CECC Facility Agreement.
3.2 Tranche A Term Facility Availability Tests
The following are the conditions for the purposes of sub-clause 3.1.5 above
and sub-clause 6.2.2 below:
3.2.1 On the proposed date for making the proposed Advance, the Obligors'
Agent has confirmed to the Facility Agent that the Group is
Operational in at least the markets of Paris, Lyon, Marseille and
Lille in the French Network and at least two of the four markets
comprising the German Network; and
3.2.2 On the date of delivery of the relevant Notice of Drawdown, and on
the proposed date for making of the proposed Advance, Total Senior
Debt expressed as a percentage of the aggregate of Invested Capital
and Total Senior Debt as set out below for the relevant Financial
Quarter in which the proposed Advance is to be made will not be
exceeded, such percentage to be calculated on the basis that the
amount of Total Senior Debt is adjusted to take account of the
proposed Advance and any other changes to Total Senior Debt which
will occur on or before the date of the proposed Advance:
Financial Quarter ending Total Senior Debt expressed as a
percentage of the aggregate of Invested
Capital and Total Senior Debt (%)
31 March 2000 35
30 June 2000 40
30 September 2000 47
31 December 2000 50
provided that this condition shall only apply if, following the
making of the proposed Advance, the Tranche A Term Loan will be an
amount equal to or greater than 47 million.
3.2.3 On the date of delivery of the relevant Notice of Drawdown, and on
the proposed date for making of the proposed Advance, the aggregate
amount of the Tranche A Term Loan and the Tranche B Revolving Loan as
set out below for the relevant Financial Quarter in which the
proposed Advance is to be made will not be exceeded, such aggregate
amount to be calculated on the
<PAGE>
basis that the amount of the Tranche A Term Loan, or as the case
may be, Tranche B Revolving Loan is adjusted to take account of
the proposed Advance and any other changes to the Tranche A Loan
and/or the Tranche B Revolving Loan which will occur on or before
the date of the proposed Advance:
Financial Quarter Ending Aggregate Amount of Tranche A
Term Loan and Tranche B Revolving Loan
(Euro million)
31 December 1999 47
31 March 2000 47
30 June 2000 118
30 September 2000 166
31 December 2000 213
31 March 2001 213
30 June 2001 237
30 September 2001 237
31 December 2001 237
31 March 2002 237
30 June 2002 265
3.3 Each Bank's Participation in Tranche A Term Advances
Each Bank will participate through its Facility Office in each Tranche A
Term Advance made pursuant to Clause 3.1 (Drawdown Conditions for Tranche A
Term Advances) in the proportion borne by its Available Tranche A Term
Commitment to the Available Tranche A Term Facility immediately prior to the
making of that Tranche A Term Advance.
3.4 Reduction of Available Tranche A Term Commitment
If a Bank's Available Tranche A Term Commitment is reduced in accordance
with the terms hereof after the Facility Agent has received the Notice of
Drawdown for a Tranche A Term Advance and such reduction was not taken into
account in the Available Tranche A Term Facility, then the amount of that
Tranche A Term Advance shall be reduced accordingly.
4. INTEREST PERIODS FOR TERM ADVANCES
4.1 Interest Periods
The period for which a Term Advance is outstanding shall be divided into
successive periods each of which (other than the first, which shall begin on
the day such Term Advance is made) shall start on the last day of the
preceding such period.
4.2 Duration
The duration of each Interest Period shall, save as otherwise provided
herein, be one, two, three or six months or such other period as may be
agreed to by the Facility Agent acting on the instructions of all the Banks
and the EIF, in each case as a
<PAGE>
Borrower to which such Term Advance is made may by not less than four
Business Days' prior notice to the Facility Agent select, provided that:
4.2.1 if such Borrower fails to give such notice of its selection in
relation to an Interest Period, the duration of that Interest Period
shall, subject to sub-clauses 4.2.2 and 4.2.3, be three months;
4.2.2 a Borrower (or the Obligors' Agent on its behalf) may select an
Interest Period of less than one month if necessary to ensure that
there are sufficient Tranche A Term Advances which have and, as the
case may be, the Tranche B Term Advances which have, an Interest
Period ending on a Term Repayment Date for the Borrowers to make the
repayment due on that date; and
4.2.3 prior to the Syndication Date, Interest Periods shall be one month
(or, if less, of such duration as is necessary to end on the
Syndication Date) or such other period as the Lead Arrangers and such
Borrower may agree.
4.3 Consolidation of Term Advances
If two or more Interest Periods relating to the same Term Facility and to
the same Borrower end at the same time, then, on the last day of those
Interest Periods, the Term Advances to which they relate shall be
consolidated into and treated as a single Term Advance.
4.4 Division of Term Advances
The Borrower to which a Term Advance is made may, by not less than four
Business Days' prior notice to the Facility Agent, direct that any such Term
Advance shall, at the beginning of any Interest Period relating thereto, be
divided into (and thereafter, save as otherwise provided herein, treated in
all respects as) two or more Term Advances in such amounts (in aggregate,
equalling the amount of the Term Advance being so divided) as shall be
specified by such Borrower in such notice, provided that such Borrower shall
not be entitled to make such a direction if:
4.4.1 as a result of so doing there would be more than 15 outstanding Term
Advances and Revolving Advances; or
4.4.2 any Term Advance thereby coming into existence would be of an amount
of less than (Euro) 15,000,000.
5. PAYMENT AND CALCULATION OF INTEREST ON TERM ADVANCES
5.1 Payment of Interest
On the last day of each Interest Period the Borrower to which such Term
Advance has been made shall pay accrued interest on the Term Advance to
which such Interest Period relates.
5.2 Calculation of Interest
The rate of interest applicable to a Term Advance from time to time during
an Interest Period relating thereto shall be the rate per annum which is the
sum of:
<PAGE>
5.2.1 the Applicable Margin;
5.2.2 the Mandatory Cost Rate in respect thereof at such time; and
5.2.3 EURIBOR on the Quotation Date therefor.
6. UTILISATION OF THE REVOLVING FACILITY
6.1 Drawdown Conditions for Revolving Advances
A Revolving Advance will be made by the Banks to a Borrower if:
6.1.1 not more than ten nor less than four Business Days before the
proposed date for the making of such Revolving Advance, the Facility
Agent has received a completed Notice of Drawdown from such Borrower;
6.1.2 the proposed date for the making of such Revolving Advance is a
Business Day falling (a) after 31 May 2000; and (b) one month or more
before the Revolving Termination Date;
6.1.3 the proposed date for the making of such Revolving Advance is not
less than five Business Days after the date upon which the previous
Revolving Advance (if any) was made;
6.1.4 the proposed amount of such Revolving Advance is (a) (if less than
the Available Revolving Facility) a minimum amount of (Euro)
2,000,000 and an integral multiple of (Euro) 1,000,000 or (b) equal
to the amount of the Available Revolving Facility;
6.1.5 the proposed Term of the Revolving Advance requested is a period of
(a) one, two, three or six months or such other period as may be
agreed to by the Facility Agent acting on the instructions of all the
Banks and the EIF in each case ending on or before the Revolving
Termination Date; or (b) in relation to a Revolving Advance to be
made prior to the Conversion Date, such other period of less than one
month, if necessary to ensure that there are Revolving Advances which
have a Term ending on the Conversion Date in an aggregate amount of
less than or equal to the Conversion Available Amount, provided that
prior to the Syndication Date, only periods of one month or a period
previously approved by the Lead Arrangers may be chosen; and
6.1.6 the conditions set out in Clause 6.2 (Revolving Facility Availability
Tests) are satisfied;
6.1.7 (save in relation to a Renewed Advance) the Repeated Representations
are true in all material respects on and as of the proposed date for
the making of such Revolving Advance before and after giving effect
to such and to the application of the proceeds therefrom, as though
made on and as of such date;
<PAGE>
6.1.8 no Event of Default or (save in relation to a Renewed Advance)
Potential Event of Default has occurred and is continuing or would
result from the making of such Revolving Advance; and
6.1.9 each Advance (including for the avoidance of doubt a Renewed
Advance) requested by a French Borrower shall also be requested
jointly by CECC and if, on the proposed date for the making of
such Advance:
(a) the Official Rate is greater than or equal to the Applicable
Interest Rate, the Advance shall be made to that French
Borrower and not to CECC; or
(b) the Official Rate is less than the Applicable Interest Rate,
(i) the Advance shall be made to CECC and not to that
French Borrower;
(ii) that French Borrower will be deemed to have requested
an amount equal to the Advance to be disbursed to it
under the Intercompany CECC Facility Agreement by CECC
on the proposed date for the making of such Advance;
(iii) CECC shall on such date be obliged to advance an
amount equal to such Advance to that French Borrower
under the Intercompany CECC Facility Agreement; and
(iv) accordingly CECC shall direct the Facility Agent to
make the Advance directly to the French Borrower in
satisfaction of its obligation under the Intercompany
CECC Facility Agreement.
then, save as otherwise provided herein, such Revolving Advance will be made
in accordance with the provisions hereof.
6.2 Revolving Facility Availability Tests
The following are the conditions for the purposes of sub-Clause 6.1.6 above.
6.2.1 The Tranche A Term Facility is fully utilised.
6.2.2 The conditions set out in Clause 3.2 (Tranche A Term Facility
Availability Tests) are satisfied in respect of each Revolving
Advance.
6.2.3 The Obligors' Agent has confirmed to the Facility Agent that the
markets of Grenoble, Nice and Toulouse are Operational in the
French Network and the remaining two markets are Operational in
the German Network; provided that in satisfaction of this
condition the Parent shall have the right to substitute up to two
different markets from those specified, where (a) such markets are
Operational; (b) that the substitute market is expected to
generate comparable EBITDA and expected to require comparable
Capital Expenditure as the original market; (c) the budget for
such market has been determined in all
<PAGE>
material respects in accordance with the Group's past
methodologies; and (d) all Licences as necessary for that market
have been obtained.
6.2.4 The Annualised Net Revenue calculated at any time no later than 30
September 2000 is at least (Euro) 20,800,000.
6.2.5 On the date of delivery of the relevant drawdown request, and on
the proposed date for the making of the proposed Revolving Advance
where the proposed date for making of the proposed Revolving
Advance is a date:
(i) on or prior to 31 December 2000, Total Senior Debt
expressed as a percentage of the aggregate of Invested
Capital and Total Senior Debt as set out below for the
relevant Financial Quarter in which the proposed Revolving
Advance is to be made will not be exceeded, such percentage
to be calculated on the basis that the amount of Total
Senior Debt is adjusted to take account of the proposed
Revolving Advance and other changes to the Total Senior
Debt which will occur on or before the date of the proposed
Advance:
<TABLE>
<CAPTION>
Financial Quarter ending Total Senior Debt expressed as a
percentage of the aggregate of Invested
Capital and Total Senior Debt (%)
<S> <C>
30 June 2000 40
30 September 2000 47
31 December 2000, 31
March 2001, 30 June 2001
and 30 September 2001; or 50
</TABLE>
(ii) on or after 1 January 2001 and on or prior to 30 September
2001 either the condition set out in sub-paragraph (i)
above is satisfied; or the ratio of Total Senior Debt to
AART as set out below for the relevant Financial Quarter in
which the proposed Revolving Advance is to be made will not
be exceeded, such ratio to be calculated: (I) on the basis
of the AART as calculated by reference to the aggregate
AART set out in the three most recently delivered monthly
management statements of the Group, or (in the event that
the most recently delivered financial statements are
quarterly financial statements) as set out in the quarterly
financial statements of the Group, in either case as
multiplied by four; and (II) on the basis that the amount
of the Total Senior Debt is adjusted to take account of the
proposed Revolving Advance and any other changes to the
Total Senior Debt which will occur on or before the date of
the proposed Advance:
<PAGE>
<TABLE>
<CAPTION>
Financial Quarter ending Total Senior Debt to AART
<S> <C>
31 March 2001 2.25 : 1
30 June 2001 2.00 : 1
30 September 2001 1.75 : 1; or
</TABLE>
(iii) on or after 1 October 2001, the Senior Debt Leverage Ratio
as set out below for the relevant Financial Quarter in
which the proposed Revolving Advance is to be made will not
be exceeded, such ratio to be calculated: (I) on the basis
of the Annualised EBITDA as calculated by reference to the
most recently delivered quarterly financial statements of
the Group; and (II) on the basis that the amount of Total
Senior Debt is adjusted to take account of the proposed
Revolving Advance and any other changes to the Total Senior
Debt which will occur on or before the date of the proposed
Advance:
<TABLE>
<CAPTION>
Financial Quarter ending Senior Debt Leverage Ratio
<S> <C>
31 December 2001 6.50: 1
31 March 2002 5.00:1
30 June 2002 4.50:1
30 September 2002 4.50:1
31 December 2002 3.50:1
31 March 2003 3.00:1
Thereafter, 31 March, 30 June, 30 September and 31 2.50:1
December.
</TABLE>
6.3 Each Bank's Participation in Revolving Advances
Each Bank will participate through its Facility Office in each Revolving
Advance made pursuant to this Clause 6 in the proportion borne by its
Available Revolving Commitment to the Available Revolving Facility
immediately prior to the making of that Revolving Advance.
6.4 Reduction of Available Revolving Commitment
If a Bank's Revolving Commitment is reduced in accordance with the terms
hereof after the Facility Agent has received the Notice of Drawdown for a
Revolving Advance and such reduction was not taken into account in the
Available Revolving Facility, then the amount of that Revolving Advance
shall be reduced accordingly.
7. PAYMENT AND CALCULATION OF INTEREST ON REVOLVING ADVANCES
7.1 Payment of Interest
On the Repayment Date relating to each Revolving Advance the Borrower to
which such Revolving Advance has been made shall pay accrued interest on
that Revolving Advance.
<PAGE>
7.2 Calculation of Interest
The rate of interest applicable to a Revolving Advance from time to time
during its Term shall be the rate per annum which is the sum of:
7.2.1 the Applicable Margin;
7.2.2 the Mandatory Cost Rate in respect thereof at such time; and
7.2.3 EURIBOR on the Quotation Date therefor.
8. CONVERSION AND WORKING CAPITAL FACILITY
8.1 Conversion Notice
The Obligors' Agent may deliver a notice to the Facility Agent specifying
the length of the Interest Period applicable to the Tranche B Term Advance
made available pursuant to Clause 8.2.2 on the Conversion Date, provided
that such notice is received by the Facility Agent no later than four
Business Days prior to the Conversion Date, and in the absence of such
notice, the Interest Period shall be three months.
8.2 Conversion and the Tranche B Term Facility
8.2.1 The Revolving Advances outstanding as at the Conversion Date in an
aggregate amount equal to the Conversion Available Amount or, if
less, the aggregate amount of all Revolving Advances outstanding
on the Conversion Date shall be converted into Tranche B Term
Advances as follows:
8.2.2 First, Revolving Advances whose Term ends on the Conversion Date
shall be automatically converted into a single Tranche B Term
Advance under the Tranche B Term Facility with an initial Interest
Period as determined in accordance with Clause 8.1 (Conversion
Notice); and
8.2.3 Secondly, Revolving Advances whose Term ends on a date falling
after the Conversion Date shall remain outstanding as Revolving
Advances until the last day of their Term when they shall be
converted in whole or in part into Tranche B Term Advances in
chronological order until such time as the aggregate amount of
Tranche B Term Advances is in an amount equal to the Conversion
Available Amount or, if less, the aggregate amount of all
Revolving Advances outstanding on the Conversion Date provided
that the first Interest Period of each such Tranche B Term Advance
(converted pursuant to this Clause 8.2.3) shall end at the same
time as the Interest Period of the outstanding Tranche B Term
Advance converted pursuant to Clause 8.2.2 (or, as the case may
be, as consolidated with previous Tranche B Term Advances
converted pursuant to this Clause 8.2.3); and
<PAGE>
8.2.4 Thirdly, the Tranche B Revolving Facility shall be reduced to an
amount equal to the Working Capital Facility (and the Revolving
Commitment of each of the Banks shall be reduced rateably) and any
Revolving Advances (or any part thereof) not converted pursuant to
sub-clauses 8.2.2 and/or 8.2.3 shall remain outstanding under the
Working Capital Facility and shall be repaid on the Repayment Date
applicable thereto.
9. MARKET DISRUPTION AND ALTERNATIVE INTEREST RATES
9.1 Market Disruption
If, in relation to any Advance:
9.1.1 EURIBOR is to be determined by reference to Reference Banks and at
or about 11.00 a.m. on the Quotation Date for the relevant
Interest Period or Term none of the Reference Banks supplies a
rate for the purpose of determining EURIBOR for the relevant
Interest Period or Term; or
9.1.2 before the close of business in Paris on the Quotation Date for
the relevant Interest Period or Term the Facility Agent has been
notified by a Bank or each of a group of Banks to whom in
aggregate more than fifty per cent. or more of such Advance is
owed (or, in the case of an undrawn Advance, if made, would be
owed) that the EURIBOR rate does not accurately reflect the cost
of funding its participation in such Advance,
then, the Facility Agent shall notify the Obligors' Agent, the relevant
Borrower and the Participants of such event and, notwithstanding anything to
the contrary in this Agreement, Clause 9.2 (Substitute Interest Period and
Interest Rate) shall apply to such Advance.
9.2 Substitute Interest Period and Interest Rate
If either sub-clause 9.1.1 or 9.1.2 of Clause 9.1 (Market Disruption)
applies to an Advance, then unless a substitute basis has been agreed in
accordance with Clause 9.3 (Alternative Rate) (i) the duration of the
relevant Interest Period or Term shall be one month or, if less, such that
it shall end on the next succeeding Term Repayment Date (in the case of a
Term Advance) or the earlier of the Conversion Date and the Revolving
Termination Date (in the case of a Revolving Advance); and (ii) the rate of
interest applicable to each Bank's portion of such Advance during the
relevant Interest Period or Term shall (subject to any agreement reached
pursuant to Clause 9.3 (Alternative Rate)) be the rate per annum which is
the sum of:
9.2.1 the Applicable Margin;
9.2.2 the Mandatory Cost Rate in respect thereof at such time; and
9.2.3 the rate per annum notified to the Facility Agent by such Bank
before the last day of such Interest Period or Term to be that
which expresses as a percentage rate per annum the cost to such
Bank of funding from whatever sources it may
<PAGE>
reasonably select its portion of such Advance during such Interest
Period or Term.
9.3 Alternative Rate
If (a) either of those events mentioned in sub-clauses 9.1.1 and 9.1.2 of
Clause 9.1 (Market Disruption) occurs in relation to an Advance or (b) by
reason of circumstances affecting the European interbank market during any
period of three consecutive Business Days EURIBOR is not available for euro
to prime banks in the European interbank market, then if the Facility Agent
or the Obligors' Agent so requires, the Facility Agent and the Obligors'
Agent shall enter into negotiations in good faith with a view to agreeing a
substitute basis (i) for determining the rates of interest from time to
time applicable to the Advances and/or (ii) upon which the Advances may be
maintained (whether in euro or some other currency) thereafter and any such
substitute basis that is agreed shall take effect in accordance with its
terms and be binding on each party hereto, provided that the Facility Agent
may not agree any such substitute basis without the prior consent of each
Bank and the EIF.
10. NOTIFICATION
10.1 Advances
Not less than three Business Days before the first day of an Interest
Period or Term, the Facility Agent shall notify each Participant of the
Facility that is to be utilised, the name of the relevant Borrower, the
proposed amount of the relevant Advance, the proposed length of the
relevant Interest Period or Term and the aggregate principal amount of the
relevant Advance allocated to such Bank pursuant to Clause 3.3 (Each Bank's
Participation in Tranche A Term Advances) or Clause 6.3 (Each Bank's
Participation in Revolving Advances) and, in the case of the EIF, the share
of the relevant Advance in relation to which it is liable under the
Participation Agreement.
10.2 Interest Rate Determination
The Facility Agent shall promptly notify the relevant Borrower and the
Participants of each determination of EURIBOR, the Mandatory Cost Rate and
the Applicable Margin.
10.3 Changes to Advances or Interest Rates
The Facility Agent shall promptly notify the relevant Borrower and the
Participants of any change to (a) the proposed length of an Interest Period
or Term or (b) any interest rate occasioned by the operation of Clause 9
(Market Disruption and Alternative Interest Rates).
11. REPAYMENT OF THE TERM fACILITIES
11.1 Term Repayment Instalments
The Parent shall procure (and each Borrower which has drawn a Term Advance
shall repay its share of each Term Loan in order to ensure) that each Term
Loan is repaid in instalments on each Term Repayment Date set out in the
table below. The amount to be repaid shall:
<PAGE>
(a) in the case of the Tranche A Term Loan, be equal to the relevant
percentage of the Tranche A Term Loan outstanding as at the last day
of the Tranche A Term Availability Period; and
(b) in the case of the Tranche B Term Loan, be equal to the relevant
percentage of the Converted Amount,
in each case, as set out in the table below.
Term Repayment Date Percentage of Tranche A Term Loan and Tranche
B Term Loan (%) as at the relevant date
30 June 2003 10
31 December 2003 10
30 June 2004 12.5
31 December 2004 12.5
30 June 2005 12.5
31 December 2005 12.5
30 June 2006 15
31 December 2006 15
11.2 Selection of Term Advances
In relation to a Term Repayment Date, the repayment shall firstly comprise
Term Advances whose Interest Periods end on such Term Repayment Date, as
selected by the Obligors' Agent by not less than four Business Days' notice
to the Facility Agent, provided that if the Obligors' Agent fails to give
such notice, the Facility Agent shall select the Term Advances to be wholly
or partially repaid.
12. REPAYMENT OF THE REVOLVING FACILITY
Each Borrower to which a Revolving Advance has been made shall repay the
Revolving Advance made to it in full on the Repayment Date relating
thereto.
13. CANCELLATION AND PREPAYMENT
13.1 Cancellation of the Term Facility
The Obligors' Agent may (subject to the provisions of this Clause), by
giving to the Facility Agent not less than ten Business Days' prior notice
to that effect, cancel the whole or any part (being a minimum amount of
(Euro) 5,000,000 and an integral multiple of (Euro) 1,000,000) of the
Available Tranche A Term Facility provided that such amount shall be
applied pro rata in cancellation of the Available Tranche A Term Facility
and the Available Revolving Facility on such date. Any such cancellation
shall reduce the Available Tranche A Term Commitments and, as the case may
be, the Available Revolving Commitments of the Banks rateably.
13.2 Prepayment of the Term Loans
Subject to Clause 13.6 (Pro-rata Requirement), the Borrower to which a Term
Advance has been made may, if it has given to the Facility Agent not less
than ten Business Days' prior notice to that effect through the Obligors'
Agent, prepay the whole of any Term Advance or any part of any Term Advance
(being a minimum
<PAGE>
amount of (Euro) 5,000,000 and an integral multiple of (Euro) 1,000,000).
Any prepayment so made after the last day of the Tranche A Term
Availability Period shall satisfy pro tanto the obligations under Clause
11.1 (Term Repayment Instalments) in inverse chronological order.
13.3 Cancellation of the Revolving Facility
Subject to Clause 13.6 (Pro-rata Requirement), the Obligors' Agent may, by
giving to the Facility Agent not less than ten Business Days' prior notice
to that effect, cancel the whole or any part (being a minimum amount of
(Euro) 5,000,000 and an integral multiple of (Euro) 1,000,000) of the
Available Revolving Facility. Any such cancellation shall reduce the
Available Revolving Commitments of the Banks rateably.
13.4 Prepayment of the Revolving Loan
Subject to Clause 13.6 (Pro-rata Requirement), the Borrower to which a
Revolving Advance has been made may, by giving to the Facility Agent
through the Obligors' Agent not less than ten Business Days prior notice to
that effect, prepay the whole or any part of a Revolving Advance (being an
amount such that such Revolving Advance will be reduced by a minimum amount
of (Euro) 5,000,000 and an integral multiple of (Euro) 1,000,000).
13.5 Notice of Cancellation or Prepayment
Any notice of cancellation or prepayment given by a Borrower pursuant to
this Clause 13 shall be irrevocable, shall specify the date upon which such
cancellation or prepayment is to be made and the amount of such
cancellation or prepayment and, in the case of a notice of prepayment,
shall oblige the relevant Borrower to make such prepayment on such date.
13.6 Pro-rata Requirement
The Parent shall ensure that on the date of any prepayment of the Tranche A
Term Loan, or as the case may be the Tranche B Term Loan, in accordance
with Clause 13.2 (Prepayment of the Term Loans):
13.6.1 if such date is prior to the Conversion Date,
(a) the Revolving Commitments of the Banks shall be cancelled pro-
rata by an amount in accordance with Clause 13.3 (Cancellation
of the Revolving Facility); or
(b) in the event that such Commitments are, or are reduced to,
zero, the Revolving Loan shall be prepaid and thereupon the
Revolving Commitments of the Banks shall be cancelled in an
equal or remaining amount in accordance with Clause 13.3
(Cancellation of the Revolving Facility) and/or Clause 13.4
(Prepayment of the Revolving Loan);
in each case such amount (the "Revolving Amount") shall be such
that the ratio of the amount to be applied in prepayment of the
Term Loan to the Revolving Amount is equal to the ratio of the
Tranche A Term Facility to the Tranche B Term Facility; and
<PAGE>
13.6.2 if such date is on or after the Conversion Date, the other Term
Loan shall be prepaid in accordance with Clause 13.2 (Prepayment
of the Term Loans) in an amount such that the ratio of the two
amounts to be prepaid is equal to the ratio, as applicable, of the
Tranche A Term Loan to the Tranche B Term Loan at that time.
13.7 Repayment of a Bank's Share of the Loan
If:
13.7.1 any sum payable to any Participant by an Obligor is required to be
increased pursuant to Clause 15.1 (Tax Gross-up) or Clause 15.3
(EIF Taxes); or
13.7.2 any Participant claims indemnification from the Parent under
Clause 15.2 (Tax Indemnity) or Clause 17.1 (Increased Costs); or
13.7.3 any Bank does not agree a substitute basis under Clause 9.3
(Alternative Rate), the Obligors' Agent may, whilst such
circumstance continues, give the Facility Agent at least ten
Business Days notice (which notice shall be irrevocable) of its
intention to:
(i) where sub-clauses 13.7.1, 13.7.2 or 13.7.3 relate to the
whole of a Bank's participation in the Facilities, to
procure the repayment of such Bank's share of the Loan; or
(ii) where sub-clauses 13.7.1 or 13.7.2 relate only to the EIF's
Participated Portion of a Bank's share of the Facilities,
to procure the repayment of such Participated Portion of
such Bank's share of the Loan.
On the last day of each current Interest Period or Term each Borrower to
which an Advance has been made shall repay such Bank's portion or, as the
case may be, such Participated Portion of the Advance to which such
Interest Period or Term relates. Any repayment of a Term Advance so made
after the last day of the Term Availability Period shall reduce rateably
the remaining obligations under Clause 11.1 (Term Repayment Instalments).
13.8 No Further Advances
A Bank for whose account a repayment is to be made under Clause 13.7
(Repayment of a Bank's Share of the Loan) shall not be obliged to
participate, in the case of a repayment to be made under paragraph (i) of
Clause 13.7 (Repayment of a Bank's Share of the Loan), in the making of
Advances or, in the case of a repayment to be made under paragraph (ii) of
Clause 13.7 (Repayment of a Bank's Share of the Loan), in the making of
such share of Advances relating to such Participated Portion on or after
the date upon which the Facility Agent receives the Obligors' Agent's
notice of its intention to procure the repayment of such Bank's share of
the Loan or, as the case may be, such Participated Portion of such Bank's
share of the Loan, and such Bank's Available Tranche A Term Commitment and
Available Revolving Commitment or, as the case may be, such Participated
Portion of such Bank's Available Tranche A Term Commitment and Available
Revolving Commitment shall be reduced to zero.
<PAGE>
13.9 No Other Repayments
The Borrowers shall not repay all or any part of the Loan except at the
times and in the manner expressly provided for in this Agreement.
13.10 No Reborrowing of the Term Facilities
None of the Borrowers shall be entitled to reborrow any amount of the Term
Facilities which is repaid.
14. Mandatory Prepayment
14.1 Excess Cash Flow
With respect to each immediately preceding financial year of the Parent,
commencing with the financial year ending on 31 December 2001, the Parent
shall on the Business Day immediately succeeding the date on which the
consolidated financial statements for such financial year are delivered by
the Parent pursuant to the provisions of Clause 21.1 (Annual Statements)
or should have been delivered in accordance with the provisions thereof,
apply 50 per cent. of Excess Cash Flow for such financial year in
prepayment of the Loan in accordance with Clause 14.4 (Application of
Prepayments).
14.2 Asset Disposals and Insurance Proceeds
The Parent shall procure that an amount equal to 100 per cent. of:
(a) the Net Cash Proceeds of any disposal, lease or transfer of any asset
of any member of the Group (other than a Permitted Disposal); and
(b) the proceeds of any insurance claims other than those payable to a
third party,
in each case to the extent that such proceeds are not applied in or
towards the carrying on of the Telecoms Business as permitted by this
Agreement within 180 days of receipt of such proceeds, shall promptly be
applied in prepayment of the Loan in accordance with Clause 14.4
(Application of Prepayments).
14.3 Change of Control
14.3.1 The Parent shall (itself or through the Obligors' Agent), promptly
upon it becoming aware that a change of control has occurred, or
will or is reasonably likely to occur, give written notice thereof
to the Participants (through the Facility Agent).
14.3.2 Upon the occurrence of a change of control, the Borrowers shall
immediately repay in full the Term Loans and Revolving Loan
outstanding at such time and all other amounts owing hereunder and
the Commitments of the Banks shall be irrevocably cancelled.
14.4 Application of Prepayments
14.4.1 Any prepayment made under Clause 14.1 (Excess Cash Flow) or Clause
14.2 (Asset Disposals and Insurance Proceeds) shall be applied:
(a) if such date is prior to the Conversion Date:
<PAGE>
(i) against the Tranche A Term Loan; and
(ii) by a cancellation of the Revolving Commitments of the
Banks pro-rata; or in the event that at such time such
Commitments are, or are reduced to, zero, the
Revolving Loan shall be prepaid and thereupon the
Revolving Commitments of the Banks shall be cancelled;
in the ratio that the Tranche A Term Facility bears to the
Tranche B Term Facility; and
(b) if such date is on or after the Conversion Date, against the
Tranche A Term Loan and the Tranche B Term Loan in the ratio
that the Tranche A Term Loan bears to the Tranche B Term Loan
at that time; provided that if on such date the Term Loans
have been prepaid in full, shall be applied in cancellation
of the Revolving Commitments of the Banks pro-rata and then
in repayment and cancellation of the Revolving Loan and the
Revolving Commitments of the Banks pro-rata.
14.4.2 Any prepayment of Term Loans shall satisfy the remaining
obligations under Clause 11.1 (Term Repayment Instalments) in
inverse chronological order.
14.5 Prepayment Account
If Clause 13.6 (Pro-rata Requirement), Clause 14.1 (Excess Cash Flow) or
Clause 14.2 (Asset Disposals and Insurance Proceeds) would require the
Parent to procure the prepayment of any Advance otherwise than at the end
of an Interest Period or Term, the Parent can elect (by written notice to
the Facility Agent to be received no later than one Business Day prior to
the date on which the prepayment obligation would, but for this Clause
14.5, arise) to credit such amount to the Prepayment Account on the date on
which the prepayment obligation but for this Clause 14.5 would arise and to
prepay the Term Advance and/or Revolving Advance at the first occurring end
of an Interest Period relative to the Term Advance to be repaid or date on
which a Revolving Advance matures. Following any such election and provided
the required payment is made to the Prepayment Account, the obligation to
prepay the relevant Term Advance and/or Revolving Advance will not arise
until the first occurring end of an Interest Period relative to the Term
Advance to be repaid or date on which a Revolving Advance matures (and for
the avoidance of doubt interest shall continue to accrue on such Advances
until the end of the applicable Interest Period or Term). The Obligors'
Agent on behalf of the Parent and the other Obligors hereby authorises the
Facility Agent to withdraw monies from the Prepayment Account and apply
such monies against prepayments which are due to be made hereunder, or upon
the occurrence of an Event of Default in respect of which a notice has been
given pursuant to Clause 24.19 (Acceleration and Cancellation) against
amounts due and payable under the Finance Documents. Following the
satisfaction of the obligations pursuant to this Clause 14.5 with respect
to any deposit made to the Prepayment Account, any interest accrued on such
deposit shall be paid to the Obligors' Agent, provided that at such time no
Event of Default has occurred and is continuing in which case such interest
shall not be paid
<PAGE>
to the Obligors' Agent but the Obligors' Agent may direct the Facility
Agent to apply such interest in satisfaction of the interest which has
accrued in relation to the outstanding Advances.
15. TAXES
15.1 Tax Gross-up
All payments to be made by an Obligor to any Finance Party or the EIF under
the Finance Documents shall be made free and clear of and without deduction
for or on account of tax. If any Obligor is required to make such a payment
subject to the deduction or withholding of tax, the sum payable by such
Obligor (in respect of which such deduction or withholding is required to
be made) shall be increased to the extent necessary to ensure that such
Finance Party or, as the case may be, the EIF receives a sum net of any
deduction or withholding equal to the sum which it would have received had
no such deduction or withholding been made or required to be made.
15.2 Tax Indemnity
Without prejudice to Clause 15.1 (Tax Gross-up), if any Finance Party or
the EIF is required to make any payment of or on account of tax on or in
relation to any sum received or receivable under the Finance Documents
(including any sum deemed for purposes of tax to be received or receivable
by such Finance Party or, as the case may be, the EIF whether or not
actually received or receivable) or if any liability in respect of any such
payment is asserted, imposed, levied or assessed against any Finance Party
or the EIF, the Parent shall, upon demand of the Facility Agent and
delivery of a written explanation of the nature of the tax due or paid by
such Finance Party or, as the case may be, the EIF, promptly indemnify the
Finance Party or, as the case may be, the EIF which suffers a loss or
liability as a result against such payment or liability, together with any
interest, penalties, costs and expenses payable or incurred in connection
therewith, other than any such interest, penalties, costs or expenses
arising as a result of a failure by the Finance Party or, as the case may
be, the EIF to make payment of tax when, to the best of its knowledge and
belief, it was due provided that this Clause 15.2 shall not apply to:
15.2.1 any tax imposed on and calculated by reference to the net income
actually received or receivable by such Finance Party or, as the
case may be, the EIF (but, for the avoidance of doubt, not
including any sum deemed for purposes of tax to be received or
receivable by such Finance Party or, as the case may be, the EIF
but not actually receivable) by the jurisdiction in which such
Finance Party or, as the case may be, the EIF is incorporated or
any jurisdiction or jurisdictions in which such Finance Party or,
as the case may be, the EIF is resident for the purpose of
assessing such tax; or
15.2.2 any tax imposed on and calculated by reference to the net income
of the Facility Office of such Finance Party or, as the case may
be, the EIF actually received or receivable by such Finance Party
or, as the case may be, the EIF (but, for the avoidance of doubt,
not including any sum deemed for purposes of tax to be received or
receivable by such Finance Party or, as the case may
<PAGE>
be, the EIF but not actually receivable) by the jurisdiction in
which its Facility Office is located.
15.3 EIF Taxes
If:
15.3.1 a Participating Lender (or the Facility Agent on its behalf) is
required to make any deduction or withholding of tax from any sum
payable by it to the EIF under the Participation Agreement; or
15.3.2 the EIF (or the Facility Agent on its behalf) is required to make
any payment of or on account of tax on or in relation to any sum
received or receivable under the Participation Agreement
(including any sum deemed for purposes of tax to be received or
receivable by the EIF whether or not actually received or
receivable) or if any liability in respect of any such payment is
asserted, imposed, levied or assessed against the EIF (other than
as set out in sub-clauses 15.2.1 and 15.2.2 of Clause 15.2 (Tax
Indemnity) to the extent such sub-clauses apply to the EIF),
the Obligors shall, upon demand of the Facility Agent and delivery of a
written explanation of the nature of the tax due or paid, promptly pay to
such Participating Lender such amount as may be necessary to ensure that
upon payment by such Participating Lender to the EIF under the
Participation Agreement, the EIF will actually have received, in aggregate,
a net amount equal to the full amount which it would have received had such
sum not been made subject to such deduction, withholding, payment or
liability.
15.4 Claims by Participants
A Participant intending to make a claim or, in the case of the EIF, to
request a Participating Lender to make a claim pursuant to Clause 15.2 (Tax
Indemnity) or Clause 15.3. (EIF Taxes) shall notify the Facility Agent of
the event giving rise to the claim, whereupon the Facility Agent shall
notify the Obligors' Agent thereof.
15.5 Qualifying Banks
Each Bank warrants that it is a Qualifying Bank as at the date it becomes a
party to this Agreement.
16. TAX RECEIPTS
16.1 Notification of Requirement to Deduct Tax
If, at any time, an Obligor is required by law to make any deduction or
withholding from any sum payable by it under the Finance Documents (or if
thereafter there is any change in the rates at which or the manner in which
such deductions or withholdings are calculated), such Obligor shall
promptly notify the Facility Agent.
16.2 Evidence of Payment of Tax
If an Obligor makes any payment under the Finance Documents in respect of
which it is required to make any deduction or withholding, it shall pay the
full amount required
<PAGE>
to be deducted or withheld to the relevant taxation or other authority
within the time allowed for such payment under applicable law and shall
deliver to the Facility Agent for each Participant, within thirty days of
issue thereof, an original receipt (or a certified copy thereof) issued by
such authority evidencing the payment to such authority of all amounts so
required to be deducted or withheld in respect of that Participant's share
of such payment.
16.3 Tax Credit Payment
If an additional payment is made under Clause 15 (Taxes) by an Obligor for
the benefit of any Finance Party or the EIF and such Finance Party or, as
the case may be, the EIF, in its sole discretion acting in good faith,
determines that it has obtained (and has derived full use and benefit from)
a credit against, a relief or remission for, or repayment of, any tax,
then, if and to the extent that such Finance Party or, as the case may be,
the EIF, in its sole opinion acting in good faith, determines that:
16.3.1 such credit, relief, remission or repayment is in respect of or
calculated with reference to the additional payment made pursuant
to Clause 15 (Taxes); and
16.3.2 its tax affairs for its tax year in respect of which such credit,
relief, remission or repayment was obtained have been finally
settled,
such Finance Party or, as the case may be, the EIF shall, to the extent
that it can do so without prejudice to the retention of the amount of such
credit, relief, remission or repayment, pay to such Obligor such amount as
such Finance Party or, as the case may be, the EIF shall, in its sole
opinion acting in good faith, determine to be the amount which will leave
such Finance Party or, as the case may be, the EIF (after such payment) in
no worse after-tax position than it would have been in had the additional
payment in question not been required to be made by such Obligor.
16.4 Tax Credit Clawback
If any Finance Party or the EIF makes any payment to an Obligor pursuant to
Clause 16.3 (Tax Credit Payment) and such Finance Party or, as the case may
be, the EIF subsequently determines, in its sole opinion acting in good
faith, that the credit, relief, remission or repayment in respect of which
such payment was made was not available or has been withdrawn or that it
was unable to use such credit, relief, remission or repayment in full, such
Obligor shall reimburse such Finance Party or, as the case may be, the EIF
such amount as such Finance Party or, as the case may be, the EIF
determines, in its sole opinion acting in good faith, is necessary to place
it in the same after-tax position as it would have been in if such credit,
relief, remission or repayment had been obtained and fully used and
retained by such Finance Party or, as the case may be, the EIF.
16.5 Tax and Other Affairs
No provision of this Agreement shall interfere with the right of any
Finance Party or the EIF to arrange its tax or any other affairs in
whatever manner it thinks fit, oblige any Finance Party or the EIF to claim
any credit, relief,
<PAGE>
remission or repayment in respect of any payment under Clause 15 (Taxes) in
priority to any other credit, relief, remission or repayment available to
it except that the Finance Party's or, as the case may be, the EIF's sole
reason (acting in good faith) for claiming such credit, relief, remission
or repayment shall not be its obligation to make a tax credit payment under
Clause 16.3 (Tax Credit Payment) nor oblige any Finance Party or the EIF to
disclose any information relating to its tax or other affairs or any
computations in respect thereof.
17. INCREASED COSTS
17.1 Increased Costs
If, by reason of (a) any change in law or in its interpretation or
administration and/or (b) compliance with any request or requirement (with
which banks generally habitually comply) relating to the maintenance of
capital or any other request from or requirement of any central bank or
other fiscal, monetary, regulatory or other authority:
17.1.1 a Bank or any holding company of such Bank or the EIF is unable to
obtain the rate of return on its capital which it would have been
able to obtain but for such Bank's or, as the case may be, the
EIF's entering into or assuming or maintaining a commitment or
participation or performing its obligations under the Finance
Documents or the Participation Agreement;
17.1.2 a Bank or any holding company of such Bank or the EIF incurs a
cost as a result of such Bank's or, as the case may be, the EIF's
entering into or assuming or maintaining a commitment or
participation or performing its obligations under the Finance
Documents or the Participation Agreement; or
17.1.3 there is any increase in the cost to a Bank or any holding company
of such Bank or the EIF of funding or maintaining or participating
in such Bank's or, as the case may be, the EIF's share of the
Advances or any Unpaid Sum,
then the Parent shall, from time to time on demand of the Facility Agent,
promptly pay to the Facility Agent for the account of that Bank or, as the
case may be, the EIF amounts sufficient to indemnify that Bank or the EIF
or to enable that Bank to indemnify its holding company from and against,
as the case may be, (i) such reduction in the rate of return of capital,
(ii) such cost or (iii) such increased cost. Any demand shall be
accompanied by particulars (in reasonable detail) of the circumstances
giving rise to the demand and a calculation (in reasonable detail) of the
amount demanded.
17.2 Increased Costs Claims
A Participant intending to make a claim pursuant to Clause 17.1 (Increased
Costs) shall notify the Facility Agent of the event giving rise to such
claim, whereupon the Facility Agent shall notify the Obligors' Agent
thereof.
17.3 Exclusions
Notwithstanding the foregoing provisions of this Clause 17, no Participant
shall be entitled to make any claim under this Clause 17 in respect of any
cost, increased cost or liability (a) compensated by Clause 15 (Taxes); (b)
included within the Mandatory Cost Rate; (c) attributable to any tax or
change in the rate of tax on the overall net
<PAGE>
income of a Bank or the holding company of such Bank or the EIF (or the
overall net income of a division or branch of such Bank or the holding
company of such Bank or the EIF); (d) attributable to a law or regulation
which at the date of this Agreement is scheduled to be implemented after
the date of this Agreement; (e) attributable to the period commencing 90
days after the Facility Office of the relevant Bank or the holding company
of such Bank or the EIF becomes aware of the increased cost to the date
that any claim is made under Clause 17.2 (Increased Costs Claims) where
such claim is made after such 90 day period; or (f) attributable solely to
the gross negligence or wilful misconduct of the relevant Bank or the
holding company of such Bank or the EIF.
18. ILLEGALITY
18.1 Bank Illegality
If, at any time, it is or will become unlawful for a Bank to make, fund or
allow to remain outstanding all or part of its share of the Advances, then
that Bank shall, promptly after becoming aware of the same, deliver to the
Obligors' Agent through the Facility Agent a notice to that effect and:
18.1.1 such Bank shall not thereafter be obliged to participate in the
making of any Advances and the amount of its Available Tranche A
Term Commitment and Available Revolving Commitment shall be
immediately reduced to zero; and
18.1.2 if the Facility Agent on behalf of such Bank so requires, the
Parent shall procure that each Borrower which has drawn an Advance
shall on such date as the Facility Agent shall have specified
(being not earlier than the latest date permitted by law) repay
such Bank's share of any outstanding Advances together with
accrued interest thereon and all other amounts owing to such Bank
under the Finance Documents and any repayment of Term Advances so
made after the last day of the Trance A Availability Period shall
reduce rateably the remaining obligations under Clause 11.1 (Term
Repayment Instalments).
18.2 EIF Illegality
If, at any time, it is or will become unlawful for the EIF to allow to
remain outstanding, maintain or perform its obligations under the
Participation Agreement, then the EIF shall, promptly upon becoming aware
of the same, deliver to the Obligors' Agent and each Participating Lender
through the Facility Agent a notice to that effect and:
18.2.1 an amount of the Available Tranche A Term Commitment and Available
Revolving Commitment of each Participating Lender equal to the
EIF's Participated Portion shall be cancelled; and
18.2.2 if the Facility Agent on behalf of the EIF so requires, the Parent
shall procure that each Borrower which has drawn an Advance shall
on such date as the Facility Agent shall have specified (being not
earlier than the latest date
<PAGE>
permitted by law) repay the EIF's Participated Portion of each
Participating Lender's share of any outstanding Advances together with
accrued interest thereon and all other amounts owing to such Participating
Lender in respect of such Participated Portion under the Finance Documents
and any repayment of Term Advances so made after the last day of the
Tranche A Availability Period shall reduce rateably the remaining
obligations under Clause 11.1 (Term Repayment Instalments).
19. MITIGATION
If, in respect of any Participant, circumstances arise which would or would
upon the giving of notice result in:
19.1.1 an increase in any sum payable to it or for its account pursuant
to Clause 15.1 (Tax Gross-up) or Clause 15.3 (EIF Taxes);
19.1.2 a claim for indemnification pursuant to Clause 15.2 (Tax
Indemnity) or Clause 17.1 (Increased Costs); or
19.1.3 the reduction of its Available Commitment to zero or, in relation
to the EIF, the cancellation of an amount of the Available
Commitment of each Participating Lender equal to the EIF's
Participated Portion or any repayment to be made pursuant to
Clause 18 (Illegality),
then, without in any way limiting, reducing or otherwise qualifying the
rights of such Participant or the obligations of the Obligors under any of
the Clauses referred to above, such Participant shall promptly upon
becoming aware of such circumstances notify the Facility Agent and, in the
case of the EIF, each Participating Lender thereof and, in consultation
with the Facility Agent and the Obligors' Agent and, in the case of the
EIF, each Participating Lender and to the extent that it can do so lawfully
and without prejudice to its own position, take reasonable steps (including
a change of location of its Facility Office or, in the case of a Bank, the
transfer of its rights, benefits and obligations under the Finance
Documents or, in the case of the EIF, the transfer of the rights, benefits
and obligations of each Participating Lender under the Finance Documents in
respect of each such Participating Lender's Participated Portion, together
with a corresponding release of the Participation Agreement, in each case
to another financial institution acceptable to the Obligors' Agent and
willing to participate in the Facilities) to mitigate the effects of such
circumstances, provided that such Participant shall be under no obligation
to take any such action if, in the opinion of such Participant (acting
reasonably), to do so might have any adverse effect upon its business,
operations or financial condition (other than any minor costs and expenses
of an administrative nature).
20. REPRESENTATIONS
Each Obligor makes the representations and warranties set out in Clause
20.1 (Status) to Clause 20.28 (Business, Business Plan, Reports). The
Original Obligors acknowledge that the Finance Parties and the EIF have
entered into this Agreement in
<PAGE>
reliance on those representations and warranties. The representations and
warranties shall be qualified to the extent set out in the disclosure
letter from the Obligors' Agent to the Facility Agent dated the same date
as this Agreement.
20.1 Status
It is a corporation duly organised or incorporated under the laws of its
jurisdiction of incorporation.
20.2 Governing Law and Judgments
In any proceedings taken in its jurisdiction of incorporation in relation
to the Credit Facility Documents, the choice of English law as the
governing law of the Credit Facility Documents expressed to be governed by
English law and any judgment obtained in England in relation to any such
Credit Facility Document will be recognised and enforced, subject to the
qualifications contained in the legal opinions referred to in Schedule 3
(Conditions Precedent) or in Schedule 1 to the Amendment Agreement.
20.3 Binding Obligations
The obligations expressed to be assumed by it in the Credit Facility
Documents are legal and valid obligations binding on it and enforceable
against it in accordance with the terms thereof subject to the
qualifications contained in the legal opinions referred to in Schedule 3
(Conditions Precedent) or in Schedule 1 to the Amendment Agreement and
mandatory provisions of law affecting creditors rights generally.
20.4 Execution of the Finance Documents
Its execution of the Credit Facility Documents and its exercise of its
rights and performance of its obligations thereunder do not and will not:
20.4.1 conflict in any material respect with any agreement, mortgage,
bond or other instrument or treaty to which it is a party or which
is binding upon it or any of its assets;
20.4.2 conflict with its constitutive documents; or
20.4.3 conflict in any material respect with any applicable law.
It has the power to enter into the Credit Facility Documents and all
corporate action required to authorise the execution of the Credit Facility
Documents and the performance of its obligations thereunder has been duly
taken.
20.5 No Material Proceedings
No action or administrative proceeding of or before any court or agency
including, without limitation, the Regulatory Authorities has been started
or threatened against it which is reasonably likely to have a Material
Adverse Effect.
20.6 Audited Financial Statements
In the case of the most recent audited annual consolidated financial
statements of the Parent delivered in accordance with Clause 21.1 (Annual
Statements) they:
<PAGE>
20.6.1 were prepared in accordance with US GAAP consistently applied;
20.6.2 disclose all liabilities (contingent or otherwise) and all
unrealised or anticipated losses of any member of the Group
required to be disclosed in accordance with US GAAP; and
20.6.3 save as disclosed therein, fairly present in all material
respects the financial condition and operations of the Group
during the relevant financial year.
20.7 No Material Adverse Change
Since the date of the Original Financial Statements, there has been no
Material Adverse Change.
20.8 Validity and Admissibility in Evidence
All acts, conditions and things required to be done, fulfilled and
performed by it in order (a) to enable it lawfully to enter into, exercise
its rights under and perform and comply with the obligations expressed to
be assumed by it in the Credit Facility Documents, (b) to ensure that the
obligations expressed to be assumed by it in the Credit Facility Documents
are legal, valid, binding and enforceable and (c) to make the Credit
Facility Documents admissible in evidence in its jurisdiction of
incorporation have been done, fulfilled and performed subject in the case
of (a), (b) and (c) above to the qualifications contained in the legal
opinions referred to in Schedule 3 (Conditions Precedent) and mandatory
provisions of law affecting creditors rights generally.
20.9 Claims Pari Passu
Under the laws of its jurisdiction of incorporation in force at the date
hereof, the claims of the Finance Parties against it under the Credit
Facility Documents will rank at least pari passu with the claims of all
its other unsecured and unsubordinated creditors save those whose claims
are mandatorily preferred solely by any bankruptcy, insolvency,
liquidation or other similar laws of general application.
20.10 No Filing or Stamp Taxes
Under the laws of its jurisdiction of incorporation in force at the date
hereof, it is not necessary that the Credit Facility Documents be filed,
recorded or enrolled with any court or other authority in such
jurisdiction (other than Security Documents which by their terms are
required to be filed and/or registered) or that any stamp, registration or
similar tax be paid (other than stamp, registration and similar taxes as
are specified herein or in the Security Documents) on or in relation to
the Credit Facility Documents subject to the qualifications contained in
the legal opinions referred to in Schedule 3 (Conditions Precedent).
20.11 No Deduction or Withholding
Under the laws of its jurisdiction of incorporation in force at the date
hereof, it will not be required to make any deduction or withholding from
any payment it may make under the Finance Documents subject to the
qualifications contained in the legal opinions referred to in Schedule 3
(Conditions Precedent) but excluding for these
<PAGE>
purposes the qualification contained in paragraph 8(viii) of the legal
opinion issued by Clifford Chance Punder.
20.12 No Winding-up
Neither the Parent nor any Material Subsidiary has taken any corporate
action nor have any other steps been taken or legal proceedings been
started or (to the best of its knowledge and belief) threatened against
the Parent or any Material Subsidiary for its winding-up, dissolution,
administration or re-organisation (whether by voluntary arrangement,
scheme of arrangement or otherwise) or for the appointment of a receiver,
administrator, administrative receiver, conservator, custodian, trustee or
similar officer of it or of any or all of its assets or revenues.
20.13 No Material Defaults
No member of the Group is in breach of or in default under any Material
Agreement to which it is a party or which is binding on it or any of its
assets to an extent or in a manner which is reasonably likely to have a
Material Adverse Effect.
20.14 Information Memorandum
As of the date of the Information Memorandum (i) the factual information
contained in the Information Memorandum relating to the Group and any
written factual information relating to the Group supplied on or after the
date of the Information Memorandum by the Obligors to the Facility Agent
and identified specifically as supplemental to the Information Memorandum,
taken as a whole, is true, complete and accurate in all material respects;
(ii) to the best of the Obligors' knowledge and belief, nothing has been
omitted that would make any material factual information relating to the
Group contained in the Information Memorandum untrue or misleading in any
material respect in light of the circumstances under which it was made;
and (iii) all forecasts made by the Obligors in relation to the Group are
believed by the Obligors to be reasonable, and the financial projections
contained therein have been prepared in good faith on the basis of
assumptions which the Obligors believed were reasonable as of the date of
such projections.
20.15 Environmental Compliance
Each member of the Group has duly performed and observed in all material
respects all Environmental Law, Environmental Permits and all other
material covenants, conditions, restrictions or agreements directly or
indirectly concerned with any contamination, pollution or waste or the
release or discharge of any toxic or hazardous substance in connection
with any real property which is or was at any time owned, leased or
occupied by any member of the Group or on which any member of the Group
has conducted any activity where failure to do so might reasonably be
expected to have a Material Adverse Effect.
20.16 Environmental Claims
No Environmental Claim has been commenced or (to the best of its knowledge
and belief) is threatened against any member of the Group where such claim
is reasonably likely to be determined against such member of the Group and
would be reasonably likely, if so determined, to have a Material Adverse
Effect.
<PAGE>
20.17 Encumbrances
Save for Permitted Encumbrances, no Encumbrance exists over all or any of
the present or future revenues or assets of any member of the Group.
20.18 Ownership of the Obligors
Each of the Obligors (other than the Parent) is a wholly-owned subsidiary
of the Parent.
20.19 Ownership of the Parent
The Original Shareholders are indirect shareholders in the Parent in the
proportions set out in Schedule 7 (Original Shareholders).
20.20 Licences and Necessary Authorisations
20.20.1 It (a) has obtained the Licences and, to the extent failure to
obtain might reasonably be expected to have a Material Adverse
Effect, any Necessary Authorisations, and (b) at all times, has
not violated, has complied with, and is in compliance with each
Relevant Law, the Licences and the terms of any Necessary
Authorisations to the extent any such violation or non-compliance
would not reasonably be expected to have a Material Adverse
Effect.
20.20.2 There are no facts or circumstances of which it is aware which
would be reasonably likely to result in such Licences or any
Necessary Authorisations being revoked, suspended, amended,
varied, withdrawn or not renewed in a manner that might reasonably
be expected to have a Material Adverse Effect.
20.20.3 So far as it is aware, none of the Licences or any Necessary
Authorisations are the subject of any pending or threatened
proceedings or revocation to the extent such proceedings or
revocation might reasonably be expected to have a Material Adverse
Effect.
20.21 Security Interest
20.21.1 There is no security interest over any of its assets ranking in
priority ahead, or having equal ranking, with the security
specified in any of the Security Documents (other than pursuant to
paragraph (a) of the definition of "Permitted Encumbrances").
20.21.2 The shares of any Group member which are subject to an Encumbrance
under the Security Documents are fully paid and not subject to any
option to purchase or similar rights and the constitutional
documents of any such Group member do not restrict or inhibit
(whether absolutely, partly, under a discretionary power or
otherwise) any transfer of such shares pursuant to enforcement of
the Security Documents.
20.22 Intellectual Property
It is not aware of any adverse circumstance relating to validity,
subsistence or use of any of its Intellectual Property which could
reasonably be expected to have a Material Adverse Effect.
<PAGE>
20.23 Information Management
The Group at all times maintains an integrated enterprise wide information
management system save to the extent that failure to do so would not
reasonably be expected to have a Material Adverse Effect.
20.24 Good Title to Assets
It has good title to or valid leases of or other appropriate licence,
authorisation or consent to use its assets necessary to carry on its
business as presently conducted.
20.25 Year 2000
20.25.1 It believes that all Computer Systems used, owned or operated by
any member of the Group are Year 2000 Compliant or, if not Year
2000 Compliant, such failure would not reasonably be expected to
have a Material Adverse Effect.
20.25.2 Each of the Group's suppliers (which are of material importance to
the business and operations of the Group) has represented to the
Group that the Computer Systems supplied by it to the Group are
Year 2000 Compliant in all material respects.
20.26 Dutch Obligors
Each Original Borrower incorporated in the Netherlands (the "Dutch
Borrower") is in compliance with The Netherlands Act on the Supervision of
Credit Institutions 1992 (Wet Toezicht Kredietwezen 1992, hereinafter, the
"WTK") and, to the extent applicable, complies with and will at all times
comply with the requirements for exemption as set out in the Ministerial
Regulation of 4th February 1993 (the "Regulation") in implementation of
Article 1 paragraph 3 of WTK as in effect - retroactively - from 1st
January 1993 and published in the Official State Gazette (Staatscourant)
No. 29 of 11th February 1993 and exempting from banking supervision
exercised by the Netherlands' Central Bank (De Nederlandsche Bank N.V.;
"DNB") Netherlands finance companies (such as the Dutch Borrower) subject
to the conditions set out in the Regulation being met.
The Dutch Borrower has not received from DNB a notice within the meaning
of article 7 of the Regulation by which DNB sets a period within which the
Dutch Borrower must comply with the provisions of the Regulation.
20.27 Existing Bank Accounts
The Existing Bank Accounts are all the accounts held by members of the
Obligor Group with financial institutions as at the date hereof.
20.28 Business, Business Plan and Reports
20.28.1 It only engages in activities which relate to the carrying on of a
Telecoms Business.
20.28.2 All material written factual information in the possession of the
Group relating to the Licences and the Material Agreements has
been disclosed for the purposes of the preparation of the Due
Diligence Reports.
<PAGE>
20.29 Repetition of Representations
Except to the extent that a Repeated Representation speaks of a particular
date, the Repeated Representations shall be repeated by the relevant
Obligor by reference to the facts and circumstances then existing, (i) on
the first day of each Interest Period; (ii) on each date on which an
Advance (including a Renewed Advance) is or is to be made; (iii) on each
date on which a company becomes (or it is proposed that a company becomes)
an Additional Guarantor; and Clause 20.14 (Information Memorandum) and
sub-clause 20.28.2 of Clause 20.28 (Business, Business Plan and Reports)
shall be deemed to be so repeated on the Syndication Date and on the date
of execution of the Participation Agreement.
21. FINANCIAL AND OTHER INFORMATION
21.1 Annual Statements
The Parent shall as soon as the same become available: (i) but in any
event within 120 days after the end of each of its financial years,
deliver to the Facility Agent in sufficient copies for the Participants
consolidated financial statements of the Group for such financial year,
audited by Arthur Andersen or another major firm of auditors of
international repute and without any material qualification by such
auditors; and (ii), if prepared, deliver to the Facility Agent in
sufficient copies for the Participants the unconsolidated annual financial
statements of each Borrower (or on a consolidated basis, as the case may
be) for its financial year (on an audited basis if so prepared).
21.2 Quarterly Management Statements
The Parent shall as soon as the same become available, but in any event
within 45 days after the end of each quarter of each of its financial
years, deliver to the Facility Agent in sufficient copies for the
Participants its management statements for such period prepared on a
consolidated basis in the agreed form or containing information of the
same type and to the same level of detail as the agreed form and shall
include, without limitation, details of Direct Client Revenues and
Indirect Client Revenues generated during such period.
21.3 Monthly Management Statements
The Parent shall as soon as the same become available, but in any event
within 30 days after the end of each month (other than the month ending at
the end of a quarter of the financial year of the Parent, when delivery of
such statements shall be at the discretion of the Parent), deliver to the
Facility Agent in sufficient copies for the Participants its monthly
accounts for such period prepared on a consolidated basis in the agreed
form or containing information of the same type and to the same level of
detail as the agreed form and shall include, without limitation, details
of Direct Client Revenues and Indirect Client Revenues generated during
such period.
21.4 Requirements as to Financial Statements
The Parent shall ensure that each of its financial statements delivered by
it pursuant to this Clause 21 (other than Clause 21.1(ii) and Clause 21.3
(Monthly Management Statements) is certified by an Authorised Signatory of
the Parent as fairly presenting in all material respects the financial
condition of the Group as at the end of the period to
<PAGE>
which those financial statements relate and of the results of the Group's
operations during such period.
21.5 Compliance Certificates
The Parent shall ensure that each set of its financial statements
delivered by it pursuant to Clause 21.1 (Annual Statements) and Clause
21.2 (Quarterly Management Statements) is accompanied by a Compliance
Certificate (a) in the case of a Compliance Certificate delivered with its
annual financial statements (i) signed by its auditors or (ii) signed by
two duly authorised officers of the Group together with a confirmation (in
a form in accordance with current practices of such auditors) signed by
the auditors confirming that they have audited the annual financial
statements in accordance with generally accepted auditing standards in the
United States of America, confirming that they are aware of the covenants
set out in sub-clauses 22.1.1 to 22.1.5 inclusive and sub-clauses 22.1.7
to 22.1.9 inclusive of Clause 22.1 (Financial Condition and MAN-Network
Construction) and providing negative assurance regarding the compliance of
the Parent with such covenants; and (b) in the case of a Compliance
Certificate delivered with its quarterly financial statements, by two duly
authorised officers of the Group.
21.6 Information in respect of the Licences
Each Obligor shall promptly, after receipt or despatch of the same,
deliver (or through the Obligors' Agent) to the Facility Agent copies of
all material correspondence with the Relevant Authorities relating to any
breach or possible revocation, suspension, amendment, variation or
withdrawal of a Licence.
21.7 Material Agreements
The Obligors' Agent shall notify the Facility Agent promptly upon the
execution of a Material Agreement after the date hereof and supply the
Facility Agent with a copy thereof.
21.8 Other Financial Information
Each Obligor shall from time to time on the request of the Facility Agent,
furnish the Facility Agent with such information about the financial
condition of the Group as the Facility Agent or any Participant (through
the Facility Agent) may reasonably require.
21.9 Budget
The Obligors' Agent shall, within 30 days of the commencement of each
financial year of the Parent, deliver to the Facility Agent in sufficient
copies for the Participants a budget for the Group for such financial year
approved by the direct or indirect shareholders of the Parent and in the
agreed form or containing information of the same type and to the same
level of detail as the agreed form.
21.10 Accounting Policies
The Parent shall ensure that each set of financial statements delivered by
the Parent in respect of the consolidated Group pursuant to this Clause 21
is prepared using accounting policies, practices, procedures and reference
periods consistent with those applied in the preparation of the Original
Financial Statements unless, in relation to any
<PAGE>
such set of financial statements, the Parent notifies the Facility Agent
that there have been one or more changes in any such accounting policies,
practices, procedures or reference periods and shall deliver all
subsequent financial statements in accordance with such changes provided
that for a period of 60 days from such date the Facility Agent shall
negotiate with the Obligors' Agent in good faith to agree amendments to
the requirements as to financial condition and/or the financial
definitions set out in Clause 22 (Financial Conditions) to reflect such
changes; and during such periods and in the event that no agreement is
reached the Parent shall ensure that its auditors provide:
21.10.1 a description of the changes and the adjustments which would be
required to be made to those financial statements in order to
cause them to use the accounting policies, practices, procedures
and reference periods upon which the Original Financial Statements
were prepared; and
21.10.2 sufficient information, in such detail and format as may be
reasonably required by the Facility Agent, to enable the
Participants to make an accurate comparison between the financial
position indicated by those financial statements and the Original
Financial Statements,
and any reference in this Agreement to those financial statements shall be
construed as a reference to those financial statements as adjusted to
reflect the basis upon which the Original Financial Statements were
prepared.
21.11 Material Proceedings
Each Obligor shall promptly notify the Facility Agent of any action or
administration proceeding of or before any court or agency including,
without limitation, any Regulatory Authority which has been started or
threatened in writing against it and which is reasonably likely to be
determined against it and if so determined would be reasonably likely to
have a Material Adverse Effect or that purports to affect the legality,
validity, binding effect or enforceability of the Credit Facility
Documents.
21.12 Notification of Events of Default
The Obligors' Agent shall promptly inform the Facility Agent of the
occurrence of any Event of Default or Potential Event of Default and, upon
receipt of a written request to that effect from the Facility Agent,
confirm to the Facility Agent that, save as previously notified to the
Facility Agent or as notified in such confirmation, no Event of Default or
Potential Event of Default has occurred which is continuing.
21.13 Access to Books and Records
The Parent shall ensure that any representative or professional adviser to
the Facility Agent may at reasonable times during normal business hours
and on reasonable notice by the Facility Agent to the Parent, have access
(to the extent not restricted by law or any confidentiality requirements
to which any member of the Group is subject) to the Group's property and
be provided with copies of reasonably required books, records, accounts,
documents, computer programmes, data or other information in the
<PAGE>
possession of or available to it subject to any reasonable confidentiality
undertaking required by it or any legal, regulatory or licence
requirements.
22. FINANCIAL CONDITION
22.1 Financial Condition and MAN-Network Construction
The Parent shall ensure that the financial condition of the Group shall be
such that:
22.1.1 Maximum Senior Debt Percentage: On the last day of each Financial
Quarter to and including 31 December 2000 which ends on each of
the dates specified below, the Total Senior Debt expressed as a
percentage of the aggregate of Invested Capital and Total Senior
Debt shall not exceed the percentage specified below opposite such
date; and
after 31 December 2000, the financial condition of the Group on
the last day of each Financial Quarter shall comply with at least
one of the requirements as to financial condition set out in this
Clause 22.1.1 and in Clause 22.1.2.
<TABLE>
<CAPTION>
Financial Quarter ending Total Senior Debt expressed as a
percentage of the aggregate of Invested
Capital and Total Senior Debt (%)
<S> <C>
31 March 2000 35
30 June 2000 40
30 September 2000 47
31 December 2000, 31 March 2001,
30 June 2001 and 30 September 2001 50
</TABLE>
22.1.2 Total Senior Debt to AART: On the last day of each Financial
Quarter which ends on each of the dates specified below (in the
event that the financial condition of the Group does not on such
date comply with the requirements set out in Clause 22.1.1), the
ratio of Total Senior Debt to AART shall not exceed the amount
specified below opposite such date.
<TABLE>
<CAPTION>
Financial Quarter ending Total Senior Debt to AART
<S> <C>
31 March 2001 2.25 : 1
30 June 2001 2.00 : 1
30 September 2001 1.75 : 1
</TABLE>
22.1.3 Senior Debt Leverage Ratio: On the last day of each Financial
Quarter which ends on each of the dates specified below, the
Senior Debt Leverage Ratio shall not exceed the amount specified
below opposite such date.
<TABLE>
<CAPTION>
Financial Quarter ending Senior Debt Leverage Ratio
<S> <C>
31 December 2001 6.50: 1
31 March 2002 5.00:1
30 June 2002 4.50:1
</TABLE>
<PAGE>
<TABLE>
<CAPTION>
Financial Quarter ending Senior Debt Leverage Ratio
<S> <C>
30 September 2002 4.50:1
31 December 2002 3.50:1
31 March 2003 3.00:1
Thereafter, 31 March, 30 June, 30 September and 31 2.50:1
December
</TABLE>
22.1.4 Annualised Direct Client Revenues: On the last day of each
Financial Quarter which ends on each of the dates specified below,
the Annualised Direct Client Revenues are not less than the amount
specified below opposite such date.
<TABLE>
<CAPTION>
Financial Quarter ending Annualised Direct Client Revenues
((Euro) million)
<S> <C>
31 December 1999 4.7
31 March 2000 7.5
30 June 2000 20
30 September 2000 33
31 December 2000 46
31 March 2001 62.5
30 June 2001 83.5
30 September 2001 112
</TABLE>
22.1.5 Annualised EBITDA: On the last day of each Financial Quarter which
ends on each of the dates specified below, Annualised EBITDA is
not less than the amount specified below opposite such date.
<TABLE>
<CAPTION>
Financial Quarter ending Annualised EBITDA
((Euro) million)
<S> <C>
31 December 1999 (56.8)
31 March 2000 (66.250)
30 June 2000 (66.250)
30 September 2000 (66.250)
31 December 2000 (55)
31 March 2001 (26.5)
30 June 2001 (11.3)
30 September 2001 12.3
</TABLE>
22.1.6 MAN-Network Constructed: On the last day of each Financial Quarter
which ends on each of the dates specified below, the minimum Route
km amount of MAN-Network (for the purposes of the definition of
MAN-Network in this Clause 22.1.6 only Leased Capacity provided
pursuant to a Long Term Lease Agreement shall be included, but not
other Leased Capacity) which shall be Constructed in aggregate in
the French Network and the German Network, is not less than the
amount set out below opposite such date provided that not
<PAGE>
more than 25% of such Route km comprises Leased Capacity leased on
Long Term Lease Agreements.
<TABLE>
<CAPTION>
Financial Quarter ending Minimum MAN-Network Constructed
(Route km)
<S> <C>
31 December 1999 160
31 March 2000 222
30 June 2000 400
30 September 2000 540
31 December 2000 580
31 March 2001 590
30 June 2001 615
30 September 2001 683
31 December 2001 715
31 December 2002 770
31 December 2003 810
31 December 2004 840
31 December 2005 860
31 December 2006 870
</TABLE>
22.1.7 Senior Interest Cover Ratio: On the last day of each Financial
Quarter which ends on each of the dates specified below, the
Senior Interest Cover Ratio shall not be less than the amount
specified below opposite such date.
<TABLE>
<CAPTION>
Financial Quarter ending Senior Interest Cover Ratio
<S> <C>
31 December 2001 2.00
31 March 2002 2.50
30 June 2002 3.00
30 September 2002 3.00
31 December 2002 3.50
Thereafter, 31 March, 30 June, 30 September and 31 4.00
December
</TABLE>
22.1.8 Total Interest Coverage Ratio: On the last day of each Financial
Quarter which ends on each of the dates specified below, the Total
Interest Coverage Ratio shall not be less than the amount
specified below opposite such date.
<TABLE>
<CAPTION>
Financial Quarter ending Total Interest Coverage Ratio
<S> <C>
31 December 2001 2.00
31 March 2002 2.50
30 June 2002 3.00
30 September 2002 3.00
Thereafter, 31 March, 30 June, 30 September and 31 3.50
December
</TABLE>
<PAGE>
22.1.9 Debt Service Cover Ratio: On the last day of each Financial
Quarter which ends on each of the dates specified below, the Debt
Service Coverage Ratio shall not be less than the amount specified
below opposite such date.
<TABLE>
<CAPTION>
Financial Quarter ending Debt Service Coverage Ratio
<S> <C>
31 March 2003 1.50
30 June 2003 1.50
30 September 2003 1.50
31 December 2003 1.50
31 March 2004 1.60
30 June 2004 1.60
30 September 2004 1.60
31 December 2004 1.60
31 March 2005 1.70
30 June 2005 1.70
30 September 2005 2.00
31 December 2005 2.00
31 March 2006 2.25
30 June 2006 2.50
30 September 2006 2.50
</TABLE>
22.2 Financial Definitions
In Clause 22.1 (Financial Condition) the following terms have the
following meanings:
"AART" means the annualised adjusted revenue test comprising, on any date
of determination, the aggregate of:
(a) 1.0 x Direct Client Revenues ; and
(b) 0.75 x Indirect Client Revenues,
in each case for the relevant Financial Quarter multiplied by four.
"Annualised EBITDA" means (i) for any period ending on or before 30
September 2001, EBITDA calculated for the relevant Financial Quarter,
multiplied by four; and (ii) thereafter, EBITDA calculated on an
historical twelve months rolling basis.
"Annualised Direct Client Revenues" means, on any date of determination,
Direct Client Revenues in respect of any Financial Quarter ending on such
date multiplied by four.
"Debt Service Coverage Ratio" means, on any date of determination,
Annualised EBITDA divided by the aggregate of any cash interest paid on
and scheduled repayments of Permitted Indebtedness paid by any member of
the Group in respect of the period of twelve months ending on that date.
"EBITDA" means net loss or income of the Group, plus interest expense,
less interest income, less unrealised foreign currency exchange gains,
plus unrealised foreign
<PAGE>
currency exchange losses, less other non-cash income, plus other non-cash
expenses, plus taxes, plus depreciation and amortisation.
"Invested Capital" means the aggregate of (i) fully paid up cash equity
and (ii) the proceeds of the High Yield Bonds as at the closing date
thereof and of any future high yield issue of the Group, in each case net
of any original issue discount, provided that such capital is immediately
upon receipt to be and is invested in Cash Equivalent Investments or the
Obligor Group (other than the Parent) in the form of equity, Subordinated
High Yield Loans or Subordinated Shareholders Loans.
"Senior Debt Leverage Ratio" means, on any date of determination, the
ratio of Total Senior Debt to Annualised EBITDA.
"Senior Interest Coverage Ratio" means, on any date of determination,
Annualised EBITDA divided by any interest paid in relation to Total Senior
Debt in respect of the period of twelve months ending on such date.
"Total Interest Coverage Ratio" means, on any date of determination,
Annualised EBITDA divided by cash interest paid on Financial Indebtedness
(other than indebtedness falling within paragraphs (b), (c), (d), (e),
(i), (j) and (k) of the definition of "Permitted Indebtedness") of each
member of the Group in respect of the period of twelve months ending on
such date.
"Total Senior Debt" means, at any time, the aggregate of all amounts
outstanding under the Facilities and all other amounts of Financial
Indebtedness of each member of the Group ranking pari passu therewith
(other than indebtedness falling within paragraphs (b), (c), (d), (e),
(f), (g), (i), (j) and (k) of the definition of "Permitted Indebtedness").
22.3 Accounting Terms
All accounting expressions which are not otherwise defined herein shall be
construed in accordance with generally accepted accounting principles in
the United States.
23. COVENANTS
23.1 Maintenance of Legal Validity and Authorisation
23.1.1 Each Obligor shall obtain and comply in all material respects with
the terms of and do all that is necessary to maintain in full
force and effect all authorisations, approvals, licences,
consents, exemptions required in or by the laws of its
jurisdiction of incorporation including, without limitation, any
Relevant Laws to enable it lawfully to enter into and perform its
obligations under the Credit Facility Documents and to ensure the
legality, validity, enforceability or admissibility in evidence in
its jurisdiction of incorporation of the Credit Facility Documents
and, on reasonable request of the Facility Agent, supply copies
(certified by an Authorised Signatory of the relevant Obligor as
true, complete and up to date) of any such authorisations,
approvals, licences, consents and exemptions.
<PAGE>
23.1.2 Each Obligor shall (a) obtain the Licences and (to the extent that
failure to obtain or maintain might reasonably be expected to have
a Material Adverse Effect) any Necessary Authorisations required
at such time for the carrying on of its business, and (b) take all
reasonable steps to ensure that any Necessary Authorisations are
not revoked, suspended, amended, varied, withdrawn or not renewed
in a manner that might reasonably be expected to have a Material
Adverse Effect.
23.2 Insurance
The Parent shall procure that each member of the Group maintains
insurances on and in relation to its business and assets with reputable
underwriters or insurance companies against such risks and to such extent
as is usual for companies carrying on a business such as that carried on
by such member of the Group.
23.3 Environmental Compliance
The Parent shall ensure that each member of the Group shall comply in all
material respects with all Environmental Law and obtain and maintain any
Environmental Permits and take all reasonable steps in anticipation of
known or expected future changes to or obligations under the same, breach
of which (or failure to obtain, maintain or take which) might reasonably
be expected to have a Material Adverse Effect.
23.4 Environmental Claims
The Obligors' Agent shall inform the Facility Agent in writing as soon as
reasonably practicable upon becoming aware of the same if any
Environmental Claim has been commenced or (to the best of the knowledge
and belief of any member of the Group) is threatened against any member of
the Group in any case where such claim would be reasonably likely, if
determined against such member of the Group, to have a Material Adverse
Effect or of any facts or circumstances which will or are reasonably
likely to result in any Environmental Claim being commenced or threatened
against any member of the Group in any case where such claim would be
reasonably likely, if determined against such member of the Group, to have
a Material Adverse Effect.
23.5 Claims Pari Passu
Each Obligor shall ensure that at all times the claims of the Finance
Parties and the EIF against it under the Credit Facility Documents rank at
least pari passu with the claims of all its other unsecured and
unsubordinated creditors save those whose claims are mandatorily preferred
by any bankruptcy, insolvency, liquidation or other similar laws of
general application.
23.6 Consents and Approvals
The Parent shall, procure that each member of the Group shall comply with
all applicable laws, rules, regulations and orders and obtain and maintain
all governmental and regulatory consents, licences, authorisations and
approvals, including the Licences and other Necessary Authorisations to
the extent any non-compliance would reasonably be expected to have a
Material Adverse Effect.
<PAGE>
23.7 Conduct and Change of Business of the Group
23.7.1 The Parent shall ensure that each member of the Group has the
right and is duly qualified to conduct Telecoms Business as it is
conducted from time to time.
23.7.2 The Parent shall ensure that each member of the Group keeps and
maintains books, records and accounts to the extent as is usual
for companies carrying on a business such as that carried on by
such member of the Group.
23.7.3 The Parent shall ensure that substantially all the business of the
Group (taken as a whole) comprises Telecoms Business in France and
Germany (not including the internet business of iPcenta Limited);
and that such Telecoms Business is managed and operated in all
material respects in accordance with the Licences, the Business
Plan and applicable laws including, without limitation, any
Relevant Laws.
23.8 Filing of Tax Returns
The Parent shall ensure that each member of the Group files all tax
returns required to be filed in all jurisdictions in which they are
situated or carry on business or otherwise subject to pay tax and will
promptly pay all taxes (including any applicable stamp duty payable in
relation to the Finance Documents) which are due and payable on such
returns or any assessment made against them (other than those being
contested in good faith).
23.9 Year 2000 Compliance
The Parent shall use its reasonable endeavours to ensure that all Computer
Systems owned or operated by any member of the Group are Year 2000
Compliant where the failure of any such system to be Year 2000 Compliant
would reasonably be expected to have a Material Adverse Effect.
23.10 Guarantors
23.10.1 The Parent shall ensure that each member of the Group that is not
an Original Guarantor as soon as reasonably practicable upon
becoming a Material Subsidiary accedes hereto as an Additional
Guarantor in accordance with Clause 37 (Additional Guarantors) to
the extent legally permissible and commercially practicable.
23.10.2 The Parent shall ensure at all times by reference to the most
recent quarterly statements delivered pursuant to Clause 21.2
(Quarterly Management Statements) that to the extent legally
permissible and commercially practicable the aggregate book assets
and the aggregate revenues of the Guarantors comprise respectively
at least 80% of the consolidated book assets and consolidated
revenues of the Group; and accordingly the Parent shall procure
that additional subsidiaries that are not Material Subsidiaries
accede as Additional Guarantors as necessary to the extent legally
permissible and commercially practicable.
<PAGE>
23.11 Security
23.11.1 The Parent shall ensure that each member of the Group which is a
Material Subsidiary shall at its own expense take all such action
as the Security Agent may reasonably require (to the extent
legally possible and commercially practicable) for the purpose of
perfecting or protecting the Security Agent's rights under and
preserving the security interests intended to be created or
evidenced by any of the Credit Facility Documents and following
the making of any declaration pursuant to Clause 24.19
(Acceleration and Cancellation) or 24.20 (Advances Due on Demand)
for facilitating the realisation of any such security or any part
thereof.
23.11.2 Each Obligor shall, and shall procure that each member of the
Group which is a Material Subsidiary shall, to the extent legally
possible and commercially practicable and as reasonably required
by the Facility Agent from time to time, promptly create or
procure the creation of security over any assets acquired after
the date hereof including, without limitation each Material
Agreement in favour of the Finance Parties to secure all or any of
the obligations of the Obligors under the Credit Facility
Documents.
23.11.3 The Parent shall procure that CompleTel Services S.A.S. shall
enter into, and CompleTel Services S.A.S. covenants to enter into,
with the Security Agent, as soon as practicable (and in any event
within 15 days) after CompleTel Services S.A.S. (a) enters into
its first contract for the provision of services and (b) has
acquired the equipment necessary to fulfil its obligations
thereunder, a Nantissement de Fonds de Commerce (Charge over
Business Agreement) substantially in the form of Schedule 14 (Form
of Charge over Business Agreement to be entered into between
CompleTel Services S.A.S. and the Security Agent pursuant to
Clause 23.11.3).
23.11.4 The Parent shall procure that CompleTel ECC B.V. and each other
member of the Group which owns any trademark of the Group shall
create, and CompleTel ECC B.V. and each such other member of the
Group covenants to create, in favour of the Security Agent (a) as
soon as practicable and in any event within 30 days of the date
hereof, security over all trademarks of the Group registered at
the date hereof in France and Germany; (b) as soon as practicable
and in any event within 30 days of the date of registration
thereof, security over all further trademarks of the Group
registered at any time in France and Germany; and (c) as soon as
practicable and in any event within 30 days of any member of the
Group launching services under the CompleTel name in any other
jurisdiction, security over all trademarks of the Group registered
in any such other jurisdiction, and in each case such security
shall be in form and substance satisfactory to the Security Agent,
acting reasonably.
23.12 Hedging Programme
The Parent shall procure that commencing three months from the date of the
Credit Agreement, each time upon which the Loan reaches an amount or
multiple of (Euro) 50
<PAGE>
million an Obligor as soon as practicable enters into hedging arrangements
with the Hedging Banks with respect to interest payments under the Credit
Agreement with respect to 50% of such increase in the Loan and for an
initial period of not less than three years.
23.13 Use of Proceeds
The Parent shall ensure that, in the case of an IPO as set out in
paragraph 2(b) of Schedule 12 (Margin Adjustment), a further raising of
equity investment or a high yield issue in accordance with paragraph (g)
of the definition of "Permitted Indebtedness", the proceeds received by it
shall be used for Cash Equivalent Investments or investment in Telecoms
Business of the Obligor Group in France or Germany.
23.14 Negative Pledge
The Parent shall ensure that no member of the Group shall create or permit
to subsist any Encumbrance over all or any of its present or future
revenues or assets other than a Permitted Encumbrance.
23.15 Loans and Guarantees
The Parent shall ensure that no member of the Group, without the prior
written consent of an Instructing Group, shall (i) make any loans (other
than Permitted Loans), (ii) grant any credit (save in the ordinary course
of business) or (ii) (other than Permitted Guarantees) give any guarantee
or indemnity (except as required hereby) to or for the benefit of any
person or otherwise voluntarily assume any liability, whether actual or
contingent, in respect of any obligation of any other person other than
another member of the Obligor Group, save that this Agreement shall not
restrict any such loan, grant of credit, guarantee, indemnity or other
voluntary assumption of any liability in respect of amounts at any time
outstanding which do not exceed in aggregate, for the Group together
(Euro) 2,500,000 or equivalent.
23.16 Disposals
The Parent shall ensure that (disregarding sales of stock in trade in the
ordinary course of business) no member of the Group shall sell, lease,
transfer or otherwise dispose of, by one or more transactions or series of
transactions (whether related or not), the whole or any part of its
revenues or its assets other than a Permitted Disposal.
23.17 Mergers
The Parent shall ensure that no member of the Group shall, without the
prior written consent of an Instructing Group, merge or consolidate with
any other person, enter into any demerger transaction or participate in
any other type of corporate reconstruction save for (i) mergers between
members of the Obligor Group (other than with the Parent) where the
surviving entity assumes the rights and obligations of the merged or
consolidated entities and (ii) solvent intra Group reorganisations (other
than with the Parent) provided that in each case upon such merger,
consolidation or solvent intra Group reorganisation, the Parent ensures
that all the shares of each member of the Group are subject to an
Encumbrance in substantially the same form as the relevant Security
Documents prior to such merger, consolidation or solvent reorganisation.
<PAGE>
23.18 Investments
The Parent shall procure that no member of the Group shall:
23.18.1 purchase, subscribe for or otherwise acquire any shares (or other
securities or any interest therein) in any other company or agree
to do any of the foregoing; or
23.18.2 purchase or otherwise acquire any assets (other than in the
ordinary course of business) or (without limitation to any of the
foregoing) acquire any business or interest therein or agree to do
so; or
23.18.3 form, or enter into, any partnership, consortium, joint venture or
other like arrangement or agree to do so,
other than, in each case, a Permitted Investment or a Permitted
Acquisition.
23.19 Financial Indebtedness
The Parent shall ensure that no member of the Group shall, incur, create
or permit to subsist or have outstanding any Financial Indebtedness or
enter into any agreement or arrangement whereby it is entitled to incur,
create or permit to subsist any Financial Indebtedness other than, in
either case, Permitted Indebtedness.
23.20 Constitutional Documents
The Parent shall ensure that no member of the Group agrees to any
amendment or variation of its memorandum or articles of association or
other constitutional documents from the form as delivered pursuant to
Clause 2.3 (Conditions Precedent) or otherwise, as the case may be, as at
the date hereof, which might be reasonably likely to have a Material
Adverse Effect or which would confer on any person a right which if
exercised might be reasonably likely to result in an Event of Default or
which might be reasonably likely to have a Material Adverse Effect.
23.21 Transactions with Affiliates
The Parent shall ensure that no member of the Group agrees to enter into
any transactions or series of transactions with any affiliate (not being a
member of the Obligor Group), other than on arm's length terms.
23.22 Intercompany CECC Facility Agreements
The Parent shall ensure that the members of the Group who are parties to
the Intercompany CECC Facility Agreements shall comply with the terms
thereof and shall not amend, without the prior consent of an Instructing
Group, the terms thereof.
23.23 Dividends and Other Distributions
The Parent shall ensure that no member of the Group (other than the
Parent) shall, without the prior written consent of an Instructing Group
pay, make or declare any dividend or other distribution in respect of any
financial year of such member of the Group to the Parent or to a person
who is not a member of the Obligor Group or make any payment of interest
on any Financial Indebtedness to the Parent or to another member of the
Group who is not an Obligor other than a Permitted Distribution.
<PAGE>
23.24 Bank Accounts
23.24.1 The Parent shall (a)(i) use its reasonable endeavours to procure
that at all times the France Accounts are charged or pledged to
the Security Agent under a Security Document on terms reasonably
satisfactory to the Facility Agent; and (ii) ensure that those
France Accounts not subject to the charge or pledge in paragraph
(i) above are operated only as receiving accounts and that debits
shall only be made for the purposes of transferring monies
standing to their credit to the SAS Account; and (b) ensure that
at all times the account holder of each of the France Accounts
(other than the SAS Account) gives an irrevocable payment
instruction to the account bank requiring a transfer to the SAS
Account of all funds standing to the credit of each of the other
France Accounts, such transfer to be made at monthly intervals.
23.24.2 The Parent shall (i) use its reasonable endeavours to procure that
at all times the Bank Accounts (other than the France Accounts)
are charged or pledged to the Security Agent under a Security
Document on terms reasonably satisfactory to the Facility Agent;
and (ii) ensure that those Bank Accounts (other than the France
Accounts) not subject to the charge or pledge in paragraph (i)
above are operated only as receiving accounts and that debits
shall only be made for the purposes of transferring monies
standing to their credit to the SAS Account and that at all times
the account holder of such accounts gives an irrevocable payment
instruction to the account bank requiring a transfer to the SAS
Account of all funds standing to the credit of each such account,
such transfer to be made at monthly intervals.
23.24.3 A member of the Obligor Group may open a new bank account in
addition to the Existing Bank Accounts provided that firstly
details of such account are delivered to the Facility Agent and
that it is pledged or charged and operated on the terms of sub-
clauses 23.24.1 and 23.24.2 of this Clause 23.24.
23.25 German Obligors
Without prejudice to any of the obligations imposed under such covenants
on any Obligor which is not incorporated in Germany whether or not related
to any Obligor incorporated in Germany, the covenants given under Clause
23.7 (Conduct and Change of Business of the Group), Clause 23.15 (Loans
and Guarantees), Clause 23.16 (Disposals), Clause 23.17 (Mergers), Clause
23.18 (Investments), Clause 23.19 (Financial Indebtedness), Clause 23.21
(Transactions with Affiliates) and Clause 23.23 (Dividends and other
Distributions) (the "Relevant Restrictive Covenants") shall not be given
by any Obligor incorporated in Germany (each a "German Obligor") or any of
its subsidiaries incorporated in Germany from time to time (together with
each German Obligor, the "German Group"), provided always that:
23.25.1 The German Obligor shall give the Facility Agent not less than 40
Business Days' prior written notice of the intention of any member
of the German Group to carry out any of the acts or take any of
the steps referred to in the Relevant Restrictive Covenants.
<PAGE>
23.25.2 The Facility Agent shall be entitled within 15 Business Days of
receipt of the German Obligor's notice under sub-clause 23.25.1 to
request the German Obligor to supply to the Facility Agent in
sufficient copies for the Participants any relevant information in
connection with the proposed action or steps referred to in such
notice.
23.25.3 The Facility Agent shall notify the German Obligor, within 15
Business Days of receipt of the German Obligor's notice under sub-
clause 23.25.1, or if additional information has been requested by
the Facility Agent within the prescribed time, within 15 Business
Days of receipt of such information, whether the proposed action
or steps under sub-clause 23.25.1 may, in the opinion of the
Facility Agent (acting with the prior consent of an Instructing
Group), have a Material Adverse Effect or otherwise adversely
affect the interests of the Finance Parties and the EIF under the
Finance Documents.
23.25.4 If the Facility Agent notifies the German Obligor under sub-clause
23.25.1 that, in its opinion, the proposed action or steps
specified in the German Obligor's notice delivered under sub-
clause 23.25.1 may have a Material Adverse Effect or otherwise
adversely affect the interests of the Finance Parties or the EIF
under the Finance Documents and the relevant member of the German
Group nevertheless takes such action or steps under sub-clause
23.25.1, the Facility Agent shall be entitled to make (and, if so
instructed by an Instructing Group, shall make) the declaration,
request and/or instruction set out in Clause 24.20 (Advances Due
on Demand).
23.26 Shareholders of German Obligors
Each Obligor which is a shareholder of a German Obligor which has provided
a guarantee or security under any of the Finance Documents and which is
constituted in the form of a German Limited liability company
(Gesellschaft mit beschrnkter Haftung - "GmbH") or a limited partnership
(Kommanditgesellschaft) where the general partner (Komplementr) is a GmbH
("GmbH & Co. KG") undertakes that with respect to such German Obligor no
increase of capital (Stammkapital) out of retained earnings
(Kapitalerhohung aus Gesellschaftsmitteln) after the date hereof will be
effected without the prior written consent of the Facility Agent (acting
on behalf of an Instructing Group).
24. EVENTS OF DEFAULT
Each of Clause 24.1 (Failure to Pay) to Clause 24.18 (Material Adverse
Change) describes circumstances which constitute an Event of Default for
the purposes of this Agreement.
24.1 Failure to Pay
Any sum due from an Obligor or the Obligors under the Finance Documents is
not paid on the due date at the time, in the currency and in the manner
specified therein unless such failure to pay is caused by administrative
or technical error and payment is made
<PAGE>
within three Business Days from the date the Facility Agent notifies the
relevant Obligor of such failure.
24.2 Misrepresentation
Any representation or statement made or deemed to be made by an Obligor in
the Finance Documents or in any notice or other document, certificate or
statement delivered by it pursuant thereto or in connection therewith is or
proves to have been incorrect or misleading in any material respect when
made or deemed to be made and in the event that the act or circumstance
which led to such representation or warranty being incorrect or misleading
is capable of remedy, such action (if any) as the Facility Agent may
require shall not have been taken within 30 days of the Facility Agent
notifying the person who made or was deemed to have made or repeated such
representation or warranty of such act or circumstance and such required
action.
24.3 Specific Covenants
An Obligor fails duly to perform or comply with any of the obligations
expressed to be assumed by it in Clause 21 (Financial and other
Information), Clause 23.5 (Claims Pari Passu), Clause 23.7 (Conduct and
Change of Business of the Group) (other than Clause 23.7.2), Clause 23.13
(Use of Proceeds), Clause 23.16 (Disposals), Clause 23.17 (Mergers), Clause
23.18 (Investments) or Clause 23.23 (Dividends and Other Distributions).
24.4 Financial Condition
At any time any of the requirements of Clause 22.1 (Financial Condition) is
not satisfied.
24.5 Other Obligations
An Obligor fails duly to perform or comply with any other obligation
expressed to be assumed by it in the Finance Documents and such failure, if
capable of remedy, is not remedied within thirty days after the Facility
Agent has given notice thereof to such Obligor.
24.6 Cross Default
Any Financial Indebtedness of any member of the Group is not paid when due
(or within any applicable grace period), any Financial Indebtedness of any
member of the Group is declared to be or otherwise becomes due and payable
prior to its specified maturity, any commitment for any Financial
Indebtedness of any member of the Group is cancelled or suspended by a
creditor of any member of the Group or any creditor of any member of the
Group becomes entitled to declare any Financial Indebtedness of any member
of the Group due and payable prior to its specified maturity, provided that
it shall not constitute an Event of Default if the aggregate amount of all
such Financial Indebtedness is less than (Euro) 5,000,000 (or its
equivalent in other currencies).
24.7 Insolvency and Rescheduling
Any Obligor is unable to pay its debts as they fall due, commences
negotiations with its creditors generally with a view to the general
readjustment or rescheduling of its
<PAGE>
indebtedness or makes a general assignment for the benefit of or a
composition with its creditors generally.
24.8 Winding-up
Other than as permitted by Clause 23.17 (Mergers), any Obligor takes any
corporate action or other steps are taken or legal proceedings are started
(unless the same are frivolous, vexatious or an abuse of the process of
the court) for its winding-up, dissolution, administration or re-
organisation (whether by way of voluntary arrangement, scheme of
arrangement or otherwise) or for the appointment of a liquidator,
receiver, administrator, administrative receiver, conservator, custodian,
trustee or similar officer of it or of any material part of or all of its
revenues and assets.
24.9 Execution or Distress
Any execution or distress is levied against, or an encumbrancer takes
possession of, the whole or any material part of, the property,
undertaking or assets of any Obligor or any event occurs which under the
laws of any jurisdiction has a similar or analogous effect.
24.10 Failure to Comply with Final Judgment
Any Obligor fails within 28 days to comply with or pay any sum due from it
under any final judgment or any final order made or given by any court of
competent jurisdiction provided that if such judgment or order is for a
monetary amount it is for an aggregate amount of at least (Euro) 500,000.
24.11 Governmental Intervention
By or under the authority of any government, (a) the management of any
Obligor is wholly or partially displaced or the authority of any Obligor
in the conduct of its business is wholly or partially curtailed or (b) all
or a majority of the issued shares of any Obligor or the whole or any part
(the book value of which is twenty per cent. or more of the book value of
the whole) of its revenues or assets is seized, nationalised, expropriated
or compulsorily acquired.
24.12 Ownership of the Obligors
Any Obligor (other than the Parent) ceases to be a direct or indirect
wholly-owned subsidiary of the Parent other than to the extent wound-up as
permitted by Clause 24.8 (Winding-up).
24.13 The Group's Business
The Group (taken as a whole) ceases to carry on the Telecoms Business.
24.14 Repudiation
Any Credit Facility Document or the security intended to be constituted by
or the subordination effected under any of the Credit Facility Documents
is repudiated by any person (other than a Finance Party or the EIF) or any
person (other than a Finance Party or the EIF) does or causes to be done
any act or thing evidencing an intention to repudiate any Finance Document
or any such security or subordination or any Credit Facility Document is
not or ceases to be in full force and effect or the validity or
<PAGE>
applicability thereof to any sums due or to become due thereunder is
disaffirmed by or on behalf of any Obligor, save that there shall not be
an Event of Default under this Clause 24.14 by virtue of any of the
matters contained in the qualifications to the legal opinions referred to
in Schedule 3 (Conditions Precedent) or in Schedule 1 to the Amendment
Agreement.
24.15 Illegality
At any time any Obligor no longer has the legal power to perform its
material obligations under the Credit Facility Documents to which it is a
party or to own its material assets or to carry on its business to a
material extent or at any time it is or becomes unlawful for an Obligor
to perform or comply with any or all of its material obligations under
any Credit Facility Document to which it is a party or any of the
material obligations of an Obligor thereunder are not or cease to be
legal, valid, binding and enforceable.
24.16 Security
The Security Documents cease to confer valid and enforceable Encumbrances
of the type described therein over the assets referred to therein.
24.17 Material Agreements and Licences
(a) Any Material Agreement is amended or breached in a manner which might
reasonably be expected to have a Material Adverse Effect other than with
the prior consent of an Instructing Group, (b) any Licence is amended or
is breached in a manner which might reasonably be expected to have a
Material Adverse Effect or (c) any Licence or Material Agreement is not
renewed or is suspended or terminated without the obtaining of a
replacement (unless no longer required).
24.18 Material Adverse Change
Any event or circumstance occurs which would constitute a Material
Adverse Change.
24.19 Acceleration and Cancellation
Upon the occurrence of an Event of Default and at any time thereafter
whilst it is continuing, the Facility Agent may (and, if so instructed by
an Instructing Group, shall) by notice to the Obligors' Agent:
24.19.1 declare all or any part of the Advances to be immediately due
and payable (whereupon the same shall become so payable together
with accrued interest thereon and any other sums then owed by
the Borrowers under the Finance Documents) or declare all or any
part of the Advances to be due and payable on demand of the
Facility Agent; and/or
24.19.2 declare that any undrawn portion of the Facilities shall be
cancelled, whereupon the same shall be cancelled and the
Available Commitment of each Bank shall be reduced to zero.
24.20 Advances Due on Demand If, pursuant to Clause 24.19 (Acceleration and
Cancellation), the Facility Agent declares all or any part of the
Advances to be due and payable on demand of the
<PAGE>
Facility Agent, then, and at any time thereafter, the Facility Agent may
(and, if so instructed by an Instructing Group, shall) by notice to the
Borrowers:
24.20.1 require repayment of all or such part of the Advances on such date
as it may specify in such notice (whereupon the same shall become
due and payable on the date specified together with accrued
interest thereon and any other sums then owed by the Borrowers
under the Finance Documents) or withdraw its declaration with
effect from such date as it may specify; and/or
24.20.2 select as the duration of any Interest Period or Term which begins
whilst such declaration remains in effect a period of six months
or less.
25. GUARANTEE AND INDEMNITY
25.1 Guarantee and Indemnity
Each of the Guarantors irrevocably and unconditionally jointly and
severally:
25.1.1 guarantees to each Finance Party and the EIF and agrees to pay
from time to time on demand by the Facility Agent any and every
sum or sums of money which each Borrower is at any time liable to
pay to any Finance Party and/or the EIF under or pursuant to the
Credit Facility Documents and which has become due and payable but
has not been paid at the time such demand is made; and
25.1.2 agrees as a primary obligation to indemnify each Finance Party and
the EIF from time to time on demand from and against any loss
incurred by any Finance Party and/or the EIF as a result of any of
the obligations of each Borrower guaranteed or purported to be
guaranteed by it under or pursuant to the Credit Facility
Documents being or becoming void, voidable, unenforceable or
ineffective as against such Borrower whether or not known to any
Finance Party and/or the EIF or any other person, the amount of
such loss being the amount which the person or persons suffering
it would otherwise have been entitled to recover from such
Borrower.
Each Guarantor shall pay any sum due hereunder within 5 Business Days of
written notice to the Guarantor.
25.2 Additional Security
The obligations of each Guarantor herein contained shall be in addition to
and independent of every other security which any Finance Party and/or the
EIF may at any time hold in respect of any Obligor's obligations under the
Credit Facility Documents.
25.3 Continuing Obligations
The obligations of each Guarantor herein contained shall constitute and be
continuing obligations notwithstanding any settlement of account or other
matter or thing whatsoever and shall not be considered satisfied by any
intermediate payment or satisfaction of all or any of the obligations of
the Obligors under the Credit Facility
<PAGE>
Documents and shall continue in full force and effect until final payment
in full of all amounts owing by any Obligor under the Credit Facility
Documents and total satisfaction of all the Obligors' actual and contingent
obligations under the Credit Facility Documents.
25.4 Obligations not Discharged
Neither the obligations of each Guarantor herein contained nor the rights,
powers and remedies conferred in respect of each Guarantor upon any Finance
Party and/or the EIF by the Credit Facility Documents or by law shall be
discharged, impaired or otherwise affected by:
25.4.1 the winding-up, dissolution, administration or re-organisation of
any Obligor or any other person or any change in its status,
function, control or ownership;
25.4.2 any of the obligations of any Obligor or any other person under
the Credit Facility Documents or under any other security taken in
respect of any of its obligations under the Credit Facility
Documents being or becoming illegal, invalid, unenforceable or
ineffective in any respect;
25.4.3 time or other indulgence being granted or agreed to be granted to
any Obligor or any other person in respect of its obligations
under the Credit Facility Documents or under any such other
security;
25.4.4 any amendment to, or any variation, waiver or release of, any
obligation of any Obligor or any other person under the Credit
Facility Documents or under any such other security;
25.4.5 any failure to take, or fully to take, any security contemplated
hereby or otherwise agreed to be taken in respect of any Obligor's
obligations under the Credit Facility Documents;
25.4.6 any failure to realise or fully to realise the value of, or any
release, discharge, exchange or substitution of, any security
taken in respect of any Obligor's obligations under the Credit
Facility Documents; or
25.4.7 any other act, event or omission which, but for this Clause 25.4,
might operate to discharge, impair or otherwise affect any of the
obligations of each Guarantor herein contained or any of the
rights, powers or remedies conferred upon any of the Finance
Parties and/or the EIF by the Credit Facility Documents or by law.
25.5 Settlement Conditional
Any settlement or discharge between an Obligor and any of the Finance
Parties and/or the EIF shall be conditional upon no security or payment to
any Finance Party and/or the EIF by an Obligor or any other person on
behalf of an Obligor being avoided or reduced by virtue of any laws
relating to bankruptcy, insolvency, liquidation or similar laws of general
application and, if any such security or payment is so avoided or
<PAGE>
reduced, each Finance Party and the EIF shall be entitled to recover the
value or amount of such security or payment from such Obligor subsequently
as if such settlement or discharge had not occurred.
25.6 Exercise of Rights
Neither any Finance Party nor the EIF shall be obliged before exercising
any of the rights, powers or remedies conferred upon them in respect of any
Guarantor by the Credit Facility Documents or by law:
25.6.1 to make any demand of any Obligor;
25.6.2 to take any action or obtain judgment in any court against any
Obligor;
25.6.3 to make or file any claim or proof in a winding-up or dissolution
of any Obligor; or
25.6.4 to enforce or seek to enforce any other security taken in respect
of any of the obligations of any Obligor under the Credit Facility
Documents.
25.7 Deferral of Guarantor's Rights
Each of the Guarantors agrees that, so long as any amounts are or may be
owed by an Obligor under the Finance Documents or an Obligor is under any
actual or contingent obligations under the Credit Facility Documents, it
shall not without the prior written consent of the Facility Agent exercise
any rights which it may at any time have by reason of performance by it of
its obligations under the Credit Facility Documents:
25.7.1 to be indemnified by an Obligor; and/or
25.7.2 to claim any contribution from any other guarantor of any
Obligor's obligations under the Credit Facility Documents; and/or
25.7.3 to take the benefit (in whole or in part and whether by way of
subrogation or otherwise) of any rights of the Finance Parties and
the EIF under the Credit Facility Documents or of any other
security taken pursuant to, or in connection with, the Credit
Facility Documents by all or any of the Finance Parties or the
EIF.
25.8 Suspense Accounts
All moneys received, recovered or realised by a Participant by virtue of
Clause 25.1 (Guarantee and Indemnity) may, in that Participant's
discretion, be credited to an interest bearing suspense account and may be
held in such account for so long as such Participant thinks fit pending the
application from time to time (as such Participant may think fit) of such
moneys in or towards the payment and discharge of any amounts owing by an
Obligor to such Participant under the Credit Facility Documents. Interest
shall accrue on monies from time to time standing to the credit of any
suspense account at the rate agreed between the relevant Guarantor and the
Facility Agent.
<PAGE>
25.9 French Limitations
The maximum liability of each Guarantor incorporated in France (a "French
Guarantor") under this Clause 25 (Guarantee and Indemnity) shall at no
time exceed an amount equal to the maximum financial capacity of such
French Guarantor, such maximum financial capacity being limited to the
higher of (a) the borrowing of such Guarantor under this Agreement and
(b) 85% of the Net Worth of such French Guarantor calculated and
certified by the statutory auditors of such French Guarantor on the basis
of the last audited financial statements available at the date of the
relevant payment hereunder, where "Net Worth" means the shareholders'
equity (including, the share capital, share premium, legal and statutory
reserves, other reserves, profits and losses carried forward, investment
subsidies and regulated provisions) ("Capitaux propres") of such French
Guarantor.
25.10 German Limitations
Each Finance Party and the EIF agrees that the enforcement of the
guarantee and indemnity contained in Clause 25 (Guarantee and Indemnity)
(the "Guarantee") shall at all times be limited if and to the extent
that, in relation to an Obligor which has provided such Guarantee and
which is constituted in the form of a German limited liability Company
(Gesellschaft mit beschrankter Haftung - "GmbH") or a limited partnership
(Kommanditgesellschaft) where the general partner (Komplementar) is a
GmbH ("GmbH & Co. KG") such enforcement and the subsequent application of
proceeds towards the obligations secured by the Guarantee would otherwise
lead to the situation that such Obligor does not have sufficient assets
to maintain its capital (Stammkapital) provided that for the purposes of
the calculation of the net assets the following balance sheet items shall
be adjusted as follows:
(a) loans provided to such Obligor by any members of the Group as far as
such loans are subordinated or qualify under Section 32a of the
German Act on Limited Liability Companies (Gesetz betreffend die
Gesellschaften mit beschrankter Haftung - "GmbH-Gesetz") and Section
172a of the German Commercial Code (Handelsgesetzbuch - "HGB") shall
be disregarded; and
(b) loans and other contractual liabilities incurred in violation of the
provisions of the Credit Facility Documents shall be disregarded.
In addition, an Obligor which has provided a Guarantee hereunder and
which is constituted in the form of a GmbH or a GmbH & Co. KG shall
realise, if and to the extent legally permitted and, in respect of the
relevant Obligor's business, not unreasonable, in a situation where (i)
such Obligor does not have sufficient assets to maintain its capital
(Stammkapital) and (ii) a Finance Party and/or the EIF would (but for the
above sub-paragraph of this Clause 25.10) be entitled to enforce the
Guarantee, any and all of its assets that are shown in the balance sheet
with a book value (Buchwert) that is significantly lower than the market
value of the asset if such asset is not necessary for the relevant
Obligor's business (betriebsnotwendig).
<PAGE>
26. COMMITMENT COMMISSION AND FEES
26.1 Commitment Commission on the Tranche A Term Facility
The Parent and each of the Borrowers, jointly and severally, shall pay to
the Facility Agent for account of each Bank a commitment commission on
the amount of such Bank's Available Tranche A Term Commitment less, in
the case of the Participating Lender, the Traded Proportion (as defined
in the Participation Agreement) of such commitment commission from day to
day during the Tranche A Term Availability Period, such commitment
commission to be calculated at the rate of 0.875 per cent. per annum or
if the events set out in paragraph 2(b) of Schedule 12 (Margin
Adjustment) occur, 1.00 per cent. per annum and shall be payable in
arrear on the last day (the "Payment Date") of each successive period of
three months which commences and ends during the Tranche A Term
Availability Period and on the last day of the Tranche A Term
Availability Period; provided that if the events set out in paragraph
2(b) of Schedule 12 (Margin Adjustment) occur during the last four
Business Days preceding the Payment Date, the adjustment in the
commitment commission shall commence on the Payment Date.
26.2 Commitment Commission on the Revolving Facility
The Parent and each of the Borrowers jointly and severally shall pay to
the Facility Agent for account of each Bank a commitment commission on
the amount of such Bank's Available Revolving Commitment less, in the
case of the Participating Lender, the Traded Proportion (as defined in
the Participation Agreement) of such commitment commission from day to
day during the period beginning on the date hereof and ending on the
Revolving Termination Date, such commitment commission to be calculated
at the rate of 0.875 per cent. per annum or if the events set out in
paragraph 2(b) of Schedule 12 (Margin Adjustment) occur, 1.00 per cent.
per annum and shall be payable in arrear on the last day (the "Payment
Date") of each successive period of three months which commences and ends
during such period and on the Revolving Termination Date; provided that
if the events set out in paragraph 2(b) of Schedule 12 (Margin
Adjustment) occur during the last four Business Days preceding the
Payment Date, the adjustment in the commitment commission shall commence
on the Payment Date.
26.3 Arrangement Fee
The Parent shall pay to the Facility Agent the fees specified in the
letter dated on or about the date hereof from the Lead Arrangers to the
Parent at the times, and in the amounts, specified in such letter.
26.4 Facility Agency and Security Agency Fee
The Parent shall pay to the Facility Agent and the Security Agent for its
own account the facility agency and security agency fees specified in the
letter dated on or about the date hereof from the Facility Agent and
Security Agent to the Obligors' Agent at the times, and in the amounts,
specified in such letter.
26.5 The Parent and the Borrowers, jointly and severally, shall pay to the
Facility Agent for the account of the EIF the Traded Proportion of the
commitment commission referred
<PAGE>
to in Clause 26.1 and 26.2 on the Participated Portion of the Participating
Lender's Available Tranche A Term Commitment and Available Revolving
Commitment calculated and payable on the same days as it is calculated and
payable pursuant to Clause 26.1 and 26.2.
26.6 The Parent and the Borrowers, jointly and severally, shall pay the Facility
Agent for the account of EIF amounts falling due under Clauses 5.1 (Payment
of Interest), 7.1 (Payment of Interest) and 28.2 (Default Interest) in
accordance with, to the extent payable, the provisions of the Participation
Agreement (and such other documents entered into in connection therewith).
27. COSTS AND EXPENSES
27.1 Transaction Expenses
The Parent shall, from time to time within ten days of a written demand of
the Facility Agent, reimburse each of the Agents and each of the Lead
Arrangers for all reasonable costs and expenses (including legal fees)
together with any VAT thereon properly incurred by it in connection with
the negotiation, preparation and execution of the Credit Facility Documents
and the Participation Agreement, (including, without limitation, in respect
of the agreed fees and expenses of Analsys Inc. in connection with the
preparation of the Business Plan Report) and the completion of the
transactions therein contemplated as well as the costs of syndication (save
for any Transferee legal costs).
27.2 Preservation and Enforcement of Rights
The Parent shall, from time to time on demand of the Facility Agent,
reimburse the Finance Parties and the EIF for all costs and expenses
(including legal fees) on a full indemnity basis together with any VAT
thereon incurred in or in connection with the preservation and/or
enforcement of any of the rights of the Finance Parties and the EIF under
the Finance Documents and any document referred to in the Finance Documents
(including, for the avoidance of doubt, the Participation Agreement).
27.3 Stamp Taxes
The Parent shall pay all stamp, registration and other taxes to which the
Finance Documents, any other document referred to in the Finance Documents
(including, for the avoidance of doubt, the Participation Agreement) or any
judgment given in connection therewith is or at any time may be subject
(other than those imposed by reason of assignment or novation) and shall,
from time to time on demand of the Facility Agent, indemnify the Finance
Parties and the EIF against any liabilities, costs, claims and out of
pocket expenses resulting from any failure to pay or any delay in paying
any such tax.
27.4 Participants' Liabilities for Costs
If the Parent fails to perform any of its obligations under this Clause 27,
each Participant shall, in its Proportion, indemnify each of the Agents and
the Lead Arrangers against any loss incurred by any of them as a result of
such failure.
<PAGE>
28. DEFAULT INTEREST AND BREAK COSTS
28.1 Default Interest Periods
If any sum due and payable by an Obligor hereunder is not paid on the due
date therefor in accordance with Clause 31 (Payments) or if any sum due and
payable by an Obligor under any judgment of any court in connection
herewith is not paid on the date of such judgment, the period beginning on
such due date or, as the case may be, the date of such judgment and ending
on the date upon which the obligation of such Obligor to pay such sum is
discharged shall be divided into successive periods, each of which (other
than the first) shall start on the last day of the preceding such period
and the duration of each of which shall (except as otherwise provided in
this Clause 28) be selected by the Facility Agent but which shall not be
more than three months.
28.2 Default Interest
An Unpaid Sum shall bear interest during each Interest Period in respect
thereof at the rate per annum which is one per cent. per annum above the
percentage rate which would apply to it if such Unpaid Sum had been an
Advance in the amount and currency of such Unpaid Sum and for the same
Interest Period, provided that if such Unpaid Sum relates to an Advance
which became due and payable on a day other than the last day of an
Interest Period or Term relating thereto:
28.2.1 the first Interest Period applicable to such Unpaid Sum shall be
of a duration equal to the unexpired portion of the current
Interest Period or Term relating to that Advance; and
28.2.2 the percentage rate of interest applicable thereto from time to
time during such period shall be that which exceeds by one per
cent. the rate which would have been applicable to it had it not
so fallen due, save that the Applicable Margin shall be, or be
deemed to be, the highest rate specified in the definition
thereof.
28.3 Payment of Default Interest
Any interest which shall have accrued under Clause 28.2 (Default Interest)
in respect of an Unpaid Sum shall be due and payable and shall be paid by
the Obligor owing such Unpaid Sum on the last day of each Interest Period
in respect thereof or on such other dates as the Facility Agent may specify
by notice to such Obligor.
28.4 Break Costs
If any Bank or the Facility Agent on its behalf receives or recovers all or
any part of such Bank's share of an Advance or Unpaid Sum otherwise than on
the last day of an Interest Period or Term relating thereto, the Parent
shall pay to the Facility Agent on demand for account of such Bank an
amount equal to the amount (if any) by which (a) the additional interest
which would have been payable on the amount so received or recovered had it
been received or recovered on the last day of that Interest Period or Term
exceeds (b) the amount of interest which in the reasonable opinion of the
Facility Agent would have been payable to the Facility Agent on the last
day of that Interest Period or Term in respect of a euro deposit equal to
the amount so received or
<PAGE>
recovered placed by it with a prime bank in the European interbank market
for a period starting on the third Business Day following the date of such
receipt or recovery and ending on the last day of that Interest Period or
Term.
29. PARENT'S INDEMNITIES
29.1 Parent's Indemnity
The Parent undertakes to indemnify:
29.1.1 each Finance Party and the EIF against any cost, claim, loss,
expense (including legal fees reasonably incurred) or liability
together with any VAT thereon, which it may sustain or incur as a
consequence of the occurrence of any Event of Default or any
default in payment by any Obligor of any sum under the Credit
Facility Documents;
29.1.2 each Participant against any cost or loss it may suffer under
Clause 27.4 (Participants' Liabilities for Costs) or Clause 34.5
(Indemnification);
29.1.3 each Bank against any cost or loss it may suffer or incur as a
result of its funding or making arrangements to fund its portion
of an Advance requested by any Borrower but not made (other than
by reason of negligence or wilful default by the Facility Agent or
any Bank) by reason of the operation of any one or more of the
provisions hereof; and
29.1.4 each Bank against any cost or loss it may suffer or any reduction
in its return on capital that it would have been able to obtain
but for entering into or performing its obligations under this
Agreement as a result of any minimum reserve requirements imposed
on it by the European Central Bank in relation to an Advance or
funding an Advance.
Any amount payable by the Parent under this Clause 29.1 is payable within 5
Business Days of demand by the relevant Finance Party or, as the case may
be, the EIF. Any demand must be accompanied by available invoices and (in
the absence of invoices) a calculation in reasonable detail of the amount
so payable.
29.2 Indemnity to EIF
29.2.1 The Parent undertakes to:
(i) indemnify the EIF against each and every sum paid or
payable by the EIF under the Participation Agreement to
the extent such amount would be payable by the EIF
under the terms of the Participation Agreement in
effect on the Effective Date and the Parent shall pay
to the EIF forthwith upon demand an amount equal to
such sums; and
(ii) hold harmless the EIF on demand from and against all
actions, proceedings, liabilities, costs, claims,
losses, damages and reasonable expenses (including
legal fees reasonably incurred) (collectively, the
"Indemnified Amounts") which the EIF may at
<PAGE>
any time incur or sustain in connection with or arising
out of the Participation Agreement other than any
Indemnified Amounts incurred, sustained or arising by
reason of the gross negligence or wilful misconduct of
the EIF.
29.2.2 Any demand must be accompanied by available invoices and (in the
absence of invoices) a calculation in reasonable detail of the
amount so payable.
29.2.3 This indemnity shall be a contractual obligation between the
Parent and the EIF which exists separately from and in addition to
any subrogation into the rights of the Banks that the EIF may be
entitled to (it being understood, for the avoidance of doubt, that
the EIF shall not be entitled to duplicate recoveries by reason of
this paragraph).
29.3 Currency Indemnity
If any sum (a "Sum") due from an Obligor under the Finance Documents or any
order or judgment given or made in relation thereto has to be converted
from the currency (the "First Currency") in which such Sum is payable into
another currency (the "Second Currency") for the purpose of:
29.3.1 making or filing a claim or proof against such Obligor;
29.3.2 obtaining or enforcing an order or judgment in any court or other
tribunal,
the Parent shall indemnify each person to whom such Sum is due from and
against any loss suffered or incurred as a result of any discrepancy
between (a) the rate of exchange used for such purpose to convert such Sum
from the First Currency into the Second Currency and (b) the rate or rates
of exchange available to such person at the time of receipt of such Sum.
30. CURRENCY OF ACCOUNT AND PAYMENT
The euro is the currency of account and payment for each and every sum at
any time due from an Obligor hereunder, provided that:
30.1.1 each payment in respect of costs and expenses shall be made in the
currency in which the same were incurred; and
30.1.2 each payment pursuant to Clause 15.2 (Tax Indemnity), Clause 15.3
(EIF Taxes), Clause 17.1 (Increased Costs) or Clause 29.1
(Parent's Indemnity) shall be made in the currency specified by
the party claiming thereunder.
31. PAYMENTS
31.1 Payments to the Facility Agent
On each date on which this Agreement requires an amount to be paid by an
Obligor, a Bank or the EIF, such Obligor, such Bank or, the EIF, as the
case may be, shall make the same available to the Facility Agent for value
on the due date at such time and in
<PAGE>
such funds and to such account with such bank as the Facility Agent shall
specify from time to time.
31.2 Payments by the Facility Agent
31.2.1 Save as otherwise provided herein, each payment received by the
Facility Agent pursuant to Clause 31.1 (Payments to the Facility
Agent) shall:
(a) in the case of a payment received for the account of a
Borrower, be made available by the Facility Agent to such
Borrower by application:
(i) first, in or towards payment the same day of any amount
then due from such Borrower hereunder to the person
from whom the amount was so received; and
(ii) secondly, in or towards payment the same day to the
account of such Borrower as such Borrower shall have
previously notified to the Facility Agent for this
purpose; and
(b) in the case of any other payment, be made available by the
Facility Agent to the person entitled to receive such
payment in accordance with this Agreement or the
Participation Agreement (in the case of a Participant, for
the account of its Facility Office) for value the same day
by transfer to such account of such person with such bank in
Paris as such person shall have previously notified to the
Facility Agent.
31.2.2 A payment will be deemed to have been made by the Facility Agent
on the date on which it is required to be made under this
Agreement if the Facility Agent has, on or before that date, taken
steps to make that payment in accordance with the regulations or
operating procedures of the clearing or settlement system used by
the Facility Agent in order to make the payment.
31.3 No Set-off
All payments required to be made by an Obligor hereunder shall be
calculated without reference to any set-off or counterclaim and shall be
made free and clear of and without any deduction for or on account of any
set-off or counterclaim unless required by law.
31.4 Clawback
Where a sum is to be paid hereunder to the Facility Agent for account of
another person, the Facility Agent shall not be obliged to make the same
available to that other person until it has been able to establish to its
satisfaction that it has actually received such sum, but if it does so and
it proves to be the case that it had not actually received such sum, then
the person to whom such sum was so made available shall on request refund
the same to the Facility Agent together with an amount sufficient to
indemnify the Facility Agent against any cost or loss it may have suffered
or incurred by reason of its having paid out such sum prior to its having
received such sum.
<PAGE>
31.5 Partial Payments
If and whenever a payment is made by an Obligor hereunder and the Facility
Agent receives an amount less than the due amount of such payment the
Facility Agent may apply the amount received towards the obligations of the
Obligors under this Agreement in the following order:
31.5.1 first, in or towards payment of any unpaid costs and expenses of
each of the Facility Agent and the Lead Arrangers due hereunder;
31.5.2 secondly, in or towards payment pro rata of any accrued interest
(including any element of such amounts payable to EIF) due but
unpaid including amounts payable in respect of accrued interest
due but unpaid pursuant to Clause 29.2 (Indemnity to EIF);
31.5.3 thirdly, in or towards payment pro rata of any principal due but
unpaid including amounts payable in respect of principal due but
unpaid pursuant to Clause 29.2 (Indemnity to EIF); and
31.5.4 fourthly, in or towards payment pro rata of any other sum due but
unpaid including amounts payable in respect of any other sum due
but unpaid pursuant to Clause 29.2 (Indemnity to EIF).
31.6 Variation of Partial Payments
The order of partial payments set out in Clause 31.5 (Partial Payments)
shall override any appropriation made by the Obligor to which the partial
payment relates but the order set out in sub-clauses 31.5.2, 31.5.3 and
31.5.4 of Clause 31.5 (Partial Payments) may be varied if agreed by all the
Participants.
31.7 Business Days
31.7.1 Any payment or conversion of Advances hereunder which is due to be
made on a day that is not a Business Day shall be made on the next
Business Day in the same calendar month (if there is one) or the
preceding Business Day (if there is not).
31.7.2 During any extension of the due date for payment of any principal
or an Unpaid Sum under this Agreement interest is payable on the
principal at the rate payable on the original due date.
32. SET-OFF
32.1 Contractual Set-off
If an Event of Default has occurred and is continuing, each Obligor
authorises each Participant to apply any credit balance to which such
Obligor is entitled on any account of such Obligor with such Participant in
satisfaction of any sum due and payable from such Obligor to such
Participant under the Finance Documents but unpaid. For this purpose, each
Participant is authorised to purchase with the moneys standing to the
credit of any such account such other currencies as may be necessary to
effect such
<PAGE>
application. Each Participant shall notify the Obligor's Agent (giving full
details) forthwith upon the exercise or purported exercise of any right of
set off.
32.2 Set-off not Mandatory
No Participant shall be obliged to exercise any right given to it by Clause
32.1 (Contractual Set-off).
33. SHARING
33.1 Payments to Participants
If a Participant (a "Recovering Bank") applies any receipt or recovery from
an Obligor to a payment due under this Agreement and such amount is
received or recovered other than in accordance with Clause 31 (Payments),
then such Recovering Bank shall:
33.1.1 notify the Facility Agent of such receipt or recovery;
33.1.2 at the request of the Facility Agent, promptly pay to the Facility
Agent an amount (the "Sharing Payment") equal to such receipt or
recovery less any amount which the Facility Agent determines may
be retained by such Recovering Bank as its share of any payment to
be made in accordance with Clause 31.5 (Partial Payments).
33.2 Redistribution of Payments
The Facility Agent shall treat the Sharing Payment as if it had been paid
by the relevant Obligor and distribute it between the Finance Parties and
the EIF (other than the Recovering Bank) in accordance with Clause 31.5
(Partial Payments).
33.3 Recovering Bank's Rights
The Recovering Bank will be subrogated into the rights of the parties which
have shared in a redistribution pursuant to Clause 33.2 (Redistribution of
Payments) in respect of the Sharing Payment (and the relevant Obligor shall
be liable to the Recovering Bank in an amount equal to the Sharing
Payment).
33.4 Repayable Recoveries
If any part of the Sharing Payment received or recovered by a Recovering
Bank becomes repayable and is repaid by such Recovering Bank, then:
33.4.1 each party which has received a share of such Sharing Payment
pursuant to Clause 33.2 (Redistribution of Payments) shall, upon
request of the Facility Agent, pay to the Facility Agent for
account of such Recovering Bank an amount equal to its share of
such Sharing Payment; and
33.4.2 such Recovering Bank's rights of subrogation in respect of any
reimbursement shall be cancelled and the relevant Obligor will be
liable to the reimbursing party for the amount so reimbursed.
<PAGE>
33.5 Exception
This Clause 33 shall not apply if the Recovering Bank would not, after
making any payment pursuant hereto, have a valid and enforceable claim
against the relevant Obligor.
33.6 Recoveries Through Legal Proceedings
If any Participant intends to commence any action in any court it shall
give prior notice to the Facility Agent and the other Participants. If any
Participant shall commence any action in any court to enforce its rights
hereunder and, as a result thereof or in connection therewith, receives any
amount, then such Participant shall not be required to share any portion of
such amount with any Participant which has the legal right to, but does
not, join in such action or commence and diligently prosecute a separate
action to enforce its rights in another court.
34. the Facility Agent, the Lead Arrangers and the Participants
34.1 Appointment of the Facility Agent
Each of the Lead Arrangers and the Participants hereby appoints the
Facility Agent to act as its Facility Agent in connection herewith and
authorises the Facility Agent to exercise such rights, powers, authorities
and discretions as are specifically delegated to the Facility Agent by the
terms hereof together with all such rights, powers, authorities and
discretions as are reasonably incidental thereto.
34.2 Facility Agent's Discretions
The Facility Agent may:
34.2.1 assume, unless it has, in its capacity as Facility Agent for the
Participants, received notice to the contrary from any other party
hereto, that (a) any representation made or deemed to be made by
an Obligor in connection with the Credit Facility Documents is
true, (b) no Event of Default or Potential Event of Default has
occurred, (c) no Obligor is in breach of or default under its
obligations under the Credit Facility Documents and (d) any right,
power, authority or discretion vested herein upon an Instructing
Group, the Participants or any other person or group of persons
has not been exercised;
34.2.2 assume that (a) the Facility Office of each Participant is that
notified to it by such Participant in writing and (b) the
information provided by each Participant pursuant to Clause 40
(Notices), Clause 34.14 (Banks' Mandatory Cost Details) and
Schedule 11 (Mandatory Costs) is true and correct in all respect
until it has received from such Participant notice of a change to
the Facility Office or any such information and act upon any such
notice until the same is superseded by a further notice;
34.2.3 engage and pay for the advice or services of any lawyers,
accountants, surveyors or other experts whose advice or services
may to it seem necessary, expedient or desirable and rely upon any
advice so obtained;
<PAGE>
34.2.4 rely as to any matters of fact which might reasonably be expected
to be within the knowledge of an Obligor upon a certificate signed
by or on behalf of such Obligor;
34.2.5 rely upon any communication or document believed by it to be
genuine;
34.2.6 refrain from exercising any right, power or discretion vested in
it as Facility Agent hereunder unless and until instructed by an
Instructing Group as to whether or not such right, power or
discretion is to be exercised and, if it is to be exercised, as to
the manner in which it should be exercised;
34.2.7 refrain from acting in accordance with any instructions of an
Instructing Group to begin any legal action or proceeding arising
out of or in connection with this Agreement until it shall have
received such security as it may require (whether by way of
payment in advance or otherwise) for all costs, claims, losses,
expenses (including legal fees) and liabilities together with any
VAT thereon which it will or may expend or incur in complying with
such instructions;
34.2.8 assume that the rate as expressed to be the Official Rate in any
Notice of Drawdown is accurate as of the proposed date of the
Advance requested therein; and
34.2.9 assume (unless it has specific notice to the contrary) that any
notice or request made by the Obligors' Agent is made on behalf of
all the Obligors.
34.3 Facility Agent's Obligations
The Facility Agent shall:
34.3.1 promptly inform each Participant of the contents of any notice or
document received by it in its capacity as Facility Agent from an
Obligor under the Finance Documents;
34.3.2 promptly notify each Participant of the occurrence of any Event of
Default or any default by an Obligor in the due performance of or
compliance with its obligations under the Credit Facility
Documents of which the Facility Agent has notice from any other
party hereto;
34.3.3 save as otherwise provided herein, act as agent hereunder in
accordance with any instructions given to it by an Instructing
Group, which instructions shall be binding on the Lead Arrangers
and the Participants; and
34.3.4 if so instructed by an Instructing Group, refrain from exercising
any right, power or discretion vested in it as Facility Agent
hereunder.
The Facility Agent's duties under the Finance Documents are solely
mechanical and administrative in nature.
<PAGE>
34.4 Excluded Obligations
Notwithstanding anything to the contrary expressed or implied herein,
neither the Facility Agent nor any of the Lead Arrangers shall:
34.4.1 be bound to enquire as to (a) whether or not any representation
made or deemed to be made by an Obligor in connection with the
Credit Facility Documents is true, (b) the occurrence or otherwise
of any Event of Default or Potential Event of Default, (c) the
performance by an Obligor of its obligations under the Credit
Facility Documents or (d) any breach of or default by an Obligor
of or under its obligations under the Credit Facility Documents;
34.4.2 be bound to account to any Participant for any sum or the profit
element of any sum received by it for its own account;
34.4.3 be bound to disclose to any other person any information relating
to any member of the Group if (a) such person, on providing such
information, expressly stated to the Facility Agent or, as the
case may be, the Lead Arrangers, that such information was
confidential or (b) such disclosure would or might in its opinion
constitute a breach of any law or be otherwise actionable at the
suit of any person;
34.4.4 be under any obligations other than those for which express
provision is made herein; or
34.4.5 be or be deemed to be a fiduciary for any other party hereto.
34.5 Indemnification
Each Participant shall, in its Proportion, from time to time on demand by
the Facility Agent, indemnify the Facility Agent against any and all costs,
claims, losses, expenses (including legal fees) and liabilities together
with any VAT thereon which the Facility Agent may incur, otherwise than by
reason of its own gross negligence or wilful misconduct, in acting in its
capacity as facility agent hereunder (other than any which have been
reimbursed by the Parent pursuant to Clause 29.1 (Parent's Indemnity)).
34.6 Exclusion of Liabilities
None of the Facility Agent and the Lead Arrangers accepts any
responsibility:
34.6.1 for the adequacy, accuracy and/or completeness of the Information
Memorandum or any other information supplied by the Facility Agent
or the Lead Arrangers, by an Obligor or by any other person in
connection with the Credit Facility Documents or any other
agreement, arrangement or document entered into, made or executed
in anticipation of, pursuant to or in connection with the Credit
Facility Documents;
34.6.2 for the legality, validity, effectiveness, adequacy or
enforceability of the Credit Facility Documents or any other
agreement, arrangement or document
<PAGE>
entered into, made or executed in anticipation of, pursuant to
or in connection with the Credit Facility Documents; or
34.6.3 for the exercise of, or the failure to exercise, any judgement,
discretion or power given to any of them by or in connection
with the Credit Facility Documents or any other agreement,
arrangement or document entered into, made or executed in
anticipation of, pursuant to or in connection with the Credit
Facility Documents.
Accordingly, none of the Facility Agent and the Lead Arrangers shall be
under any liability in respect of such matters, save in the case of gross
negligence or wilful misconduct.
34.7 No Actions
Each of the Participants agree that it will not assert or seek to assert
against any director, officer or employee of the Facility Agent or any
Lead Arranger any claim it might have against any of them in respect of
the matters referred to in Clause 34.6 (Exclusion of Liabilities).
34.8 Business with the Group
The Facility Agent and each of the Lead Arrangers may accept deposits
from, lend money to and generally engage in any kind of banking or other
business with any member of the Group.
34.9 Resignation
The Facility Agent may (after consultation with the Obligors' Agent)
resign its appointment hereunder at any time without assigning any reason
therefor by giving not less than thirty days' prior written notice to
that effect to each of the other parties hereto, provided that no such
resignation shall be effective until a successor for such Facility Agent
is appointed in accordance with the succeeding provisions of this Clause
34.
34.10 Removal of Facility Agent
An Instructing Group may with the prior written consent of the Obligors'
Agent (such consent not to be unreasonably withheld) remove the Facility
Agent from its role as facility agent hereunder by giving notice to that
effect to each of the other parties hereto. Such removal shall take
effect only when a successor to the Facility Agent is appointed in
accordance with the terms hereof.
34.11 Successor Facility Agent
If the Facility Agent gives notice of its resignation pursuant to Clause
34.9 (Resignation) or the Facility Agent is removed pursuant to Clause
34.10 (Removal of Facility Agent) then any reputable and experienced bank
or other financial institution may be appointed as a successor Facility
Agent provided that, (i) in the case of Clause 34.9 (Resignation) such
successor is a Bank selected by the resigning Facility Agent or, if not a
Bank, is a financial institution selected with the prior consent of the
Obligors' Agent; and (ii) in the case of Clause 34.10 (Removal of
Facility Agent) such
<PAGE>
successor is appointed with the prior written consent of the Obligors'
Agent (such consent not to be unreasonably withheld).
34.12 Rights and Obligations
If a successor to the Facility Agent is appointed under the provisions of
Clause 34.11 (Successor Facility Agent), then (a) the retiring or
departing Facility Agent shall be discharged from any further obligation
hereunder but shall remain entitled to the benefit of the provisions of
this Clause 34 and (b) its successor and each of the other parties hereto
shall have the same rights and obligations amongst themselves as they
would have had if such successor had been a party hereto.
34.13 Own Responsibility
It is understood and agreed by each Participant that at all times it has
itself been, and will continue to be, solely responsible for making its
own independent appraisal of and investigation into all risks arising
under or in connection with the Credit Facility Documents including, but
not limited to:
34.13.1 the financial condition, creditworthiness, condition, affairs,
status and nature of each member of the Group;
34.13.2 the legality, validity, effectiveness, adequacy and
enforceability of the Credit Facility Documents and any other
agreement, arrangement or document entered into, made or
executed in anticipation of, pursuant to or in connection with
the Credit Facility Documents;
34.13.3 whether such Participant has recourse, and the nature and extent
of that recourse, against an Obligor or any other person or any
of their respective assets under or in connection with the
Credit Facility Documents, the transactions therein contemplated
or any other agreement, arrangement or document entered into,
made or executed in anticipation of, pursuant to or in
connection with the Credit Facility Documents; and
34.13.4 the adequacy, accuracy and/or completeness of the Information
Memorandum and any other information provided by the Facility
Agent or the Lead Arrangers, an Obligor, or by any other person
in connection with the Finance Documents, the transactions
contemplated therein or any other agreement, arrangement or
document entered into, made or executed in anticipation of,
pursuant to or in connection with the Credit Facility Documents.
Accordingly, each Participant acknowledges to the Facility Agent and the
Lead Arrangers that it has not relied on and will not hereafter rely on
the Facility Agent and the Lead Arrangers or any of them in respect of
any of these matters.
34.14 Banks' Mandatory Cost Details
Each Bank will supply the Facility Agent with such information and in
such detail as the Facility Agent may require in order to calculate the
Mandatory Cost Rate in accordance with Schedule 11 (Mandatory Costs).
<PAGE>
34.15 Agency Division Separate
In acting as Facility Agent hereunder for the Participants, the Facility
Agent shall be regarded as acting through its agency division which shall
be treated as a separate entity from any other of its divisions or
departments and, notwithstanding the foregoing provisions of this Clause
34, any information received by some other division or department of the
Facility Agent may be treated as confidential and shall not be regarded
as having been given to the Facility Agent's agency division.
35. ASSIGNMENTS AND TRANSFERS
35.1 Binding Agreement
The Finance Documents shall be binding upon and enure to the benefit of
each party hereto and its or any subsequent successors and Transferees.
35.2 No Assignments and Transfers by the Obligors
No Obligor shall be entitled to assign or transfer all or any of its
rights and obligations under the Credit Facility Documents other than
pursuant to a merger in accordance with Clause 23.17 (Mergers).
35.3 Assignment and Transfers by Participants
Any Bank may, at any time, assign all or any of its rights in respect of
its Exposure (in an amount equal to or greater than (Euro) 2,500,000
(except for an assignment or transfer by the Participating Lender to EIF
which may be of lesser amounts) hereunder or any Participant may, at any
time, transfer in accordance with Clause 35.5 (Transfers by Participants)
all or any part of its Exposure, rights and obligations hereunder to a
Qualifying Bank or to the EIF, in each case provided that:
35.3.1 after the Syndication Date and unless an Event of Default has
occurred and is continuing, it has obtained the prior consent of
the Parent, such consent not to be unreasonably withheld or
delayed;
35.3.2 the assignee or transferee is, on the effective date of the
assignment or transfer, a Qualifying Bank or is the EIF;
35.3.3 if the assignment or transfer is by a Bank of all or any part of
the Participated Portion of such Bank's rights and obligations as
a Participating Lender, it has obtained the prior consent of the
EIF, such consent not to be unreasonably withheld or delayed;
35.3.4 such assignment or transfer will not, as a consequence of laws or
regulations in force at that time, result in any amount being
required to be prepaid under Clause 18 (Illegality);
35.3.5 the proposed assignees or transferee would not be entitled to
receive (i) any payment under Clause 15 (Taxes); or (ii) a greater
payment under Clause 17 (Increased Costs) than the assigning or
transferring Participant would have been entitled to receive on
such date under such Clauses with respect to the rights and/or
obligations assigned or transferred; and
<PAGE>
35.3.6 any assignment or transfer shall be pro rata across the Tranche A
Term Facility and Tranche B Revolving Facility, or as the case may
be the Tranche A Term Facility, Tranche B Term Facility and the
Working Capital Facility other than an assignment or transfer by
the Participating Lender to EIF in accordance with the provisions
of the Participation Agreement,
and no Obligor shall be obliged to pay any amount under Clause 15 (Taxes)
or which it would not otherwise have been obliged to pay hereunder as a
result of any assignment or transfer by any Participant which does not
comply with the requirements of this Clause 35.3. The Participating Lender
shall not increase the aggregate amount of the Loan which benefits from
the risk participation assumed by the EIF pursuant to the Participation
Agreement as of the Effective Date without the prior consent of the
Parent, such consent not to be unreasonably withheld. For the avoidance of
doubt, this shall not limit the ability of any Participating Lenders to
assign or transfer all or any part of the Participated Portion of such
Participant's rights and obligations to another Participant as long as it
satisfies the conditions in Clause 35.3.
35.4 Assignments by Banks
If any Bank assigns all or any of its rights and benefits under the
Finance Documents in accordance with Clause 35.3 (Assignments and
Transfers by Participants), then, unless and until the assignee has
delivered a notice to the Facility Agent confirming in favour of the
Facility Agent, the Lead Arrangers and the other Participants that it
shall be under the same obligations towards each of them as it would have
been under if it had been an original party hereto as a Bank (whereupon
such assignee shall become a party hereto as a "Bank"), the Facility
Agent, the Lead Arrangers and the other Participants shall not be obliged
to recognise such assignee as having the rights against each of them which
it would have had if it had been such a party hereto.
35.5 Transfers by Participants
35.5.1 If any Participant wishes to transfer all or any part of its
Exposure or of its rights, benefits and/or obligations as a
Participating Lender under the Finance Documents and, in the case
of a Participating Lender and the EIF, under the Participation
Agreement as contemplated in Clause 35.3 (Assignments and
Transfers by Participants) to a Qualifying Bank then such transfer
may be effected by the delivery to the Facility Agent of a duly
completed Transfer Certificate executed by such Participant, the
relevant Transferee and, in the case of a transfer by the EIF, the
Participating Lenders, and such transfer shall take effect in
accordance with sub-clause 35.5.2 of this Clause 35.5, on the
later of the Transfer Date specified in such Transfer Certificate
and the fifth Business Day after (or such earlier Business Day
endorsed by the Facility Agent on such Transfer Certificate
falling on or after) the date of delivery of such Transfer
Certificate to the Facility Agent.
35.5.2 Any transfer pursuant to a Transfer Certificate shall take effect
as follows:
(a) in the case of a transfer by a Bank of an Exposure to a
Transferee participating as a Bank:
<PAGE>
(i) an assignment to the Transferee by such Bank of its rights under
the Finance Documents in relation to the transferred Exposure;
and
(ii) a transfer to and assumption by the Transferee of such Bank's
obligations under the Finance Documents in relation to the
transferred Exposure, such Bank being released from such
obligations to the extent of such Exposure;
(b) in the case of a transfer by a Bank of all or any of its rights and
obligations as a Participating Lender to a Transferee participating as
a Participating Lender:
(i) an assignment to the Transferee by such Bank of the rights of
such Bank under the Finance Documents and the Participation
Agreement in relation to the share of such Bank's Participated
Portion of the Facilities to be transferred; and
(ii) a transfer to and assumption by the Transferee of such Bank's
obligations under the Finance Documents and the Participation
Agreement in relation to the share of such Bank's Participated
Portion of the Facilities to be transferred, such Bank being
released from such obligations to the extent of the Participated
Portion being transferred;
(c) in the case of a transfer by the EIF of an Exposure to a Transferee
participating as a Bank:
(i) an assignment to the Transferee by each Participating Lender of
such Participating Lender's rights under the Finance Documents
in respect of any part of such Participating Lender's
Participated Portion of the Facilities corresponding to the
transferred Exposure;
(ii) a transfer to and assumption by the Transferee of each
Participating Lender's obligations under the Finance Documents
in respect of any part of such Participating Lender's
Participated Portion of the Facilities corresponding to the
transferred Exposure such Participating Lender being released
from such obligations to the extent of such Participated
Portion; and
(iii) a release of the respective rights and obligations inter se of
each Participating Lender and the EIF under the Participation
Agreement corresponding to the transferred Exposure; and
(d) in the case of each transfer pursuant to paragraphs (i) , (ii) or (iii)
of sub-clause 35.5.2(a), (b) and (c):
(i) the Facility Agent, the Lead Arrangers, the Transferee and the
other Participants shall acquire the same rights and benefits
and
<PAGE>
assume the same obligations between themselves as they
would have acquired and assumed had the Transferee
been an original party hereto as a Bank with the
rights and/or obligations acquired or assumed by it as
a result of such transfer and to that extent the
Facility Agent, the Lead Arrangers and the relevant
Participant shall each be released from further
obligations to each other under the Finance Documents;
and
(ii) such Transferee shall become a party hereto as a
"Bank".
35.5.3 Each Transfer Certificate shall identify in relation to each
transfer contemplated thereby:
(a) the transferring Participant;
(b) the principal amount of the Exposure or the rights and
obligations to be transferred by it;
(c) if they are held by it as a Bank, whether or not they form
part of a Participated Portion;
(d) if they are held by the EIF, the identity of any Participated
Lender to whose Participated Portion they relate and, if
there is more than one such Participating Lender, the
respective principal amounts of the portions of the Exposure
to be transferred relating to their respective Participated
Portions;
(e) the Transferee; and
(f) if they are to be received by it as a Participating Lender,
the principal amount to form part of a Participated Portion.
35.6 Assignment and Transfer Fees
On any date after the Syndication Date upon which an assignment takes
effect pursuant to Clause 35.4 (Assignments by Banks) or a transfer takes
effect pursuant to Clause 35.5 (Transfers by Participants) the relevant
assignee or Transferee shall pay to the Facility Agent for its own account
a fee of (Euro) 2,000.
35.7 Disclosure of Information
Any Participant may, having obtained the prior consent of the Parent (such
consent not to be unreasonably withheld or delayed) disclose to any
person:
35.7.1 to (or through) whom such Participant assigns or transfers (or may
potentially assign or transfer) all or any of its rights and
obligations under the Finance Documents or, in the case of the
EIF, the Participation Agreement;
35.7.2 with (or through) whom such Participant enters into (or may
potentially enter into) any sub-participation in relation to, or
any other transaction under which
<PAGE>
payments are to be made by reference to, the Finance Documents or
any Obligor; or
35.7.3 to whom information may be required to be disclosed by any
applicable law,
such information about any Obligor or the Group and the Finance Documents
as such Participant shall consider reasonably appropriate subject to the
prospective person referred to in sub-clause 35.7.1 and 35.7.2 first
entering into a confidentiality undertaking.
35.8 Notification
The Facility Agent shall within five Business Days of receiving a Transfer
Certificate notify the Obligors' Agent of any assignment or transfer
completed pursuant to this Clause 35.
36. ADDITIONAL BORROWERS
36.1 Request for Additional Borrower
The Parent may request that any of its direct or indirect wholly-owned
subsidiaries become an Additional Borrower by delivering to the Facility
Agent a Borrower Accession Memorandum duly executed by the Obligors' Agent
and such subsidiary, together with the documents and other evidence listed
in Schedule 9 (Additional Conditions Precedent) in relation to such
subsidiary.
36.2 Borrower Conditions Precedent
A subsidiary, in respect of which the Obligors' Agent has delivered a
Borrower Accession Memorandum to the Facility Agent, shall become an
Additional Borrower and assume all the rights, benefits and obligations of
a Borrower as if it had been an Original Borrower on the Business Day
following the date on which the Facility Agent notifies the Obligors'
Agent (copied to each of the Participants) that:
36.2.1 an Instructing Group has accepted the Obligors' Agent's request in
respect of such subsidiary (other than where the Obligors' Agent
has certified to the Facility Agent that the purpose of such
subsidiary acceding as an Additional Borrower is solely for good
faith and reasonable tax or treasury management purposes); and
36.2.2 it has received, in form and substance reasonably satisfactory to
it, all documents and other evidence listed in Schedule 9
(Additional Conditions Precedent) in relation to such subsidiary,
unless on such date an Event of Default or Potential Event of Default is
continuing or would occur as a result of such subsidiary becoming an
Additional Borrower.
37. ADDITIONAL GUARANTORS
37.1 Request for Additional Guarantor
The Obligors' Agent may request that any of the Parent's subsidiaries
become an Additional Guarantor by delivering to the Facility Agent a
Guarantor Accession
<PAGE>
Memorandum duly executed by the Obligors' Agent and such subsidiary,
together with the documents and other evidence listed in Schedule 9
(Additional Conditions Precedent) in relation to such subsidiary.
37.2 Guarantor Conditions Precedent
A company, in respect of which the Obligors' Agent has delivered a
Guarantor Accession Memorandum to the Facility Agent, shall became an
Additional Guarantor and assume all the rights, benefits and obligations
of a Guarantor as if it had been an original party hereto as a Guarantor
on the date on which the Facility Agent notifies the Obligors' Agent that
it has received, in form and substance reasonably satisfactory to it, all
the documents and other evidence listed in Schedule 9 (Additional
Conditions Precedent).
37.3 Resignation of CompleTel SPC II as an Original Guarantor
CompleTel SPC II shall cease to be an Original Guarantor and shall be
released from all its obligations under this Agreement and any of the
Security Documents to which it is a party on the date that the Facility
Agent confirms to it that the Facility Agent has received from CompleTel
SPC II a letter confirming that the circumstances set out in sub-Clause
37.3.1 are true and correct as at the date thereof and requesting its
resignation as an Original Guarantor, provided that on such date:
37.3.1 CompleTel GmbH is a direct wholly owned subsidiary of an Obligor
(other than CompleTel SPC II) and that all the shares in CompleTel
GmbH are secured substantially on the terms of the Security
Document dated at or around the date hereof entered into by
CompleTel Holding I BV and CompleTel SPC II in relation to its
shares in CompleTel GmbH.
Each of the Security Agent and the Facility Agent shall as soon as
reasonably practicable execute and do all such assurances, acts or things
as the Obligors' Agent acting in good faith may reasonably require to
release CompleTel SPC II from its obligations under this Agreement and the
Security Documents to which it is a party; provided that CompleTel SPC II
has indemnified each of the Security Agent and the Facility Agent for all
costs and expenses (including legal fees) together with VAT thereon, as
reasonably determined by them, to be incurred in connection therewith.
38. CALCULATIONS AND EVIDENCE OF DEBT
38.1 Basis of Accrual
Interest and commitment commission shall accrue from day to day and shall
be calculated on the basis of a year of 360 days (or, in any case where
market practice differs, in accordance with market practice) and the
actual number of days elapsed.
38.2 Quotations
If on any occasion a Reference Bank or Participant fails to supply the
Facility Agent with a quotation required of it under the foregoing
provisions of this Agreement, the rate for which such quotation was
required shall be determined from those quotations which are supplied to
the Facility Agent, provided that, in relation to determining
<PAGE>
EURIBOR, this Clause 38.2 shall not apply if only one Reference Bank
supplies a quotation.
38.3 Evidence of Debt
Each Participant shall maintain in accordance with its usual practice
accounts evidencing the amounts from time to time lent by and owing to it
hereunder.
38.4 Control Accounts
The Facility Agent shall maintain on its books a control account or
accounts in which shall be recorded (a) the amount of any Advance or any
Unpaid Sum and each Participant's share therein, (b) the amount of all
principal, interest and other sums due or to become due from an Obligor
and each Participant's share therein and (c) the amount of any sum
received or recovered by the Facility Agent hereunder and each
Participant's share therein.
38.5 Prima Facie Evidence
In any legal action or proceeding arising out of or in connection with
this Agreement, the entries made in the accounts maintained pursuant to
Clause 38.3 (Evidence of Debt) and Clause 38.4 (Control Accounts) shall,
in the absence of manifest error, be prima facie evidence of the existence
and amounts of the specified obligations of the Obligors.
38.6 Certificates of Participants
A certificate of a Participant as to (a) the amount by which a sum payable
to it hereunder is to be increased under Clause 15.1 (Tax Gross-up) or
Clause 15.3 (EIF Taxes), (b) the amount for the time being required to
indemnify it against any such cost, payment or liability as is mentioned
in Clause 15.2 (Tax Indemnity), Clause 17.1 (Increased Costs) or Clause
29.1 (Parent's Indemnity) or Clause 29.2 (Indemnity to EIF) or (c) the
amount of any credit, relief, remission or repayment as is mentioned in
Clause 16.3 (Tax Credit Payment) or Clause 16.4 (Tax Credit Clawback)
shall, in the absence of manifest error, be prima facie evidence of the
existence and amounts of the specified obligations of the Obligors.
38.7 Facility Agent's Certificates
A certificate of the Facility Agent as to the amount at any time due from
a Borrower or the Parent hereunder or the amount which, but for any of the
obligations of such Borrower or the Parent hereunder being or becoming
void, voidable, unenforceable or ineffective, at any time would have been
due from such Borrower hereunder shall, in the absence of manifest error,
be conclusive for the purposes of Clause 25 (Guarantee and Indemnity).
39. REMEDIES AND WAIVERS, PARTIAL INVALIDITY
39.1 Remedies and Waivers
No failure to exercise, nor any delay in exercising, on the part of any
Finance Party and/or the EIF, any right or remedy under the Finance
Documents shall operate as a waiver thereof, nor shall any single or
partial exercise of any right or remedy prevent any further or other
exercise thereof or the exercise of any other right or remedy. The
<PAGE>
rights and remedies herein provided are cumulative and not exclusive of
any rights or remedies provided by law.
39.2 Partial Invalidity
If, at any time, any provision of the Credit Facility Documents is or
becomes illegal, invalid or unenforceable in any respect under the law of
any jurisdiction, neither the legality, validity or enforceability of the
remaining provisions thereof nor the legality, validity or enforceability
of such provision under the law of any other jurisdiction shall in any way
be affected or impaired thereby.
40. NOTICES
40.1 Communications in Writing
Each communication to be made under the Credit Facility Documents shall be
made in writing and, unless otherwise stated, shall be made by fax or
letter.
40.2 Addresses
Any communication or document to be made or delivered pursuant to this
Agreement shall (unless the recipient of such communication or document
has, by fifteen days' written notice to the Facility Agent, specified
another address or fax number) be made or delivered to the address or fax
number:
40.2.1 in the case of the Original Obligors, of the Obligors' Agent
identified below for the attention of Hugues Lemasne and David
Lacey, with a copy to Anna Lascar;
40.2.2 in the case of the Facility Agent, identified with its name below;
40.2.3 in the case of each Bank, notified in writing to the Facility
Agent prior to the date hereof (or, in the case of a Transferee,
at the end of the Transfer Certificate to which it is a party as
Transferee);
40.2.4 in the case of the EIF, notified in writing to the Facility Agent
prior to the date of the Amendment Agreement; and
40.2.5 in the case of each Additional Guarantor or Additional Borrower,
in the relevant Guarantor Accession Memorandum or Borrower
Accession Memorandum
provided that not more than one address may be specified by each party
pursuant to this Clause 40.2 at any time.
40.3 Delivery
Any communication or document to be made or delivered by one person to
another pursuant to the Credit Facility Documents shall:
40.3.1 if by way of fax, be deemed to have been received on receipt of an
answer back unless the date of despatch is not a working day or
after business hours
<PAGE>
in the place of receipt in which case it shall be deemed to have
been received at the opening of business on the next such working
day; and
40.3.2 if by way of letter, be deemed to have been delivered on receipt
of a return receipt if sent by registered mail or if sent by
courier,
provided that any communication or document to be made or delivered to an
Agent shall be effective only when received by its agency division and
then only if the same is expressly marked for the attention of the
department or officer identified with that Agent's signature below (or
such other department or officer as that Agent shall from time to time
specify for this purpose).
40.4 English Language
Each communication and document made or delivered by one party to another
pursuant to the Credit Facility Documents shall be in the English language
or in the event that such communication or document attaches a document
originally prepared in a language other than English, the delivery of such
document in its original language shall satisfy the requirements of this
Clause 40.4, provided that if reasonably requested by the Agent in writing
an English translation certified (by an officer of the person making or
delivering the same) as being a true and accurate translation thereof is
delivered within 45 Business Days thereof.
40.5 Notification of Changes
Promptly upon receipt of notification of a change of address or fax number
pursuant to Clause 40.2 (Addresses) or changing its own address or fax
number the Facility Agent shall notify the other parties hereto of such
change.
40.6 Deemed Receipt by the Obligors
Any communication or document made or delivered to the Obligors' Agent in
accordance with Clause 40.3 (Delivery) shall be deemed to have been made
or delivered to each of the Obligors.
41. COUNTERPARTS
This Agreement may be executed in any number of counterparts with
different parties executing different counterparts, all of which taken
together shall constitute one and the same instrument.
42. AMENDMENTS
42.1 Amendments
If the Facility Agent has the prior consent of an Instructing Group (or if
and to the extent expressly authorised), the Facility Agent and the
Obligors may from time to time agree in writing to amend any Finance
Documents or to waive, prospectively or retrospectively, any of the
requirements of any Finance Document and any amendments or waivers so
agreed shall be binding on all the Finance Parties and the EIF, provided
that no such amendment or waiver shall result in any Bank which has a
Revolving Commitment being required to participate in a Revolving Advance
unless
<PAGE>
the consent of Banks with Revolving Commitments exceeding sixty-six and
two thirds per cent. of the aggregate of Revolving Commitments has been
obtained.
42.2 Amendments Requiring the Consent of all the Participants
An amendment or waiver which relates to:
42.2.1 Clause 33 (Sharing) or this Clause 42;
42.2.2 an increase in the principal amount of or a change in currency of
any Advance, or deferral of the Conversion Date, any Term
Repayment Date or Repayment Date, Revolving Termination Date or
the Tranche A Term Availability Period;
42.2.3 a reduction in the Applicable Margin, the amount or currency of
any payment of interest, fees or any other amount payable
hereunder to any Finance Party or the EIF or deferral of the date
for payment thereof;
42.2.4 a release of any Guarantor from any of its obligations set out in
Clause 25 (Guarantee and Indemnity) except as permitted under the
terms of the Finance Documents;
42.2.5 Clause 36 (Additional Borrowers) or Clause 37 (Additional
Guarantors);
42.2.6 the definition of Instructing Group;
42.2.7 an increase in Commitment;
42.2.8 any release of any security constituted by any of the Security
Documents except as permitted under the terms of the Finance
Documents; or
42.2.9 any provision which expressly requires the consent or approval of
all the Banks or, as the case may be, Participants, shall not be
made without the prior consent of all the Banks or, as the case
may be, Participants.
42.3 Exceptions
Notwithstanding any other provisions hereof, the Facility Agent shall not
be obliged to agree to any such amendment or waiver if the same would:
42.3.1 amend or waive this Clause 42, Clause 27 (Costs and Expenses) or
Clause 34 (The Facility Agent, The Lead Arrangers and The
Participants); or
42.3.2 otherwise amend or waive any Agent's rights hereunder or subject
any Agent or the Lead Arrangers to any additional obligations
hereunder;
42.3.3 An amendment or waiver which relates to Clause 45 shall not be
made without the prior consent of the EIF.
<PAGE>
43. GOVERNING LAW
This Agreement shall be governed by English law.
44. JURISDICTION
44.1 English Courts
The courts of England have exclusive jurisdiction to settle any dispute (a
"Dispute") arising out of or in connection with this Agreement (including
a dispute regarding the existence, validity or termination of this
Agreement or the consequences of its nullity).
44.2 Convenient Forum
The parties agree that the courts of England are the most appropriate and
convenient courts to settle Disputes between them and, accordingly, that
they will not argue to the contrary.
44.3 Non-Exclusive Jurisdiction
Each of the parties agree for the benefit of each of the other parties, as
a result and notwithstanding Clause 44.1 (English Courts), that it does
not prevent any Finance Party, the EIF or any Obligor from taking
proceedings relating to a Dispute ("Proceedings") in any other courts with
jurisdiction. To the extent allowed by law, the Finance Parties, the EIF
or, as the case may be, the Obligors may take concurrent Proceedings in
any number of jurisdictions.
44.4 Service of Process
Each Original Obligor agrees that the documents which start any
Proceedings and any other documents required to be served in relation to
those Proceedings may be served on it:
44.4.1 in the case of each Original Borrower, on HRO Registrars Limited
at present of Heathcoat House, 20 Savile Row, London W1X 1AE or,
if different, its registered office.
44.4.2 in the case of each Original Guarantor, on HRO Registrars Limited
at present of Heathcoat House, 20 Savile Row, London W1X 1AE or,
if different, its registered office.
If any Original Obligor ceases to have a place of business in Great
Britain or, as the case may be, the appointment of the person mentioned in
this Clause 44.4 ceases to be effective, the relevant Original Obligor
shall immediately appoint another person in England to accept service of
process on its behalf in England. If an Original Obligor fails to do so
(and such failure continues for a period of not less than fourteen days),
the Facility Agent shall be entitled to appoint such a person by notice to
such Original Obligor. Nothing contained herein shall restrict the right
to serve process in any other manner allowed by law. This Clause 44.4
applies to Proceedings in England and to Proceedings elsewhere.
<PAGE>
45. EIF Risk Participation
45.1 Obligors' Acknowledgement
The Obligors hereby acknowledge that the EIF, under and in accordance with
the terms of the Participation Agreement, will assume obligations to one
or more Participating Lenders under the Participation Agreement whereby
demand may be made by such Participating Lenders for payment by the EIF of
amounts corresponding to certain amounts due from but unpaid by the
Borrowers to such Participating Lenders under the Finance Documents in
relation to the Participated Portion to which the EIF's obligations to
such Participating Lenders relate.
45.2 Obligations not reduced
The obligations of the Obligors shall not be reduced by any obligation of,
or any amount paid or payable by, the EIF under the Participation
Agreement, and an Obligor shall not have any right of contribution against
or to be subrogated to any claim against, the EIF in relation to any
obligation of or payment by an Obligor under the Finance Documents.
45.3 Amounts Payable
Where an amount may become payable hereunder to a Participating Lender to
enable it to make a payment to the EIF, such amount shall become payable
notwithstanding that any such payment to the EIF by such Participating
Lender may be limited by reference to amounts received by it from an
Obligor.
45.4 Payment without investigation
The Obligors irrevocably direct the EIF to pay without investigation or
confirmation from an Obligor any amount claimed from it by a Participating
Lender pursuant to the Participation Agreement notwithstanding that any
Obligor may dispute the validity of such claim.
45.5 Obligations not impaired
The obligations of the Obligors to the EIF shall not be impaired by any
amendment of the Participation Agreement or any other circumstance which,
but for this Clause 45.5, might impair such obligations.
45.6 Right of Subrogation and Assignment
The Obligors acknowledge that, upon the EIF making payment under the
Participation Agreement to a Participating Lender in respect of and equal
to an amount (the "Overdue Amount") payable by the Obligors hereunder, the
EIF shall be entitled, at its option, to be subrogated (with effect from
notice thereof to the Facility Agent) to or have assigned or transferred
to it, such Participating Lender's rights relating to such Overdue Amount
and any other security therefor or to be entitled to receive from such
Participating Lender under the Participation Agreement each amount
thereafter applied by such Participating Lender towards the Overdue
Amount.
AS WITNESS the hands of the duly authorised representatives of the parties
hereto the day and year first before written.
<PAGE>
SIGNATURES
The Parent
COMPLETEL EUROPE N.V.
By: /s/ ANNA LASCAR
Address: Kruisweg 609, 2132 NA Hoofddorp, The Netherlands
Fax: 00 31 20 666 1666
The Obligor's Agent
COMPLETEL S.A.S.
By: /s/ ANNA LASCAR
Address: Washington Plaza, Immeuble Artois 44, rue Washington,
75408 Paris Cedex 08, France
Fax: 00 33 1 53 53 83 84
The Borrowers
COMPLETEL ECC B.V.
By: /s/ ANNA LASCAR
Address: Kruisweg 609, 2132 NA Hoofddorp, The Netherlands
Fax: 00 31 20 666 1666
COMPLETEL GmbH
By: /s/ ANNA LASCAR
Address: Hans-Stiessberger - Strasse 2a, 85540 Haar bei Munchen,
Germany
Fax: 00 49 89 45 69 68 56
<PAGE>
COMPLETEL SERVICES S.A.S.
By: /s/ ANNA LASCAR
Address: Washington Plaza, Immeuble Artois 44, rue Washington,
75408 Paris Cedex 08, France
Fax: 00 33 1 53 53 83 84
COMPLETEL S.A.S.
By: /s/ ANNA LASCAR
Address: Washington Plaza, Immeuble Artois 44, rue Washington,
75408 Paris Cedex 08, France
Fax: 00 33 1 53 53 83 84
The Original Guarantors
COMPLETEL EUROPE N.V.
By: /s/ ANNA LASCAR
Address: Kruisweg 609, 2132 NA Hoofddorp, The Netherlands
Fax: 00 31 20 666 1666
COMPLETEL ECC B.V.
By: /s/ ANNA LASCAR
Address: Kruisweg 609, 2132 NA Hoofddorp, The Netherlands
Fax: 00 31 20 666 1666
COMPLETEL HOLDING I B.V.
By: /s/ ANNA LASCAR
Address: Kruisweg 609, 2132 NA Hoofddorp, The Netherlands
Fax: 00 31 20 666 1666
<PAGE>
COMPLETEL HOLDING II B.V.
By: /s/ ANNA LASCAR
Address: Kruisweg 609, 2132 NA Hoofddorp, The Netherlands
Fax: 00 31 20 666 1666
COMPLETEL GmbH
By: /s/ ANNA LASCAR
Address: Hans-Stiessberger - Strasse B, 85540 Haar bei Munchen,
Germany
Fax: 00 49 89 45 46 51 99
COMPLETEL SERVICES S.A.S.
By: /s/ ANNA LASCAR
Address: Washington Plaza, Immeuble Artois 44, rue Washington,
75408 Paris Cedex 08, France
Fax: 00 33 1 53 53 83 84
COMPLETEL S.A.S.
By: /s/ ANNA LASCAR
Address: Washington Plaza, Immeuble Artois 44, rue Washington,
75408 Paris Cedex 08, France
Fax: 00 33 1 53 53 83 84
ACCES ET SOLUTIONS INTERNET S.A.R.L.
By: /s/ ANNA LASCAR
Address: Double Mixte, 43 Boulevard du 11 Novembre 1998, 69625
Villeurbanne Cedex, France
Fax: 00 33 4 78 93 00 99
<PAGE>
COMPLETEL UK LIMITED
By: /s/ ANNA LASCAR
Address: c/o Holme Roberts & Owen, Heathcoat House, 20 Savile Row,
London W1X 1AE
Fax: +44 (0)207 287 9344
iPCENTA LIMITED
By: /s/ ANNA LASCAR
Address: Vaughan Chambers, Vaughan Road, Harpenden, Hertfordshire,
AL5 4EE
Fax: +44 (0)208 960 0820
COMPLETEL SPC
By: /s/ ANNA LASCAR
Address: c/o Holme Roberts & Owen, Heathcoat House, 20 Savile Row,
London W1X 1AE
Fax: +44(0) 207 287 9344
COMPLETEL SPC II
By: /s/ ANNA LASCAR
Address: c/o Holme Roberts & Owen, Heathcoat House, 20 Savile Row,
London W1X 1AE
Fax: +44(0) 207 287 9344
The Lead Arrangers
GOLDMAN SACHS INTERNATIONAL
By: /s/ GABRIEL LEFEBVRE
Address: Peterborough Court, 133 Fleet Street, London EC4A 2BB
Fax: +44 171 774 1313
<PAGE>
PARIBAS
By: /s/ BENOIT TANGUY
Address: 37 Place du Marche, Saint Honore 75031
Paris Cedex 01
France
Fax: 0331 42 98 09 79
The Facility Agent
PARIBAS
By: /s/ GABRIEL LEFEBVRE
Address: 37 Place du Marche Saint Honore
75031 Paris Cedex 01
Fax: + 33 1 42 98 43 17
Attention: Gabriel Lefevbre
The Security Agent
PARIBAS
By: /s/ GABRIEL LEFEBVRE
Address: 37 Place du Marche Saint Honore
75031 Paris Cedex 01
Fax: + 33 1 42 98 43 17
Attention: Gabriel Lefevbre
The Risk Participant
EUROPEAN INVESTMENT FUND
By: /s/ GERBRAND G. HOP
<PAGE>
The Banks
GOLDMAN SACHS INTERNATIONAL
By: /s/ GABRIEL LEFEBVRE
PARIBAS
By: /s/ BENOIT TANGUY
BARCLAYS BANK PLC
By: /s/ GABRIEL LEFEBVRE
CITIBANK INTERNATIONAL PLC
By: /s/ PAREEJAT SINGHAL
COMPTOIR DES ENTREPRENEURS
By: /s/ GABRIEL LEFEBVRE
CREDIT LYONNAIS
By: /s/ GABRIEL LEFEBVRE
MERRILL LYNCH CAPITAL MARKETS BANK LIMITED
By: /s/ GABRIEL LEFEBVRE
SCOTIABANK EUROPE PLC
By: /s/ GABRIEL LEFEBVRE
AUSTRALIA AND NEW ZEALAND BANKING GROUP LIMITED
ACTING THROUGH ITS PARIS BRANCH
By: /s/ GABRIEL LEFEBVRE
<PAGE>
CREDIT AGRICOLE INDOSUEZ
By: /s/ GABRIEL LEFEBVRE
BANCA NAZIONALE DEL LAVORO S.p.A. - Paris Branch
By: /s/ GABRIEL LEFEBVRE
IBM FRANCE FINANCEMENT S.A.
By: /s/ GABRIEL LEFEBVRE
<PAGE>
Exhibit 10.24
DATED 6 APRIL 2000
BETWEEN
COMPLETEL EUROPE N.V.
AS PARENT
COMPLETEL S.A.S.
AS OBLIGORS' AGENT
MEMBERS OF THE COMPLETEL GROUP
AS ORIGINAL BORROWERS
MEMBERS OF THE COMPLETEL GROUP
AS ORIGINAL GUARANTORS
GOLDMAN SACHS INTERNATIONAL AND PARIBAS
AS LEAD ARRANGERS
EUROPEAN INVESTMENT FUND
AS RISK PARTICIPANT
PARIBAS
AS SECURITY AGENT
PARIBAS
AS FACILITY AGENT
AND
OTHERS
_______________________________________________
SUPPLEMENTAL AGREEMENT
RELATING TO THE SUSPENSION OF
CERTAIN PROVISIONS OF
A CREDIT AGREEMENT
DATED 6 JANUARY 2000 AND A
PARTICIPATION AGREEMENT DATED 17 MARCH 2000
_______________________________________________
<PAGE>
THIS AGREEMENT is made on 6 April 2000
BETWEEN
(1) COMPLETEL EUROPE N.V. (the "Parent");
(2) COMPLETEL S.A.S. in its capacity as the obligors' agent (the "Obligors
Agent");
(3) THE COMPANIES listed in Part A of Schedule 1 (The Original Parties) of the
Credit Agreement (defined below) in their capacity as borrowers (the
"Original Borrowers");
(4) THE COMPANIES listed in Part B of Schedule 1 (The Original Parties) of the
Credit Agreement (defined below) in their capacity as original guarantors
(the "Original Guarantors");
(5) GOLDMAN SACHS INTERNATIONAL and PARIBAS as lead arrangers (the "Lead
Arrangers")
(6) PARIBAS as facility agent for the Participants (the "Facility Agent");
(7) PARIBAS as security agent for the Participants (the "Security Agent");
(8) EUROPEAN INVESTMENT FUND as risk participant (the "EIF"); and
(9) THE FINANCIAL INSTITUTIONS named in Part C of Schedule 1 (The Original
Parties) of the Credit Agreement (defined below) in their capacity as Banks
(the "Banks").
RECITALS
IT IS AGREED as follows.
1. DEFINITIONS AND INTERPRETATION
1.1 Definitions
In this Deed:
"Credit Agreement" means the euro 265,000,000 Credit Agreement dated 6
January 2000 between the Parent, the Obligors' Agent, the Original
Borrowers, the Original Guarantors, the Lead Arrangers, the Facility Agent,
the Security Agent and the Banks defined therein as amended and restated by
the Supplemental Deed.
"Effective Date" means the date the Facility Agent receives a notice from
the Parent stating that the New High Yield Bond is expected to close
imminently and requesting this Agreement to become effective immediately.
"Enlarged Business Plan" means the management base case for the Group
reflecting the utilisation of proceeds of the IPO and the New High Yield
Bond to be delivered by the Parent to the Facility Agent.
<PAGE>
"New High Yield Bond" means the, up to, euro 300,000,000 senior notes due
2010 of the Parent to be issued in April 2000.
"Restricted Period" shall have the meaning given to such term in sub-clause
4.1.2 hereunder.
"Supplemental Deed" means the supplemental deed relating to the Credit
Agreement and the Subordination, Security Agency and Intercreditor Deed
dated 17 March 2000.
1.2 Incorporation of Defined Terms
Terms defined in the Credit Agreement shall, unless otherwise defined
herein, have the same meaning herein and the principles of construction set
out in the Credit Agreement shall have effect as if set out in this
Agreement.
1.3 Clauses
In this Agreement any reference to a "Clause" or a "Schedule" is, unless the
context otherwise requires, a reference to a Clause or a Schedule hereof.
Clause headings are for ease of reference only.
2. EFFECTIVE DATE
2.1 Effective Date
This Agreement (other than this Clause 2 (Effective Date), Clause 6 (Fees
Costs and Expenses) and Clause 7 (Miscellaneous)) shall become effective on
the Effective Date. Clause 2 (Effective Date), Clause 6 (Fees, Costs and
Expenses) and Clause 7 (Miscellaneous) are effective as at the date hereof.
In the event that either:
(i) the Effective Date has not occurred by the date falling thirty days
after the date hereof; or
(ii) the New High Yield Bond has not closed within five Business Days of the
Effective Date,
this Agreement shall terminate and the provisions of the Credit Agreement
and the Participation Agreement shall continue in full force and effect.
2.2 Notification
The Facility Agent shall promptly notify the Participants of the occurrence
of the Effective Date and any termination of this Agreement pursuant to
Clause 2.1.
3. REPRESENTATIONS
3.1 Repeated Representations
The Original Borrowers and the Original Guarantors on the date hereof and on
the Effective Date shall be deemed to make the representations set out in
Clauses 20.1 (Status) to 20.4 (Execution of the Finance Documents) and
Clause 20.8 (Validity and Admissibility in Evidence) of the Credit Agreement
as if the same were set out in full herein and as if each reference therein
to the "Credit Facility Documents" or the "Finance Documents" includes a
reference to this Agreement Provided that in respect of the deemed
repetition
<PAGE>
of such representations on the Effective Date, any misrepresentation that
occurs solely because of the issue of the New High Yield Bond shall be
waived.
3.2 New Representation
Each Obligor on the date hereof and on the Effective Date represents and
warrants to the Participants that there have been no changes to the
constitutional documents delivered by such Obligor pursuant to the Credit
Agreement and the Supplemental Deed other than any changes notified and
evidenced to and acceptable to the Facility Agent on or prior to the
Effective Date.
4. AMENDMENTS TO THE CREDIT AGREEMENT AND THE PARTICIPATION AGREEMENT
4.1 The Credit Agreement
On the Effective Date, the relevant provisions of the Credit Agreement shall
be amended, read and construed so as to give effect to the provisions set
out in sub-clauses 4.1.1 to 4.1.10 below:
4.1.1 The Parent shall procure (and each Borrower which has drawn an
Advance shall repay its share of the Loan and accrued interest in
order to ensure) that the Loan and all amounts of accrued interest
are repaid in full on the Effective Date. No amount payable pursuant
to this sub-clause 4.1.1 or in respect of an amount payable pursuant
to this sub-clause 4.1.1 shall constitute an Overdue Amount for the
purposes of the Participation Agreement.
4.1.2 Each of the parties hereto agrees that the Facilities will not be
available for drawing and no Notice of Default may be given by the
Participating Lender to the EIF during the period beginning on the
Effective Date and ending on the earlier of:
(i) the date falling six months after the Effective Date or, if
before the end of such six month period the Parent has served
a notice on the Facility Agent requesting an extension of
three months, the date falling nine months after the Effective
Date;
(ii) the date upon which the Facilities are cancelled in full
pursuant to the provisions of Clause 13 (Cancellation and
Prepayment) of the Credit Agreement; and
(iii) the date the Facilities are restructured to reflect the
Enlarged Business Plan,
(the "Restricted Period"). Each of the parties hereto acknowledges
and confirms that the Banks shall be under no commitment to lend and
the EIF shall not be obliged to make payments under the Participation
Agreement during the Restricted Period.
4.1.3 The Parent and each of the Borrowers, jointly and severally, shall
pay to the Facility Agent for the account of each Bank a commitment
commission on the amount of such Bank's Tranche A Term Commitment and
Revolving
<PAGE>
Commitment less, in the case of the Participating Lender, the Traded
Proportion (as defined in the Participation Agreement) of the
commitment commission calculated at the same rate and payable on the
same days as it is calculated and payable under Clause 26.1
(Commitment Commission on the Tranche A Term Facility) and Clause
26.2 (Commitment Commission on the Revolving Facility) of the Credit
Agreement.
4.1.4 The Parent and each of the Borrowers, jointly and severally, shall
pay to the Facility Agent for the account of the EIF the Traded
Proportion of the commitment commission referred to in sub-clause
4.1.3 on the Participated Portion of the Participating Lender's
Commitment calculated at the same rate and payable on the same days
as it is calculated and payable under Clause 26.5 of the Credit
Agreement.
4.1.5 Each of the Participants agrees, subject to receipt by it of all
amounts owed to it under sub-clause 4.1.1, to:
(i) waive the occurrence of any Event of Default subsisting on the
Effective Date;
(ii) disapply the provisions of Clause 22 (Financial Condition),
Clause 23 (Covenants) and Clause 24 (Events of Default) of the
Credit Agreement; and
(iii) disapply the provisions of any undertakings or covenants in
any of the Security Documents and the provisions of Clauses
11.2, 24.2 and 24.3 of the Intercreditor Agreement,
during the Restricted Period Provided that if this Agreement is
terminated pursuant to the provisions of Clause 2.1 hereof or
following the Restricted Period, the Finance Parties shall be
entitled to exercise any rights they may have under any of the
Finance Documents as if such waivers and disapplication of provisions
of the Finance Documents under this sub-clause 4.1.5 had never
occurred.
4.1.6 Each of the parties hereto agrees that none of the Obligors will be
obliged to deliver any statements, reports or information required by
the terms of Clause 21 (Financial Condition) of the Credit Agreement
or any other statements, reports or information required by the terms
of any of the other Finance Documents during the Restricted Period
save that during the Restricted Period the Parent shall:
(i) continue to be obliged to deliver all financial and other
information required by the terms of Clause 21.1 (Annual
Statements) of the Credit Agreement; and
(ii) deliver to the Facility Agent in sufficient copies for the
Participants, as soon as the same become available, copies of
the Form 10-Q submitted to the Securities and Exchange
Commission at the end of each quarter of its financial years.
<PAGE>
4.1.7 The Parent shall as soon as the same become available deliver to the
Facility Agent in sufficient copies for the Participants the offering
memoranda in respect of the New High Yield Bond and the IPO.
4.1.8 The Parent undertakes to finalise the Enlarged Business Plan and to
forward it to the Lead Arrangers as soon as reasonably practicable
and in any event at least 60 days prior to the end of the Restricted
Period. The Lead Arrangers will forward the Enlarged Business Plan
and proposals for restructuring the Facilities to the Facility Agent
as soon as reasonably practicable thereafter and the Facility Agent
will deliver copies to the Participants promptly on receipt of this
information. The Lead Arrangers and the Parent will agree a timetable
for obtaining the views of the Participants and documenting the
restructuring of the Facilities and, after being informed of the
same, all the Participants shall use reasonable endeavours to work
towards this timetable.
4.1.9 Each of the Participants may determine, in its complete discretion,
whether it wishes to commit to lend or, in the case of the EIF, to
risk participate under the Participation Agreement under
documentation restructuring the Facilities once the Enlarged Business
Plan and restructuring proposal have been delivered to it. In the
event a Bank decides not to enter into this restructuring
documentation at the end of the Restricted Period the Commitment of
such Bank shall be reduced to zero. In the event the EIF decides to
terminate the Participation Agreement at the end of the Restricted
Period the Commitment of the Participating Lender shall be reduced by
the Participated Portion.
4.1.10 If the Enlarged Business Plan and/or the restructuring proposal is
not presented and agreed by the end of the Restricted Period, the
Facilities shall be cancelled, the Commitment of each Bank shall be
reduced to zero, the Participation Agreement shall be terminated and
all the security constituted under the Security Documents shall be
released in accordance with its terms.
4.2 The Participation Agreement
Notwithstanding the provisions of Clause 2.3 of the Participation Agreement,
the Participation Agreement shall remain effective during the Restricted
Period provided that no Notice of Default may be given by the Participating
Lender to the EIF during the Restricted Period. At the end of the
Restricted Period the EIF shall determine, in its complete discretion, if it
wishes to terminate the Participation Agreement and shall notify the
Participating Lender and the Facility Agent accordingly.
4.3 This Agreement
In the event of any inconsistency between the terms of the Credit Agreement
and this Agreement or, as the case may be, the terms of the Participation
Agreement and this Agreement, the terms of this Agreement shall prevail.
For the avoidance of doubt, the Facility Agent and the Obligors' Agent
hereby agree this document is designated a Finance Document.
<PAGE>
5. CONTINUITY AND FURTHER ASSURANCE
5.1 Continuing Obligations
Each of the parties hereto expressly acknowledges that the provisions of the
Credit Agreement, the Participation Agreement and the other Finance
Documents shall, save as amended and modified hereby, continue in full force
and effect. All parties hereto acknowledge that the "Effective Date" as
defined in the Supplemental Deed occurred on 30 March 2000.
5.2 Further Assurance
Each of the Original Borrowers and the Original Guarantors and the Banks
shall, at the request of the Facility Agent and at its own expense, do all
such acts and things necessary or desirable to give effect to the amendments
and modifications effected or to be effected pursuant to this Agreement.
6. FEES, COSTS AND EXPENSES
6.1 Transaction Expenses
The Parent shall within ten days of a written demand, reimburse each of the
Agents and each of the Lead Arrangers for all reasonable costs and expenses
(including legal fees) notified to it together with any VAT thereon incurred
by it in connection with (i) the negotiation, preparation and execution of
this Agreement and the completion of the transactions herein contemplated
and (ii) the negotiation, preparation and execution of the Finance Documents
and the completion of the transactions therein contemplated.
6.2 Preservation and Enforcement of Rights
The Original Borrowers shall, from time to time on demand of the Facility
Agent, reimburse the Finance Parties and the EIF for all costs and expenses
(including legal fees) on a full indemnity basis together with any VAT
thereon incurred in or in connection with the preservation and/or
enforcement of any of the rights of the Finance Parties and/or the EIF, as
the case may be, under this Agreement and any other document referred to in
this Agreement.
6.3 Stamp Taxes
The Original Borrowers shall pay all stamp, registration and other taxes to
which this Agreement, any other document referred to in this Agreement or
any judgment given in connection herewith is or at any time may be subject
(other than those imposed by reason of assignment or novation) and shall,
from time to time on demand of the Facility Agent, indemnify the Finance
Parties and the EIF against any liabilities, costs, claims and out of pocket
expenses resulting from any failure to pay or any delay in paying any such
tax.
7. MISCELLANEOUS
7.1 Incorporation of Terms
The provisions of Clause 35.1 (Binding Agreement), Clause 39 (Remedies and
Waiver, Partial Invalidity), Clause 43 (Governing Law) and Clause 44
(Jurisdiction) of the Credit Agreement shall be incorporated into this
Agreement as if set out in full herein and as if
<PAGE>
references therein to this Agreement or the Finance Documents are references
to this Agreement.
7.2 Counterparts
This Agreement may be executed in any number of counterparts, with different
parties executing different counterparts all of which taken together shall
constitute one and the same instrument.
AS WITNESS the hands of duly authorised representatives of the parties hereto
the day and year first before written.
<PAGE>
SIGNATURES
The Parent
COMPLETEL EUROPE N.V.
By: /s/ ANNA LASCAR
Address: Kruisweg 609
2132 NA Hoofddorp
The Netherlands
Fax: 00 31 20 666 1666
The Obligors' Agent
COMPLETEL S.A.S.
By: /s/ ANNA LASCAR
Address: Tour Egee
9-11, allee de l'Arche
92671 Courbevoie Cedex
France
Fax: 00 331 729 22614
The Original Borrowers
COMPLETEL ECC B.V.
By: /s/ ANNA LASCAR
Address: Kruisweg 609
2132 NA Hoofddorp
The Netherlands
Fax: 00 31 20 666 1666
COMPLETEL GmbH
By: /s/ ANNA LASCAR
Address: Hans-Stiessberger - Strasse 2B
85540 Harr bei Munchen
Germany
Fax: 00 49 89 95 465 199
<PAGE>
COMPLETEL SERVICES S.A.S.
By: /s/ ANNA LASCAR
Address: Tour Egee
9-11, allee de l'Arche
92671 Courbevoie Cedex
France
Fax: 00 33 1 7292 2614
COMPLETEL S.A.S.
By: /s/ ANNA LASCAR
Address: Tour Egee
9-11, allee de l'Arche
92671 Courbevoie Cedex
France
Fax: 00 33 1 7292 2614
The Original Guarantors
COMPLETEL EUROPE N.V.
By: /s/ ANNA LASCAR
Address: Kruisweg 609
2132 NA Hoofddorp
The Netherlands
Fax: 00 31 20 666 1666
COMPLETEL ECC B.V.
By: /s/ ANNA LASCAR
Address: Kruisweg 609
2132 NA Hoofddorp
The Netherlands
Fax: 00 31 20 666 1666
<PAGE>
COMPLETEL HOLDING I B.V.
By: /s/ ANNA LASCAR
Address: Kruisweg 609
2132 NA Hoofddorp
The Netherlands
Fax: 00 31 20 666 1666
COMPLETEL HOLDING II B.V.
By: /s/ ANNA LASCAR
Address: Kruisweg 609
2132 NA Hoofddorp
The Netherlands
Fax: 00 31 20 666 1666
COMPLETEL GmbH
By: /s/ ANNA LASCAR
Address: Hans-Stiessberger - Strasse 2B
85540 Harr bei Munchen
Germany
Fax: 00 49 89 95 465 199
COMPLETEL SERVICES S.A.S.
By: /s/ ANNA LASCAR
Address: Tour Egee
9-11, allee de l'Arche
92671 Courbevoie Cedex
France
Fax: 00 33 1 7292 2614
COMPLETEL S.A.S.
By: /s/ ANNA LASCAR
Address: Tour Egee
9-11, allee de l'Arche
92671 Courbevoie Cedex
France
Fax: 00 33 1 7292 2614
<PAGE>
ACCES ET SOLUTIONS INTERNET S.A.R.L.
By: /s/ ANNA LASCAR
Address: Double Mixte
43 Boulevard du 11 Novembre 1918
69625 Villeurbanne Cedex
France
Fax: 00 33 4 78 93 00 99
COMPLETEL UK LIMITED
By: /s/ ANNA LASCAR
Address: c/o Holme Roberts & Owen
Heathcoat House
20 Savile Row
London W1X 1AE
Fax: +44 (0)207 287 9344
iPCENTA LIMITED
By: /s/ ANNA LASCAR
Address: Vaughan Chambers
Vaughan Road
Harpenden
Hertfordshire
AL5 4EE
Fax: +44 (0)208 960 0820
COMPLETEL SPC
By: /s/ ANNA LASCAR
Address: c/o Holme Roberts & Owen
Heathcoat House
20 Savile Row
London W1X 1AE
Fax: +44(0) 207 287 9344
<PAGE>
COMPLETEL SPC II
By: /s/ ANNA LASCAR
Address: c/o Holme Roberts & Owen
Heathcoat House
20 Savile Row
London W1X 1AE
Fax: +44(0) 207 287 9344
The Lead Arrangers
GOLDMAN SACHS INTERNATIONAL
By: /s/ DAVID COTTAM
Address: Peterborough Court
133 Fleet Street
London EC4A 2BB
Fax: +44 171 774 1313
PARIBAS
By: /s/ BENOIT TANGUY
Address: 37 Place du Marche Saint Honore
75031 Paris Cedex 01
Fax: + 33 1 42 98 0979
The Facility Agent
PARIBAS
By: /s/ GABRIEL LEFEBVRE
The Security Agent
PARIBAS
By: /s/ GABRIEL LEFEBVRE
<PAGE>
The Banks
GOLDMAN SACHS INTERNATIONAL
By: /s/ DAVID COTTAM
PARIBAS
By: /s/ BENOIT TANGUY
BARCLAYS BANK PLC
By: /s/ ANDREW VINE
CITIBANK INTERNATIONAL PLC
By: /s/ PAREEJAT SINGHAL
COMPTOIR DES ENTREPRENEURS
By: /s/ EMMANUEL GILLET-LAGARDE
CREDIT LYONNAIS
By: /s/ JEAN-LOUIS DE BERGH
MERRILL LYNCH CAPITAL MARKETS BANK LIMITED
By: /s/ BERNARD HOEY /s/ SHANE O'NEILL
SCOTIABANK EUROPE PLC
By: /s/ P. SHANLEY
AUSTRALIA AND NEW ZEALAND BANKING GROUP LIMITED
ACTING THROUGH ITS PARIS BRANCH
By: /s/ PHILIPPE CASSIERS
<PAGE>
BANCA NAZIONALE DEL LAVORO S.p.A. - Paris Branch
By: /s/ SERGE BUZIN /s/ GIULIANO VIOLETTA
CREDIT AGRICOLE INDOSUEZ
By: /s/ ALEXANDRA BOLESLAWSKI /s/ YANNICK RATTE
IBM FRANCE FINANCEMENT S.A.
By: /s/ LAURENT DU FAYET
The Risk Participant
EUROPEAN INVESTMENT FUND
By: /s/ GERBRAND G. HOP
<PAGE>
Exhibit 10.25
PROMISSORY NOTE
---------------
$206,500 23 March 2000
FOR VALUE RECEIVED, the undersigned, MARTIN RUSHE ("Maker"), promises to
pay to the order of IPCENTA LIMITED, a limited company organized under the laws
of England and Wales (together with any subsequent holder hereof, "Payee"), the
sum of TWO HUNDRED SIX THOUSAND FIVE HUNDRED DOLLARS ($206,500), (the "Principal
Balance"), together with interest on the unpaid Principal Balance at the rate of
seven percent (7%) compounded at half-yearly intervals calculated from January
15, 2000.
The entire unpaid Principal Balance of this Promissory Note (this "Note")
together with all accrued but unpaid interest and all other amounts due from
Maker will be due and payable in full on the earlier of (the "Maturity Date"):
(i) January 15, 2003, or (ii) the date which is thirty (30) days after the date
on which Maker's employment with Payee or an Affiliate employing Payee
terminates as a result of a Termination For Cause, or (iii) the date which is
ninety (90) days after the date on which Maker's employment with Payee or an
Affiliate employing Payee terminates as a result of a Voluntary Termination.
Maker may prepay this Note, in any amount, at any time and from time to time,
without penalty. All payments made under this Note must be made in legal tender
of the United States of America to Payee at Payee's principal place of business
or at such other place as the holder of this Note designates in writing.
As used herein, the following terms have the following meanings:
"Affiliate" of any particular Person means (i) any other Person
controlling, controlled by or under common control with such particular Person,
where "control" means the possession, directly or indirectly, of the power to
direct the management and policies of a Person, whether through the ownership of
shares, by contract or otherwise, and (ii) if such Person is a partnership, any
partner thereof.
"CompleTel UK Limited Employment Agreement" means the employment
agreement to be dated January 24, 2000 by and between Maker and CompleTel UK
Limited, as amended from time to time in accordance with the provisions thereof.
"Executive Agreement" means the Amended and Restated Executive
Securities Agreement dated as of the date hereof by and between CompleTel LLC
and Maker.
"Termination For Cause" means (i) termination of Maker's appointment
as President of CompleTel UK Limited pursuant to Section 5.1 of the CompleTel UK
Limited Employment Agreement and (ii) termination of Maker's appointment as
President of CompleTel UK Limited for "Cause" as such term is defined in the
Executive Agreement.
"Voluntary Termination" means any termination of Maker's appointment
as President of CompleTel UK Limited other than Termination for Cause.
<PAGE>
This Note is secured by Maker's interest in the common units of CompleTel
LLC (the "Collateral") issued to Maker pursuant to the Executive Agreement.
Maker covenants and agrees that he will not pledge or otherwise encumber or
grant a security interest in the Collateral to any other party while any
indebtedness represented by this Note remains unpaid and outstanding.
Whenever Payee sustains or incurs any losses or out-of-pocket expenses with
respect to this Note in connection with (i) repayment of overdue amounts under
this Note, or (ii) failure by Maker to pay all principal and interest on this
Note, when due hereunder (whether at maturity, by reason of acceleration, or
otherwise), Maker will pay, on demand, to Payee, in addition to any other
penalties or premiums hereunder, an amount sufficient to compensate Payee for
all such losses or out-of-pocket expenses, including, without limitation, all
costs and expenses of a suit or proceeding (or any appeal thereof) brought for
recovery of all or any part of or for protection of the indebtedness evidenced
by this Note or to enforce Payee's rights hereunder, including reasonable legal
fees and expenses.
Maker acknowledges and agrees that Payee is entitled to setoff any amounts
owed or distributable by Payee or any of its Affiliates to Maker against any
amounts that are due and owing from Maker to Payee hereunder.
Time is of the essence hereof. At the option of Payee, payment of the
Principal Balance and any and all accrued interest thereon may be accelerated,
and such amounts will be immediately due and payable without further notice or
demand upon the occurrence of any of the following events (each an "Event of
Default"):
(1) Maker's failure to make any payment of any and all amounts required to
be paid hereunder when due or declared due.
(2) The occurrence of any default by Maker or event of default under any
other documents executed in connection herewith.
Unpaid principal and interest due and payable hereunder not paid when due
or declared due hereunder will bear interest at the rate of 10% per annum until
paid.
The remedies provided in this Note will be cumulative, and will be in
addition to any other rights or remedies now or hereafter provided by law or
equity. No delay, failure or omission by any holder of this Note, in respect of
any default by Maker, to exercise any right or remedy will constitute a waiver
of the right to exercise the right or remedy upon any such default or subsequent
default.
Maker and any endorser herein waives presentment, demand, notice of
dishonor, notice of acceleration and protest and assents to any extension of
time with respect to any payment due under this Note, to any substitution or
release of security and to the addition or release of any party. No waiver of
any payment or other right under this Note will operate as a waiver of any other
payment or right.
2
<PAGE>
This Note may not be changed orally, but only by an agreement in writing,
signed by the party against whom enforcement of any waiver, change, modification
or discharge is sought.
If any provision of this Note is held to be invalid or unenforceable, the
determination of invalidity or unenforceability of such provision will not
affect the validity or enforceability of any other provision or provisions
hereof.
This Note will be binding upon Maker and its successors and assigns and
will inure to the benefit of and be enforceable by Payee and its successors and
assigns.
This Note will be governed by, and construed and enforced in accordance
with English law.
[REMAINDER OF PAGE INTENTIONALLY LEFT BLANK]
3
<PAGE>
IN WITNESS WHEREOF, Maker has caused this instrument to be executed as of
the day and year first above written.
/s/ Martin Rushe
- --------------------------------
Martin Rushe
SIGNED and DELIVERED
by MARTIN RUSHE as his
Deed in the presence of:
WITNESS
Signature: /s/ David Lacey
---------------------------
Name: David Lacey
---------------------------
Address: 6300 S. Syracuse, Suite 355
Englewood, CO 80111
---------------------------
4
<PAGE>
Exhibit 10.26
IPCENTA LIMITED
The Pall Mall Deposit, 124-128 Barlby Road
London W10 6BL, Phone: 44 1181 962 3200
March 23, 2000
Martin Rushe
c/o iPcenta Limited
The Pall Mall Deposit
124-128 Barlby Road
London W10 6BL
Phone: 44 1181 962 3200
RE: Purchase of 100 Common Units of CompleTel, LLC
Dear Mr. Rushe:
This letter is delivered in connection with the purchase by you, Martin Rushe
("Rushe") of 100 common units (the "Units") of CompleTel LLC ("CompleTel") at a
per unit price of US$2,065 and an aggregate price of US$206,500. IPcenta
Limited ("iPcenta") has agreed to loan you the purchase price in exchange for a
promissory note dated as of March 23, 2000, but effective from January 15, 2000
(the "Note"). The purpose of this Letter is to set forth the understandings
among you, CompleTel and iPcenta concerning the forgiveness of principal and
accrued interest on the Note.
In connection with the foregoing, the parties agree as follows:
1. At such time as ownership of any of the Units vest pursuant to the
vesting provisions contained in the Amended and Restated Executive Securities
Agreement and the Second Amended and Restated Performance Vesting Agreement, or
any successor vesting agreement (the "Vesting Agreements"), iPcenta agrees to
forgive a pro rata percentage of principal and accrued interest under the Note.
2. At such time as ownership of any of the Units are forfeited under the
Vesting Agreements, a pro rata percentage of principal and accrued interest
under the Note will become due and payable; provided, however, that such
obligation will be satisfied in full by CompleTel repurchasing such forfeited
Units pursuant to the Vesting Agreements and paying the repurchase price
directly to iPcenta.
3. IPcenta agrees to reimburse Rushe for any and all taxes incurred by
him as a result of iPcenta forgiving any principal and accrued interest under
the
<PAGE>
Martin Rushe
March 23, 2000
Page 2
Note. IPcenta's intention is that Rushe shall be held fully harmless from any
additional taxes of any kind associated with such loan forgiveness.
Please indicate your acceptance of this agreement by signing below.
Very truly yours,
IPCENTA LIMITED
By: /s/ James E. Dovey
---------------------------
James E. Dovey, Director
Accepted and agreed to as of the date first written above:
COMPLETEL LLC
/s/ Martin Rushe /s/ William H. Pearson
- ----------------------- ----------------------------
Martin Rushe William H. Pearson
President and CEO
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<PAGE>
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<PERIOD-TYPE> 3-MOS
<FISCAL-YEAR-END> DEC-31-2000
<PERIOD-START> JAN-01-2000
<PERIOD-END> MAR-31-2000
<CASH> 521,643,000
<SECURITIES> 0
<RECEIVABLES> 4,588,000
<ALLOWANCES> 0
<INVENTORY> 0
<CURRENT-ASSETS> 544,988,000
<PP&E> 130,884,000
<DEPRECIATION> (7,013,000)
<TOTAL-ASSETS> 686,037,000
<CURRENT-LIABILITIES> 68,419,000
<BONDS> 86,143,000
0
0
<COMMON> 15,741,000
<OTHER-SE> 515,734,000
<TOTAL-LIABILITY-AND-EQUITY> 686,037,000
<SALES> 2,972,000
<TOTAL-REVENUES> 2,972,000
<CGS> 3,011,000
<TOTAL-COSTS> 90,861,000
<OTHER-EXPENSES> 7,943,000
<LOSS-PROVISION> 0
<INTEREST-EXPENSE> 1,869,000
<INCOME-PRETAX> (97,256,000)
<INCOME-TAX> 0
<INCOME-CONTINUING> (97,256,000)
<DISCONTINUED> 0
<EXTRAORDINARY> 0
<CHANGES> 0
<NET-INCOME> (97,256,000)
<EPS-BASIC> (0.77)
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