SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
FORM 8-K
CURRENT REPORT
Pursuant to Section 13 or 15(d) of the
Securities Exchange Act of 1934
FLAG Telecom Holdings Limited
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(Exact name of registrant as specified in its charter)
March 17, 2000
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Date of Report (Date of earliest event reported)
Bermuda 000-29207 N/A
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(State or other juris- (Commission (I.R.S. Employer
diction of incorporation) File Number) Identification No.)
Emporium Building, 69 Front Street, Hamilton HM12, Bermuda
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(Address of principal executive offices) (Zip Code)
(441) 296-0909
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(Registrant's telephone number, including area code)
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Item 5. Other Events.
On March 17, 2000 FLAG Telecom Holdings Limited issued a press release
announcing its completion of a private placement of $ 300 million and 300
million Euro 11-5/8% Senior Notes Due 2010 to "qualified institutional buyers"
(as defined under Rule 144A of the Securities Act of 1933) and outside of the
United States in accordance with Regulation S under the Securities Act of 1933.
A copy of the press release is attached to this Form 8-K as Exhibit 99.1 and is
incorporated herein by reference.
Item 7. Financial Statements and Exhibits.
(a) Not applicable.
(b) Not applicable.
(c) Exhibits.
4.1 Purchase Agreement dated March 14, 2000 among FLAG Telecom Holdings
Limited, as Issuer, and Salomon Smith Barney Inc., Morgan Stanley &
Co. International Limited, Deutsche Bank Securities Inc. and Bear
Stearns & Co. Inc, as Initial Purchasers
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4.2 Indenture dated March 17, 2000 between FLAG Telecom Holdings Limited
and The Bank of New York, as Trustee, relating to 11-5/8% Senior
Euro Notes Due 2010
4.3 Indenture dated March 17, 2000 between FLAG Telecom Holdings Limited
and The Bank of New York, as Trustee, relating to 11-5/8% Senior
Dollar Notes Due 2010
4.4 Registration Agreement dated March 17, 2000 among FLAG Telecom
Holdings Limited, as Issuer, and Salomon Smith Barney Inc., Morgan
Stanley & Co. International Limited, Deutsche Bank Securities Inc.
and Bear Stearns & Co. Inc., as Initial Purchasers (Euro Notes)
4.5 Registration Agreement dated March 17, 2000 among FLAG Telecom
Holdings Limited, as Issuer, and Salomon Smith Barney Inc., Morgan
Stanley & Co. International Limited, Deutsche Bank Securities Inc.
and Bear Stearns & Co. Inc., as Initial Purchasers (Dollar Notes)
99.1 Press Release of FLAG Telecom Holdings Limited dated March 17, 2000
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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.
FLAG TELECOM HOLDINGS LIMITED
(Registrant)
Dated: March 23, 2000 By: /s/ Edward McCormack
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Edward McCormack
Chief Operating Officer and
Chief Financial Officer
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Exhibit Index
Item No. Description
4.1 Purchase Agreement dated March 14, 2000 among FLAG Telecom Holdings
Limited, as Issuer, and Salomon Smith Barney Inc., Morgan Stanley & Co.
International Limited, Deutsche Bank Securities Inc. and Bear Stearns &
Co. Inc, as Initial Purchasers
4.2 Indenture dated March 17, 2000 between FLAG Telecom Holdings Limited and
The Bank of New York, as Trustee, relating to 11-5/8% Senior Euro Notes
Due 2010
4.3 Indenture dated March 17, 2000 between FLAG Telecom Holdings Limited and
The Bank of New York, as Trustee, relating to 11-5/8% Senior Dollar Notes
Due 2010
4.4 Registration Agreement dated March 17, 2000 among FLAG Telecom Holdings
Limited, as Issuer, and Salomon Smith Barney Inc., Morgan Stanley & Co.
International Limited, Deutsche Bank Securities Inc. and Bear Stearns &
Co. Inc., as Initial Purchasers (Euro Notes)
4.5 Registration Agreement dated March 17, 2000 among FLAG Telecom Holdings
Limited, as Issuer, and Salomon Smith Barney Inc., Morgan Stanley & Co.
International Limited, Deutsche Bank Securities Inc. and Bear Stearns &
Co. Inc., as Initial Purchasers (Dollar Notes)
99.1 Press Release of FLAG Telecom Holdings Limited dated March 17, 2000
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FLAG Telecom Holdings Limited
$300,000,000 11.625% Senior Dollar Notes Due 2010
(euro)300,000,000 11.625% Senior Euro Notes Due 2010
PURCHASE AGREEMENT
Dated: March 14, 2000
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FLAG Telecom Holdings Limited
$300,000,000 11.625% SENIOR NOTES DUE 2010
(euro)300,000,000 11.625% SENIOR NOTES DUE 2010
PURCHASE AGREEMENT
New York, New York
March 14, 2000
Salomon Smith Barney Inc.
Morgan Stanley & Co. International Limited
Deutsche Bank Securities Inc.
Bear, Stearns & Co. Inc.
As Representatives of the
Initial Purchasers
c/o Salomon Smith Barney Inc.
388 Greenwich Street
New York, New York 10013
Ladies and Gentlemen:
FLAG Telecom Holdings Limited, a company organized under the laws of
Bermuda (the "Company"), proposes to issue and sell to the parties named in
Schedule I hereto (the "Initial Purchasers"), for whom you are acting as
representatives (the "Representatives"), $300,000,000 aggregate principal amount
at maturity of its 11.625% Senior Dollar Notes Due 2010 (the "Dollar Notes") and
(euro)300,000,000 aggregate principal amount at maturity of its 11.625% Senior
Euro Notes Due 2010 (the "Euro Notes" and, together with the Dollar Notes, the
"Securities"). The Securities are to be issued under two separate indentures
(the "Indentures") to be dated as of March 17, 2000 between the Company and Bank
of New York, as trustee . If you are the only Initial Purchasers, all references
herein to the Representatives shall be deemed to be to the Initial Purchasers.
The sale of the Securities to the Initial Purchasers will be made
without registration of the Securities under the Securities Act of 1933, as
amended (the "Securities Act"), in reliance upon exemptions from the
registration requirements of the Securities Act. You have advised the Company
that the Initial Purchasers will offer and sell the Securities purchased by them
hereunder in accordance with Section 4 hereof as soon as you deem advisable.
The holders of the Securities will be entitled to the benefits of a
Registration Agreement to be dated as of March 17, 2000 between the Company and
Salomon Smith Barney Inc. (the "Registration Agreement"), pursuant to which the
Company will agree to file a registration statement with the Securities and
Exchange Commission (the "Commission") registering the Securities or New
Securities (referred to in the Registration Agreement) under the Securities Act.
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In connection with the sale of the Securities, the Company has
prepared a preliminary offering memorandum, dated March 3, 2000 (including any
and all exhibits thereto, the "Preliminary Memorandum") and a final offering
memorandum, dated March 14, 2000 (as amended or supplemented at the Execution
Time (as defined below), including any and all exhibits thereto, the "Final
Memorandum"). Each of the Preliminary Memorandum and the Final Memorandum sets
forth certain information concerning the Company and the Securities. The Company
hereby confirms that it has authorized the use of the Preliminary Memorandum and
the Final Memorandum, and any amendment or supplement thereto, in connection
with the offer and sale of the Securities by the Initial Purchasers.
1. Representations and Warranties. The Company represents and
warrants to each Initial Purchaser as set forth below in this Section 1.
(a) The Preliminary Memorandum, at the date thereof, did not contain
any untrue statement of a material fact or omit to state any material fact
necessary in order to make the statements therein, in the light of the
circumstances under which they were made, not misleading. At the Execution
Time and on the Closing Date, the Final Memorandum did not, and will not
(and any amendment or supplement thereto, at the date thereof and at the
Closing Date, will not), contain any untrue statement of a material fact
or omit to state any material fact necessary in order to make the
statements therein, in the light of the circumstances under which they
were made, not misleading; provided, however, that the Company
makes no representation or warranty as to the information
contained in or omitted from the Preliminary Memorandum or the Final
Memorandum, or any amendment or supplement thereto, in reliance upon and
in conformity with information furnished in writing to the Company by or
on behalf of the Initial Purchasers through the Representatives
specifically for inclusion therein.
(b) Each of the Company, FLAG Atlantic Holdings Limited, FLAG
Atlantic Limited and the Company's significant subsidiaries as identified
on Schedule II hereto (referred to herein, together with FLAG Atlantic
Holdings Limited and FLAG Atlantic Limited, as the "subsidiaries") has
been duly incorporated and is validly existing as a corporation or company
in good standing under the laws of the jurisdiction in which it is
chartered or organized with the requisite corporate power and authority to
own or lease, as the case may be, and to operate its properties and
conduct its business as described in the Final Memorandum.
(c) All the outstanding shares of capital stock of each subsidiary
of the Company have been duly and validly authorized and issued and are
fully paid and nonassessable, and, except as otherwise set forth in the
Final Memorandum, all outstanding shares of capital stock of the
subsidiaries are owned by the Company either directly or through wholly
owned subsidiaries free and clear of any perfected security interest or
any other security interests, claims, liens or encumbrances.
(d) The Company has all requisite corporate power and authority to
enter into and to perform its obligations under this Agreement, the
Indentures, the Registration Agreement and the Securities.
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(e) The Company has an authorized, issued and outstanding common
stock capitalization as set forth in the Final Memorandum under the
heading "Capitalization." All of the issued and outstanding shares of
capital stock of the Company have been duly authorized and validly issued
and are fully paid and nonassessable.
(f) The financial statements and schedules of the Company and FLAG
Limited included in the Final Memorandum fairly present the financial
position of the Company and its consolidated subsidiaries and the results
of operations and changes in financial condition as of the dates and for
the periods therein specified. Such financial statements and schedules
have been prepared in accordance with generally accepted accounting
principles of the United States of America consistently applied throughout
the periods involved (except as otherwise noted therein). The selected
financial data set forth under the captions "Summary Financial Data" and
"Selected Financial Data" in the Final Memorandum fairly present, on the
basis stated in the Final Memorandum, the information included therein.
(g) Arthur Andersen & Co., who have certified certain financial
statements of the Company and its consolidated subsidiaries and delivered
their report with respect to the audited financial statements and
schedules included in the Final Memorandum, are independent public
accountants with respect to the Company within the meaning of the
Securities Act and the applicable published rules and regulations
thereunder.
(h) This Agreement has been duly authorized, executed, and delivered
by the Company.
(i) The Registration Agreement has been duly authorized by the
Company and, when duly executed and delivered by the Company, will
constitute a legal, valid and binding obligation of the Company
enforceable against the Company in accordance with its terms (subject, as
to the enforcement of remedies, to applicable bankruptcy, reorganization,
insolvency, fraudulent conveyance, moratorium or other laws affecting
creditors', rights generally from time to time in effect, general
principles of equity (whether considered in a proceeding in equity or at
law) and to the possible unenforceability of the indemnification or
contribution provisions contained therein).
(j) Each of the Indentures has been duly authorized by the Company
and, when duly executed and delivered by the Company and the Trustee, will
constitute a valid and binding instrument enforceable against the Company
in accordance with its terms (subject, as to the enforcement of remedies,
to applicable bankruptcy, reorganization, insolvency, fraudulent
conveyance, moratorium or other laws affecting creditors' rights generally
from time to time in effect, and general principles of equity (whether
considered in a proceeding in equity or at law)); the Securities have been
duly and validly authorized and, when executed and authenticated in
accordance with the provisions of the related Indenture and delivered to
and paid for by the Initial Purchasers pursuant to this Agreement, will
constitute valid and binding obligations of the Company (subject, as to
the enforcement of remedies, to applicable bankruptcy, reorganization,
insolvency, fraudulent conveyance, moratorium or other laws affecting
creditors' rights generally from time to time in effect, and to general
equitable principles (whether considered in a
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proceeding in equity or at law)) entitled to the benefits of the related
Indenture; and the statements set forth under the heading "Description of
Notes" in the Final Memorandum, insofar as such statements purport to
summarize certain provisions of the Securities and the Indentures, provide
a fair summary of such provisions.
(k) No action, suit or proceeding by or before any court or
governmental agency, authority or body or any arbitrator involving the
Company or any of its subsidiaries or its or their property is pending or,
to the best knowledge of the Company, threatened that (i) would have a
material adverse effect on the performance by the Company of this
Agreement or the consummation of any of the transactions contemplated
hereby or (ii) would have a material adverse effect on the condition
(financial or otherwise), prospects, earnings, business or properties of
the Company and its subsidiaries, taken as a whole, whether or not arising
from transactions in the ordinary course of business (a "Material Adverse
Effect"), except as set forth in or contemplated in the Final Memorandum
(exclusive of any supplement thereto).
(l) The Company has filed all foreign, federal, state and local tax
returns that are required to be filed or has requested extensions thereof
(except in any case in which the failure so to file would not have a
Material Adverse Effect) and has paid all taxes required to be paid by it
and any other assessment, fine or penalty levied against it, to the extent
that any of the foregoing is due and payable, except for any such tax
assessment, fine or penalty that is currently being contested in good
faith or as would not have a Material Adverse Effect.
(m) The issuance, offering and sale of the Securities to the Initial
Purchasers by the Company pursuant to this Agreement, the performance by
the Company of its obligations under this Agreement, the Registration
Agreement, the Indentures and the Securities, the consummation of the
transactions herein and therein and the application of proceeds from the
sale of the Securities as described in the Final Memorandum (i) do not
require the consent, approval, authorization, registration or
qualification of or with any governmental authority, except such as have
been obtained and such as may be required under state securities or blue
sky laws and the filing of the Final Memorandum with the Registrar of
Companies of Bermuda and the consent of the Bermuda Monetary Authority,
and except as may be required under the Securities Act and the rules and
regulations thereunder with respect to the Registration Agreement and
transactions contemplated thereunder and (ii) will not at the time of such
sale, performance, consummation and application, conflict with or result
in a breach or violation of, or imposition of any lien, charge or
encumbrance upon any property or assets of the Company or any of its
subsidiaries pursuant to, any of the terms and provisions of, or
constitute a default under, any indenture, mortgage, deed of trust, lease
or other material agreement or instrument to which the Company or any of
its subsidiaries is a party or by which the Company's or any of is
subsidiaries' property is bound, or the charter documents or by-laws of
the Company or any of its subsidiaries, or any statute or any judgment,
decree, order, rule or regulation of any court or other governmental
authority or any arbitrator applicable to the Company or any of its
subsidiaries.
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(n) Subsequent to the respective dates as of which information is
given in the Final Memorandum, (i) neither the Company nor any of its
subsidiaries has incurred any material liability or obligation, direct or
contingent, nor entered into any material transaction not in the ordinary
course of business except in each case as set forth or contemplated in the
Final Memorandum (exclusive of any amendment or supplement thereto); (ii)
the Company has not purchased any of its outstanding capital stock, nor
declared, paid or otherwise made any dividend or distribution of any kind
on its capital stock; (iii) there has not been any material change in the
capital stock, short-term debt or long-term debt of the Company and its
subsidiaries, except in each case as set forth in or contemplated by the
Final Memorandum (exclusive of any amendment or supplement thereto); and
(iv) there has not been any material adverse change in the condition
(financial or otherwise), prospects, earnings, business or properties of
the Company and its subsidiaries, taken as a whole, whether or not arising
from transactions in the ordinary course of business.
(o) Each of the Company and its subsidiaries owns or leases all such
properties as are necessary to the conduct of its operations as presently
conducted.
(p) The Company and each of its subsidiaries are insured by insurers
of recognized financial responsibility against such losses and risks and
in such amounts as are prudent and customary in the businesses in which
they are engaged; all policies of insurance and fidelity or surety bonds
insuring the Company or any of its subsidiaries or their respective
businesses, assets, employees, officers and directors are in full force
and effect; the Company and its subsidiaries are in compliance with the
terms of such policies and instruments in all material respects; and there
are no claims by the Company or any of its subsidiaries under any such
policy or instrument as to which any insurance company is denying
liability or defending under a reservation of rights clause; neither the
Company nor any such subsidiary has been refused any insurance coverage
sought or applied for; and neither the Company nor any such subsidiary has
any reason to believe that it will not be able to renew its existing
insurance coverage as and when such coverage expires or to obtain similar
coverage from similar insurers as may be necessary to continue its
business at a cost that would not have a Material Adverse Effect, except
as set forth in or contemplated by the Final Memorandum (exclusive of any
amendment or supplement thereto).
(q) No subsidiary of the Company is currently prohibited, directly
or indirectly, from paying any dividends to the Company, from making any
other distribution on such subsidiary's capital stock, from repaying to
the Company any loans or advances to such subsidiary from the Company or
from transferring any of such subsidiary's property or assets to the
Company or any other subsidiary of the Company, except as set forth in or
contemplated by the Final Memorandum (exclusive of any amendment or
supplement thereto).
(r) The Company and its subsidiaries possess all licenses,
certificates, permits and other authorizations issued by the appropriate
federal, state or foreign regulatory authorities necessary to conduct
their respective businesses as presently conducted, except for those the
failure to obtain which would not have a Material Adverse Effect,
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and neither the Company nor any such subsidiary has received any notice of
proceedings relating to the revocation or modification of any such
certificate, authorization or permit which, singly or in the aggregate, if
the subject of an unfavorable decision, ruling or finding, would have a
Material Adverse Effect, in each case except as set forth in or
contemplated by the Final Memorandum (exclusive of any amendment or
supplement thereto).
(s) Each certificate signed by any officer of the Company and
delivered to the Representatives or counsel for the Initial Purchasers
shall be deemed to be a representation and warranty by the Company (and
not individually by such officer) to the Initial Purchasers as to the
matters covered thereby.
(t) Neither the Company nor any subsidiary is in violation or
default of (i) any provision of its charter or bylaws; (ii) the terms of
any indenture, contract, lease, mortgage, deed of trust, note agreement,
loan agreement or other agreement, obligation, condition, covenant or
instrument to which it is a party or bound or to which its property is
subject; or (iii) any statute, law, rule, regulation, judgment, order or
decree applicable to the Company or any of its subsidiaries of any court,
regulatory body, administrative agency, governmental body, arbitrator or
other authority having jurisdiction over the Company or such subsidiary or
any of its properties, as applicable (other than such violations or
defaults that would not have a Material Adverse Effect).
(u) The Company has not (i) taken, directly or indirectly, any
action designed to cause or to result in, or that has constituted or which
might reasonably be expected to constitute, the stabilization or
manipulation of the price of any security of the Company to facilitate the
sale or resale of the Securities or (ii) paid or agreed to pay to any
person any compensation for soliciting another to purchase the Securities
(except for the sale of Securities by the Initial Purchasers under this
Agreement).
(v) Neither the Company, nor, to the best knowledge of the Company,
any of its Affiliates (as defined in Rule 501(b) of Regulation D under the
Securities Act ("Regulation D")), nor any person acting on its or their
behalf has, directly or indirectly, made offers or sales of any security,
or solicited offers to buy any security, under circumstances that would
require the registration of the Securities under the Securities Act.
(w) Neither the Company, nor, to the best knowledge of the Company,
any of its Affiliates, nor any person acting on its or their behalf has
engaged in any form of general solicitation or general advertising (within
the meaning of Regulation D) in connection with any offer or sale of the
Securities in the United States.
(x) The Securities satisfy the eligibility requirements of Rule
144A(d)(3) under the Securities Act.
(y) Neither the Company, nor, to the best knowledge of the Company,
any of its Affiliates, nor any person acting on its or their behalf has
engaged in any directed selling efforts with respect to the Securities;
and the Company and, to the best knowledge of the
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Company, each of the others has complied with the offering restrictions
requirement of Regulation S ("Regulation S") under the Securities Act.
Terms used in this paragraph have the meanings given to them by Regulation
S.
(z) The Company as of the Execution Time expects to be and as of the
Closing Date will have been advised by the National Association of
Securities Dealers, Inc. PORTAL Market that the Dollar Notes have been
designated "PORTAL-eligible securities" in accordance with the rules and
regulations of the National Association of Securities Dealers, Inc.
(aa) The Company is not and, after giving effect to the offering and
sale of the Securities and the application of the proceeds thereof as
described in the Final Memorandum, will not be an "investment company" as
defined in the Investment Company Act of 1940, as amended (the "Investment
Company Act").
(bb) The Company is subject to and in full compliance with the
reporting requirements of Section 13 or Section 15(d) of the Securities
Exchange Act of 1934, as amended (the "Exchange Act").
(cc) The Company and each of its subsidiaries maintain a system of
internal accounting controls sufficient to provide reasonable assurance
that (i) transactions are executed in accordance with management's general
or specific authorizations; (ii) transactions are recorded as necessary to
permit preparation of financial statements in conformity with generally
accepted accounting principles and to maintain asset accountability; (iii)
access to assets is permitted only in accordance with management's general
or specific authorization; and (iv) the recorded accountability for assets
is compared with the existing assets at reasonable intervals and
appropriate action is taken with respect to any differences.
(dd) None of the Company or any of its subsidiaries or, to the
knowledge of the Company, any director, officer, agent, employee or other
person acting on behalf of the Company or any of its subsidiaries, has (i)
used any corporate funds of the Company or any of its subsidiaries for any
unlawful contribution, gift, entertainment or other unlawful expense
relating to political activity, or (ii) made any direct or indirect
unlawful payment to any foreign or domestic government official or
employee from corporate funds of the Company or any of its subsidiaries.
(ee) No strike, work stoppage or slow-down by employees of the
Company or any of its subsidiaries exists or, to the knowledge of the
Company, is threatened, and the Company is not aware of any existing or
threatened strikes, work stoppages or slow-downs by the employees of any
of its or its subsidiaries' principal suppliers, contractors or customers,
that would have a Material Adverse Effect, except as set forth or
contemplated by the Final Memorandum (exclusive of any amendment or
supplement thereto).
(ff) No violation of, or liabilities or obligations pursuant to, any
applicable laws, statutes, ordinances, codes, orders, judgments, licenses,
permits, authorizations,
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rules, regulations or governmental requirements, including without
limitation common law, relating to protection of human health and safety,
hazardous or toxic substances or wastes, pollutants or contaminants
("Hazardous Substances"), or the environment ("Environmental Laws"), and
no conditions relating to Hazardous Substances, human health and safety or
the environment, exist that could reasonably be expected, individually or
in the aggregate, to have a Material Adverse Effect
(gg) No pending or threatened claims or proceedings pursuant to
Environmental Law, or relating to Hazardous Substances, human health or
safety or the environment, exist that could reasonably be expected to (i)
have, individually or in the aggregate, a Material Adverse Effect, or (ii)
result in monetary sanctions by a governmental authority of $100,000 or
more.
(hh) Neither the Company nor any person that would be treated as a
single employer with the Company under Section 414(b), (c), (m) or (o) of
the Code has incurred any liability under Title IV or Section 302 of the
Employee Retirement Income Security Act of 1974, as amended ("ERISA") or
Section 412 of the Code or maintains or contributes to or is or has been
required to maintain or contribute to, any employee benefit plan subject
to Title IV of ERISA or Section 412 of the Code.
(ii) The Company and its subsidiaries have not, as of the Execution
Time, experienced any material disruption to their business or operations
associated with the failure of computer hardware and software to recognize
and properly execute date-sensitive functions involving certain dates
prior to and any dates after December 31, 1999 ( the "Year 2000 Problem"),
including as a result of the failure of suppliers, vendors, customers or
financial services organizations used or serviced by the Company to remedy
the Year 2000 Problem.
(jj) Neither the Company nor any of its subsidiaries nor any of its
or their properties or assets has any immunity from the jurisdiction of
any court or from any legal process (whether through service or notice,
attachment prior to judgment, attachment in aid of execution or otherwise)
under the laws of their respective jurisdictions of incorporation.
(kk) There is no contract or other document of a character that
would be required to be described or referred to in the Final Memorandum,
if it were a prospectus filed as part of a registration statement on Form
F-1 under the Securities Act, that is not described or referred to as
would be so required, and the description thereof or references thereto
are correct in all material respects.
(ll) Subject to compliance by the Initial Purchasers with the
representations and warranties set forth in Section 4, it is not necessary
in connection with the offer, sale and delivery of the Securities to the
Initial Purchasers and the resale to each subsequent purchaser in the
manner contemplated by this Agreement and the Final Memorandum to register
the Securities under the Securities Act or to qualify the Indentures under
the Trust Indenture Act of 1939, as amended.
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2. Purchase and Sale. Subject to the term and conditions and in
reliance upon the representations, warranties and agreements herein set forth,
the Company agrees to sell to each Initial Purchaser, and each Initial Purchaser
agrees, severally and not jointly, to purchase from the Company, at a purchase
price of 98% of the aggregate principal amount at maturity thereof, plus accrued
interest, if any, from March 17, 2000 to the Closing Date, the aggregate
principal amount of Dollar Notes and Euro Notes set forth opposite such Initial
Purchaser's name in Schedule I hereto.
3. Delivery and Payment. Delivery of and payment for the Securities
shall be made at 10:00 AM, New York City time, on March 17, 2000, or such later
date (not later than March 24, 2000) as the Representatives shall designate,
which date and time may be postponed by agreement between the Representatives
and the Company or as provided in Section 9 hereof (such date and time of
delivery and payment for the Securities being herein called the "Closing Date").
Delivery of the Securities shall be made to the Representatives for the
respective accounts of the Initial Purchasers against payment by the Initial
Purchasers through the Representatives of the purchase price thereof to or upon
the order of the Company by wire transfer of federal funds or other immediately
available funds or such other manner of payment as may be agreed by the Company
and the Representatives. Delivery of the Securities shall be made at such
location as the Representatives shall reasonably designate at least one business
day in advance of the Closing Date and payment for the Securities shall be made
at the office of Cleary, Gottlieb, Steen & Hamilton, One Liberty Plaza, New
York, New York. Certificates for the Securities shall be registered in such
names and in such denominations as the Representatives may request not less than
three full business days in advance of the Closing Date.
The Company agrees to have the Securities available for inspection,
checking and packaging by the Representatives in New York, New York, not later
than 1:00 PM on the business day prior to the Closing Date.
4. Offering of Securities. Each Initial Purchaser, severally and not
jointly, represents and warrants to and agrees with the
Company that:
(a) It has not offered or sold, and will not offer or sell, any
Securities except (i) to those it reasonably believes to be qualified
institutional buyers (as defined in Rule 144A under the Securities Act)
and that, in connection with each such sale, it has taken or will take
reasonable steps to ensure that the purchaser of such Securities is aware
that such sale is being made in reliance on Rule 144A, or (ii) in
accordance with the restrictions set forth in Exhibit A hereto.
(b) Neither it nor any person acting on its behalf has made or will
make offers or sales of the Securities by means of any form of general
solicitation or general advertising (within the meaning of Regulation D)
or in any manner involving a public offering within the meaning of Section
4(2) of the Securities Act in the United States or, with respect to
Securities to be sold in reliance on Regulation S, by means of any
directed selling efforts.
(c) It is a qualified institutional buyer (as defined in Rule 144A
under the Securities Act) and it will offer the Securities for resale only
upon the terms and conditions set forth in this Agreement and in the Final
Memorandum.
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5. Agreements. The Company agrees with each Initial Purchaser that:
(a) The Company will furnish to each Initial Purchaser and to
counsel for the Initial Purchasers, without charge, during the period
referred to in paragraph (c) below, as many copies of the Final Memorandum
and any amendments and supplements thereto it may reasonably request.
(b) The Company will not amend or supplement the Final Memorandum
without the prior consent of the Initial Purchasers as contemplated by
paragraph (c) below.
(c) If at any time prior to the completion of the sale of the
Securities by the Initial Purchasers (as determined by the
Representatives), any event occurs as a result of which the Final
Memorandum, as then amended or supplemented, would include any untrue
statement of a material fact or omit to state any material fact necessary
to make the statements therein, in the light of the circumstances under
which they were made, not misleading, or if it should be necessary to
amend or supplement the Final Memorandum to comply with applicable law,
the Company will promptly notify the Representatives of the same and,
subject to the requirements of paragraph (b) of this Section 5, will
prepare and, provide as promptly as practicable to the Representatives
pursuant to paragraph (a) of this Section 5 an amendment or supplement
which will correct such statement or omission or effect such compliance.
(d) The Company will use its best efforts to arrange for the
qualification of the Securities for sale by the Initial Purchasers under
the laws of such jurisdictions as the Initial Purchasers may reasonably
designate and will use its best efforts to maintain such qualifications in
effect so long as required for the sale of the Securities. Notwithstanding
the foregoing, the Company shall not be obligated to qualify as a foreign
corporation in any jurisdiction in which it is not so qualified, to file a
general consent to service of process in any jurisdiction or to take any
action which would result in its being required to pay taxes in any
jurisdiction where it is not currently required to do so. The Company will
promptly advise the Representatives of the receipt by the Company of any
notification with respect to the suspension of the qualification of the
Securities for sale in any jurisdiction or the initiation or threatening
of any proceeding for such purpose.
(e) The Company will not resell any Securities that have been
acquired by the Company.
(f) The Company (i) will not, directly or indirectly, make offers or
sales of any security, or solicit offers to buy any security, under
circumstances that would require the registration of the securities under
the Securities Act and (ii) will use its best efforts to cause any of its
Affiliates or any person authorized to act on its or their behalf not to
engage, directly or indirectly, in the activities described in (i) above.
(g) The Company (i) will not engage in any form of general
solicitation or general advertising (within the meaning of Regulation D)
in connection with any offer or sale of the Securities in the United
States and (ii) will use its best efforts to cause any of its
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Affiliates, or any person authorized to act on its or their behalf not to
engage in the activities described in (i) above.
(h) So long as any of the Securities are "restricted securities"
within the meaning of Rule 144(a)(3) under the Securities Act, the Company
will, during any period in which it is not subject to and in compliance
with Section 13 or 15(d) of the Exchange Act and it is not exempt from
such reporting requirements pursuant to and in compliance with Rule
12g3-2(b) under the Exchange Act, provide to each holder of such
restricted securities and to each prospective purchaser (as designated by
such holder) of such restricted securities, upon the request of such
holder or prospective purchaser, any information required to be provided
by Rule 144A(d)(4) under the Securities Act and such information will not,
as of the date of such information, contain any untrue statement of a
material fact or omit to state any material fact necessary to make the
statements therein, in the light of the circumstances under which they
were made, not misleading. This covenant is intended to be for the benefit
of the holders, and the prospective purchasers designated by such holders,
from time to time of such restricted securities.
(i) The Company (i) will not engage in any directed selling efforts
with respect to the Securities and (ii) will use its best efforts to cause
any of its Affiliates or any person authorized to act on its or their
behalf not to engage in the activities described in (i), and the Company
will and will use its best efforts to cause each of the others to comply
with the offering restrictions requirement of Regulation S. Terms used in
this paragraph have the meanings given to them by Regulation S.
(j) The Company will cooperate with the Representatives and use its
best efforts to permit the Dollar Notes to be eligible for clearance and
settlement through The Depository Trust Company and to permit the Euro
Notes to be eligible for clearance and settlement through Euroclear and
Clearstream, Luxembourg (each as defined in the Indentures).
(k) The Company will use the net proceeds received by it from the
sale of the Securities in the manner specified in the Final Memorandum
under "Use of Proceeds."
6. Conditions to the Obligations of the Initial Purchasers. The
obligations of the Initial Purchasers to purchase the Securities shall be
subject to the accuracy of the representations and warranties on the part of the
Company contained herein at the date and time that this Agreement is executed
and delivered by the parties hereto (the "Execution Time") and the Closing Date,
to the accuracy of the statements of the Company made in any certificates
pursuant to the provisions hereof, to the performance by the Company of its
obligations hereunder and to the following additional conditions:
(a) The Company shall have furnished to the Representatives the
opinion of Morgan, Lewis & Bockius LLP, counsel for the Company, dated the
Closing Date, to the effect that:
(i) this Agreement has been duly executed and delivered by the
Company under New York law;
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(ii) the information contained in the Final Memorandum under
the heading "Tax Considerations--Taxation of the Company--United
States Federal Income Tax Considerations" fairly summarizes in all
material respects the matters therein described and to the extent
that such statements purport to describe certain provisions of U.S.
federal laws, rules or regulations, have been reviewed by such
counsel and are correct as to legal matters in all material
respects;
(iii) assuming the due authorization of the Indentures by the
Company under Bermuda law, each of the Indentures has been duly
executed and delivered and constitutes a legal, valid and binding
instrument enforceable against the Company in accordance with its
terms (subject, as to the enforcement of remedies, to applicable
bankruptcy, reorganization, insolvency, fraudulent conveyance,
moratorium or other laws affecting creditors' rights generally from
time to time in effect, and to general principles of equity (whether
considered in a proceeding in equity or at law)); when the
Securities have been duly and validly authorized and are executed
and authenticated in accordance with the provisions of the related
Indenture, and when the Securities are delivered to and paid for by
the Initial Purchasers pursuant to this Agreement, the Securities
will constitute legal, valid and binding obligations of the Company
(subject, as to the enforcement of remedies, to applicable
bankruptcy, reorganization, insolvency, fraudulent conveyance,
moratorium or other laws affecting creditors' rights generally from
time to time in effect, and to general equitable principles)
entitled to the benefits of the related Indenture; and the
Securities and the Indentures conform as to legal matters in all
material respects to the descriptions thereof set forth under the
heading "Description of Notes" in the Final Memorandum;
(iv) the Registration Agreement has been duly executed and
delivered by the Company, and constitutes the legal, valid and
binding obligation of the Company enforceable against the Company in
accordance with its terms (subject, as to the enforcement of
remedies, to applicable bankruptcy, reorganization, insolvency,
fraudulent conveyance, moratorium or other laws affecting creditors'
rights generally from time to time in effect, and to general
principles of equity), and further such counsel expresses no opinion
as to (i) the enforceability of the indemnification or contribution
provisions contained therein or (ii) the enforceability of any
provision of the Registration Agreement that requires or relates to
the payment of any interest at a rate or in an amount which a court
would determine in the circumstances under applicable law to be
commercially unreasonable or a penalty or a forfeiture, and the
Registration Agreement conforms as to legal matters in all material
respects to the description thereof contained in the Final
Memorandum;
(v) to the best of such counsel's knowledge, no consent,
approval, authorization or order of any court or governmental agency
or body (other than such as may be required under the applicable
securities laws of the various jurisdictions in which the Securities
will be offered or sold, as to which such counsel expresses not
opinion, or as required in connection with the
transactions contemplated by the Registration Agreement) is required
in connection with
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<PAGE>
the due execution and delivery of this Agreement, the Registration
Agreement, the Indentures or the Securities, the performance by the
Company of its obligations thereunder, the consummation of the
transactions therein, the application of proceeds from the sale of
the Securities as described in the Final Memorandum or for the
issuance, offering and sale or delivery of the Securities to the
Initial Purchasers or the resale of the Securities by the Initial
Purchasers in accordance with this Agreement;
(vi) to the best of such counsel's knowledge, there is no
pending or threatened action, suit or proceeding by or before any
court or governmental agency, authority or body or any arbitrator
involving the Company or any of its subsidiaries or its or their
respective property of a character that would be required to be
described or referred to in the Final Memorandum, if it were a
prospectus filed as part of a registration statement on Form F-1
under the Securities Act, that is not described or referred to as
would be so required, and the descriptions thereof or references
thereto are correct in all material respects; and, there is no
franchise, contract or other document of a character that would be
required to be described or referred to in the Final Memorandum, if
it were a prospectus filed as part of a registration statement on
Form F-1 under the Securities Act, that is not described or referred
to as would be so required, and the descriptions thereof or
references thereto are correct in all material respects.
(vii) the issue, offering and sale of the Securities, the
execution and delivery of this Agreement, the Registration
Agreement, the Indentures and the Securities, the consummation of
the transactions contemplated therein and the application of
proceeds from the sale of the Securities as described in the Final
Memorandum and the compliance by the Company with its obligations
under this Agreement, the Registration Agreement, the Indentures or
the Securities, will not conflict with, result in a breach or
violation of, or constitute a default under any applicable U.S. law
or the terms of any material indenture or other material agreement
or instrument to which the Company or any of its subsidiaries is a
party which is known to such counsel or which would have been
required to have been filed as an exhibit to the Offering Memorandum
if it had been filed as part of a Registration Statement on Form F-1
or any judgment, order or decree known to such counsel to be
applicable to the Company or any of its subsidiaries of any court,
regulatory body, administrative agency, governmental body or
arbitrator having jurisdiction over the Company or any of its
subsidiaries;
(viii) assuming the accuracy of the representations and
warranties and compliance with the agreements contained in this
Agreement, no registration of the Securities under the Securities
Act is required, and no qualification of the Indentures under the
Trust Indenture Act of 1939 is necessary, for the purchase by the
Initial Purchases of the Securities, or the offer and sale by the
Initial Purchasers of the Securities, in each case, in the manner
contemplated by this Agreement (and not taking into account the
transactions contemplated by the Registration Agreement);
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<PAGE>
(ix) the Company is not and, after giving effect to the
offering and sale of the Securities and the application of the
proceeds thereof as described in the Final Memorandum, will not be
an "investment company" within the meaning of the Investment Company
Act of 1940, as amended.
Such counsel shall also state that they have no reason to believe
that at the Execution Time or at the Closing Date the Final Memorandum contained
an untrue statement of a material fact or omitted to state a material fact
necessary in order to make the statements therein, in the light of the
circumstances under which they were made, not misleading; provided, however,
that such counsel expresses no belief as to the financial statements, including
the notes thereto, or supporting schedules or other financial, statistical and
accounting data included in the Final Memorandum.
All references in this Section 6(a) to the Final Memorandum shall be
deemed to include any amendment or supplement thereto at the Closing Date
(b) The Company shall have requested and caused Appleby, Spurling &
Kempe, Bermuda counsel for the Company, to have furnished to the
Representatives their opinion, dated the Closing Date and addressed to the
Representatives, to the effect that:
(i) the Company and each of its subsidiaries organized under
the laws of Bermuda has been duly organized and is validly existing
as a company in good standing under the laws of Bermuda, with full
corporate power and authority to own or lease its properties and
conduct its business as described in the Final Memorandum, and the
Company has full corporate power and authority to enter into and
perform its obligations under this Agreement, the Registration
Agreement, the Indentures and the Securities;
(ii) all of the outstanding shares of capital stock of the
Company have been duly and validly authorized and issued and are
fully paid and nonassessable, and the Company's authorized common
stock capitalization is as set forth in the Final Memorandum under
the heading "Capitalization";
(iii) all the outstanding shares of capital stock of each
subsidiary organized under the laws of Bermuda have been duly and
validly authorized and issued and are fully paid and nonassessable
and, except as otherwise set forth in the Final Memorandum, all
outstanding shares of capital stock of the subsidiaries are owned by
the Company either directly or through wholly owned subsidiaries
free and clear of any security interest and, to the knowledge of
such counsel, after due inquiry, any other security interest, claim,
lien or encumbrance;
(iv) each of this Agreement, the Registration Agreement, the
Indentures and the Securities has been duly authorized by the
Company;
(v) to the best of such counsel's knowledge, no consent,
approval, authorization or order of any court or governmental agency
or body of Bermuda (other than the filing of the Final Memorandum
with the Registrar of Companies and the consent of the Bermuda
Monetary Authority) is required in connection
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<PAGE>
with the due authorization, execution and delivery of this
Agreement, the Registration Agreement, the Indentures or the
Securities, the performance by the Company of its obligations
thereunder, the consummation of the transactions therein, the
application of proceeds from the sale of the Securities as described
in the Final Memorandum or for the issuance, offering and sale or
delivery of the Securities to the Initial Purchasers or the resale
of the Securities by the Initial Purchasers in accordance with this
Agreement;
(vi) neither the issue and sale of the Securities, nor the
consummation of any other of the transactions contemplated in this
Agreement nor the fulfillment of the terms of this Agreement will
conflict with, result in a breach or violation of or imposition of
any lien, charge or encumbrance upon any property or assets of the
Company or its subsidiaries pursuant to, (i) the charter or by-laws
of the Company or its subsidiaries or (ii) any statute, law, rule,
regulation, judgment, order or decree applicable to the Company or
its subsidiaries of any court, regulatory body, administrative
agency, governmental body, arbitrator or other authority having
jurisdiction over the Company or its subsidiaries or any of its or
their properties; and
(vii) the choice of law provision set forth in Section 14
hereof is legal, valid and binding under the laws of Bermuda and
such counsel knows of no reason why the courts of Bermuda would not
give effect to the choice of New York law as the proper law of this
Agreement; the Company has the legal capacity to sue and be sued in
its own name under the laws of Bermuda; the Company has the power to
submit, and has irrevocably submitted, to the non-exclusive
jurisdiction of the New York Courts; the irrevocable submission of
the Company to the non-exclusive jurisdiction of the New York Courts
and the waivers by the Company of any immunity and any objection to
the venue of the proceeding in a New York Court herein are legal,
valid and binding under the laws of Bermuda and such counsel knows
of no reason why the courts of Bermuda would not give effect to the
submission and waivers; service of process in the manner set forth
in Section 17 hereof, will be effective to confer valid personal
jurisdiction over the Company under the laws of Bermuda; and the
courts in Bermuda will recognize as valid and final, and will
enforce, any final and conclusive judgment against the Company
obtained in a New York Court arising out of or in relation to the
obligations of the Company under this Agreement.
All references in this Section 6(b) to the Final Memorandum shall be
deemed to include any amendment or supplement thereto at the Closing Date.
(c) The Company shall have requested and caused Stuart Rubin,
General Counsel for the Company, to have furnished to the Representatives
his opinion, dated the Closing Date and addressed to the Representatives,
in form and substance satisfactory to the Representatives, relating to
certain regulatory matters in respect of the Company and certain of its
subsidiaries.
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<PAGE>
(d) The Representatives shall have received from Cleary, Gottlieb,
Steen & Hamilton, counsel for the Initial Purchasers, such opinion or
opinions, dated the Closing Date, with respect to the issuance and sale of
the Securities, the Final Memorandum (as amended or supplemented at the
Closing Date) and other related matters as the Representatives my
reasonably require, and the Company shall have furnished or made available
to such counsel such documents as they request for the purpose of enabling
them to pass upon such matters.
(e) The Company shall have furnished to Representatives a
certificate of the Company, signed by any two of the following officers:
the President, the Chief Operating Officer, the Chief Executive Officer,
the Chief Financial Officer, the Treasurer or the General Counsel of the
Company, dated the Closing Date, to the effect that the signers of such
certificate have carefully reviewed the Final Memorandum, any amendment or
supplement to the Final Memorandum and this Agreement and that:
(i) the representations and warranties of the Company in this
Agreement are true and correct in all material respects on and as of
the Closing Date with the same effect as if made on the Closing
Date, except to the extent such representations and warranties speak
as of an earlier date in which case they shall be true in all
material respects as of such earlier date, and the Company has
complied in all material respects with all the agreements and
satisfied all the conditions on its part to be performed or
satisfied hereunder at or prior to the Closing Date; and
(ii) since the date of the most recent financial statements
included in the Final Memorandum, there has been no material adverse
change in the condition (financial or otherwise), prospects,
earnings, business or properties of the Company and its
subsidiaries, taken as a whole, whether or not arising from
transactions in the ordinary course of business, except as set forth
in or contemplated in the Final Memorandum (exclusive of any
amendment or supplement thereto).
(f) (A) At the Execution Time, Arthur Andersen & Co. shall have
furnished to the Representatives a letter dated such date, in form and
substance satisfactory to the Initial Purchasers, containing statements
and information of the type ordinarily included in accountants' "comfort
letters" to underwriters with respect to the financial statements and
certain financial information contained in the Final Memorandum and (B) at
the Closing Date, Arthur Andersen & Co. shall have furnished to the
Representatives a letter dated such date, in form and substance
satisfactory to the Initial Purchasers, to the effect that they reaffirm
the statements made in the letter furnished pursuant to clause (A) of this
sentence, except that the specified date referred to shall be a date not
more than three business days prior to the Closing Date.
(g) Subsequent to the Execution Time or, if earlier, the dates as of
which information is given in the Final Memorandum, there shall not have
been (i) any change or decrease specified in the letters referred to in
paragraph (e) of this Section 6 or (ii) any change, or any development
involving a prospective change, in or affecting the condition
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<PAGE>
(financial or otherwise), prospects, earnings, business or properties of
the Company and its subsidiaries, taken as a whole, whether or not arising
from transactions in the ordinary course of business, except as set forth
or contemplated in the final Memorandum (exclusive of any amendment or
supplement thereto), the effect of which, in any case referred to in
clause (i) or (ii) above, is, in the sole judgment of the Representatives,
so material and adverse as to make it impractical or inadvisable to market
the Securities as contemplated by the Final Memorandum (exclusive of any
amendment or supplement thereto).
(h) The Dollar Notes shall have been designated as PORTAL-eligible
securities in accordance with the rules and regulations of the National
Association of Securities Dealers, Inc.
(i) Subsequent to the Execution Time, there shall not have been any
decrease in the rating of any of FLAG Limited's debt securities by any
"nationally recognized statistical rating organization" (as defined for
purposes of Rule 436(g) under the Securities Act) or any notice given of
any intended or potential decrease in any such rating or of a possible
change in any such rating that does not indicate the direction of the
possible change.
(j) Prior to the Closing Date, the Company shall have furnished to
the Representatives such reasonable further information, certificates and
documents as the Representatives may reasonably request.
If any of the conditions specified in this Section 6 shall
not have been fulfilled in all material respects when and as provided in this
Agreement, or if any of the opinions and certificates mentioned above or
elsewhere in this Agreement shall not be in all material respects reasonably
satisfactory in form and substance to the Representatives and counsel for the
Initial Purchasers, this Agreement and all obligations of the Initial Purchasers
hereunder may be cancelled at, or at any time prior to, the Closing Date by the
Representatives. Notice of such cancellation shall be given to the Company in
writing, by facsimile or by telephone confirmed in writing.
The documents required to be delivered by this Section 6 shall be
delivered at the office of counsel for the Initial Purchasers at One Liberty
Plaza, New York, New York, or such other place as the Representatives and the
Company shall mutually agree, on the Closing Date.
7. Reimbursement of Expenses. If the sale of the Securities provided
for herein is not consummated because any condition to the obligations of the
Initial Purchasers set forth in Section 6 hereof is not satisfied, because of
any termination pursuant to Section 10(i)(A) hereof or because of any refusal,
inability or failure on the part of the Company to perform any agreement herein
or comply with any provision hereof other than by reason of a default by any of
the Initial Purchasers as described in Section 9 hereof, the Company will remain
obligated to reimburse the Initial Purchasers severally upon demand for all
reasonable and documented out-of-pocket expenses (including reasonable fees and
disbursements of counsel) that shall have been incurred by them in connection
with the proposed purchase and sale of the Securities.
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8. Indemnification and Contribution. (a) The Company agrees to
indemnify and hold harmless each Initial Purchaser, the directors, officers,
employees and agents of each Initial Purchaser and each person who controls any
Initial Purchaser within the meaning of either the Securities Act or the
Exchange Act against any and all losses, claims, damages or liabilities, joint
or several, to which they or any of them may become subject under the Securities
Act, the Exchange Act or other federal or state or foreign statutory law or
regulation, at common law or otherwise, insofar as such losses, claims, damages
or liabilities (or actions in respect thereof) arise out of or are based upon
any untrue statement or alleged untrue statement of a material fact contained in
the Preliminary Memorandum, the Final Memorandum (or in any supplement or
amendment thereto) or any information provided by the Company to any holder or
prospective purchaser of Securities pursuant to Section 5(h), or in any
amendment thereof or supplement thereto, or arise out of or are based upon the
omission or alleged omission to state therein a material fact required to be
stated therein or necessary to make the statements therein, in the light of the
circumstances under which they were made, not misleading, and agrees to
reimburse each such indemnified party, as incurred, for any legal or other
expenses reasonably incurred by them in connection with investigating or
defending any such loss, claim, damage, liability or action; provided, however,
that the Company will not be liable in any such case to the extent that any such
loss, claim, damage or liability arises out of or is based upon any such untrue
statement or alleged untrue statement or omission or alleged omission made in
the Preliminary Memorandum or the Final Memorandum, or in any amendment thereof
or supplement thereto, in reliance upon and in conformity with written
information furnished to the Company by or on behalf of any of the Initial
Purchasers through the Representatives specifically for inclusion therein; and
provided further, that the foregoing indemnity agreement with respect to the
Preliminary Memorandum shall not inure to the benefit of the Initial Purchasers
from whom the person asserting or causing any such losses, claims, damages or
liabilities purchased Securities (or to the benefit of any person controlling
any Initial Purchaser or any directors, officers, employees and agents of any
Initial Purchaser), if a copy of the Final Memorandum (or the Final Memorandum
as amended or supplemented) (if the Company shall have timely furnished the
Initial Purchasers with sufficient copies thereof) was not sent or given by or
on behalf of the Initial Purchasers to such person at or prior to the written
confirmation of the sales of the Securities to such person and if the Final
Memorandum (or the Final Memorandum as amended or supplemented) would have cured
the defect giving rise to such loss, claim, damage or liability. This indemnity
agreement will be in addition to any liability which the Company may otherwise
have.
(b) Each Initial Purchaser severally agrees to indemnify and hold
harmless the Company, its directors, its officers, employees and agents and each
person who controls the Company within the meaning of either the Securities Act
or the Exchange Act, to the same extent as the foregoing indemnity from the
Company to each Initial Purchaser, but only with reference to written
information relating to such Initial Purchaser furnished to the Company by or on
behalf of such Initial Purchaser through the Representatives specifically for
inclusion in the Preliminary Memorandum or the Final Memorandum (or in any
amendment or supplement thereto). This indemnity agreement will be in addition
to any liability which any Initial Purchaser may otherwise have. The Company
acknowledges that the statements set forth in the last paragraph of the cover
page and under the heading "Plan of Distribution" in the Preliminary Memorandum
and the Final Memorandum constitute the only information furnished in writing by
or an behalf of the Initial Purchasers for inclusion in the Preliminary
Memorandum and the Final Memorandum (or in any amendment or supplement thereto).
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(c) Promptly after receipt by an indemnified party under this
Section 8 of notice of the commencement of any action, such indemnified party
will notify the indemnifying party in writing of the commencement thereof; but
the failure so to notify the indemnifying party (i) will not relieve the
indemnifying party from liability under paragraph (a) or (b) above unless and to
the extent the indemnifying party did not otherwise learn of such action and
such failure results in the forfeiture by the indemnifying party of substantial
rights and defenses and (ii) will not, in any event, relieve the indemnifying
party from any obligations to any indemnified party other than the
indemnification obligation provided in paragraph (a) or (b) above. The
indemnifying party shall be entitled to appoint counsel of the indemnifying
party's choice at the indemnifying party's expense to represent the indemnified
party in any action for which indemnification is sought (in which case the
indemnifying party shall not thereafter be responsible for the fees and expenses
of any separate counsel retained by the indemnified party or parties except as
set forth below); provided, however, that such counsel shall be satisfactory to
the indemnified party. Notwithstanding the indemnifying party's election to
appoint counsel to represent the indemnified party in an action, the indemnified
party shall have the right to employ separate counsel (including local counsel),
and the indemnifying party shall bear the reasonable fees, costs and expenses of
such separate counsel if (i) the use of counsel chosen by the indemnifying party
to represent the indemnified party would present such counsel with a conflict of
interest, (ii) the actual or potential defendants in, or targets of, any such
action include both the indemnified party and the indemnifying party and the
indemnified party shall have reasonably concluded that there may be legal
defenses available to it and/or other indemnified parties which are different
from or additional to those available to the indemnifying party, (iii) the
indemnifying party shall not have employed counsel satisfactory to the
indemnified party to represent the indemnified party within a reasonable time
after notice of the institution of such action or (iv) the indemnifying party
shall authorize the indemnified party to employ separate counsel at the expense
of the indemnifying party. No indemnifying party shall be liable for any
settlement of any such action effected without its written consent (which
consent shall not be unreasonably withheld), but if settled with its written
consent or if there be a final judgment for the plaintiff in any such action,
the indemnifying party agrees to indemnify and hold harmless any indemnified
party from and against any loss or liability by reason of such settlement or
judgment. An indemnifying party will not, without the prior written consent of
the indemnified parties, settle or compromise or consent to the entry of any
judgment with respect to any pending or threatened claim, action, suit or
proceeding in respect of which indemnification or contribution may be sought
hereunder (whether or not the indemnified parties are actual or potential
parties to such claim or action) unless such settlement, compromise or consent
includes an unconditional release of each indemnified party from all liability
arising out of such claim, action, suit or proceeding.
(d) In the event that the indemnity provided in paragraph (a) or (b)
of this Section 8 is unavailable to or insufficient to hold harmless an
indemnified party for any reason, the Company and the Initial Purchasers agree
to contribute to the aggregate losses, claims, damages and liabilities
(including legal or other expenses reasonably incurred in connection with
investigating or defending same) (collectively "Losses") to which the Company
and one or more of the Initial Purchasers may be subject in such proportion as
is appropriate to reflect the relative benefits received by the Company on the
one hand and by the Initial Purchasers on the other from the offering of the
Securities; provided, however, that in no case shall any Initial Purchaser
(except as may be provided in any agreement among the Initial Purchasers
relating to the
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offering of the Securities) be responsible for any amount in excess of the
purchase discount or commission applicable to the Securities purchased by such
Initial Purchaser hereunder. If the allocation provided by the immediately
preceding sentence is unavailable for any reason, the Company and the Initial
Purchasers shall contribute in such proportion as is appropriate to reflect not
only such relative benefits but also the relative fault of the Company on the
one hand and of the Initial Purchasers on the other in connection with the
statements or omissions which resulted in such Losses as well as any other
relevant equitable considerations. Benefits received by the Company shall be
deemed to be equal to the total net proceeds from the offering (before deducting
expenses), and benefits received by the Initial Purchasers shall be deemed to be
equal to the total purchase discounts and commissions received by the Initial
Purchasers from the Company in connection with the purchase of the Securities
hereunder, in each case as set forth on the cover of the Final Memorandum.
Relative fault shall be determined by reference to whether any untrue or any
alleged untrue statement or omission relates to information provided by the
Company on the one hand or the Initial Purchasers on the other. The Company and
the Initial Purchasers agree that it would not be just and equitable if
contribution were determined by pro rata allocation or any other method of
allocation which does not take account of the equitable considerations referred
to above. Notwithstanding the provisions of this paragraph (d) , no person
guilty of fraudulent misrepresentation (within the meaning of Section 11(f) of
the Securities Act) shall be entitled to contribution from any person who was
not guilty of such fraudulent misrepresentation. For purposes of this Section 8,
each person who controls an Initial Purchaser within the meaning of either the
Securities Act or the Exchange Act and each director, officer, employee and
agent of an Initial Purchaser shall have the same rights to contribution as such
Initial Purchaser, and each person who controls the Company within the meaning
of either the Securities Act or the Exchange Act and each director, officer,
employee, and agent of the Company shall have the same rights to contribution as
the Company, subject in each case to the applicable terms and conditions of this
paragraph (d).
9. Default by an Initial Purchaser. If any one or more Initial
Purchasers shall fail to purchase and pay for any of the Securities agreed to be
purchased by such Initial Purchaser hereunder and such failure to purchase shall
constitute a default in the performance of its or their obligations under this
Agreement, the remaining Initial Purchasers shall be obligated severally to take
up and pay for (in the respective proportions which the principal amount of
Securities set forth opposite their names in Schedule I hereto bears to the
aggregate principal amount of Securities set forth opposite the names of all the
remaining Initial Purchasers) the Securities which the defaulting Initial
Purchaser or Initial Purchasers agreed but failed to purchase; provided,
however, that in the event that the aggregate principal amount of Securities
which the defaulting Initial Purchaser or Initial Purchasers agreed but failed
to purchase shall exceed 10% of the aggregate principal amount of Securities set
forth in Schedule I hereto, the remaining Initial Purchasers shall have the
right to purchase all, but shall not be under any obligation to purchase any, of
the Securities, and if such non-defaulting Initial Purchasers do not purchase
all the Securities, this Agreement will terminate without liability to any
non-defaulting Initial Purchaser or the Company. In the event of a default by
any Initial Purchaser as set forth in this Section 9, the Closing Date shall be
postponed for such period, not exceeding seven days, as the Representatives
shall determine in order that the required changes in the Final Memorandum or in
any other documents or arrangements may be effected. Nothing contained in this
Agreement shall relieve any defaulting Initial Purchaser of its liability, if
any, to the Company or any non-defaulting Initial Purchaser for damages
occasioned by its default hereunder.
20
<PAGE>
10. Termination. This Agreement shall be subject to termination in
the absolute discretion of the Representatives, by notice given to the Company
prior to delivery of and payment for the Securities, if prior to such time (i)
(A) trading in the Company's securities shall have been suspended by the
Commission, the Nasdaq National Market or the London Stock Exchange, or trading
in securities generally on the New York Stock Exchange, the Nasdaq National
Market or the London Stock Exchange shall have been suspended or limited or (B)
minimum prices shall have been established on the New York Stock Exchange, the
Nasdaq National Market or the London Stock Exchange, (ii) a banking moratorium
shall have been declared either by federal or New York state authorities or
(iii) there shall have occurred any outbreak or escalation of hostilities,
declaration by the United States of a national emergency or war or other
calamity or crisis the effect of which on financial markets is such as to make
it, in the judgment of the Representatives, impracticable or inadvisable to
proceed with the offering or delivery of the Securities as contemplated by the
Final Memorandum (exclusive of any amendment or supplement thereto).
11. Representations and Indemnities to Survive. The respective
agreements, representations, warranties, indemnities and other statements of the
Company or its officers and of the Initial Purchasers set forth in or made
pursuant to this Agreement will remain in full force and effect, regardless of
any investigation made by or on behalf of the Initial Purchasers or the Company
or any of the officers, directors or controlling persons referred to in Section
8 hereof, and will survive delivery of and payment for the Securities. The
provisions of Sections 7 and 8 hereof shall survive the termination or
cancellation of this Agreement.
12. Notices. All communications hereunder will be in writing and
effective only on receipt, and, if sent to the Representatives, will be mailed,
delivered or telefaxed and confirmed to them, care of Salomon Smith Barney Inc.,
at 388 Greenwich Street, New York, New York 10013, attention: General Counsel
(fax no. (212) 816-7912); or, if sent to the Company, will be mailed, delivered
or telefaxed to the attention of Stuart Rubin, General Counsel (fax no. (44)
171-317-0808) and confirmed to it at 3rd Floor, 103 Mount Street, London W1Y
5HE.
13. Successors. This Agreement will inure to the benefit of and be
binding upon the parties hereto and their respective successors and the officers
and directors and controlling persons referred to in Section 8 hereof, and,
except as expressly set forth in Section 5(h) hereof, no other person will have
any right or obligation hereunder.
14. Applicable Law. This Agreement will be governed by and construed
in accordance with the laws of the state of New York applicable to agreements
made and to be performed in said state.
15. Business Day. For Purposes of this Agreement, "business day"
means each Monday, Tuesday, Wednesday, Thursday and Friday that is not a day on
which banking institutions in the City of New York, New York are authorized or
obligated by law, executive order or regulation to close.
21
<PAGE>
16. Counterparts. This Agreement may be executed in one or more
counterparts, each of which will be deemed to be an original, but all such
counterparts will together constitute one and the same instrument.
17. Submission to Jurisdiction; Appointment of Agents for Service;
Currency Indemnity. (a) To the fullest extent permitted by applicable law, the
Company irrevocably submits to the jurisdiction of any Federal or State court in
the Borough of Manhattan, in the City of New York, New York, in any suit, action
or proceeding based on or arising under this Agreement (solely in connection
with any such suit or proceeding), and irrevocably agrees that all claims in
respect of such suit or proceeding may be determined in any such court. The
Company irrevocably waives, to the fullest extent permitted by law, any
objection which it may have to the laying of the venue of any such suit, action
or proceeding brought in such a court and any claim that any suit, action or
proceeding brought in such a court has been brought in an inconvenient forum.
The Company agrees that final judgment in any such suit, action or proceeding
brought in such a court shall be conclusive and binding upon the Company and may
be enforced in the courts of Bermuda (or any other courts to the jurisdiction of
which the Company is subject) by a suit upon such judgment, provided that
service of process is effected upon the Company in the manner specified herein
or as otherwise permitted by law. The Company hereby irrevocably designates and
appoints FLAG Telecom USA Ltd., 570 Lexington Avenue, New York, New York 10020,
U.S.A. (the "Process Agent"), as the authorized agent of the Company upon whom
process may be served in any such suit or proceeding, it being understood that
the designation and appointment of the Process Agent as such authorized agent
shall become effective immediately without any further action on the part of the
Company. The Company represents to the Initial Purchasers that it has notified
the Process Agent of such designation and appointment and that the Process Agent
has accepted the same in writing. The Company hereby irrevocably authorizes and
directs the Process Agent to accept such service. The Company further agrees
that service of process upon the Process Agent and written notice of said
service to the Company mailed by prepaid registered first class mail or
delivered to the Process Agent at its principal office, shall be deemed in every
respect effective service of process upon the Company in any such suit or
proceeding. Nothing herein shall affect the right of the Initial Purchasers or
any person controlling the Initial Purchasers to serve process in any other
manner permitted by law. 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 Company has any outstanding
obligations under this Agreement, the Securities or the Indentures. To the
extent that the Company has or hereafter may require any immunity from
jurisdiction of any court or from any legal process (whether through service of
note, attachment prior to judgment, attachment in aid of execution, executor or
otherwise) with respect to itself or its property, the Company hereby
irrevocably waives such immunity in respect of its obligations under this
Agreement, to the extent permitted by law.
(b) The obligation of the parties to make payments hereunder for the
Dollar Notes is in U.S. dollars and the obligation of the parties to make
payments hereunder for the Euro Notes is in Euros (in each case, the "Obligation
Currency") and, unless otherwise agreed by the parties hereto, such obligations
shall not be discharged or satisfied by any tender or recovery pursuant to any
judgment expressed in or converted into any currency other than the applicable
Obligation Currency or any other realization in such other currency, whether as
proceeds of
22
<PAGE>
set-off, security, guarantee, distributions, or otherwise, except to the extent
such tender, recovery or realization shall result in the effective receipt by
the party which is to receive such payment of the full amount of the applicable
Obligation Currency payable hereunder, and the party liable to make such payment
agrees to indemnify the party which is to receive such payment (as an
additional, separate and independent obligation) for the amount (if any) by
which such effective receipt is less than the full amount of the applicable
Obligation Currency payable hereunder and such obligation to indemnify shall not
be affected by judgment being obtained for any other sums due under this
Agreement.
18. Headings. The headings in this Agreement are for convenience of
reference only and shall not limit or otherwise affect the meaning hereof.
19. Severability. In the event that any one or more of the
provisions contained herein, or the application thereof in any circumstances, is
held invalid, illegal or unenforceable in any respect for any reason, the
validity, legality and enforceability of any such provision in every other
respect and of the remaining provisions hereof shall not be in any way impaired
or affected thereby, it being intended that all of the rights and privileges of
the parties shall be enforceable to the fullest extent permitted by law.
23
<PAGE>
If the foregoing is in accordance with your understanding of our
agreement, please sign and return to us the enclosed duplicate hereof, whereupon
this Agreement and your acceptance shall represent a binding agreement between
the Company and the several Initial Purchasers.
Very truly yours,
FLAG Telecom Holdings Limited
By
-------------------------------
Name:
Title:
The foregoing Agreement is hereby
confirmed and accepted as of
the date first above written.
Salomon Smith Barney Inc.
By
-------------------------------
Name:
Title:
Morgan Stanley & Co. International Limited
By
-------------------------------
Name:
Title:
Deutsche Bank Securities Inc.
By
-------------------------------
Name:
Title:
Bear, Stearns & Co. Inc.
By
-------------------------------
Name:
Title:
For themselves and the other Initial
Purchasers named in Schedule I to
the foregoing Agreement
24
<PAGE>
Schedule I
Principal Amount at
Principal Amount at Maturity of Euro
Maturity of Dollar Notes
Initial Purchasers Notes to be Purchased to be Purchased
- ------------------ --------------------- -------------------
Salomon Smith Barney Inc....... $150,000,000 (euro)150,000,000
Morgan Stanley & Co.
International Limited.... $ 60,000,000 (euro)60,000,000
Deutsche Bank Securities Inc. . $ 45,000,000 (euro)45,000,000
Bear, Stearns & Co. Inc. ...... $ 45,000,000 (euro)45,000,000
------------ -----------------
Total.................... $300,000,000 (euro)300,000,000
25
<PAGE>
Schedule II
LIST OF SUBSIDIARIES OF FLAG TELECOM HOLDINGS LIMITED
FLAG Limited
FLAG Telecom Asia Limited
FLAG Wholesale Services Limited
FLAG Telecom Wholesale Services Ireland Limited
FLAG Telecom Ireland Limited
FLAG Telecom Japan Limited
FLAG Telecom Ireland Network Limited
FLAG Telecom Ireland Services Limited
FLAG Telecom Espana SA
FLAG Telecom Group Services Limited
FLAG Telecom Limited
FLAG Telecom USA Ltd.
FLAG Atlantic Holdings Limited
FLAG Atlantic Limited
FLAG Atlantic UK Limited
FLAG Atlantic USA Limited
FLAG Atlantic France SARL
26
<PAGE>
EXHIBIT A
Selling Restrictions for Offers and
Sales Outside the United States
1. (a) The Securities have not been and will not be registered under
the Securities Act and may not be offered or sold within the United States or
to, or for the account or benefit of, U.S. persons except in accordance with
Regulation S under the Securities Act or pursuant to an exemption from the
registration requirements of the Securities Act. Each Initial Purchaser
represents and agrees that, except as otherwise permitted by Section 4(a)(i) of
(ii) of the Agreement to which this is an exhibit, it has offered and sold the
Securities, and will offer and sell the Securities, (i) as part of their
distribution at any time and (ii) otherwise until 40 days after the later of the
commencement of the offering and the Closing Date, only in accordance with Rule
903 of Regulation S under the Securities Act. Accordingly, each Initial
Purchaser represents and agrees that neither it, nor any of its affiliates nor
any person acting on its or their behalf has engaged or will engage in any
directed selling efforts with respect to the Securities, and that it and they
have complied and will comply with the offering restrictions requirement or
Regulation S. Each Initial Purchaser agrees that, at or prior to the
confirmation of sale of Securities (other than a sale of Securities pursuant to
Section 4(a)(i) or (ii) of the Agreement to which this is an exhibit), it shall
have sent to each distributor, dealer or person receiving a selling concession,
fee or other remuneration that purchases Securities from it during the
restricted period a confirmation or notice to substantially the following
effect:
"The Securities covered hereby have not been registered
under the U.S. Securities Act of 1933 (the "Securities
Act") and may not be offered or sold within the United
States or to, or for the account or benefit of, U.S.
persons (i) as part of their distribution at any time or
(ii) otherwise until 40 days after the later of the
commencement of the offering and March 17, 2000, except
in either case in accordance with Regulation S or Rule
144A under the Securities Act. Terms used above have the
meanings given to them by Regulation S."
(b) Each Initial Purchaser represents, warrants and agrees that it
has not entered and will not enter into any contractual arrangement with any
distributor with respect to the distribution of the Securities, except with its
affiliates or with the prior written consent of the Company.
(c) Terms used in this section have the meanings given to them by
Regulation S.
(d) Each Initial Purchaser represents, warrants and agrees that (i)
it has not offered or sold, and will not offer or sell, any Securities to
persons in the United Kingdom, except to persons whose ordinary activities
involve them in acquiring, holding, managing or disposing of investments (as
principal or agent) for the purposes of their business or in circumstances which
have not resulted and will not result in an offer to the public in the United
Kingdom within the meaning of the Public Offers of Securities Regulations 1995
(the "Regulations"), (ii) it has complied and will comply with all applicable
provisions of the
A-1
<PAGE>
Financial Services Act 1986 of the United Kingdom and the Regulations with
respect to anything done by it in relation to the Securities in, from or
otherwise involving the United Kingdom, and (iii) it has only issued or passed
on, and will only issue or pass on, to any person in the United Kingdom any
document received by it in connection with the issue of the Securities if that
person is of a kind described in Article 11(3) of the Financial Services Act
1986 (Investment Advertisements) (Exemption) Order 1995 or is a person to whom
the document may otherwise lawfully be issued or passed on.
A-2
FLAG TELECOM HOLDINGS LIMITED
AND
THE BANK OF NEW YORK,
as TRUSTEE
11.625% SENIOR EURO NOTES DUE 2010
Dated as of March 17, 2000
<PAGE>
TABLE OF CONTENTS
Page
ARTICLE I
DEFINITIONS AND INCORPORATION BY REFERENCE
Section 1.1. Definitions....................................................1
Section 1.2. Incorporation by Reference of Trust Indenture Act.............27
Section 1.3. Rules of Construction.........................................27
ARTICLE II
THE NOTES
Section 2.1. Form and Dating...............................................28
Section 2.2. Execution and Authentication..................................28
Section 2.3. Registrar and Paying Agent....................................29
Section 2.4. Paying Agent to Hold Money in Trust...........................30
Section 2.5. Holder Lists..................................................30
Section 2.6. Global Note Provisions........................................31
Section 2.7. Legends.......................................................32
Section 2.8. Transfer and Exchange.........................................32
Section 2.9. Mutilated, Destroyed, Lost or Stolen Notes....................35
Section 2.10. Temporary Notes...............................................36
Section 2.11. Cancellation..................................................36
Section 2.12. Defaulted Interest............................................36
Section 2.13. Additional Interest Under Registration Agreements.............37
ARTICLE III
COVENANTS
Section 3.1. Payment of Notes..............................................37
Section 3.2. Maintenance of Office or Agency...............................38
Section 3.3. Corporate Existence...........................................38
Section 3.4. Payment of Taxes and Other Claim..............................38
Section 3.5. Compliance Certificate........................................39
Section 3.6. Further Instruments and Acts..................................39
Section 3.7. Waiver of Stay, Extension or Usury Laws.......................39
Section 3.8. Change Of Control.............................................40
Section 3.9. Additional Amounts............................................40
Section 3.10. Limitation On Incurrence Of Additional Indebtedness And
Preferred Stock...............................................43
Section 3.11. Limitation On Restricted Payments.............................44
Section 3.12. Limitation on Designation of Unrestricted Subsidiaries........48
Section 3.13. Limitation on Liens...........................................49
Section 3.14. Limitation On Dividend And Other Payment Restrictions
Affecting Restricted Subsidiaries.............................49
Section 3.15. Limitation On Asset Sales.....................................51
Section 3.16. Limitation On Transactions With Affiliates....................53
i
<PAGE>
Section 3.17. Limitation On Business Activities.............................54
Section 3.18. Reports To Holders............................................54
ARTICLE IV
SURVIVING ENTITY
Section 4.1. Merger, Consolidation and Sale of Assets......................55
ARTICLE V
OPTIONAL REDEMPTION OF NOTES
Section 5.1. Optional Redemption...........................................56
Section 5.2. Election to Redeem............................................56
Section 5.3. Notice of Redemption..........................................56
Section 5.4. Selection of Notes to Be Redeemed in Part.....................57
Section 5.5. Deposit of Redemption Price...................................58
Section 5.6. Notes Payable on Redemption Date..............................58
Section 5.7. Unredeemed Portions of Partially Redeemed Note................58
ARTICLE VI
DEFAULTS AND REMEDIES
Section 6.1. Events of Default.............................................58
Section 6.2. Acceleration..................................................60
Section 6.3. Other Remedies................................................61
Section 6.4. Waiver of Past Defaults.......................................61
Section 6.5. Control by Majority...........................................61
Section 6.6. Limitation on Suits...........................................61
Section 6.7. Rights of Holders to Receive Payment..........................62
Section 6.8. Collection Suit by Trustee....................................62
Section 6.9. Trustee May File Proofs of Claim, etc.........................62
Section 6.10. Priorities....................................................63
Section 6.11. Undertaking for Costs.........................................63
ARTICLE VII
TRUSTEE
Section 7.1. Duties of Trustee.............................................64
Section 7.2. Rights of Trustee.............................................65
Section 7.3. Individual Rights of Trustee..................................66
Section 7.4. Trustee's Disclaimer..........................................66
Section 7.5. Notice of Defaults............................................66
Section 7.6. Reports by Trustee to Holders.................................66
Section 7.7. Compensation and Indemnity....................................66
Section 7.8. Replacement of Trustee........................................67
Section 7.9. Successor Trustee by Merger...................................68
Section 7.10. Eligibility; Disqualification.................................68
Section 7.11. Preferential Collection of Claims Against Company.............69
ii
<PAGE>
ARTICLE VIII
DEFEASANCE; DISCHARGE OF INDENTURE
Section 8.1. Legal Defeasance and Covenant Defeasance......................70
Section 8.2. Conditions to Defeasance......................................71
Section 8.3. Application of Trust Money....................................72
Section 8.4. Repayment to Company..........................................72
Section 8.5. Indemnity for European Union Obligations......................73
Section 8.6. Reinstatement.................................................73
Section 8.7. Satisfaction and Discharge....................................73
ARTICLE IX
AMENDMENTS
Section 9.1. Without Consent of Holders....................................74
Section 9.2. With Consent of Holders.......................................74
Section 9.3. Compliance with Trust Indenture Act...........................75
Section 9.4. Revocation and Effect of Consents and Waivers.................75
Section 9.5. Notation on or Exchange of Notes..............................76
Section 9.6. Trustee to Sign Amendments....................................76
ARTICLE X
MISCELLANEOUS
Section 10.1. Trust Indenture Act Controls..................................76
Section 10.2. Notices.......................................................76
Section 10.3. Communication by Holders with Other Holders...................77
Section 10.4. Certificate and Opinion as to Conditions Precedent............78
Section 10.5. Statements Required in Certificate or Opinion.................78
Section 10.6. Rules by Trustee, Paying Agent and Registrar..................78
Section 10.7. Legal Holidays................................................79
Section 10.8. Governing Law, etc............................................79
Section 10.9. No Recourse Against Others....................................79
Section 10.10 Successors....................................................80
Section 10.11 Duplicate and Counterpart Originals...........................80
Section 10.12 Severability..................................................80
Section 10.13 Qualification of Indenture....................................80
Section 10.14 Table of Contents; Headings...................................80
EXHIBIT A FORM OF FACE OF NOTE
EXHIBIT B FORM OF TRANSFER CERTIFICATE FOR TRANSFER TO QIB
EXHIBIT C FORM OF CERTIFICATE FOR TRANSFER PURSUANT TO REGULATION S
EXHIBIT D FORM OF RULE 144 CERTIFICATION
iii
<PAGE>
iv
<PAGE>
INDENTURE, dated as of March 17, 2000, between FLAG Telecom Holdings
Limited, a Bermuda company (the "Company"), The Bank of New York, a New York
banking corporation (the "Trustee"), as Trustee and Kredietbank SA
Luxembourgeoise, as Luxembourg Paying Agent (as defined).
Each party agrees as follows for the benefit of the other parties
and for the equal and ratable benefit of the Holders of the Company's 11.625%
Senior Euro Notes Due 2010 issued hereunder.
ARTICLE I
DEFINITIONS AND INCORPORATION BY REFERENCE
Section 1.1. Definitions.
"Acquired Indebtedness" means Indebtedness of a Person or any of its
Subsidiaries existing at the time such Person becomes a Restricted Subsidiary or
at the time it merges with or into or consolidates with the Company or any of
its Restricted Subsidiaries or is assumed in connection with the acquisition of
assets from such Person and in each case not Incurred in connection with, or in
anticipation or contemplation of, such acquisition, merger or consolidation.
Such Indebtedness shall be deemed to have been Incurred at the time such Person
becomes a Restricted Subsidiary or at the time it merges or consolidates with
the Company or a Restricted Subsidiary or at the time such Indebtedness is
assumed in connection with the acquisition of assets from such Person.
"Additional Amounts" has the meaning set forth in Section 3.9.
"Acquired Preferred Stock" means Preferred Stock of a Person or any
of its Subsidiaries existing at the time such Person becomes a Restricted
Subsidiary or merges with or into or consolidates with a Restricted Subsidiary,
in each case not issued in connection with, or in anticipation or contemplation
of, such acquisition, merger or consolidation. Such Preferred Stock shall be
deemed to have been issued at the time such Person becomes a Restricted
Subsidiary or at the time it merges or consolidates with a Restricted
Subsidiary.
"Affiliate" means, with respect to any specified Person, any other
Person who directly or indirectly through one or more intermediaries controls,
or is controlled by, or is under common control with, such specified Person. The
term "control" means the possession, directly or indirectly, of the power to
direct or cause the direction of the management and policies of a Person,
whether through the ownership of voting securities, by contract or otherwise;
provided, that for purposes of Section 3.16 only, beneficial ownership of 10% or
more of the Voting Stock of a Person shall be deemed to be control. For purposes
of this definition, the terms "controlling," "controlled by" and "under common
control with" have correlative meanings.
"Agent Members" has the meaning assigned to it in Section 2.6(b).
"Approved Jurisdiction" means any state of the United States or the
District of Columbia or any Member State of the European Union in respect of
which the Company delivers
<PAGE>
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:
(1) an Investment by the Company or any Restricted Subsidiary in any
other Person pursuant to which such Person shall become a Restricted
Subsidiary, or shall be merged with or into the Company or any Restricted
Subsidiary;
(2) the acquisition by the Company or any Restricted Subsidiary of
the assets of any Person (other than a Subsidiary of the Company) which
constitute all or substantially all of the assets of such Person or
comprises any division or line of business of such Person or any other
properties or assets of such Person other than in the ordinary course of
business; or
(3) any Revocation with respect to an Unrestricted Subsidiary.
"Asset Sale" means any direct or indirect sale, disposition,
issuance, conveyance, transfer, lease, assignment or other transfer, including a
Sale and Leaseback Transaction (each, a "Disposition") by the Company or any
Restricted Subsidiary of:
(a) any Capital Stock other than any Capital Stock of the Company
and Capital Stock issued by Subsidiaries pursuant to employee
benefit plans, stock option plans or similar arrangements; or
(b) any property or assets (other than cash, Cash Equivalents or
Capital Stock) of the Company or any Restricted Subsidiary.
Notwithstanding the preceding, the following items shall not be
deemed to be Asset Sales:
(1) the Disposition of all or substantially all of the assets of the
Company and its Restricted Subsidiaries as permitted under Section 4.1;
(2) a Disposition of inventory or obsolete or worn-out equipment, in
each case in the ordinary course of business;
(3) Dispositions of assets in any fiscal year with a Fair Market
Value not to exceed $5 million in the aggregate;
(4) for purposes of Section 3.15 only, the making of a Restricted
Payment permitted under Section 3.11;
(5) a Disposition to the Company or a Restricted Subsidiary,
including a Person that is or will become a Restricted Subsidiary
immediately after the Disposition;
(6) a Disposition in the ordinary course of business of capacity,
fiber, space, minutes, packets or other related facilities or services on
any fiber optic cable system or
2
<PAGE>
telecommunications network owned, controlled, resold or operated by the
Company or any Restricted Subsidiary or of telecommunications capacity,
transmission rights, conduit or rights-of-way acquired by the Company or
any Restricted Subsidiary for use in a Telecommunications Business of the
Company or any Restricted Subsidiary or of telecommunications services on
any property owned, controlled or operated by the Company or any
Restricted Subsidiary; and
(7) a Disposition to a landing party pursuant to and in accordance
with the provisions of the Construction and Maintenance Agreement, dated
as of December 14, 1994, among FLAG Limited and each of the landing
parties signatory thereto.
"Asset Sale Offer" has the meaning set forth in Section 3.15.
"Asset Sale Offer Notice" means notice of an Asset Sale Offer which
shall be mailed first class, postage prepaid, to the record Holders as shown on
the Note Register within 30 days following the 360th day after the receipt of
Net Cash Proceeds of any Asset Sale, with a copy to the Trustee which notice
shall govern the terms of the Asset Sale Offer, and state:
(1) the terms and conditions of the Asset Sale, that an Asset Sale
Offer is being made pursuant to Section 3.15 and that all Notes that are
timely tendered will be accepted for payment;
(2) the Asset Sale Offer Amount and the Asset Sale Offer Payment
Date, which date shall be a Business Day no earlier than 30 days nor later
than 60 days from the date the Asset Sale Offer notice is mailed (other
than as may be required by law);
(3) that any Notes or portions thereof not tendered or accepted for
payment will continue to accrue interest;
(4) that, unless the Company defaults in the payment of the Asset
Sale Offer Amount with respect thereto, all Notes or portions thereof
accepted for payment pursuant to the Asset Sale Offer shall cease to
accrue interest from and after the Asset Sale Offer Payment Date;
(5) that any Holder electing to have any Notes or portions thereof
purchased pursuant to the Asset Sale Offer will be required to surrender
such Notes, with the form entitled "Option of Holder to Elect Purchase" on
the reverse of such Notes completed, to the Paying Agent at the address
specified in the notice prior to the close of business on the third
Business Day preceding the Asset Sale Offer Payment Date;
(6) that any Holder shall be entitled to withdraw such election if
the Paying Agent receives, not later than the close of business on the
second Business Day preceding the Asset Sale Offer Payment Date, a
facsimile transmission or letter, setting forth the name of the Holder,
the principal amount of Notes delivered for purchase, and a statement that
such Holder is withdrawing such Holder's election to have such Notes or
portions thereof purchased pursuant to the Asset Sale Offer;
3
<PAGE>
(7) that any Holder electing to have Notes purchased pursuant to the
Asset Sale Offer must specify the principal amount that is being tendered
for purchase, which principal amount must be Euro 1,000 or an integral
multiple thereof;
(8) that any Holder of Certificated Notes whose Certificated Notes
are being purchased only in part will be issued new Certificated Notes
equal in principal amount to the unpurchased portion of the Certificated
Note or Notes surrendered, which unpurchased portion will be equal in
principal amount to Euro 1,000 or an integral multiple thereof;
(9) that the Trustee will return to the Holder of a Global Note that
is being purchased in part, such Global Note with a notation on the
schedule of increases or decreases thereof adjusting the principal amount
thereof to be equal to the unpurchased portion of such Global Note; and
(10) any other information necessary to enable any Holder to tender
Notes and to have such Notes purchased pursuant to Section 3.15.
"Authenticating Agent" has the meaning assigned to it in Section
2.2(d).
"Bankruptcy Law" means Title 11, U.S. Code or any similar Federal,
state or foreign law for the relief of debtors.
"Board Of Directors" means, as to any Person, the board of
directors, management committee or similar governing body of such Person or any
duly authorized committee thereof.
"Board Resolution" means, with respect to any Person, a copy of a
resolution certified by the Secretary or an Assistant Secretary of such Person
to have been duly adopted by the Board of Directors of such Person and to be in
full force and effect on the date of such certification, and delivered to the
Trustee.
"Business Day" means a day other than a Saturday, Sunday or other
day on which commercial banking institutions and foreign exchange markets are
authorized or required by law to close in New York City, London or Luxembourg.
"Capitalized Lease Obligations" means, as to any Person, the
obligations of such Person under a lease that are required to be classified and
accounted for as capital lease obligations under U.S. GAAP. For purposes of this
definition, the amount of such obligations at any date shall be the capitalized
amount of such obligations at such date, determined in accordance with U.S.
GAAP.
"Capital Stock" means:
(1) with respect to any Person that is a corporation, any and all
shares, interests, participations or other equivalents (however designated
and whether or not voting) of corporate stock, including each class of
Common Stock and Preferred Stock of such Person;
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(2) with respect to any Person that is not a corporation, any and
all partnership, limited liability or other equity or ownership interests
of such Person; and
(3) any warrants, rights or options to purchase any of the
instruments or interests referred to in clause (1) or (2) above;
provided, that Capital Stock does not include debt instruments
convertible into Capital Stock.
"Cash Equivalents" means:
(1) marketable direct obligations issued by, or unconditionally
guaranteed by, the government of the United States, the United Kingdom,
France or Germany or any European Union central bank or issued by any
agency of any such government and backed by the full faith and credit of
such government, in each case maturing within six months from the date of
acquisition thereof;
(2) marketable direct obligations issued by any state of the United
States of America or any political subdivision of any such state or any
public instrumentality thereof maturing within six months from the date of
acquisition thereof and, at the time of acquisition, having one of the two
highest ratings obtainable from either Standard & Poor's Corporation
("S&P") or Moody's Investors Service, Inc. ("Moody's");
(3) commercial paper maturing within 270 days from the date of
creation thereof and, at the time of acquisition, rated at least "A-2" or
the equivalent thereof or "P-2" or the equivalent thereof by S&P and
Moody's, respectively;
(4) certificates of deposit or bankers' acceptances maturing within
six months from the date of acquisition thereof issued by any bank
organized under the laws of the United States of America or any state
thereof or the District of Columbia or any country of the European Union
or any U.S. branch of a foreign bank having at the date of acquisition
thereof combined capital and surplus of not less than $500 million (or the
equivalent) and Thompson Bank Rating Watch of "B" or better;
(5) repurchase obligations with a term of not more than seven days
for underlying securities of the types described in clause (1) above
entered into with any bank meeting the qualifications specified in clause
(4) above; and
(6) investments in money market funds which invest substantially all
their assets in securities of the types described in clauses (1) through
(5) above.
"Certificated Note" means any Note issued in fully-registered
certificated form (other than a Global Note), which shall be substantially in
the form of Exhibit A, with appropriate legends as specified in Section 2.7 and
Exhibit A.
"Change Of Control" means the occurrence of one or more of the
following events:
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(1) any person" or "group" other than a Permitted Holder is or
becomes the "beneficial owner" (as such terms are used in Section 13(d)(3)
of 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 50% or more of the Voting
Stock (measured by voting power rather than number of shares) of the
Company,
(2) during any period of two consecutive years, individuals who at
the beginning of such period constituted the Board of Directors of the
Company, together with any new directors whose election by such Board of
Directors or whose nomination for election by the shareholders of the
Company was approved by a vote of a majority of the directors of the
Company then still in office who were either directors at the beginning of
such period or whose election or nomination for election was previously so
approved or is a designee of any one of the Permitted Holders or any
combination thereof or was so nominated or elected by any such Permitted
Holder or Permitted Holders or any of their designees, cease for any
reason to constitute a majority of the Board of Directors of the Company
then in office; or
(3) the Company consolidates or merges with or into any other Person
or sells, assigns, conveys, transfers leases or otherwise disposes of all
or substantially all of its assets to any other Person, other than a
consolidation or merger or disposition of assets:
(a) of or by the Company into or to a Wholly Owned Restricted
Subsidiary of the Company,
(b) into or to a Permitted Holder, or
(c) pursuant to a transaction in which the outstanding Voting
Stock of the Company is changed into or exchanged for securities or
other property with the effect that the beneficial owners of the
outstanding Voting Stock of the Company immediately prior to such
transaction, beneficially own, directly or indirectly, at least a
majority of the Voting Stock (measured by voting power rather than
number of shares) of the surviving corporation or the Person to whom
the Company's assets are transferred immediately following such
transaction.
"Change of Control Notice" means a notice which the Company must
send, by first-class mail, postage prepaid, to each Holder within 30 days
following the date upon which a Change of Control occurred, with a copy to the
Trustee which notice shall govern the terms of the Change of Control Offer and
state:
(1) that a Change of Control has occurred, the circumstances or
events causing such Change of Control and that a Change of Control Offer
is being made pursuant to Section 3.8, and that all Notes that are timely
tendered will be accepted for payment;
(2) the Change of Control Payment, and the Change of Control Payment
Date, which date shall be a Business Day no earlier than 30 calendar days
nor later than 60 calendar days subsequent to the date such notice is
mailed (other than as may be required by law);
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(3) that any Notes or portions thereof not tendered or accepted for
payment will continue to accrue interest;
(4) that, unless the Company defaults in the payment of the Change
of Control Payment with respect thereto, all Notes or portions thereof
accepted for payment pursuant to the Change of Control Offer shall cease
to accrue interest from and after the Change of Control Payment Date;
(5) that any Holder electing to have any Notes or portions thereof
purchased pursuant to a Change of Control Offer will be required to tender
such Notes, with the form entitled "Option of Holder to Elect Purchase" on
the reverse of such Notes completed, to the Paying Agent at the address
specified in the notice prior to the close of business on the third
Business Day preceding the Change of Control Payment Date;
(6) that any Holder shall be entitled to withdraw such election if
the Paying Agent receives, not later than the close of business on the
second Business Day preceding the Change of Control Payment Date, a
facsimile transmission or letter, setting forth the name of the Holder,
the principal amount of Notes delivered for purchase, and a statement that
such Holder is withdrawing such Holder's election to have such Notes or
portions thereof purchased pursuant to the Change of Control Offer;
(7) that any Holder electing to have Notes purchased pursuant to the
Change of Control Offer must specify the principal amount that is being
tendered for purchase, which principal amount must be Euro 1,000 or an
integral multiple thereof;
(8) that any Holder of Certificated Notes whose Certificated Notes
are being purchased only in part will be issued new Certificated Notes
equal in principal amount to the unpurchased portion of the Certificated
Note or Notes surrendered, which unpurchased portion will be equal in
principal amount to Euro 1,000 or an integral multiple thereof;
(9) that the Trustee will return to the Holder of a Global Note that
is being purchased in part, such Global Note with a notation on Schedule A
thereof adjusting the principal amount thereof to be equal to the
unpurchased portion of such Global Note; and
(10) any other information necessary to enable any Holder to tender
Notes and to have such Notes purchased pursuant to Section 3.8.
"Clearstream Luxembourg" means Clearstream Banking S.A., societe
anonyme, as operator of Clearstream, Luxembourg, or its successor in such
capacity.
"Code" means the Internal Revenue Code of 1986, as amended.
"Commission" means the Securities and Exchange Commission, or any
successor agency thereto with respect to the regulation or registration of
securities.
"Common Stock" of any Person means any and all shares, interests or
other participations in, and other equivalents (however designated and whether
voting or non-voting)
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of such Person's common equity interests, whether outstanding on the Issue
Date or issued after the Issue Date, and includes, without limitation, all
series and classes of such common equity interests and any warrants,
rights or options to purchase any such common equity interests.
"Company" means the party named as such in the introductory
paragraph to this Indenture and its successors and assigns, including any
Surviving Entity which becomes such in accordance with Article IV.
"Company Order" has the meaning assigned to it in Section 2.2(c).
"Consolidated Capital Ratio" means, as of any date of determination,
the ratio of:
(1) the aggregate amount of Consolidated Indebtedness outstanding as
of such date to
(2) the Consolidated Net Worth for such date.
"Consolidated Cash Flow" means, for any period, Consolidated Net Income
for such period, plus or minus the following, as the case may be:
(1) to the extent deducted in calculating such Consolidated Net
Income, Consolidated Income Tax Expense for such period; plus
(2) to the extent deducted in calculating such Consolidated Net
Income, Consolidated Interest Expense for such period; plus or minus
(3) any change in Deferred Revenues; plus
(4) to the extent deducted in calculating such Consolidated Net
Income, Consolidated Non-cash Charges for such period; and minus
(5) (a) all non-cash credits and gains increasing Consolidated Net
Income for such period (excluding non-cash credits and gains excluded in
the determination of Consolidated Net Income for such period) and (b) all
cash payments during such period relating to non-cash charges that were
added back in determining Consolidated Cash Flow in any prior period.
Notwithstanding the foregoing, Consolidated Income Tax Expense,
Consolidated Non-cash Charges and change in Deferred Revenues of a Restricted
Subsidiary of the Company shall be added to Consolidated Net Income to compute
Consolidated Cash Flow of the Company only to the extent that a corresponding
amount would be permitted at the date of determination to be dividended to the
Company by such Restricted Subsidiary without prior governmental approval (that
has not been obtained), and without direct or indirect restriction pursuant to
the terms of its charter and all agreements, instruments, judgments, decrees,
orders, statutes, rules and governmental regulations applicable to that
Restricted Subsidiary or its shareholders.
"Consolidated Income Tax Expense" means, for any period, the
provision for Federal, state, local and foreign income taxes payable by the
Company and its Restricted
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Subsidiaries for such period as determined on a consolidated basis in accordance
with U.S. GAAP.
"Consolidated Indebtedness" means, as of any date of determination,
an amount equal to the aggregate amount of all Indebtedness of the Company and
the Restricted Subsidiaries and Preferred Stock of the Restricted Subsidiaries,
other than Preferred Stock held by the Company or by any Restricted Subsidiary,
outstanding at such time.
"Consolidated Interest Expense" means, for any period, the sum of,
without duplication determined on a consolidated basis in accordance with U.S.
GAAP:
(1) the aggregate of cash and non-cash interest expense of the
Company and its Restricted Subsidiaries for such period determined on a
consolidated basis in accordance with U.S. GAAP, including, without
limitation (whether or not classified as interest expense in accordance
with U.S. GAAP):
(a) any amortization or accretion of debt discount or any interest
paid on Indebtedness of the Company in the form of additional
Indebtedness,
(b) any amortization of deferred financing costs,
(c) the net costs under Hedging Obligations (including amortization
of fees),
(d) all capitalized interest,
(e) the interest portion of any deferred payment obligation,
(f) commissions, discounts and other fees and charges Incurred in
respect of letters of credit or bankers' acceptances, and
(g) any interest expense on Indebtedness of another Person that is
guaranteed by such Person or one of its Restricted Subsidiaries or secured
by a Lien on the assets of such Person or one of its Restricted
Subsidiaries (whether or not such guarantee or Lien is called upon);
(2) the interest component of Capitalized Lease Obligations paid,
accrued and/or scheduled to be paid or accrued by the Company and its
Restricted Subsidiaries during such period;
(3) the amount of all cash and non-cash dividend payments or
distributions on any series of Preferred Stock or Disqualified Capital
Stock of any Restricted Subsidiary (other than dividends payable to the
Company or any Restricted Subsidiary) paid, accrued or scheduled to be
paid or accrued during such period; and
(4) the cash contributions to any employee stock ownership plan or
similar trust to the extent such contributions are used by such plan or
trust to pay interest or fees to any Person (other than the Company) in
connection with Indebtedness Incurred by such plan or trust.
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"Consolidated Leverage Ratio" means, as of any date of
determination, the ratio of the aggregate amount of Consolidated Indebtedness as
of such date to Consolidated Cash Flow for the four most recent full fiscal
quarters for which financial statements are available ending prior to the date
of such determination (the "Four Quarter Period"). For purposes of this
definition, "Consolidated Indebtedness" and "Consolidated Cash Flow" shall be
calculated after giving effect on a pro forma basis in accordance with
Regulation S-X under the Securities Act for the period of such calculation to:
(1) the Incurrence or repayment or redemption of any Indebtedness of
the Company or any of its Restricted Subsidiaries (and the application of
the proceeds thereof), including the Incurrence of any Indebtedness (and
the application of the proceeds thereof) giving rise to the need to make
such determination, occurring during such Four Quarter Period or at any
time subsequent to the last day of such Four Quarter Period and on or
prior to such date of determination, to the extent, in the case of an
Incurrence, such Indebtedness is outstanding on the date of determination,
as if such Incurrence or repayment, as the case may be (and the
application of the proceeds thereof), occurred on the first day of such
Four Quarter Period; and
(2) any Asset Sale or Asset Acquisition (including, without
limitation, any Asset Acquisition giving rise to the need to make such
determination as a result of the Company or one of its Restricted
Subsidiaries (including any Person who becomes a Restricted Subsidiary as
a result of the Asset Acquisition) Incurring Acquired Indebtedness and
including, without limitation, by giving pro forma effect to any
Consolidated Cash Flow (provided that such pro forma Consolidated Cash
Flow shall be calculated in a manner consistent with the exclusions in the
definition of "Consolidated Net Income") attributable to the assets which
are the subject of the Asset Sale or Asset Acquisition during the Four
Quarter Period) occurring during the Four Quarter Period or at any time
subsequent to the last day of the Four Quarter Period and on or prior to
such date of determination, as if such Asset Sale or Asset Acquisition
(including the Incurrence of any such Acquired Indebtedness) occurred on
the first day of the Four Quarter Period.
In addition, the amount of Indebtedness under any revolving credit
facility will be computed based on:
(a) the average daily balance of such Indebtedness during such Four
Quarter Period, or
(b) if such facility was created after the end of such Four Quarter
Period, the average daily balance of such Indebtedness during the period
from the date of creation of such facility to the date of such
calculation,
in each case giving pro forma effect to any borrowings related to any
transaction referred to in clause (2) above.
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"Consolidated Net Income" means, for any period, the aggregate net
income (or loss) of the Company and its Restricted Subsidiaries for such period
on a consolidated basis, determined in accordance with U.S. GAAP; provided, that
there shall be excluded therefrom:
(1) net after-tax gains or losses from Asset Sales or abandonments
or reserves relating thereto;
(2) net after-tax items classified as extraordinary gains or losses;
(3) for purposes of calculating Consolidated Cash Flow pursuant to
clause (3) of the first paragraph of Section 3.11 only, the net income of
any Person acquired in a "pooling of interests" transaction accrued prior
to the date it becomes a Restricted Subsidiary or is merged or
consolidated with the Company or any Restricted Subsidiary;
(4) the net income (but not loss) of any Restricted Subsidiary to
the extent that the declaration of dividends or similar distributions by
that Restricted Subsidiary of that income is restricted by contract,
operation of law or otherwise;
(5) the net income (or loss, but only in the case of Unrestricted
Subsidiaries) of any Person, other than the Company or a Restricted
Subsidiary, except to the extent of cash dividends or distributions paid
to the Company or to a Restricted Subsidiary by such Person which are not
included pursuant to clause (C) of the first paragraph of Section 3.11;
(6) any increase (but not decrease) in net income attributable to
minority interests in any Restricted Subsidiary;
(7) any restoration to income of any contingency reserve, except to
the extent that provision for such reserve was made out of Consolidated
Net Income accrued at any time following the Issue Date;
(8) the cumulative effect of changes in accounting principles; and
(9) for purposes of calculating Consolidated Cash Flow pursuant to
clause 3(A) of the first paragraph of Section 3.11 only, any earnings of a
Surviving Entity prior to assuming the Company's obligations under this
Indenture and the Notes pursuant to Section 3.11.
"Consolidated Net Worth" means, as of any date of determination, the
excess (if any) of:
(1) the total amounts shown on the balance sheet of the Company and
its Restricted Subsidiaries, determined on a consolidated basis in
accordance with U.S. GAAP, as of the end of the most recent fiscal quarter
for which financial statements are available ending prior to such date as
the aggregate paid-in capital relating to the Company's Capital Stock
(excluding Disqualified Stock), after giving pro forma effect to any
issuance, repurchase or redemption of the Company's Capital Stock since
the end of such most recent fiscal quarter, over
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(2) the amount of Restricted Investments (including Designation
Amounts, but excluding Restricted Investments in Permitted Joint Ventures)
made by the Company or its Restricted Subsidiaries since the Issue Date.
"Consolidated Non-Cash Charges" means, for any period, the aggregate
depreciation, amortization (including amortization of goodwill and other
intangibles and the amount of capacity available for sale charged to cost of
sales, but excluding amortization of prepaid cash expenses that were paid in a
prior period) and other non-cash expenses or losses (including non-cash charges
related to any employee stock ownership or option plan) of the Company and its
Restricted Subsidiaries for such period, determined on a consolidated basis in
accordance with U.S. GAAP (excluding any such charge which constitutes an
accrual of or a reserve for cash charges for any future period or the
amortization of a prepaid cash expense paid in a prior period).
"Corporate Trust Office" has the meaning assigned to it in Section
2.3(c).
"Covenant Defeasance" has the meaning assigned to it in Section
8.1(c).
"Currency Agreement" means, in respect of any Person, any foreign
exchange contract, currency swap agreement or other similar agreement as to
which such Person is a party relating to foreign currency denominated
Indebtedness.
"Custodian" means any receiver, trustee, assignee, liquidator,
sequestrator or similar official under any Bankruptcy Law.
"Default" means an event or condition the occurrence of which is, or
with the lapse of time or the giving of notice or both would be, an Event of
Default.
"Defaulted Interest" has the meaning assigned to it in Exhibit A.
"Deferred Revenue" means amounts appearing as a liability on the
balance sheet of the Company and its Restricted Subsidiaries (determined on a
consolidated basis in accordance with U.S. GAAP) classified as deferred revenues
to the extent of cash received in connection therewith or to the extent a
receivable with terms customary in the industry or otherwise commercially
reasonable is recorded on the balance sheet, as of the end of the most recent
fiscal quarter for which financial statements are available ending prior to the
date of determination.
"Depositary" means, with respect to a Global Note, the Person
specified in Section 2.3 as the Depositary with respect to the Notes, and any
and all successors thereto appointed as depositary hereunder and having become
such pursuant to the applicable provisions of this Indenture.
"Designation" and "Designation Amount" have the meanings set forth
in Section 3.11.
"Disqualified Capital Stock" means that portion of any Capital Stock
which, by its terms (or by the terms of any security into which it is
convertible or for which it is
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exchangeable at the option of the holder thereof), or upon the happening of any
event, matures or is mandatorily redeemable, pursuant to a sinking fund
obligation or otherwise, or is redeemable at the sole option of the holder
thereof, in any case, on or prior to the 91st day after the final maturity date
of the Notes; provided, however, that any Capital Stock that would constitute
Disqualified Stock solely because the holders thereof have the right to require
the Company to repurchase such Capital Stock upon the occurrence of a Change of
Control or an Asset Sale shall not constitute Disqualified Stock if the terms of
such Capital Stock provide that the Company may not repurchase or redeem any
such Capital Stock pursuant to such provisions unless such repurchase or
redemption complies with Section 3.11 and until such time as the Company has
satisfied its obligations to the Holders of Notes pursuant to Section 3.8.
"Distribution Compliance Period" means, in respect of any Regulation
S Global Note, the 40 consecutive days beginning on and including the later of
(a) the day on which any Notes represented thereby are offered to persons other
than distributors (as defined in Regulation S under the Securities Act) pursuant
to Regulation S and (b) the issue date for such Notes.
"Euro" means the currency adopted by the European Union.
"European Union" means the member nations to the third stage of
European Monetary Union pursuant to the Treaty of Rome establishing the European
Community, as amended by the Treaty on European Union, signed at Maastricht on
February 7, 1992.
"European Union Obligations" means direct non-callable or redeemable
obligations of, or fully guaranteed by, the government of a member of the
European Union for the payment of which obligation or guarantee, the full faith
and credit of such member is pledged.
"Euroclear" means Morgan Guaranty Trust Company of New York,
Brussels Office, as operator of the Euroclear System, or its successor in such
capacity.
"Event of Default" has the meaning assigned to it in Section 6.1.
"Exchange Act" means the Securities Exchange Act of 1934, as
amended; or any successor statute or statutes thereto.
"Exchange Notes" means Notes issued in a Registered Exchange Offer
in exchange for a like principal amount of Notes originally issued pursuant to
an exemption from registration under the Securities Act, and replacement Notes
issued therefor in accordance with this Indenture.
"Fair Market Value" means, with respect to any asset, the price
(after taking into account any liabilities relating to such assets) which could
be negotiated in an arm's-length free market transaction, for cash, between a
willing seller and a willing and able buyer, neither of which is under any
compulsion to complete the transaction; provided, that the Fair Market Value of
any such asset or assets shall be determined conclusively by the Board of
Directors of the Company acting in good faith, and shall be evidenced by a Board
Resolution.
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"FLAG Limited Credit Agreement" means the credit agreement, dated as
of January 28, 1998, among FLAG Limited, the Term Lenders thereto, the Revolving
Lenders thereto, Barclays Bank plc and International Trust Company of Bermuda,
as amended.
"Four Quarter Period" has the meaning set forth in the definition of
"Consolidated Leverage Ratio" above.
"Global Note" means any Note issued in fully-registered certificated
form to the Depositary (or its nominee), as depositary for the beneficial owners
thereof, which shall be substantially in the form of Exhibit A, with appropriate
legends as specified in Section 2.7 and Exhibit A.
"Guarantee" means any obligation, contingent or otherwise, of any
Person directly or indirectly guaranteeing any Indebtedness of any other Person:
(a) to purchase or pay, or advance or supply funds for the purchase
or payment of, such Indebtedness of such other Person, whether arising by
virtue of partnership arrangements, or by agreement to keep-well, to
purchase assets, goods, securities or services, to take-or-pay, or to
maintain financial statement conditions or otherwise, or
(b) 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 "Guarantee" shall not include endorsements for collection or
deposit in the ordinary course of business. The term "Guarantee" used as a
verb has a corresponding meaning.
"Hedging Obligations" means the obligations of any Person pursuant
to any Interest Rate Agreement or Currency Agreement.
"Holder" means the Person in whose name a Note is registered in the
Note Register.
"Incur" means, with respect to any Indebtedness, Lien or other
obligation of any Person, to create, issue, incur (including by conversion,
exchange or otherwise), assume, Guarantee or otherwise become liable in respect
of such Indebtedness or other obligation on the balance sheet of such Person or
Lien (and "Incurrence," "Incurred" and "Incurring" shall have meanings
correlative to the preceding); provided, however, that a change in U.S. GAAP
that results in an obligation of such person that exists at such time becoming
Indebtedness shall not be deemed an Incurrence of such Indebtedness and that
neither the accrual of interest nor the accretion of original issue discount
shall be deemed an Incurrence of Indebtedness. Any Indebtedness or Lien of any
Person outstanding at the time such Person becomes a Restricted Subsidiary
(including upon Revocation) or is merged with or into or consolidates with the
Company or a Restricted Subsidiary, whether or not such Indebtedness or Lien was
Incurred in connection with or in anticipation thereof, shall be deemed Incurred
at the time it becomes a Restricted Subsidiary.
"Indebtedness" means with respect to any Person, without
duplication:
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(1) the principal amount (or, if less, the accreted value) of all
obligations of such Person for borrowed money;
(2) the principal amount (or, if less, the accreted value) of all
obligations of such Person evidenced by bonds, debentures, notes or other
similar instruments;
(3) all Capitalized Lease Obligations of such Person;
(4) all obligations of such Person issued or assumed as the deferred
purchase price of property, all conditional sale obligations and all
obligations under any title retention agreement (but excluding trade
accounts payable and other accrued liabilities arising in the ordinary
course of business that are not overdue by 90 days or more or are being
contested in good faith by appropriate proceedings promptly instituted and
diligently conducted);
(5) all letters of credit, banker's acceptances or similar credit
transactions, including reimbursement obligations in respect thereof;
(6) Guarantees of such Person in respect of Indebtedness referred to
in clauses (1) through (5) above and clauses (8) and (9) below;
(7) all Indebtedness of any other Person of the type referred to in
clauses (1) through (6) which is secured by any Lien on any property or
asset of such Person, the amount of such Indebtedness being deemed to be
the lesser of the Fair Market Value of such property or asset or the
amount of the Indebtedness so secured;
(8) all obligations under Hedging Obligations of such Person; and
(9) all Disqualified Capital Stock issued by such Person with the
amount of Indebtedness represented by such Disqualified Capital Stock
being equal to the greater of its voluntary or involuntary liquidation
preference and its maximum fixed repurchase price, but excluding accrued
dividends, if any; provided, that:
(a) if the Disqualified Capital Stock does not have a fixed
repurchase price, such maximum fixed repurchase price shall be calculated
in accordance with the terms of the Disqualified Capital Stock as if the
Disqualified Capital Stock were purchased on any date on which
Indebtedness shall be required to be determined pursuant to this
Indenture, and
(b) if the maximum fixed repurchase price is based upon, or measured
by, the fair market value of the Disqualified Capital Stock, the fair
market value shall be the Fair Market Value thereof.
"Indenture" means this Indenture as amended or supplemented from
time to time.
"Independent Financial Advisor" means an accounting firm, appraisal
firm, investment banking firm or consultant of nationally recognized standing
that is, in the judgment
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of the Company's Board of Directors, qualified to perform the task for which it
has been engaged and which is independent in connection with the relevant
transaction.
"Interest Payment Date" means the stated due date of an installment
of interest on the Notes as specified in Exhibit A.
"Interest Rate Agreement" of any Person means any interest rate
protection agreement (including, without limitation, interest rate swaps, caps,
floors, collars, derivative instruments and similar agreements) and/or other
types of interest hedging agreements.
"Investment" means, with respect to any Person, any:
(1) direct or indirect loan or other extension of credit (including,
without limitation, a guarantee),
(2) capital contribution to (by means of any transfer of cash or
other property to others or any payment for property or services for the
account or use of others), or
(3) any purchase or acquisition by such Person of any Capital Stock,
bonds, notes, debentures or other securities or evidences of Indebtedness
issued by, any other Person.
"Investment" shall exclude (A) accounts receivable or deposits
arising in the ordinary course of business; (B) payroll, travel and similar
advances to cover matters that are expected at the time of such advances
ultimately to be treated as expenses for accounting purposes and that are made
in the ordinary course of business; (C) loans or advances to employees made in
the ordinary course of business consistent with past practices of the Company or
such Restricted Subsidiary; and (D) stock, obligations or securities received in
settlement of debts created in the ordinary course of business and owing to the
Company or any Restricted Subsidiary or in satisfaction of judgments. Any
property transferred to or from an Unrestricted Subsidiary will be valued at its
Fair Market Value at the time of such transfer. If the Company or any Restricted
Subsidiary sells or otherwise disposes of any Common Stock of a Restricted
Subsidiary (including any issuance and sale of Capital Stock by a Restricted
Subsidiary) such that, after giving effect to any such sale or disposition, such
Restricted Subsidiary would cease to be a Subsidiary of the Company, the Company
shall be deemed to have made an Investment on the date of any such sale or
disposition equal to sum of the Fair Market Value of the Capital Stock of such
former Restricted Subsidiary held by the Company or any Restricted Subsidiary
immediately following such sale or other disposition and the amount of any
Indebtedness of such former Restricted Subsidiary Guaranteed by the Company or
any Restricted Subsidiary or owed to the Company or any other Restricted
Subsidiary immediately following such sale or other disposition.
"Issue Date" means March 17, 2000.
"Legal Defeasance" has the meaning assigned to it in Section 8.1(b).
"Legal Holiday" has the meaning assigned to it in Section 11.7.
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"Lien" means any lien, mortgage, deed of trust, pledge, security
interest, charge or encumbrance of any kind (including any conditional sale or
other title retention agreement, any lease in the nature thereof and any
agreement to give any security interest).
"Maturity Date" means March 30, 2010.
"Net Cash Proceeds" means, with respect to any Asset Sale, the
proceeds in the form of cash or Cash Equivalents, including payments in respect
of deferred payment obligations when received in the form of cash or Cash
Equivalents received by the Company or any of its Restricted Subsidiaries from
such Asset Sale, net of:
(1) reasonable out-of-pocket expenses and fees relating to such
Asset Sale (including, without limitation, legal, accounting and
investment banking fees and sales commissions);
(2) taxes paid or payable in respect of such Asset Sale after taking
into account any reduction in consolidated tax liability due to available
tax credits or deductions and any tax sharing arrangements;
(3) repayment of Indebtedness secured by a Lien on the asset
disposed of in such Asset Sale permitted under this Indenture that is
required to be repaid in connection with such Asset Sale; and
(4) appropriate amounts to be provided by the Company or any
Restricted Subsidiary, as the case may be, as a reserve, in accordance
with U.S. GAAP, against any liabilities associated with such Asset Sale
and retained by the Company or any Restricted Subsidiary, as the case may
be, after such Asset Sale, including, without limitation, pension and
other post-employment benefit liabilities, liabilities related to
environmental matters and liabilities under any indemnification
obligations associated with such Asset Sale.
"Non-U.S. Person" means a person who is not a U.S. person, as
defined in Regulation S.
"Note Custodian" means the custodian with respect to any Global Note
appointed by Clearstream Luxembourg, or any successor Person thereto, and shall
initially be the Trustee.
"Note Register" has the meaning assigned to it in Section 2.3(a).
"Notes" means any of the Company's 11.625% Senior Euro Notes Due
2010 issued and authenticated pursuant to this Indenture.
"Officer" means, when used in connection with any action to be taken
by the Company, the Chairman of the Board, the Chief Executive Officer, the
Chief Operating Officer, the Chief Financial Officer or the Treasurer of the
Company.
"Officers' Certificate" means, when used in connection with any
action to be taken by the Company, a certificate signed by two Officers of the
Company and delivered to the Trustee.
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"Opinion of Counsel" means a written opinion of counsel, who may be
an employee of or counsel for the Company and who shall be reasonably acceptable
to the Trustee.
"Outstanding" means, as of the date of determination, all Notes
theretofor authenticated and delivered under this Indenture, except:
(i) Notes theretofor canceled by the Trustee or delivered to the
Trustee for cancellation;
(ii) Notes, or portions thereof, for whose payment or redemption
money in the necessary amount has been theretofor deposited with the
Trustee or any Paying Agent (other than the Company) in trust or set aside
and segregated in trust by the Company (if the Company shall act as its
own Paying Agent) for the Holders of such Notes; provided that, if the
Notes are to be redeemed, notice of such redemption has been duly given
pursuant to this Indenture or provision therefor satisfactory to the
Trustee has been made;
(iii) Notes which have been surrendered pursuant to Section 2.9 or
in exchange for or in lieu of which other Notes have been authenticated
and delivered pursuant to this Indenture, other than any such Notes in
respect of which there shall have been presented to the Trustee proof
satisfactory to it that such Notes are held by a bona fide purchaser in
whose hands such Notes are valid obligations of the Company; and
(iv) Solely to the extent provided in Article VIII, Notes which are
subject to Legal Defeasance or Covenant Defeasance as provided in Article
VIII.
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 Trust 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.
"Paying Agent" has the meaning assigned to it in Section 2.3(a).
"Permitted Credit Facility" means one or more credit agreements,
loan agreements or similar facilities in the bank credit market (which may
include institutional investor participation), secured or unsecured, providing
for revolving credit loans, term loans and/or letters of credit, including the
FLAG Limited Credit Agreement, entered into from time to time by the Company and
its Restricted Subsidiaries, and including any related notes,
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Guarantees, collateral documents, instruments and agreements executed in
connection therewith, as the same may be amended, supplemented, modified,
restated or replaced from time to time.
"Permitted Holders" means Bell Atlantic Corporation, Dallah Albaraka
Holding Company and their respective Affiliates.
"Permitted Investments" means:
(1) Investments by the Company or any Restricted Subsidiary in any
Person that is, or that result in any Person becoming, immediately after
such Investment, a Restricted Subsidiary or constituting a merger or
consolidation of such Person into the Company or with or into a Restricted
Subsidiary;
(2) Investments by any Restricted Subsidiary in the Company;
(3) Investments in cash and Cash Equivalents;
(4) any extension, modification or renewal of any Investments
existing as of the Issue Date (but not Investments involving additional
advances, contributions or other investments of cash or property or other
increases thereof, other than as a result of the accrual or accretion of
interest or original issue discount or payment-in-kind pursuant to the
terms of such Investment as of the Issue Date);
(5) Investments received as a result of the bankruptcy or
reorganization of any Person or taken in settlement of or other resolution
of claims or disputes, and, in each case, extensions, modifications and
renewals thereof; and
(6) Investments made by the Company or its Restricted Subsidiaries
as a result of non-cash consideration permitted to be received in
connection with an Asset Sale made in compliance with Section 3.15.
"Permitted Joint Venture" means a Person engaged in the
Telecommunications Business as to which the Company exercises no less than a
veto right over material operating, financial and strategic actions and owns at
least 30% of the Voting Stock and Capital Stock and no more than 50% of the
Voting Stock and Capital Stock; provided, however, that neither the Company nor
any Restricted Subsidiary will at any time:
(1) provide credit support for, subject any of its property or
assets (other than the Capital Stock of any Permitted Joint Venture) to
the satisfaction of, or guarantee, any Indebtedness of any Permitted Joint
Venture (including any undertaking, agreement or instrument evidencing
such Indebtedness);
(2) be directly or indirectly liable for any Indebtedness of any
Permitted Joint Venture; or
(3) be directly or indirectly liable for any Indebtedness which
provides that the holder thereof may (upon notice, lapse of time or both)
declare a default thereon or cause the payment thereof to be accelerated
or payable prior to its final scheduled maturity
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upon the occurrence of a default with respect to any Indebtedness of any
Permitted Joint Venture; except, in the case of (1), (2) or (3), (x)
Guarantees provided on a several, but not joint, basis, or loans, in each
case, in proportion to the Company's ownership interest in the relevant
Permitted Joint Venture or (y) any non-recourse guarantee given solely to
support the pledge by the Company or any Restricted Subsidiary of the
Capital Stock of any Permitted Joint Venture.
"Permitted Liens" means any of the following:
(1) Liens securing Indebtedness Incurred in accordance with clause
2(d), (e) or (f) of Section 3.10, provided that:
(a) Liens securing Indebtedness Incurred pursuant to such
clause 2(e)(x) shall cover only the assets acquired with the
proceeds of such Indebtedness and shall be created within 180 days
of such acquisition; and
(b) Liens securing Indebtedness pursuant to such clause 2(f)
shall only cover the property securing the Indebtedness to which the
relevant Hedging Obligations relate;
(2) Liens in favor of the Company or any Restricted Subsidiary;
(3) Liens:
(a) on property of a Person existing at the time such Person
is merged with or into or consolidated with the Company or any of
its Restricted Subsidiaries (including Liens Securing Acquired
Indebtedness), provided that such Liens were in existence prior to
the contemplation of such merger or consolidation and do not extend
to any assets other than those of the Person merged into or
consolidated with the Company or such Restricted Subsidiary and if
such Liens secure Subordinated Indebtedness, such Liens shall be
junior and subordinate to Liens on the same property securing the
Notes;
(b) Liens on property existing at the time of acquisition
thereof by the Company or any of its Restricted Subsidiaries,
provided that such Liens were in existence prior to the
contemplation of such acquisition;
(4) Liens to secure the performance of statutory obligations, surety
or appeal bonds, performance bonds or other obligations of a like nature
incurred in the ordinary course of business;
(5) Liens existing on the Issue Date and Liens to secure any
Permitted Refinancing Indebtedness which is Incurred to Refinance any
Indebtedness which has been secured by a Lien permitted under Section 3.13
and which Indebtedness has been Incurred in accordance with Section 3.10;
provided, that such new Liens:
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(a) are no less favorable to the Holders of Notes and are not
more favorable to the lienholders with respect to such Liens than
the Liens in respect of the Indebtedness being Refinanced; and
(b) do not extend to any property or assets other than the
property or assets securing the Indebtedness Refinanced by such
Refinancing Indebtedness;
(6) Liens for taxes, assessments or governmental charges or claims
that are not yet delinquent or that are being contested in good faith by
appropriate proceedings promptly instituted and diligently concluded,
provided that any reserve or other appropriate provision as shall be
required in conformity with U.S. GAAP shall have been made therefor;
(7) zoning restrictions, rights-of-way, easements and similar
charges or encumbrances incurred in the ordinary course which in the
aggregate do not detract from the value of the property thereof;
(8) Liens arising by reason of operation of law in favor of
mechanics, materialmen, laborers, employees or suppliers, Incurred in the
ordinary course of business for sums which are not yet delinquent or are
being contested in good faith by appropriate proceedings which suspend the
collection thereof; and
(9) Liens incurred in the ordinary course of business of the Company
or any of its Restricted Subsidiaries with respect to obligations that do
not exceed $15 million at any one time outstanding and that:
(a) are not Incurred in connection with the borrowing of money
or the obtaining of advances or credit (other than trade credit in
the ordinary course of business); and
(b) do not in the aggregate materially detract from the value
of the property or materially impair the use thereof in the
operation of business by the Company or such Restricted Subsidiary.
"Permitted Refinancing Indebtedness" means Refinancing Indebtedness
in respect of:
(1) Indebtedness (other than Indebtedness owed to the Company or any
Subsidiary) Incurred pursuant to paragraph (1) of Section 3.10, or
(2) Indebtedness Incurred pursuant to paragraph 2(a) or 2(i) of
Section 3.10.
"Person" means an individual, partnership, corporation, limited
liability company, unincorporated organization, trust or joint venture, or a
governmental agency or political subdivision thereof.
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"Preferred Stock" of any Person means any Capital Stock of such
Person that has preferential rights over any other Capital Stock of such Person
with respect to profits, dividends, distributions or redemptions or upon
liquidation.
"Private Exchange Notes" shall have the meaning assigned to such
term in the Registration Agreement.
"Private Placement Legend" has the meaning assigned to it in Section
2.7(b).
"Public Equity Offering" means an underwritten public offering of
Common Stock of the Company (other than Disqualified Stock) for cash resulting
in gross proceeds to the Company of at least $50 million.
"Purchase Money Indebtedness" means Indebtedness (including Acquired
Indebtedness and Acquired Preferred Stock) of the Company or any Restricted
Subsidiary Incurred for the purpose of financing all or any part of the purchase
price, or other cost of construction, development, leasing or improvement of any
property (excluding a Sale and Leaseback Transaction involving property
previously owned by the Company or any Restricted Subsidiary); provided that the
aggregate principal amount of such Indebtedness or liquidation value of such
Preferred Stock does not exceed the lesser of the Fair Market Value of such
property or such purchase price or cost at the time of purchase, construction,
development, lease or improvement, as determined in accordance with U.S. GAAP in
good faith by the Board of Directors of the Company, including any Refinancing
Indebtedness for such Indebtedness.
"QIB" means any "qualified institutional buyer" (as defined in Rule
144A).
"Qualified Capital Stock" means any Capital Stock that is not
Disqualified Capital Stock and any warrants, rights or options to purchase or
acquire Capital Stock that is not Disqualified Capital Stock and that is not
convertible into or exchangeable into Disqualified Capital Stock.
"Record Date" has the meaning assigned to it in Exhibit A.
"Redemption Date" means, with respect to any redemption of Notes,
the date of redemption with respect thereto.
"Refinance" means, in respect of any security or Indebtedness, to
refinance, extend, renew, refund, repay, prepay, redeem, defease or retire, or
to issue a security or Indebtedness in exchange or replacement for, such
security or Indebtedness in whole or in part. "Refinanced" and "Refinancing"
shall have correlative meanings.
"Refinancing Indebtedness" means any Refinancing by the Company or
any Restricted Subsidiary, to the extent that such Refinancing does not:
(1) result in an increase in the aggregate principal amount (or
accreted value, if less) of the Indebtedness of such Person as of the date
of such proposed Refinancing (plus the amount of any premium required to
be paid under the terms of the instrument
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governing such Indebtedness and plus the amount of reasonable expenses
incurred by the Company in connection with such Refinancing); or
(2) create Indebtedness with:
(a) a Weighted Average Life to Maturity that is less than the
Weighted Average Life to Maturity of the Indebtedness being
Refinanced; or
(b) a final maturity earlier than the final maturity of the
Indebtedness being Refinanced; provided, that:
(x) if such Indebtedness being Refinanced is Indebtedness of
the Company, then such Refinancing Indebtedness shall be
Indebtedness of the Company, and
(y) if such Indebtedness being Refinanced is Subordinated
Indebtedness, then such Refinancing Indebtedness shall be
subordinate to the Notes at least to the same extent and in the same
manner as the indebtedness being Refinanced.
"Registered Exchange Offer" means an exchange offer by the Company
registered under the Securities Act pursuant to which Notes originally issued
pursuant to an exemption from registration under the Securities Act are
exchanged for Notes of like principal amount not bearing the Private Placement
Legend.
"Registrar" has the meaning assigned to it in Section 2.3(a).
"Registration Agreement" means the Registration Agreement, dated as
of March 17, 2000, among the Company and Salomon Smith Barney Inc., Morgan
Stanley & Co. International Limited, Deutsche Bank Securities Inc. and Bear
Stearns & Co., Inc., as Initial Purchasers.
"Registration Statement" means an effective shelf registration
statement under the Securities Act that registers the resale by Holders (and
beneficial owners) of Notes (or beneficial interests therein).
"Regulation S" means Regulation S under the Securities Act or any
successor regulation.
"Regulation S Global Note" has the meaning assigned to it in Section
2.1(e).
"Replacement Assets" has the meaning set forth under Section 3.15.
"Resale Restriction Termination Date" means, for any Restricted Note
(or beneficial interest therein), two years (or such other period specified in
Rule 144(k)) from the Issue Date.
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"Restricted Investment" means any Investment (other than a Permitted
Investment).
"Restricted Note" means any Note (or beneficial interest therein) or
any Exchange Note, until such time as:
(i) such Note (or beneficial interest therein) has been transferred
pursuant to a Registration Statement;
(ii) the Resale Restriction Termination Date therefor has passed;
(iii) such Note is a Regulation S Global Note and the Distribution
Compliance Period therefor has terminated; or
(iv) the Private Placement Legend therefor has otherwise been
removed pursuant to Section 2.8(d) or, in the case of a beneficial
interest in a Global Note, such beneficial interest has been exchanged for
an interest in a Global Note not bearing a Private Placement Legend.
"Restricted Payment" has the meaning set forth under Section 3.11.
"Restricted Subsidiary" means any Subsidiary of the Company which at
the time of determination is not an Unrestricted Subsidiary.
"Rule 144" means Rule 144 under the Securities Act (or any successor
rule).
"Rule 144A" means Rule 144A under the Securities Act (or any
successor rule).
"Rule 144A Global Note" has the meaning assigned to it in Section
2.1(d).
"Sale And Leaseback Transaction" means any direct or indirect
arrangement with any Person or to which any such Person is a party providing for
the leasing to the Company or a Restricted Subsidiary of any property, whether
owned by the Company or any Restricted Subsidiary at the Issue Date or later
acquired, which has been or is to be sold or transferred by the Company or such
Restricted Subsidiary to such Person or to any other Person by whom funds have
been or are to be advanced on the security of such Property.
"SEC" means the Securities and Exchange Commission.
"Securities Act" means the Securities Act of 1933, as amended.
"Senior Indebtedness" means the Notes and any other Indebtedness of
the Company which ranks equal in right of payment with the Notes.
"Significant Subsidiary" shall mean a Restricted Subsidiary of the
Company constituting a "Significant Subsidiary" in accordance with Rule 1-02(w)
of Regulation S-X under the Securities Act.
"Special Record Date" has the meaning assigned to it in Section
2.12(A).
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"Stated Maturity" means, with respect to any security, the date
specified in such security as the fixed date on which payment of principal of
such security is due and payable, including pursuant to any mandatory redemption
provision (but excluding any provision providing for the repurchase of such
security at the option of the holder thereof upon the happening of any
contingency).
"Subordinated Indebtedness" means any Indebtedness of the Company
which is expressly subordinated in right of payment to the Notes.
"Subsidiary", with respect to any Person, mean any other Person of
which such Person owns, directly or indirectly, more than 50% of the voting
power of the other Person's outstanding Voting Stock.
"Surviving Entity" has the meaning assigned to it in Section 4.1.
"Telecommunications Assets" means all assets, rights (contractual or
otherwise) and properties, whether tangible or intangible, used by the Company
and its Restricted Subsidiaries in the Telecommunications Business owned and
operated by the Company and its Restricted Subsidiaries; provided that Capital
Stock shall constitute Telecommunications Assets only to the extent it
represents Capital Stock of a Person engaged in a Telecommunications Business
and such Person becomes a Restricted Subsidiary as a result of the acquisition
of such Capital Stock by the Company or another Restricted Subsidiary.
"Telecommunications Business" means the business of:
(1) transmitting, or providing services relating to the transmission
of, voice, video or data through owned or leased transmission facilities,
(2) constructing, creating, developing or marketing communications
networks, related network transmission equipment, software and other
devices for use in a telecommunications business,
(3) maintaining, operating or repairing communications networks,
including ownership of the assets necessary to engage in the
aforementioned activities,
(4) providing data center management or co-location services, or
(5) evaluating, participating or pursuing any other activity or
opportunity that is primarily related to those identified in (1) through
(4) above, provided that the determination of what constitutes a
Telecommunications Business shall be made in good faith by the Board of
Directors of the Company.
"TIA" or "Trust Indenture Act" means the Trust Indenture Act of
1939, as amended, as in effect on the date of this Indenture (except as
otherwise provided in this Indenture).
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"Trustee" means the party named as such in the introductory
paragraph of this Indenture until a successor replaces it in accordance with the
terms of this Indenture and, thereafter, means the successor.
"Trust Officer" means, when used with respect to the Trustee, any
officer within the corporate trust department of the Trustee, including any vice
president, assistant vice president, assistant secretary, assistant treasurer,
trust officer or any other officer of the Trustee who customarily performs
functions similar to those performed by the Persons who at the time shall be
such officers, respectively, or to whom any corporate trust matter is referred
because of such person's knowledge of and familiarity with the particular
subject and who shall have direct responsibility for the administration of this
Indenture.
"Unrestricted Subsidiary" means any Subsidiary of the Company
designated as such pursuant to Section 3.11. Any such Designation may be revoked
by a Board Resolution of the Company, subject to the provisions of Section 3.11.
"U.S. Dollar Notes" means the 11.625% U.S. Dollar Senior Notes due
2010 of the Company, and any exchange notes issued therefor.
"U.S. GAAP" means generally accepted accounting principles set forth
in the opinions and pronouncements of the Accounting Principles Board of the
American Institute of Certified Public Accountants and statements and
pronouncements of the Financial Accounting Standards Board or in such other
statements by such other entity as may be approved by a significant segment of
the accounting profession of the United States, which are in effect as of the
Issue Date.
"U.S. Government Obligations" means direct obligations (or
certificates representing an ownership interest in such obligations) of the
United States of America (including any agency or instrumentality thereof) for
the payment of which the full faith and credit of the United States of America
is pledged and which are not callable or redeemable at the issuer's option.
"U.S. Legal Tender" means such coin or currency of the United States
of America as at the time of payment shall be legal tender for the payment of
public and private debts.
"Vendor Facility" means any agreements between the Company or any
Restricted Subsidiary and one or more vendors or lessors of equipment or other
capital assets (or their affiliated financial providers) to the Company or any
Restricted Subsidiary for use by them in the Telecommunications Business
providing financing to the Company or any Restricted Subsidiary for the lease or
purchase of such equipment or other capital assets.
"Voting Stock" with respect to any Person, means securities of any
class of Capital Stock of such Person entitling the holders thereof (whether at
all times or only so long as no senior class of stock has voting power by reason
of any contingency) to vote in the election of members of the Board of Directors
(or equivalent governing body) of such Person.
"Weighted Average Life To Maturity" means, when applied to any
Indebtedness at any date, the number of years obtained by dividing:
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(1) the then outstanding aggregate principal amount or liquidation
preference, as the case may be, of such Indebtedness into
(2) the sum of the total of the products obtained by multiplying:
(a) the amount of each then remaining installment, sinking
fund, serial maturity or other required payment of principal or
liquidation preference, as the case may be, including payment at
final maturity, in respect thereof, by
(b) the number of years (calculated to the nearest
one-twelfth) which will elapse between such date and the making of
such payment.
"Wholly Owned Restricted Subsidiary" of the Company means any
Restricted Subsidiary of which all the outstanding Capital Stock (other than in
the case of a foreign Restricted Subsidiary, directors' qualifying shares or an
immaterial amount of shares required to be owned by other Persons pursuant to
applicable law) are owned by the Company or any Wholly Owned Restricted
Subsidiary.
Section 1.2. Incorporation by Reference of Trust Indenture Act. If
any provision of this Indenture limits, qualifies or conflicts with the duties
that would be imposed by any of Sections 310 to 317 of the TIA through operation
of Section 318(c) thereof on any person if this Indenture were qualified under
the TIA, such imposed duties shall control.
"obligor" on the indenture securities means the Company and any
other obligor on the indenture securities.
All other TIA terms used in this Indenture that are defined by the
TIA, defined in the TIA by reference to another statute or defined by SEC rule
have the meanings assigned to them by such definitions.
Section 1.3. Rules of Construction. Unless the context otherwise
requires:
(1) a term has the meaning assigned to it;
(2) an accounting term not otherwise defined has the meaning
assigned to it in accordance with U.S. GAAP;
(3) "or" is not exclusive;
(4) "including" means including without limitation;
(5) words in the singular include the plural and words in the plural
include the singular;
(6) references to the payment of principal of the Notes shall
include applicable premium, if any;
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(7) references to the payment of interest on the Notes shall include
Additional Amounts and amounts payable under the Registration Agreement,
if any; and
(8) references to "$" or U.S. Dollars are to United States dollars.
ARTICLE II
THE NOTES
Section 2.1. Form and Dating.
(a) The Notes are being originally offered and sold by the Company
pursuant to a Purchase Agreement, dated as of March 14, 2000, among the Company
and Salomon Smith Barney Inc., Morgan Stanley & Co. International Limited,
Deutsche Bank Securities Inc. and Bear Stearns & Co. Inc. The Notes will be
issued in fully-registered certificated form without coupons, and only in
denominations of Euro 1,000 and any integral multiple thereof. The Notes and the
Trustee's certificate of authentication shall be substantially in the form of
Exhibit A.
(b) The terms and provisions of the Notes, the form of which is in
Exhibit A, shall constitute, and are hereby expressly made, a part of this
Indenture, and, to the extent applicable, the Company and the Trustee, by their
execution and delivery of this Indenture expressly agree to such terms and
provisions and to be bound thereby. Except as otherwise expressly permitted in
this Indenture, all Notes shall be identical in all respects. Notwithstanding
any differences among them, all Notes issued under this Indenture shall vote and
consent together on all matters as one class.
(c) The Notes may have notations, legends or endorsements as
specified in Section 2.7 or as otherwise required by law, stock exchange rule or
Euroclear or Clearstream, Luxembourg rule or usage. The Company and the Trustee
shall approve the form of the Notes and any notation, legend or endorsement on
them. Each Note shall be dated the date of its authentication.
(d) Notes originally offered and sold to QIBs in reliance on Rule
144A will be issued in the form of one or more permanent Global Notes (a "Rule
144A Global Note").
(e) Notes originally offered and sold outside the United States of
America will be issued in the form of one or more permanent Global Notes (the
"Regulation S Global Note").
Section 2.2. Execution and Authentication.
(a) Two Officers, one of whom shall be the Chairman of the Board,
the President, the Chief Executive Officer or the Chief Financial Officer of the
Company, shall sign the Notes for the Company by manual or facsimile signature.
If an Officer whose signature is on a Note no longer holds that office at the
time the Trustee authenticates the Note, the Note shall be valid nevertheless.
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(b) A Note shall not be valid until an authorized signatory of the
Trustee manually authenticates the Note. The signature of the Trustee on a Note
shall be conclusive evidence that such Note has been duly and validly
authenticated and issued under this Indenture.
(c) At any time and from time to time after the execution and
delivery of this Indenture, the Trustee shall authenticate and make available
for delivery Notes upon a written order of the Company signed by two Officers or
by an Officer and either an Assistant Treasurer or an Assistant Secretary of the
Company (the "Company Order"). A Company Order shall specify the amount of the
Notes to be authenticated and the date on which the original issue of Notes is
to be authenticated. The aggregate principal amount of Notes that may be
authenticated and delivered under this Indenture is limited to Euro 300 million.
(d) The Trustee may appoint an agent (the "Authenticating Agent")
reasonably acceptable to the Company to authenticate the Notes. Unless limited
by the terms of such appointment, any such Authenticating Agent may authenticate
Notes whenever the Trustee may do so. Each reference in this Indenture to
authentication by the Trustee includes authentication by the Authenticating
Agent.
(e) In case the Company:
(i) shall be consolidated with or merged into any other Person, or
(ii) shall convey, transfer, lease or otherwise dispose of its
properties and assets substantially as an entirety to any Person,
and the Surviving Entity resulting from such consolidation, or surviving such
merger, or which shall have received a conveyance, transfer, lease or other
disposition as aforesaid, shall have executed an indenture supplemental hereto
with the Trustee pursuant to Article IV, any of the Notes authenticated or
delivered prior to such transaction may, from time to time, at the request of
the Surviving Entity, be exchanged for other Notes executed in the name of the
Surviving Entity with such changes in phraseology and form as may be
appropriate, but otherwise identical to the Notes surrendered for such exchange
and of like principal amount; and the Trustee, upon Company Order of the
Surviving Entity, shall authenticate and deliver Notes as specified in such
order for the purpose of such exchange. If Notes shall at any time be
authenticated and delivered in any new name of a Surviving Entity pursuant to
this Section 2.2 in exchange or substitution for or upon registration of
transfer of any Notes, such Surviving Entity, at the option of the Holders but
without expense to them, shall provide for the exchange of all Notes at the time
Outstanding for Notes authenticated and delivered in such new name.
Section 2.3. Registrar and Paying Agent.
(a) The Company shall maintain in the Borough of Manhattan, The City
of New York, New York or in London, England (the "Corporate Trust Office") and,
as long as the Notes are listed on the Luxembourg Stock Exchange and the rules
of The Luxembourg Stock Exchange so require, in Luxembourg, (i) offices or
agencies where the Notes may be presented for registration of transfer or for
exchange ("Registrar") and (ii) offices or agencies where the Notes may be
presented for payment ("Paying Agent"). The Company initially designates the
Trustee at its corporate trust office in the Borough of Manhattan, The City of
New York, New
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York to act as Registrar and principal Paying Agent and Kredietbank SA
Luxembourgeoise as Paying Agent and co-Registrar in Luxembourg (the "Luxembourg
Paying Agent"). The Company shall also maintain a Paying Agent and Registrar in
London, England, and initially designates the Trustee at its corporate trust
office in London to act as such Paying Agent and Registrar. The Trustee, as
Registrar at its corporate trust office in the Borough of Manhattan, The City of
New York, New York or in London, England, shall keep a register of the Notes and
of their transfer and exchange (the "Note Register"). The Note Register shall be
in written form or in any other form capable of being converted into written
form within a reasonable time. The Company may appoint one or more co-registrars
and one or more additional paying agents in such other locations as it shall
determine. The term "Registrar" includes any co-registrar and the term "Paying
Agent" includes the Luxembourg Paying Agent and any additional paying agent. The
Company may at any time and from time to time authorize any Person to act as any
Agent in place of the Trustee without prior notice to any Holder. The Company
shall notify the Trustee of the name and address of any Agent not a party to
this Indenture. If the Company fails to appoint or maintain another entity as
Registrar or Paying Agent, the Trustee shall act as such. The Company or any of
its Affiliates may act as Paying Agent or Registrar.
(b) The Company shall enter into an appropriate agency agreement
with any Registrar, Paying Agent or co-Registrar not a party to this Indenture,
which shall incorporate the terms of the TIA. The agreement shall implement the
provisions of this Indenture that relate to such agent. The Company shall notify
the Trustee of the name and address of each such agent. If the Company fails to
maintain a Registrar or Paying Agent, the Trustee shall act as such and shall be
entitled to appropriate compensation therefor pursuant to Section 7.7. The
Company may act as Paying Agent, Registrar, co-Registrar or transfer agent.
(c) The Company initially appoints The Bank of New York (Nominees),
Ltd., as common depositary (the "Depositary") for Euroclear and Clearstream,
Luxembourg to act as Depositary with respect to the Global Notes.
Section 2.4. Paying Agent to Hold Money in Trust. The Company shall
require each Paying Agent (other than the Trustee) to agree in writing that such
Paying Agent shall hold in trust for the benefit of Holders or the Trustee all
money held by such Paying Agent for the payment of principal of or interest on
the Notes and shall notify the Trustee in writing of any default by the Company
in making any such payment. If the Company or an Affiliate of the Company acts
as Paying Agent, it shall segregate the money held by it as Paying Agent and
hold it as a separate trust fund. The Company at any time may require a Paying
Agent (other than the Trustee) to pay all money held by it to the Trustee and to
account for any funds disbursed by such Paying Agent. Upon complying with this
Section 2.4, the Paying Agent (if other than the Company) shall have no further
liability for the money delivered to the Trustee. Upon any proceeding under any
Bankruptcy Law with respect to the Company or any Affiliate of the Company, if
the Company or such Affiliate is then acting as Paying Agent, the Trustee shall
replace the Company or such Affiliate as Paying Agent.
Section 2.5. Holder Lists. The Trustee shall preserve in as current
a form as is reasonably practicable the most recent list available to it of the
names and addresses of Holders. If the Trustee is not the Registrar, or to the
extent otherwise required under the TIA, the Company shall furnish to the
Trustee, in writing at least seven Business Days before each
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Interest Payment Date and at such other times as the Trustee may request in
writing, a list in such form and as of such date as the Trustee may reasonably
require of the names and addresses of Holders.
Section 2.6. Global Note Provisions.
(a) Each Global Note initially shall: (i) be registered in the name
of the Depositary or the nominee of the Depositary, (ii) be delivered to the
Note Custodian, and (iii) bear the appropriate legend, as set forth in Section
2.7 and Exhibit A. Any Global Note may be represented by more than one
certificate. The aggregate principal amount of each Global Note may from time to
time be increased or decreased by adjustments made on the records of the Note
Custodian, as provided in this Indenture.
(b) Members of, or participants in, Euroclear or Clearstream
Luxembourg ("Agent Members") shall have no rights under this Indenture with
respect to any Global Note held on their behalf by the Depositary or by the Note
Custodian under such Global Note, and the Depositary may be treated by the
Company, the Trustee, the Paying Agent and the Registrar and any of their agents
as the absolute owner of such Global Note for all purposes whatsoever (except
with respect to determination of Additional Amounts). Notwithstanding the
foregoing, nothing herein shall prevent the Company, the Trustee, the Paying
Agent or the Registrar or any of their agents from giving effect to any written
certification, proxy or other authorization furnished by the Depositary or
impair, as between Euroclear or Clearstream Luxembourg and its Agent Members,
the operation of customary practices of such clearing system governing the
exercise of the rights of an owner of a beneficial interest in any Global Note.
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 Members, to take any action that a Holder is entitled to take under this
Indenture or the Notes.
(c) Except as provided below, owners of beneficial interests in
Global Notes will not be entitled to receive Certificated Notes. Certificated
Notes shall be issued to all owners of beneficial interests in a Global Note in
exchange for such interests if:
(i) Euroclear or Clearstream Luxembourg notifies the Company that it
is unwilling or unable to continue as depositary for such Global Note, and
a successor depositary is not appointed by the Company within 90 days of
such notice,
(ii) the Company executes and delivers to the Trustee and Registrar
an Officers' Certificate stating that such Global Note shall be so
exchangeable, or
(iii) an Event of Default has occurred and is continuing.
In connection with the exchange of an entire Global Note for Certificated Notes
pursuant to this paragraph (c), such Global Note shall be deemed to be
surrendered to the Trustee for cancellation, and the Company shall execute, and
upon Company Order the Trustee shall authenticate and deliver, to each
beneficial owner identified by the Depositary in exchange for its beneficial
interest in such Global Note, an equal aggregate principal amount of
Certificated Notes of authorized denominations.
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(d) In the event of the occurrence of the events specified in
Section 2.6(c), the Company will promptly make available to the Trustee a
reasonable supply of certificated Notes in definitive, fully registered form
without interest coupons.
Section 2.7. Legends.
(a) Each Global Note shall bear the legend specified therefor in
Exhibit A on the face thereof.
(b) Each Restricted Note shall bear the private placement legend
specified therefor in Exhibit A on the face thereof (together with, if
applicable, the legend specified in paragraph (c) of this Section 2.7, the
"Private Placement Legend").
(c) Each Certificated Note that is a Restricted Note shall bear the
legend specified therefor in Exhibit A on the face thereof.
Section 2.8. Transfer and Exchange.
(a) If (1) the owner of a beneficial interest in a Rule 144A Global
Note that is a Restricted Note wishes to transfer such interest (or portion
thereof) to a Non-U.S. Person pursuant to Regulation S and (2) such Non-U.S.
Person wishes to hold its interest in the Notes through a beneficial interest in
the Regulation S Global Note, (x) upon receipt by the Note Custodian and
Registrar of:
(A) instructions from the Holder of the Rule 144A Global Note directing
the Note Custodian and Registrar to credit or cause to be credited a
beneficial interest in the Regulation S Global Note equal to the principal
amount of the beneficial interest in the Rule 144A Global Note to be
transferred, and
(B) a certificate in the form of Exhibit C from the transferor,
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and (y) subject to the rules and procedures of Euroclear or Clearstream
Luxembourg, the Note Custodian and Registrar shall increase the Regulation S
Global Note and decrease the Rule 144A Global Note by such amount in accordance
with the foregoing.
(b) If the owner of an interest in a Regulation S Global Note wishes
to transfer such interest (or any portion thereof) to a QIB pursuant to Rule
144A prior to the expiration of the Distribution Compliance Period therefor, (x)
upon receipt by the Note Custodian and Registrar of:
(A) instructions from the Custodian and Holder of the Regulation S Global
Note directing the Note Registrar to credit or cause to be credited a
beneficial interest in the Rule 144A Global Note equal to the principal
amount of the beneficial interest in the Regulation S Global Note to be
transferred, and
(B) a certificate in the form of Exhibit B duly executed by the
transferor,
and (y) in accordance with the rules and procedures of Euroclear or Clearstream
Luxembourg, the Note Custodian and Registrar shall increase the Rule 144A Global
Note and decrease the Regulation S Global Note by such amount in accordance with
the foregoing.
(c) Other Transfers. Any transfer of Restricted Notes not described
above (other than a transfer of a beneficial interest in a Global Note that does
not involve an exchange of such interest for a Certificated Note or a beneficial
interest in another Global Note, which must be effected in accordance with
applicable law and the rules and procedures of Euroclear or Clearstream
Luxembourg, but is not subject to any procedure required by this Indenture)
shall be made only upon receipt by the Registrar of such opinions of counsel,
certificates and/or other information reasonably required by and satisfactory to
it in order to ensure compliance with the Securities Act or in accordance with
paragraph (d) of this Section 2.8.
(d) Use and Removal of Private Placement Legends. Upon the transfer,
exchange or replacement of Notes (or beneficial interests in a Global Note) not
bearing a Private Placement Legend, the Note Custodian and Registrar shall
exchange such Notes (or beneficial interests) for beneficial interests in a
Global Note (or Certificated Notes if they have been issued pursuant to Section
2.6(c)) that does not bear a Private Placement Legend. Upon the transfer,
exchange or replacement of Notes (or beneficial interests in a Global Note)
bearing a Private Placement Legend, the Note Custodian and Registrar shall
deliver only Notes (or beneficial interests in a Global Note) that bear a
Private Placement Legend unless:
(i) such Notes (or beneficial interests) are exchanged in a
Registered Exchange Offer;
(ii) such Notes (or beneficial interests) are transferred pursuant
to a Registration Statement;
(iii) such Notes (or beneficial interests) are transferred pursuant
to Rule 144 upon delivery to the Registrar of a certificate of the
transferor in the form of Exhibit D and an Opinion of Counsel reasonably
satisfactory to the Registrar;
(iv) such Notes (or beneficial interests) are transferred, replaced
or exchanged after the Resale Restriction Termination Date therefor; or
(v) in connection with such transfer, exchange or replacement the
Registrar shall have received an Opinion of Counsel and other evidence
reasonably satisfactory to it to the effect that neither such Private
Placement Legend nor the related restrictions on transfer are required in
order to maintain compliance with the provisions of the Securities Act.
The Private Placement Legend on any Note shall be removed at the request of the
Holder on or after the Resale Restriction Termination Date therefor. The Holder
of a Global Note may exchange an interest therein for an equivalent interest in
a Global Note not bearing a Private Placement Legend (other than a Regulation S
Global Note) upon transfer of such interest pursuant to any of clauses (i)
through (v) of this paragraph (e). The Company shall deliver to the Trustee an
Officers' Certificate promptly upon effectiveness, withdrawal or suspension of
any Registration Statement.
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(e) Consolidation of Global Notes and Exchange of Certificated Notes
for Beneficial Interests in Global Notes. If a Global Note not bearing a Private
Placement Legend (other than a Regulation S Global Note) is Outstanding at the
time of a Registered Exchange Offer, any interests in a Global Note exchanged in
such Registered Exchange Offer shall be exchanged for interests in such
Outstanding Global Note.
(f) Retention of Documents. The Registrar shall retain copies of all
letters, notices and other written communications received pursuant to this
Article II. 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.
(g) Execution, Authentication of Notes, etc.
(i) Subject to the other provisions of this Section 2.8, when
Notes are presented to the Registrar or a co-Registrar with a request to
register the transfer of such Notes or to exchange such Notes for an equal
principal amount of Notes of other authorized denominations, the Registrar
or co-Registrar shall register the transfer or make the exchange as
requested if its requirements for such transaction are met; provided that
any Notes presented or surrendered for registration of transfer or
exchange shall be duly endorsed or accompanied by a written instrument of
transfer in form satisfactory to the Registrar or co-Registrar, duly
executed by the Holder thereof or his attorney duly authorized in writing.
To permit registrations of transfers and exchanges and subject to the
other terms and conditions of this Article II, the Company will execute
and upon Company Order the Trustee will authenticate Certificated Notes
and Global Notes at the Registrar's or co-Registrar's request. In
accordance with the Registration Agreement, the Company will execute and
upon Company Order the Trustee will authenticate Exchange Notes or Private
Exchange Notes, as the case may be in exchange for Notes.
(ii) No service charge shall be made to a Holder for any
registration of transfer or exchange, but the Company may require payment
of a sum sufficient to cover any transfer tax, assessments, or similar
governmental charge payable in connection therewith (other than any such
transfer taxes, assessments or similar governmental charges payable upon
exchange or transfer pursuant to a Registered Exchange Offer, or Sections
5.1, 3.8, 3.15 or 9.5).
(iii) The Registrar or co-Registrar shall not be required to
register the transfer of or exchange of any Note for a period beginning:
(1) 15 days before the mailing of a notice of an offer to repurchase or
redeem Notes and ending at the close of business on the day of such
mailing or (2) 15 days before an Interest Payment Date and ending on such
Interest Payment Date.
(iv) Prior to the due presentation for registration of
transfer of any Note, the Company, the Trustee, the Paying Agent, the
Registrar or any co-Registrar may deem and treat the person in whose name
a Note is registered as the absolute owner of such Note for the purpose of
receiving payment of principal of and interest on such Note and for all
other purposes whatsoever, whether or not such Note is overdue, and none
of the
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Company, the Trustee, the Paying Agent, the Registrar or any co-Registrar
shall be affected by notice to the contrary.
(v) All Notes issued upon any transfer or exchange pursuant to
the terms of this Indenture shall evidence the same debt and shall be
entitled to the same benefits under this Indenture as the Notes
surrendered upon such transfer or exchange.
(h) No Obligation of the Trustee.
(i) The Trustee shall have no responsibility or obligation to
any beneficial owner of interest in a Global Note, a member of, or a
participant in, Euroclear or Clearstream Luxembourg or other Person with
respect to the accuracy of the records of Euroclear or Clearstream
Luxembourg or its nominee or of any participant or member thereof, with
respect to any ownership interest in the Notes or with respect to the
delivery to any participant, member, beneficial owner or other Person
(other than the Depositary, Euroclear or Clearstream Luxembourg) of any
notice (including any notice of redemption) or the payment of any amount
or delivery of any Notes (or other security or property) under or with
respect to such Notes. All notices and communications to be given to the
Holders and all payments to be made to Holders in respect of the Notes
shall be given or made only to or upon the order of the registered Holders
(which shall be the Depositary, Euroclear or Clearstream Luxembourg or its
nominee in the case of a Global Note). The Trustee may rely and shall be
fully protected in relying upon information furnished by Euroclear or
Clearstream Luxembourg with respect to its members, participants and any
beneficial owners.
(ii) The Trustee shall have no obligation or duty to monitor,
determine or inquire as to compliance with any restrictions on transfer
imposed under this Indenture or under applicable law with respect to any
transfer of any interest in any Note (including any transfers between or
among Euroclear or Clearstream Luxembourg participants, members or
beneficial owners in any Global Note) other than to require delivery of
such certificates and other documentation or evidence as are expressly
required by, and to do so if and when expressly required by, the terms of
this Indenture, and to examine the same to determine substantial
compliance as to form with the express requirements hereof.
Section 2.9. Mutilated, Destroyed, Lost or Stolen Notes.
(a) If a mutilated Note is surrendered to the Registrar or if the
Holder of a Note claims that the Note has been lost, destroyed or wrongfully
taken, the Company shall execute and upon Company Order the Trustee shall
authenticate a replacement Note if the requirements of Section 8-405 of the
Uniform Commercial Code are met and the Holder satisfies any other reasonable
requirements of the Trustee. If required by the Trustee or the Company, such
Holder shall furnish an affidavit of loss and indemnity bond sufficient in the
judgment of the Company and the Trustee to protect the Company, the Trustee, the
Paying Agent, the Registrar and any co-Registrar from any loss that any of them
may suffer if a Note is replaced, and, in the absence of notice to the Company
or the Trustee that such Note has been acquired by a bona fide purchaser, the
Company shall execute and upon Company Order the Trustee shall authenticate and
make
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available for delivery, in exchange for any such mutilated Note or in lieu
of any such destroyed, lost or stolen Note, a new Note of like tenor and
principal amount, bearing a number not contemporaneously Outstanding.
(b) Upon the issuance of any new Note under this Section 2.9, the
Company may require the payment of a sum sufficient to cover any tax or other
governmental charge that may be imposed in relation thereto and any other
expenses (including the fees and expenses of the Trustee) in connection
therewith.
(c) Every new Note issued pursuant to this Section 2.9 in exchange
for any mutilated Note, or in lieu of any destroyed, lost or stolen Note, shall
constitute an original additional contractual obligation of the Company and any
other obligor upon the Notes, whether or not the mutilated, destroyed, lost or
stolen Note shall be at any time enforceable by anyone, and shall be entitled to
all benefits of this Indenture equally and proportionately with any and all
other Notes duly issued hereunder.
Section 2.10. Temporary Notes. Until definitive Notes are ready for
delivery, the Company may execute and upon Company Order the Trustee will
authenticate temporary Notes. Temporary Notes will be substantially in the form
of definitive Notes but may have variations that the Company considers
appropriate for temporary Notes. Without unreasonable delay, the Company will
prepare and execute and upon Company Order the Trustee will authenticate
definitive Notes. After the preparation of definitive Notes, the temporary Notes
will be exchangeable for definitive Notes upon surrender of the temporary Notes
at any office or agency maintained by the Company for that purpose and such
exchange shall be without charge to the Holder. Upon surrender for cancellation
of any one or more temporary Notes, the Company will execute and upon Company
Order the Trustee will authenticate and make available for delivery in exchange
therefor one or more definitive Notes representing an equal principal amount of
Notes. Until so exchanged, the Holder of temporary Notes shall in all respects
be entitled to the same benefits under this Indenture as a Holder of definitive
Notes.
Section 2.11. Cancellation. The Company at any time may deliver
Notes to the Trustee for cancellation. The Registrar and the Paying Agent shall
forward to the Trustee any Notes surrendered to them for registration of
transfer, exchange or payment. The Trustee, the Paying Agent and no one else
shall cancel and dispose of cancelled Notes in accordance with its policy of
disposal or return to the Company or to the Trustee all Notes surrendered for
registration of transfer, exchange, payment or cancellation. The Company may not
issue new Notes to replace Notes it has paid or delivered to the Trustee for
cancellation for any reason other than in connection with a transfer or exchange
upon Company Order.
Section 2.12. Defaulted Interest. When any installment of interest
becomes Defaulted Interest, such installment shall forthwith cease to be payable
to the Holders in whose names the Notes were registered on the Record Date
applicable to such installment of interest. Defaulted Interest (including any
interest on such Defaulted Interest) may be paid by the Company, at its
election, as provided in clause (A) or (B) below.
(A) The Company may elect to make payment of any Defaulted Interest
(including any interest on such Defaulted Interest) to the Holders in
whose names the
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Notes are registered at the close of business on a special record date for
the payment of such Defaulted Interest (a "Special Record Date"), which
shall be fixed in the following manner. The Company shall notify the
Trustee in writing of the amount of Defaulted Interest proposed to be paid
and the date of the proposed payment, and at the same time the Company
shall deposit with the Trustee an amount of money equal to the aggregate
amount proposed to be paid in respect of such Defaulted Interest or shall
make arrangements satisfactory to the Trustee for such deposit prior to
the date of the proposed payment, such money when deposited to be held in
trust for the benefit of the Holders entitled to such Defaulted Interest
as provided in this clause (A). Thereupon the Trustee shall fix a Special
Record Date for the payment of such Defaulted Interest, which shall be not
more than 15 calendar days and not less than ten calendar days prior to
the date of the proposed payment and not less than ten calendar days after
the receipt by the Trustee of the notice of the proposed payment. The
Trustee shall promptly notify the Company of such Special Record Date and,
in the name and at the expense of the Company, shall cause notice of the
proposed payment of such Defaulted Interest and the Special Record Date
therefor to be sent, first-class mail, postage prepaid, to each Holder at
such Holder's address as it appears in the registration books of the
Registrar, not less than ten calendar days prior to such Special Record
Date. Notice of the proposed payment of such Defaulted Interest and the
Special Record Date therefor having been mailed as aforesaid, such
Defaulted Interest shall be paid to the Holders in whose names the Notes
are registered at the close of business on such Special Record Date and
shall no longer be payable pursuant to the following clause (B).
(B) Alternatively, the Company may make payment of any Defaulted
Interest (including any interest on such Defaulted Interest) in any other
lawful manner not inconsistent with the requirements of any securities
exchange on which the Notes may be listed, and upon such notice as may be
required by such exchange, if, after notice given by the Company to the
Trustee of the proposed payment pursuant to this clause (B), such manner
of payment shall be deemed practicable by the Trustee.
Section 2.13. Additional Interest Under Registration Agreements.
Under certain circumstances, the Company may be obligated to pay additional
interest to Holders, all as and to the extent set forth in the Registration
Agreement. The terms thereof are hereby incorporated herein by reference and
such additional interest is deemed to be interest for purposes of this
Indenture.
ARTICLE III
COVENANTS
Section 3.1. Payment of Notes.
(a) The Company shall pay the principal of and interest (including
Defaulted Interest) on the Notes in Euros on the dates and in the manner
provided in the Notes and in this Indenture. Prior to 10:00 a.m. (London,
England time) two business days before the date on which any principle of or
interest on any Note is due and payable, the Company shall irrevocably deposit
with the Trustee or the Paying Agent in immediately available funds Euros
sufficient
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to make cash payments due on such Interest Payment Date or Maturity
Date, as the case may be. If the Company or an Affiliate of the Company is
acting as Paying Agent, the Company or such Affiliate shall, prior to 10:00 a.m.
on each Interest Payment Date and the Maturity Date, segregate and hold in trust
Euros sufficient to make cash payments due on such Interest Payment Date or
Maturity Date, as the case may be. Principal and interest shall be considered
paid on the date due if on such date the Trustee or the Paying Agent (other than
the Company or an Affiliate of the Company) holds in accordance with this
Indenture Euros designated for and sufficient to pay all principal and interest
then due and the Trustee or the Paying Agent, as the case may be, is not
prohibited from paying such money to the Holders on that date pursuant to the
terms of this Indenture.
(b) Notwithstanding anything to the contrary contained in this
Indenture, the Company may, to the extent it is required to do so by law, deduct
or withhold income or other similar taxes imposed by the United States of
America from principal or interest payments hereunder.
Section 3.2. Maintenance of Office or Agency.
(a) The Company shall maintain each office or agency required under
Section 2.3. The Company will give prompt written notice to the Trustee of any
change in the location of any such office or agency. If at any time the Company
shall fail to maintain any such required office or agency or shall fail to
furnish the Trustee with the address thereof, such presentations, surrenders,
notices and demands may be made or served at the Corporate Trust Office of the
Trustee, and the Company hereby appoints the Trustee as its agent to receive all
such presentations, surrenders, notices and demands.
(b) The Company may also from time to time designate one or more
other offices or agencies (in or outside of The City of New York) where the
Notes may be presented or surrendered for any or all such purposes and may from
time to time rescind any such designation; provided, however, that no such
designation or rescission shall in any manner relieve the Company of its
obligation to maintain an office or agency in The City of New York or in London,
England for such purposes. The Company will give prompt written notice to the
Trustee of any such designation or rescission and any change in the location of
any such other office or agency.
(c) In addition, the Company shall maintain in London, England, an
office or agency where Notes may be presented or surrendered for payment. So
long as the Notes are listed on the Luxembourg Stock Exchange and the rules of
the Luxembourg Stock Exchange so require, the Company shall maintain an agent
for making payments on, and transfers of, Notes in Luxembourg.
Section 3.3. Corporate Existence. Subject to Article IV, the Company
will do or cause to be done all things necessary to preserve and keep in full
force and effect its corporate existence.
Section 3.4. Payment of Taxes and Other Claim. The Company will pay
or discharge or cause to be paid or discharged, before the same shall become
delinquent, (i) all
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taxes, assessments and governmental charges levied or imposed upon the Company
or any Restricted Subsidiary or for which it or any of them are otherwise
liable, or upon the income, profits or property of the Company or any Restricted
Subsidiary and (ii) all lawful claims for labor, materials and supplies, which,
if unpaid, might by law become a liability or Lien upon the property of the
Company or any Restricted Subsidiary; provided, however, that the Company shall
not be required to pay or discharge or cause to be paid or discharged any such
tax, assessment, charge or claim whose amount, applicability or validity is
being contested in good faith by appropriate proceedings and for which
appropriate reserves, if necessary (in the good faith judgment of management of
the Company), are being maintained in accordance with U.S. GAAP or where the
failure to effect such payment will not be disadvantageous to the Holders.
Section 3.5. Compliance Certificate. (a) The Company shall deliver
to the Trustee within 90 days after the end of each fiscal year of the Company,
commencing with fiscal year 2000, an Officers' Certificate stating that in the
course of the performance by the signers of their duties as Officers of the
Company they would normally have knowledge of any Default or Event of Default
and whether or not the signers know of any Default or Event of Default that
occurred during such period. If they do, the certificate shall describe the
Default or Event of Default, its status and what action the Company is taking or
proposes to take with respect thereto. The Company also shall comply with TIA
ss. 314(a)(4).
(b) So long as not contrary to the then current recommendations of
the American Institute of Certified Public Accountants or to the policies of the
Company's independent accountants, the annual Officers' Certificate delivered
pursuant to this Section 3.5 to the Trustee shall be accompanied by a written
report of the Company's independent accountants (who shall be a firm of
established national reputation) that in conducting their audit of the financial
statements of the Company for the most recent fiscal year nothing has come to
their attention that would lead them to believe that a Default or Event of
Default under this Indenture has occurred insofar as they relate to accounting
matters or, if any such violation has occurred, specifying the nature and period
of existence thereof, it being understood that such accountants shall not be
liable directly or indirectly to any Person for any failure to obtain knowledge
of any such violation that would not be disclosed in the course of an audit
examination conducted in accordance with U.S. GAAP.
Section 3.6. Further Instruments and Acts. The Company will execute
and deliver such further instruments and do such further acts as may be
reasonably necessary or proper or as the Trustee may reasonably request to carry
out more effectively the purpose of this Indenture.
Section 3.7. 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, 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 or interest on the Notes as contemplated herein, wherever enacted,
now or at any time hereafter in force, or which may affect the covenants or the
performance of this Indenture. The Company hereby expressly waives (to the
extent that it may lawfully do so) all benefit or advantage of any such law, and
covenants that it will not hinder, delay or impede
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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 3.8. Change Of Control.
(a) Upon the occurrence of a Change of Control, each Holder of Notes
will have the right to require that the Company purchase all or a portion (in
integral multiples of Euro 1,000) of the Holder's Notes at a purchase price
equal to 101% of the principal amount thereof, plus accrued and unpaid interest
through the date of purchase (the "Change of Control Payment").
(b) Within 30 days following the date upon which the Change of
Control occurred, the Company must send a Change of Control Notice to each
Holder of Notes, with a copy to the Trustee, offering to purchase such Notes as
described above (a "Change of Control Offer"). The Change of Control Offer shall
state, among other things, the purchase date, which must be no earlier than 30
days nor later than 60 days from the date the notice is mailed, other than as
may be required by law (the "Change of Control Payment Date").
(c) On the Change of Control Payment Date, the Company will, to the
extent lawful:
(1) accept for payment all Notes or portions thereof properly
tendered pursuant to a Change of Control Offer (or, if the Trustee is
acting as agent for the Company, direct the Trustee to so accept);
(2) deposit with the Paying Agent funds in an amount equal to the
Change of Control Payment in respect of all Notes or portions thereof so
tendered; and
(3) deliver or cause to be delivered to the Trustee (including by
designating the Trustee as its agent for acceptance of Notes) the Notes so
accepted together with an Officers' Certificate stating the aggregate
principal amount of Notes or portions thereof being purchased by the
Company.
(d) If only a portion of a Note is purchased pursuant to a Change of
Control Offer, a new Note in a principal amount equal to the portion thereof not
purchased will be issued in the name of the Holder thereof upon cancellation of
the original Note (or appropriate adjustments to the amount and beneficial
interests in the applicable Global Note will be made, as appropriate).
(e) The Company will comply with the requirements of Rule 14e-1
under the Exchange Act and any other applicable securities laws and regulations
in connection with the purchase of Notes in connection with any Change of
Control Offer. To the extent that the provisions of any securities laws or
regulations conflict with this Section 3.8, the Company will comply with the
applicable securities laws and regulations and will not be deemed to have
breached its obligations under such Indenture by doing so.
Section 3.9. Additional Amounts.
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(a) If any deduction or withholding for any present or future taxes,
assessments or other governmental charges of:
(1) Bermuda or any political subdivision or governmental authority
thereof or therein having power to tax,
(2) any jurisdiction, other than the United States, the United
Kingdom or Luxembourg, from or through which payment on the Notes is made
by the Company or a successor corporation, or its paying agent in its
capacity as such, or any political subdivision or governmental authority
thereof or therein having the power to tax, or
(3) any other jurisdiction, other than the United States, in which
the Company or a successor corporation is organized, or any political
subdivision or governmental authority thereof or therein having the power
to tax
shall at any time be required by such jurisdiction (or any such political
subdivision or taxing authority) in respect of any amounts to be paid by the
Company or a successor corporation under the Notes, the Company or a successor
corporation will pay each holder of such a Note as additional interest, such
additional amounts ("Additional Amounts") as may be necessary in order that the
net amounts paid to such Holder who, with respect to any such tax, assessment or
other governmental charge, is not resident in, or a citizen of, such
jurisdiction, after deduction or withholding, shall be not less than the amount
specified in such Note to which such Holder is entitled; provided, however, the
Company or a successor corporation shall not be required to make any payment of
Additional Amounts for or on account of:
(i) any tax, assessment or other governmental charge which would not
have been imposed but for:
(x) the existence of any present or former connection between such Holder
(or between a fiduciary, settlor, beneficiary, member or shareholder of,
or possessor of a power over, such Holder, if such Holder is an estate,
trust, partnership, limited liability company or corporation) and the
taxing jurisdiction or any political subdivision or territory or
possession thereof or area subject to its jurisdiction (other than the
mere receipt of such payment or the ownership or holding of such Note),
including, without limitation, such Holder (or such fiduciary, settlor,
beneficiary, member, shareholder or possessor) being or having been a
citizen or resident thereof or being or having been present or engaged in
trade or business therein or having or having had a permanent
establishment therein,
(y) the presentation of a Note (where presentation is required) for
payment on a date more than 30 days after (A) the date on which such
payment became due and payable or (B) the date on which payment thereof is
duly provided for, whichever occurs later, or
(z) the presentation of a Note for payment in Bermuda or any political
subdivision thereof or therein, unless such Note could not have been
presented for payment elsewhere;
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(ii) any estate, inheritance, gift, sales, transfer, personal
property or similar tax, assessment or other governmental charge;
(iii) any tax, assessment or other governmental charge which is
payable otherwise than by withholding from a payment of the principal of,
premium, if any, or any interest on, the Notes;
(iv) any tax, assessment or other governmental charge that is
imposed or withheld by reason of the failure by the Holder or the
beneficial owner of the Note to comply with a request of the Company
addressed to the Holder:
(x) to provide information, documents or other evidence concerning
the nationality, residence or identity of the Holder or such
beneficial owner; or
(y) to make and deliver any declaration or other similar claim
(other than a claim for refund of a tax, assessment or other
governmental charge withheld by the Company) or satisfy any
information or reporting requirements,
which, in the case of (x) or (y), is required or imposed by a statute, treaty,
regulation or administrative practice of the taxing jurisdiction as a
precondition to exemption from all or part of such tax, assessment or other
governmental charge; or
(v) any combination of items (i), (ii), (iii) and (iv) above, nor
shall Additional Amounts be paid with respect to any payment of the principal
of, or any premium or interest on, any Note to any Holder who is a fiduciary or
partnership or limited liability company or other than the sole beneficial owner
of such payment to the extent such payment would be required by the laws of:
(1) Bermuda or any political subdivision or governmental authority
thereof or therein having the power to tax;
(2) any jurisdiction, other than the United States, the United
Kingdom or Luxembourg, from or through which payment on the Notes is made
by the Company or a successor corporation, or its paying agent in its
capacity as such, or any political subdivision or governmental authority
thereof or therein having the power to tax; or
(3) any other jurisdiction, other than the United States, in which
the Company or a successor corporation is organized, or any political
subdivision or governmental authority having the power to tax
to be included in the income for tax purposes of a beneficiary or settlor with
respect to such fiduciary or a member of such partnership or limited liability
company or a beneficial owner who would not have been entitled to such
Additional Amounts had it been the holder of such Note.
(b) The Company shall provide the Trustee with the official
acknowledgment of the relevant taxing authority (or, if such acknowledgment is
not available, a certified copy thereof) evidencing the payment of the
withholding taxes, if any, by the Company. Copies of
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such documentation shall be made available to the holders of the Notes or the
Paying Agents, as applicable, upon request therefor.
Section 3.10. Limitation On Incurrence Of Additional Indebtedness
And Preferred Stock.
(1) The Company will not, and will not cause or permit any
Restricted Subsidiaries to, directly or indirectly, Incur any Indebtedness,
including Acquired Indebtedness, or permit any Restricted Subsidiary to Incur
Preferred Stock, except that the Company may Incur Indebtedness, including
Acquired Indebtedness, and any Restricted Subsidiary may Incur Acquired
Indebtedness or Acquired Preferred Stock, if, at the time of and immediately
after giving pro forma effect to the Incurrence thereof and the application of
the proceeds therefrom:
(a) the Consolidated Leverage Ratio is less than 6.0 to 1.0, or
(b) the Consolidated Capital Ratio is less than 2.5 to 1.0.
(2) Clause (1) will not prohibit the Incurrence of any of the
following items of Indebtedness or Preferred Stock of Restricted Subsidiaries
(collectively, "Permitted Indebtedness"):
(a) the Notes, the Exchange Notes and the U.S. Dollar Notes;
(b) Indebtedness Incurred by the Company to any Restricted
Subsidiary or Indebtedness or Preferred Stock Incurred or issued by any
Restricted Subsidiary to the Company or any Restricted Subsidiary
(provided, however, that (x) upon a Disposition by a Restricted Subsidiary
or the Company of any Indebtedness so Incurred to a Person other than the
Company or another Restricted Subsidiary or (y) if for any reason a
Restricted Subsidiary that is either an issuer or lender of such
Indebtedness ceases to be a Restricted Subsidiary, the provisions of this
clause (b) shall no longer be applicable to such Indebtedness); provided
that any such Indebtedness of the Company shall be unsecured and
subordinated in all respects to the Company's obligations pursuant to the
Notes;
(c) Indebtedness of the Company in an aggregate amount outstanding
at any time of up to $50 million;
(d) Indebtedness of the Company or any Restricted Subsidiary
pursuant to any Permitted Credit Facility in an aggregate amount
outstanding at any time pursuant to this clause (d) of up to $350 million,
minus the amount of any such Indebtedness:
(x) permanently repaid with the Net Cash Proceeds from any
AssetSale pursuant to Section 3.15; or
(y) assumed by a transferee in an Asset Sale;
(e) (x) Purchase Money Indebtedness of the Company in respect of
Telecommunications Assets, or
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(y) Purchase Money Indebtedness of any Restricted
Subsidiary in respect of Telecommunications Assets Incurred
pursuant to any Permitted Credit Facility or Vendor Facility;
(f) Hedging Obligations of the Company or any Restricted Subsidiary
in respect of Indebtedness that is permitted by the terms of the relevant
Indenture to be outstanding; provided that the notional amount of any such
Hedging Obligation does not exceed the amount of Indebtedness to which
such Hedging Obligation relates;
(g) Indebtedness of the Company or any Restricted Subsidiary solely
in respect of bankers acceptances, letters of credit and performance
bonds, in each case Incurred in the ordinary course of business;
(h) Permitted Refinancing Indebtedness; and
(i) Indebtedness outstanding on the Issue Date ("Existing
Indebtedness"), other than Indebtedness described in clause 2(d) of this
Section 3.10.
(3) For purposes of determining compliance with, and the outstanding
principal amount of any particular Indebtedness Incurred pursuant to, and in
compliance with, this covenant, the amount of Indebtedness issued at a price
that is less than the principal amount thereof will be equal to the amount of
the liability in respect thereof determined in accordance with U.S. GAAP.
Accrual of interest, the accretion or amortization of original issue discount,
the payment of regularly scheduled interest in the form of additional
Indebtedness of the same instrument or the payment of regularly scheduled
dividends on Disqualified Stock in the form of additional Disqualified Stock
with the same terms will not be deemed to be an Incurrence of Indebtedness for
purposes of this Section 3.10.
(4) The Company will not, directly or indirectly, Incur any
Indebtedness that is subordinate in right of payment to any other Indebtedness,
unless such Indebtedness is expressly subordinate in right of payment to the
Notes to the same extent and on the same terms as such Indebtedness is
subordinate to such other Indebtedness.
Section 3.11. Limitation On Restricted Payments.
The Company will not, and will not cause or permit any of its
Restricted Subsidiaries to, directly or indirectly, take any of the following
actions (each, a "Restricted Payment"):
(a) declare or pay any dividend or return of capital or make any
other payment or distribution on or in respect of shares of Capital Stock of the
Company or any Restricted Subsidiary to holders of such Capital Stock, other
than:
(x) dividends or distributions payable in Qualified Capital Stock of
the Company, or
(y) dividends or distributions payable to the Company and/or a
Restricted Subsidiary;
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(b) purchase, redeem or otherwise acquire or retire for value any
Capital Stock of the Company or any direct or indirect parent of the Company,
(c) make any principal payment on, purchase, defease, redeem,
prepay, decrease or otherwise acquire or retire for value, prior to the Stated
Maturity thereof, any Subordinated Indebtedness; or
(d) make any Restricted Investment;
if at the time of the Restricted Payment immediately after giving
effect thereto:
(1) a Default or an Event of Default shall have occurred and be
continuing;
(2) the Company is not able to Incur at least $1.00 of additional
Indebtedness pursuant to clause (1) of Section 3.10; or
(3) the aggregate amount (the amount expended for these purposes, if
other than in cash, being the Fair Market Value of the relevant property)
of Restricted Payments, including the proposed Restricted Payment, made
subsequent to the Issue Date shall exceed the sum of:
(A) the excess (or deficit) of:
o the cumulative Consolidated Cash Flow of the Company over (or
under)
o 150% of the cumulative Consolidated Interest Expense of the
Company, accrued during the period, treated as one accounting
period, beginning on the first full fiscal quarter after the
Issue Date to the end of the most recent fiscal quarter for
which consolidated financial information of the Company is
available; plus
(B) 100% of the aggregate net cash proceeds received by the Company
from any Person from any:
(x) contribution to the equity capital of the Company not
representing an interest in Disqualified Capital Stock or issuance and
sale of Qualified Capital Stock of the Company, in each case, subsequent
to the Issue Date, or
(y) issuance and sale subsequent to the Issue Date of any
Disqualified Stock or debt securities of the Company that have been
converted into or exchanged for Qualified Capital Stock of the Company
plus the amount of net cash proceeds received by the Company upon such
conversion or exchange, excluding, in each case, any net cash proceeds:
(a) received from a Subsidiary of the Company, or
(b) used to redeem Notes pursuant to Article V with respect to
Public Equity Offerings; or
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(c) applied in accordance with clause (2) or (3) of the second
paragraph of this Section 3.11 below; plus
(C) without duplication of any amounts included in clause (A) above
or
(D) below, in the case of any Restricted Investment made after the
Issue Date:
(x) the disposition of such Restricted Investment (other than to a
Subsidiary of the Company) by, or repayment of such Restricted Investment
to, the Company or a Restricted Subsidiary, or
(y) the receipt by the Company or any Restricted Subsidiary of any
dividends or distributions from such Restricted Investment, or
(z) if such Investment was a Guarantee, the release in full of the
Guarantee, an amount equal to the lesser of:
o the amount of such Investment treated as a Restricted Payment
pursuant to clause (d) above, and
o the amount in cash received by the Company or any Restricted
Subsidiary upon such disposition, repayment, dividend or
distribution or, in the case of a released Guarantee, the
amount of such Guarantee less any payments made in respect
thereof; plus
(E) so long as the Designation of an Unrestricted Subsidiary was
treated as a Restricted Payment made after the Issue Date, in the case of
a Revocation with respect to any Unrestricted Subsidiary after the Issue
Date in accordance with Section 3.12, an amount equal to the lesser of:
(x) the Company's Investment in such Unrestricted Subsidiary at the
time of such Revocation;
(y) that portion of the Fair Market Value of the net assets of such
Unrestricted Subsidiary at the time of such Revocation that is
proportionate to the Company's equity interest in such Unrestricted
Subsidiary at the time of the Revocation; and
(z) the Designation Amount with respect to such Unrestricted
Subsidiary upon its Designation which was treated as a Restricted
Payment plus any Investment made after Designation and prior to
Revocation that was treated as a Restricted Payment, in each case
less any amounts included in clause (A) or (C) above.
Notwithstanding the preceding, this Section 3.11 does not prohibit:
(1) the payment of any dividend within 60 days after the date of
declaration of such dividend if the dividend would have been permitted on
the date of declaration;
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(2) if no Default or Event of Default shall have occurred and be
continuing, the acquisition of any shares of Capital Stock of the Company,
(a) in exchange for Qualified Capital Stock of the Company, or
(b) through the application of the net cash proceeds received by the
Company from a substantially concurrent sale of Qualified Capital Stock of the
Company or a contribution to the equity capital of the Company not representing
an interest in Disqualified Capital Stock, in each case not received from a
Subsidiary of the Company; provided, that the value of any such Qualified
Capital Stock issued in exchange for such acquired Capital Stock and any such
net cash proceeds shall be excluded from clause (3)(B) of the first paragraph of
this Section 3.11;
(3) if no Default or Event of Default shall have occurred and be
continuing, the voluntary prepayment, purchase, defeasance, redemption or other
acquisition or retirement for value of any Subordinated Indebtedness solely in
exchange for, or through the application of net cash proceeds of a substantially
concurrent sale, other than to a Subsidiary of the Company, of:
(x) Qualified Capital Stock of the Company, or
(y) Permitted Refinancing Indebtedness for such Subordinated
Indebtedness;
provided, that the value of any Qualified Capital Stock issued in exchange for
Subordinated Indebtedness and any net cash proceeds referred to above shall be
excluded from clause (3)(B) of the first paragraph of this Section 3.11;
(4) the payment of any dividend or other distribution by a
Restricted
Subsidiary to the holders of its Capital Stock on a pro rata basis;
(5) the repurchase, redemption or other acquisition or retirement
for value of any Capital Stock (other than Disqualified Stock) of the Company or
any of its Restricted Subsidiaries held by any member of the Company's or such
Restricted Subsidiary's management; provided, that the aggregate price paid for
all such repurchased, redeemed, acquired or retired Capital Stock shall not
exceed $5 million in any fiscal year (with unused amounts being carried over to
succeeding fiscal years, subject to a maximum of $10 million in any fiscal
year);
(6) Investments in any Permitted Joint Venture; and
(7) Investments in any Person engaged, except to a de minimis
extent, in a Telecommunications Business, the aggregate Fair Market Value of
which (measured on the date each such Investment was made or returned, as
applicable), when taken together with all other Investments made pursuant to
this clause (7) that are at any time outstanding, does not exceed the sum of:
(x) $50 million, plus
(y) the amount then available for the making of Restricted Payments
pursuant to clause (3) of the preceding paragraph without giving effect to
subclause (A) thereof.
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Each Restricted Payment permitted pursuant to clauses (1), (4), (5),
(6) and (7) of this paragraph shall be included, and each Restricted Payment
permitted pursuant to clauses (2) and (3) of this paragraph shall be excluded
(except as specifically set forth in each such clause), for all purposes when
performing the calculation set forth in clause (3) of the first paragraph of
this Section 3.11.
Section 3.12. Limitation on Designation of Unrestricted
Subsidiaries.
(a) The Board of Directors may not designate a Subsidiary of the
Company (other than a newly created Subsidiary in which no Investment has
previously been made (other than any de minimus amount required to capitalize
such Subsidiary in connection with its organization)) as an Unrestricted
Subsidiary (a "Designation") if:
(1) a Default or Event of Default shall have occurred and be
continuing at the time of or after giving effect to such Designation, and
(2) the Company would be prohibited under this Indenture from making
a Restricted Investment at the time of such Designation (assuming the
effectiveness of such Designation for purposes of this Section 3.12) in an
amount equal to the Designation Amount (as defined below).
(b) Any Designation shall be made by Board Resolution. In the event
of any such Designation, all outstanding Investments owned by the Company and
its Restricted Subsidiaries in the Subsidiary at Designation will be deemed to
be a Restricted Investment made as of the time of such Designation and will
reduce the amount available for Restricted Payments under the first or second
paragraph of this Section 3.12. All such outstanding Investments will be deemed
to constitute Restricted Payments in an amount equal to the Fair Market Value of
such Investments at the time of such Designation (the "Designation Amount").
(c) A Designation may be revoked and an Unrestricted Subsidiary may
thus be redesignated as a Restricted Subsidiary (a "Revocation") by Board
Resolution, provided that the Company will not make any Revocation unless after
giving pro forma effect to such Revocation:
(1) no Default or Event of Default shall have occurred and be
continuing;
(2) all Liens of such Unrestricted Subsidiary outstanding
immediately following such Revocation would, if Incurred at such time,
have been permitted to be Incurred at such time for all purposes under
this Indenture; and
(3) the Company could Incur $1 of additional Indebtedness pursuant
to clause (1) Section 3.10.
(d) Neither the Company nor any Restricted Subsidiary will at any
time:
(1) provide credit support for, subject any of its property or
assets (other than the Capital Stock of any Unrestricted Subsidiary) to
the satisfaction of, or guarantee, any Indebtedness of any Unrestricted
Subsidiary (including any undertaking, agreement or instrument evidencing
such Indebtedness);
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(2) be directly or indirectly liable for any Indebtedness of any
Unrestricted Subsidiary; or
(3) be directly or indirectly liable for any Indebtedness which
provides that the holder thereof may (upon notice, lapse of time or both)
declare a default thereon or cause the payment thereof to be accelerated
or payable prior to its final scheduled maturity upon the occurrence of a
default with respect to any Indebtedness of any Unrestricted Subsidiary,
except for any non-recourse guarantee given solely to support the pledge
by the Company or any Restricted Subsidiary of the Capital Stock of any
Unrestricted Subsidiary.
Section 3.13. Limitation on Liens.
The Company will not, and will not cause or permit any Restricted
Subsidiary to, directly or indirectly, Incur or suffer to exist or become
effective any Liens of any kind (except for Permitted Liens) against or upon any
of their respective properties or assets, whether owned on the Issue Date or
acquired after the Issue Date, or any income, profits or proceeds therefrom,
unless contemporaneously therewith effective provision is made by the Company to
secure the Notes and all other amounts due under the relevant Indenture equally
and ratably with such Indebtedness with a Lien on the same properties and assets
securing such Indebtedness for so long as such Indebtedness is secured by such
Lien; provided, that no such Lien may secure Subordinated Indebtedness except as
permitted by clause 3(a) of the definition of "Permitted Liens."
Section 3.14. Limitation On Dividend And Other Payment Restrictions
Affecting Restricted Subsidiaries.
(a) Except as provided in clause (b) below, the Company will not,
and will not cause or permit any of its Restricted Subsidiaries to, directly or
indirectly, create or otherwise cause or permit to exist or become effective any
encumbrance or restriction on the ability of any Restricted Subsidiary to:
(1) pay dividends or make any other distributions on or in respect
of its Capital Stock or with respect to any other interest or
participation, or measured by its profits, to the Company or any other
Restricted Subsidiary or pay any Indebtedness owed to the Company or any
other Restricted Subsidiary;
(2) make loans or advances to, or guarantee any Indebtedness or
other obligations of, or make any Investment in, the Company or any other
Restricted Subsidiary; or
(3) transfer any of its property or assets to the Company or any
other Restricted Subsidiary.
(b) Clause (a) will not apply to encumbrances or restrictions
existing under or by reason of:
(1) Existing Indebtedness as in effect on the Issue Date;
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(2) this Indenture and the Notes;
(3) any Permitted Credit Facility or Vendor Facility, provided that:
(a) the outstanding Indebtedness under such Permitted Credit
Facility or Vendor Facility does not exceed the amounts permitted under clause
2(d) or 2(e)(y), as the case may be, of Section 3.10, and
(b) the Chief Financial Officer of the Company determines in good
faith that:
(x) such encumbrances or restrictions are no more restrictive, taken
as a whole, than those that would be contained in a credit agreement with
terms that are commercially reasonable for a borrower engaged in a
business comparable to the Company that has substantially comparable
Indebtedness, and
(y) any such restrictions will not materially affect the Company's
ability to make principal, premium or interest payments on the Notes
pursuant to the terms of this Indenture,
(4) applicable law,
(5) any instrument governing Indebtedness or Capital Stock of a
Person or assets acquired by the Company or any of its Restricted
Subsidiaries as in effect at the time of such acquisition (except to the
extent such Indebtedness was Incurred in connection with or in
contemplation of such acquisition), which encumbrances or restrictions are
not applicable to any Person, or the properties or assets of any Person,
other than the Person, or the property or assets of the Person, so
acquired, provided that any such Indebtedness or Preferred Stock was
permitted by the terms of this Indenture to be incurred,
(6) customary non-assignment provisions in leases entered into in
the ordinary course of business and consistent with past practices,
(7) any agreement for the sale or other disposition of a Restricted
Subsidiary that restricts distributions by that Restricted Subsidiary
pending its sale or other disposition, provided that the consummation of
such transaction would not result in a Default or Event of Default, that
such restriction terminates if such transaction is not consummated and
that the consummation or abandonment of such transaction occurs within one
year of the date such agreement was entered into,
(8) Permitted Refinancing Indebtedness, provided that the
restrictions contained in the agreements governing such Permitted
Refinancing Indebtedness are no more restrictive, taken as a whole, than
those contained in the agreements governing the Indebtedness being
Refinanced,
(9) limitations on the right to dispose of assets subject to a Lien
securing Indebtedness to the extent that such Lien is permitted to be
Incurred pursuant to Section 3.13, and
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(10) provisions with respect to the disposition or distribution of
assets or property in joint venture agreements and other similar
agreements entered into in the ordinary course of business.
Section 3.15 Limitation On Asset Sales.
(a) The Company will not, and will not permit any Restricted
Subsidiary to, directly or indirectly, consummate an Asset Sale unless:
(i) the Company or the applicable Restricted Subsidiary, as the case
may be, receives consideration at the time of the Asset Sale at least
equal to the Fair Market Value of the assets sold or otherwise disposed
of, and
(ii) at least 75% of the consideration received for the assets
disposed of by the Company or the Restricted Subsidiary, as the case may
be, in the Asset Sale shall be in the form of:
(1) cash or Cash Equivalents, or
(2) (A) tangible or intangible assets to be used by the Company or
any Restricted Subsidiary in the Telecommunications Business, or
(B) Capital Stock of a Person engaged, except to a de minimis
extent, solely in a Telecommunications Business that will become, upon
purchase, a Restricted Subsidiary (collectively, "Replacement Assets"),
(b) The Company or such Restricted Subsidiary, as the case may be,
may apply the Net Cash Proceeds of any such Asset Sale within 360 days of
receipt thereof to:
(i) permanently repay or repurchase outstanding (without Refinancing
and including a permanent reduction in commitments in the case of a
revolving credit facility) (x) Indebtedness of the Company (other than
Subordinated Indebtedness or Disqualified Stock) that is secured
Indebtedness or which has a final maturity date prior to the final
maturity date of the Notes or (y) Indebtedness (other than Disqualified
Stock) of any Restricted Subsidiary, or
(ii) purchase Replacement Assets from a Person other than the
Company and its Subsidiaries.
The balance of the Net Cash Proceeds that are not applied or
invested as described in the immediately preceding clauses (i) and (ii), shall
constitute "Excess Proceeds."
(c) When the aggregate amount of Excess Proceeds equals or exceeds
$25 million, taking into account income earned on such Excess Proceeds, the
Company will be required to make a pro rata offer (an "Asset Sale Offer") to all
holders of Notes and of pari passu Indebtedness with comparable provisions
requiring such Indebtedness to be purchased with the proceeds of such Asset Sale
to purchase the maximum principal amount (or accreted value in the case of
Indebtedness issued with original issue discount) (the "Asset Sale Offer
Amount") of
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Notes and such pari passu Indebtedness that may be purchased with the Excess
Proceeds, at a purchase price in cash in an amount equal to 100% of the
principal amount thereof (or the accreted value thereof in the case of
Indebtedness issued with original issue discount) plus accrued and unpaid
interest or accretion thereon to the date of purchase, subject to the right of
holders on the relevant record date to receive interest due on the relevant
interest payment date, in accordance with the procedures set forth in the
Indenture and the agreements governing such pari passu Indebtedness. To the
extent that any Excess Proceeds remain after consummation of an Asset Sale
Offer, the Company may use such Excess Proceeds for any purpose not otherwise
prohibited by this Indenture. If the aggregate principal amount (or accreted
values) of Notes and pari passu Indebtedness tendered into such Asset Sale Offer
surrendered by holders thereof exceeds the amount of Excess Proceeds, the
Trustee shall select the Notes and pari passu Indebtedness to be purchased on a
pro rata basis in proportion to the respective principal amounts (or accreted
values) of the Notes and such other Indebtedness. Upon completion of such Asset
Sale Offer, the amount of Excess Proceeds shall be reset at zero for purposes of
the first sentence of this paragraph.
(d) Pending application in accordance with this Section 3.15, Net
Cash Proceeds may be applied to temporarily reduce revolving credit borrowings
which can be reborrowed or invested in Cash Equivalents. An Asset Sale Offer
Notice will be mailed first class, postage prepaid, to the record Holders as
shown on the register of Holders within 30 days following such 360th day, with a
copy to the Trustee offering to purchase the Notes as described above. Each
notice of an Asset Sale Offer shall state, among other things, the purchase
date, which must be no earlier than 30 days nor later than 60 days from the date
the notice is mailed, other than as may be required by law (the "Asset Sale
Offer Payment Date"). Upon receiving an Asset Sale Offer Notice, Holders may
elect to tender their Notes in whole or in part in integral multiples of Euro
1,000 in exchange for cash.
(e) On the Asset Sale Offer Payment Date, the Company will, to the
extent lawful:
(1) accept for payment all Notes or portions thereof properly
tendered pursuant to the Asset Sale Offer (or, if the Trustee is acting as
agent for the Company, direct the Trustee to so accept);
(2) deposit with the Paying Agent funds in an amount equal to the
Asset Sale Offer Amount in respect of all Notes or portions thereof so
tendered; and
(3) deliver or cause to be delivered to the Trustee (including by
designating the Trustee as its agent for acceptance of Notes) the Notes so
accepted together with an Officers' Certificate stating the aggregate
principal amount of Notes or portions thereof being purchased by the
Company.
(f) The Company will comply with the requirements of Rule 14e-1
under the Exchange Act and any other applicable securities laws in connection
with the purchase of Notes pursuant to an Asset Sale Offer. To the extent that
the provisions of any applicable securities laws or regulations conflict with
this Section 3.15, the Company shall comply with these laws
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and regulations and shall not be deemed to have breached its obligations under
this Section 3.15 by doing so.
(g) In the event of the transfer of substantially all (but not all)
of the property and assets of the Company and its Restricted Subsidiaries as an
entirety to a Person in a transaction permitted under Section 4.1 the surviving
entity shall be deemed to have sold the properties and assets of the Company and
its Restricted Subsidiaries not so transferred for purposes of this Section
3.15, and shall comply with the provisions of this Section 3.15 with respect to
the deemed sale as if it were an Asset Sale. In addition, the Fair Market Value
of properties and assets of the Company or its Restricted Subsidiaries so deemed
to be sold shall be deemed to be Net Cash Proceeds for purposes of this Section
3.15.
(h) If at any time any non-cash consideration received by the
Company or any Restricted Subsidiary, as the case may be, in connection with any
Asset Sale is converted into or sold or otherwise disposed of for cash (other
than interest received with respect to any non-cash consideration), the
conversion or disposition shall be deemed to constitute an Asset Sale hereunder
and the Net Cash Proceeds thereof shall be applied in accordance with this
Section 3.15 within 360 days of conversion or disposition.
Section 3.16. Limitation On Transactions With Affiliates.
(1) The Company will not, and will not permit any of its Restricted
Subsidiaries to, make any payment to, or sell, lease, transfer or otherwise
dispose of any of its properties or assets to, or purchase any property or
assets from, or enter into or make or amend any transaction, contract,
agreement, understanding, loan, advance or guarantee with, or for the benefit
of, any Affiliate (each of the foregoing, an "Affiliate Transaction"), unless:
(a) such Affiliate Transaction is on terms that are not materially
less favorable to the Company or the relevant Restricted Subsidiary than those
that would have been obtained in a comparable transaction on an arm's length
basis by the Company or such Restricted Subsidiary with a Person that is not an
Affiliate, and
(b) with respect to any Affiliate Transaction or series of related
Affiliate Transactions:
(x) involving aggregate consideration in excess of $10 million, the
Company delivers to the Trustee a resolution of the Board of Directors set
forth in an Officers' Certificate that such Affiliate Transaction is
approved by a majority of the disinterested members of the Board of
Directors and certifying that such Affiliate Transaction complies with
clause (a) above and is in the best interests of the Company or such
Restricted Subsidiary, or
(y) if involving aggregate consideration in excess of $25 million, a
favorable written opinion as to the fairness to the Company of such
Affiliate Transaction from a financial point of view is also obtained by
the Company from an independent accounting, appraisal or investment
banking firm of national standing and delivered to the Trustee.
(2) Clause (1) will not apply to the following:
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(a) the entering into, maintaining or performance of any employment
contract, collective bargaining agreement, benefit plan, program or arrangement,
related trust agreement or any other similar arrangement for or with any
employee, officer or director of the Company or any Restricted Subsidiary
heretofore or hereafter entered into in the ordinary course of business,
including vacation, health, insurance, deferred compensation, retirement,
savings or other similar plans;
(b) the payment of compensation, performance of indemnification or
contribution obligations, or an issuance, grant or award of stock, options, or
other equity-related interests or other securities, to employees, officers or
directors of the Company or any Restricted Subsidiary in the ordinary course of
business;
(c) transactions between or among the Company and/or its Restricted
Subsidiaries;
(d) payment of reasonable fees to directors of the Company;
(e) any sale or other issuance of Capital Stock (other than
Disqualified Stock) of the Company;
(f) Affiliate Transactions in effect or approved by the Board of
Directors on the Issue Date, including any amendments thereto; provided that the
terms of such amendments are not materially less favorable to the Company than
the terms of such agreement prior to such amendment;
(g) Restricted Payments that are permitted by Section 3.11; and
(h) (x) the Primary Supplier Agreement dated January 18, 2000
between Bell Atlantic Global Systems Company and the Company, including any
amendments thereto, provided that the terms of such amendments are not
materially less favorable to the Company than the terms of such agreements prior
to such amendment, or
(y) any transaction with respect to capacity and/or the provision of
telecommunications services between the Company or any Restricted
Subsidiary and any Affiliates, provided that such transaction complies
with clause (1)(a) of this Section 3.16.
Section 3.17. Limitation On Business Activities.
The Company will not, and will not permit any of its Restricted
Subsidiaries to, engage, to more than a de minimus extent, in any business other
than a Telecommunications Business.
Section 3.18. Reports To Holders.
Whether or not the Company is subject to the reporting requirements
of Section 13 or 15(d) of the Exchange Act, so long as any Notes remain
outstanding, the Company will:
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(1) provide the Trustee and the Holders with the annual reports and
information, documents and other reports as are specified in Sections 13 and
15(d) of the Exchange Act subject to such Sections within 15 days after the
times specified for the filing of the information, documents and reports under
such Sections; provided that, whether or not required under such Sections, the
Company shall provide quarterly financial statements (including a balance sheet,
income statement and cash flow statement and notes thereto) and "Management's
Discussion and Analysis of Financial Condition and Results of Operations"
satisfying the requirements therefor established by the Commission; and
(2) file with the Commission, to the extent permitted, the
information, documents and reports referred to in clause (1) within the periods
specified under such Sections; provided that the quarterly information specified
in clause (1) shall be filed within 45 days after the end of the relevant fiscal
quarter or such shorter time established by the Commission.
At any time when the Company is not subject to or is not current in
its reporting obligations under clause (2) of the preceding paragraph, the
Company will make available, upon request, to any holder and any prospective
purchaser of Notes the information required pursuant to Rule 144A(d)(4) under
the Securities Act.
ARTICLE IV
SURVIVING ENTITY
Section 4.1. Merger, Consolidation and Sale of Assets. The Company
will not, directly or indirectly, consolidate or merge with or into (whether or
not the Company is the surviving corporation), or sell, assign, transfer, convey
or otherwise dispose of all or substantially all of its properties or assets, in
one or more related transactions, to another Person unless:
(1) the Company is the surviving corporation or the Person formed by
or surviving any such consolidation or merger (if other than the Company) or to
which such sale, assignment, transfer, conveyance or other disposition shall
have been made is a corporation organized or existing under the laws of Bermuda
or an Approved Jurisdiction;
(2) the Person formed by or surviving any such consolidation or
merger (if other than the Company) or the Person to which such sale, assignment,
transfer, conveyance or other disposition shall have been made assumes all the
obligations of the Company under the Registration Agreement, the Notes and this
Indenture pursuant to supplemental indenture in a form reasonably satisfactory
to the Trustee;
(3) no Default or Event of Default shall exist or shall occur
immediately after giving effect on a pro forma basis to such transaction;
(4) except in the case of a merger of the Company with or into a
Wholly Owned Restricted Subsidiary of the Company, the Company or the Person
formed by or surviving any such consolidation or merger (if other than the
Company), or to which such sale, assignment, transfer, conveyance or other
disposition shall have been made will immediately after such transaction and
after giving pro forma effect thereto and any related financing transactions as
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if the same had occurred at the beginning of the applicable period, be permitted
to incur at least $1.00 of additional Indebtedness pursuant to paragraph (1) of
Section 3.10;
(5) if, as a result of any such transaction, property or assets of
the Company or any Restricted Subsidiary would become subject to a Lien (other
than a Permitted Lien), the Company or the successor entity to the Company shall
have secured the Notes as required by Section 3.10; and
(6) the Company shall have delivered to the Trustee an Officers'
Certificate and an Opinion of Counsel, each stating that such consolidation,
merger or transfer and such supplemental indenture (if any) comply with this
Indenture.
ARTICLE V
OPTIONAL REDEMPTION OF NOTES
Section 5.1. Optional Redemption. The Company may redeem the Notes,
as a whole or from time to time in part, at any time on or after March 30, 2005,
subject to the conditions and at the redemption prices specified in the form of
Notes in Exhibit A. In addition, at any time prior to March 30, 2003, the
Company may redeem a portion of the Notes at the redemption prices specified in
the form of Notes in Exhibit A with the proceeds of Public Equity Offerings.
Section 5.2. Election to Redeem. The Company shall evidence its
election to redeem any Notes pursuant to Section 5.1 by a Board Resolution.
Section 5.3. Notice of Redemption.
(a) The Company shall give or cause the Trustee to give notice of
redemption, in the manner provided for in Section 11.2, not less than 30 nor
more than 60 days prior to the Redemption Date, to each Holder of Notes to be
redeemed at its registered address. If the Company itself gives the notice, it
shall also deliver a copy to the Trustee.
(b) If either (i) the Company is not redeeming all Outstanding
Notes, or (ii) the Company elects to have the Trustee give notice of redemption,
then the Company shall deliver to the Trustee, at least 45 days prior to the
Redemption Date (unless the Trustee is satisfied with a shorter period), an
Officer's Certificate requesting that the Trustee select the Notes to be
redeemed and/or give notice of redemption and setting forth the information
required by paragraph (c) of this Section 5.3 (with the exception of the
identification of the particular Notes, or portions of the particular Notes, to
be redeemed in the case of a partial redemption). If the Company elects to have
the Trustee give notice of redemption, the Trustee shall give the notice in the
name of the Company and at the Company's expense.
(c) All notices of redemption shall state:
(1) the Redemption Date,
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(2) the redemption price and the amount of any accrued
interest payable as provided in Section 5.6,
(3) whether or not the Company is redeeming all Outstanding
Notes,
(4) if the Company is not redeeming all Outstanding Notes, the
aggregate principal amount of Notes that the Company is redeeming and the
aggregate principal amount of Notes that will be Outstanding after the
partial redemption, as well as the identification of the particular Notes,
or portions of the particular Notes, that the Company is redeeming,
(5) if the Company is redeeming only part of a Note, the
notice that relates to that Note shall state that on and after the
Redemption Date, upon surrender of that Note, the Holder will receive,
without charge, a new Note or Notes of authorized denominations for the
principal amount of the Note remaining unredeemed,
(6) that on the Redemption Date the redemption price and any
accrued interest payable to the Redemption Date as provided in Section 5.6
will become due and payable in respect of each Note, or the portion of
each Note, to be redeemed, and, unless the Company defaults in making the
redemption payment, that interest on each Note, or the portion of each
Note, to be redeemed, will cease to accrue on and after the Redemption
Date,
(7) the place or places where a Holder must surrender the
Holder's Notes for payment of the redemption price, and
(8) the ISIN number, if any, listed in the notice or printed
on the Notes, and that no representation is made as to the accuracy or
correctness of such ISIN number.
Section 5.4. Selection of Notes to Be Redeemed in Part. (a) If the
Company is not redeeming all Outstanding Notes, the Trustee shall select the
Notes to be redeemed in compliance with the requirements of the principal
national securities exchange, if any, on which the Notes are listed or, if the
Notes are not then listed on a national securities exchange, on a pro rata
basis, by lot or in another fair and reasonable manner chosen at the discretion
of the Trustee; provided, however, that if a partial redemption is made with the
proceeds of a Public Equity Offering, selection of the Notes, or portions of the
Notes, for redemption shall be made by the Trustee only on a pro rata basis as
is practicable (subject to the procedures of Euroclear or Clearstream,
Luxembourg, as the case may be), unless that method is prohibited. The Trustee
shall make the selection from the Outstanding Notes not previously called for
redemption. The Trustee shall promptly notify the Company in writing of the
Notes selected for redemption and, in the case of any Notes selected for partial
redemption, the principal amount of the Notes to be redeemed. In the event of a
partial redemption by lot, the Trustee shall select the particular Notes to be
redeemed not less than 30 nor more than 60 days prior to the relevant Redemption
Date from the Outstanding Notes not previously called for redemption. The
Company may redeem Notes in denominations of Euro 1,000 only in whole. The
Trustee may select for redemption portions (equal to Euro 1,000 or any integral
multiple of Euro 1,000) of the principal of Notes that have denominations larger
than Euro 1,000.
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(b) For all purposes of this Indenture, unless the context otherwise
requires, all provisions relating to redemption of Notes shall relate, in the
case of any Note redeemed or to be redeemed only in part, to the portion of the
principal amount of that Note which has been or is to be redeemed.
Section 5.5. Deposit of Redemption Price. On or prior to 10 a.m. on
the relevant Redemption Date, the Company shall deposit with the Trustee or with
a Paying Agent (or, if the Company is acting as its own Paying Agent, segregate
and hold in trust as provided in Section 2.4) an amount of money in immediately
available funds sufficient to pay the redemption price of, and accrued interest
on, all the Notes that the Company is redeeming on that date.
Section 5.6. Notes Payable on Redemption Date. If the Company, or
the Trustee on behalf of the Company, gives notice of redemption in accordance
with this Article V, the Notes, or the portions of Notes, called for redemption,
shall, on the Redemption Date, become due and payable at the redemption price
specified in the notice (together with accrued and unpaid interest, if any, to
the Redemption Date), and from and after the Redemption Date (unless the Company
shall default in the payment of the redemption price and accrued interest) the
Notes or the portions of Notes shall cease to bear interest. Upon surrender of
any Note for redemption in accordance with the notice, the Company shall pay the
Notes at the redemption price, together with accrued and unpaid interest, if
any, to the Redemption Date (subject to the rights of Holders of record on the
relevant record date to receive interest due on the relevant Interest Payment
Date). If the Company shall fail to pay any Note called for redemption upon its
surrender for redemption, the principal shall, until paid, bear interest from
the Redemption Date at the rate borne by the Notes.
Section 5.7. Unredeemed Portions of Partially Redeemed Note. Upon
surrender of a Note that is to be redeemed in part, the Company shall execute,
and the Trustee shall authenticate and make available for delivery to the Holder
of the Note at the expense of the Company, a new Note or Notes, of any
authorized denomination as requested by the Holder, in an aggregate principal
amount equal to, and in exchange for, the unredeemed portion of the principal of
the Note surrendered, provided that each new Note will be in a principal amount
of Euro 1,000 or integral multiple of Euro 1,000.
ARTICLE VI
DEFAULTS AND REMEDIES
Section 6.1. Events of Default.
(a) An "Event of Default" occurs if:
(1) default in the payment when due of the principal of or premium,
if any, on any Notes issued under this Indenture, including the failure to
make a required payment to purchase any such Notes tendered pursuant to an
optional redemption, Change of Control Offer or an Asset Sale Offer;
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(2) default for 30 days or more in the payment when due of interest
on any Notes issued under this Indenture (including additional interest
payable under the Registration Agreement and Additional Amounts);
(3) the failure to perform or comply with any of the provisions
described under Section 4.1;
(4) the failure by the Company or any Restricted Subsidiary to
comply with any other covenant or agreement contained in this Indenture or
Notes, for 60 days or more after written notice is sent to the Company
from the Trustee or the Holders of at least 25% in aggregate principal
amount of the Notes;
(5) default by the Company or any Restricted Subsidiary under any
Indebtedness which:
(a) is caused by a failure to pay principal of or premium, if any,
or interest on such Indebtedness when due within any applicable grace
period; or
(b) results in the acceleration of such Indebtedness prior to its
Stated Maturity; and the principal amount of Indebtedness covered by (a)
or (b) at the relevant time, aggregates $15 million or more.
(6) failure by the Company or any of its Restricted Subsidiaries to
pay one or more final judgments against any of them or any of their
respective properties (which are not covered by adequate insurance by a
solvent insurer of national or international reputation which has
acknowledged its obligations in writing), aggregating $15 million or more,
which judgment(s) are not paid, discharged or stayed for a period of 60
days or more;
(7) the entry by a court of competent jurisdiction of: (i) a decree
or order for relief in respect of the Company or any Restricted Subsidiary
of the Company in an involuntary case or proceeding under any Bankruptcy
Law or (ii) a decree or order (A) adjudging the Company or any Restricted
Subsidiary of the Company a bankrupt or insolvent, (B) approving as
properly filed a petition seeking reorganization, arrangement, adjustment
or composition of, or in respect of, the Company or any Restricted
Subsidiary of the Company under any Bankruptcy Law, (C) appointing a
Custodian of the Company or any Restricted Subsidiary of the Company or of
any substantial part of the property of the Company or any Restricted
Subsidiary of the Company, or (D) ordering the winding-up or liquidation
of the affairs of the Company or any Restricted Subsidiary of the Company,
and in each case, the continuance of any such decree or order for relief
or any such other decree or order unstayed and in effect for a period of
60 consecutive calendar days; or
(8) (i) the commencement by the Company or any Restricted Subsidiary
of the Company of a voluntary case or proceeding under any Bankruptcy Law
or of any other case or proceeding to be adjudicated a bankrupt or
insolvent, (ii) the consent by the Company or any Restricted Subsidiary of
the Company to the entry of a decree or order for relief in respect of the
Company or any Restricted Subsidiary of the Company in an
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involuntary case or proceeding under any Bankruptcy Law or to the
commencement of any bankruptcy or insolvency case or proceeding against
the Company or any Restricted Subsidiary of the Company, (iii) the filing
by the Company or any Restricted Subsidiary of the Company of a petition
or answer or consent seeking reorganization or relief under any Bankruptcy
Law, (iv) the consent by the Company or any Restricted Subsidiary of the
Company to the filing of such petition or to the appointment of or taking
possession by a Custodian of the Company or any Restricted Subsidiary of
the Company or of any substantial part of the Property of the Company or
any Restricted Subsidiary of the Company, (v) the making by the Company or
any Restricted Subsidiary of the Company of an assignment for the benefit
of creditors, (vi) the admission by the Company or any Restricted
Subsidiary of the Company in writing of its inability to pay its debts
generally as they become due, or (vii) the approval by stockholders of the
Company or any Restricted Subsidiary of the Company of any plan or
proposal for the liquidation or dissolution of the Company or any
Restricted Subsidiary of the Company, or (viii) the taking of corporate
action by the Company or any Restricted Subsidiary of the Company in
furtherance of any such action.
The foregoing will constitute Events of Default whatever the reason for any such
Event of Default and whether it is voluntary or involuntary or is effected by
operation of law or pursuant to any judgment, decree or order of any court or
any order, rule or regulation of any administrative or governmental body.
(b) The Company shall deliver to the Trustee upon becoming aware of
any Default or Event of Default written notice in the form of an Officers'
Certificate of any Default or Event of Default, their status and what action the
Company is taking or proposes to take in respect thereof.
Section 6.2. Acceleration.
(a) If an Event of Default (other than an Event of Default specified
in clauses (7) and (8) above with respect to the Company) shall occur and be
continuing, the Trustee or the Holders of at least 25% in principal amount of
outstanding Notes may declare the unpaid principal of and accrued and unpaid
interest on all the Notes to be immediately due and payable by notice in writing
to the Company and the Trustee specifying the Event of Default and that it is a
"notice of acceleration." If an Event of Default specified in clauses (7) and
(8) above occurs with respect to the Company, then the unpaid principal of and
accrued and unpaid interest on all the Notes will become immediately due and
payable without any declaration or other act on the part of the Trustee or any
Holder.
(b) At any time after a declaration of acceleration with respect to
the Notes as described in the preceding paragraph, the Holders of a majority in
principal amount of such Notes may rescind and cancel such declaration and its
consequences:
(1) if the rescission would not conflict with any judgment or
decree;
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(2) if all existing Events of Default have been cured or waived,
except nonpayment of principal or interest that has become due solely
because of the acceleration;
(3) to the extent the payment of such interest is lawful, interest
on overdue installments of interest and overdue principal, which has
become due otherwise than by such declaration of acceleration, has been
paid; and
(4) if the Company has paid the Trustee its reasonable compensation
and reimbursed the Trustee for its reasonable expenses, disbursements and
advances.
No recission shall affect any subsequent Default or impair any rights relating
thereto.
Section 6.3. Other Remedies.
(a) If an Event of Default occurs and is continuing, the Trustee may
pursue any available remedy to collect the payment of principal of and interest
on the Notes or to enforce the performance of any provision of the Notes or this
Indenture.
(b) The Trustee may maintain a proceeding even if it does not
possess any of the Notes or does not produce any of them in the proceeding. A
delay or omission by the Trustee or any Holder in exercising any right or remedy
accruing upon an Event of Default shall not impair the right or remedy or
constitute a waiver of or acquiescence in the Event of Default. No remedy is
exclusive of any other remedy. All available remedies are cumulative to the
extent permitted by law.
Section 6.4. Waiver of Past Defaults. The Holders of a majority in
principal amount of the Notes may waive any existing Default or Event of
Default, and its consequences, except a default in the payment of the principal
of, premium, if any, or interest on such Notes.
Section 6.5. Control by Majority. The Holders of a majority in
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 of
exercising any trust or power conferred on the Trustee. Subject to Sections 7.1
and 7.2, however, the Trustee may refuse to follow any direction that conflicts
with law or this Indenture; provided, however, that the Trustee may take any
other action deemed proper by the Trustee that is not inconsistent with such
direction.
Section 6.6. Limitation on Suits. (a) Subject to the provisions of
this Indenture relating to the duties of the Trustee, the Trustee is under no
obligation to exercise any of its rights or powers under this Indenture at the
request, order or direction of any of the Holders of the Notes unless such
Holders have offered to the Trustee reasonable security or indemnity. Subject to
all provisions of this Indenture and applicable law, the Holders of a majority
in aggregate principal amount of the then outstanding Notes have the right to
direct the time, method and place of conducting any proceeding for any remedy
available to the Trustee or exercising any trust or power conferred on the
Trustee.
(b) No Holder of any Notes will have any right to institute any
proceeding with respect to this Indenture or for any remedy thereunder, unless:
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(1) such Holder gives to the Trustee written notice of a continuing
Event of Default;
(2) Holders of at least 25% in principal amount of the then
outstanding Dollar Notes or Euro Notes, as the case may be, make a written
request to pursue the remedy;
(3) such Holders of the Dollar Notes or Euro Notes, as the case may
be, provide to the Trustee satisfactory indemnity;
(4) the Trustee does not comply within 60 days; and
(5) during such 60-day period the Holders of a majority in principal
amount of the outstanding Notes do not give the Trustee a written
direction which, in the opinion of the Trustee, is inconsistent with the
request.
Otherwise, no Holder of any Notes will have any right to institute
any proceeding with respect to this Indenture or for any remedy hereunder,
except:
(1) a Holder of Notes may institute suit for enforcement of payment
of the principal of and premium, if any, or interest on such Note held by it on
or after the respective due dates expressed in such Note, or
(2) for the institution of any proceeding with respect to this
Indenture or any remedy hereunder, including, without limitation, acceleration,
by the Holders of a majority in principal amount of the outstanding Notes;
provided, that upon institution of any proceeding or exercise of any remedy,
such Holder or Holders provide the Trustee with prompt notice thereof.
Section 6.7. Rights of Holders to Receive Payment. Notwithstanding
any other provision of this Indenture (including, without limitation, Section
6.6), the right of any Holder to receive payment of principal of or interest on
the Notes held by such Holder, on or after the respective due dates, Redemption
Dates or repurchase date expressed in this Indenture or the Notes, or to bring
suit for the enforcement of any such payment on or after such respective dates,
shall not be impaired or affected without the consent of such Holder.
Section 6.8. Collection Suit by Trustee. If an Event of Default
specified in Section 6.1 (1) or (2) occurs and is continuing, the Trustee may
recover judgment in its own name and as trustee of an express trust against the
Company for the whole amount then due and owing (together with applicable
interest on any overdue principal and, to the extent lawful, interest on overdue
interest) and the amounts provided for in Section 7.7.
Section 6.9. Trustee May File Proofs of Claim, etc.
(a) The Trustee may (irrespective of whether the principal of the
Notes is then due):
(i) 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 and
the Holders under this Indenture and the Notes allowed in any bankruptcy,
insolvency, liquidation or other
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judicial proceedings relative to the Company or any Subsidiary of the
Company or its or their respective creditors or properties; and
(ii) collect and receive any monies or other property payable or
deliverable in respect of any such claims and distribute them in
accordance with this Indenture.
Any receiver, trustee, liquidator, sequestrator (or other similar official) in
any such proceeding is hereby authorized by each Holder to make such payments to
the Trustee and, in the event that the Trustee shall consent to the making of
such payments directly to the Holders, to pay to the Trustee any amount due to
it for the reasonable compensation, expenses, taxes, disbursements and advances
of the Trustee, its agent and counsel, and any other amounts due to the Trustee
pursuant to Section 7.7.
(b) Nothing in this Indenture shall be deemed to authorize the
Trustee to authorize or consent to or accept or adopt on behalf of any Holder
any plan of reorganization, arrangement, adjustment or composition affecting the
Notes or the rights of any Holder thereof, or to authorize the Trustee to vote
in respect of the claim of any Holder in any such proceeding.
Section 6.10. Priorities. If the Trustee collects any money or
property pursuant to this Article VI, it shall pay out the money or property in
the following order:
FIRST: to the Trustee for amounts due under Section 7.7;
SECOND: if the Holders proceed against the Company directly without
the Trustee in accordance with this Indenture, to Holders for their
collection costs;
THIRD: to Holders for amounts due and unpaid on the Notes for
principal and interest, ratably, without preference or priority of any
kind, according to the amounts due and payable on the Notes for principal
and interest, respectively; and
FOURTH: to the Company or to such party as a court of competent
jurisdiction shall direct.
The Trustee may, upon notice to the Company, 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 in its discretion may
require the filing by any party litigant in the suit of an undertaking to pay
the costs of the suit, and the court in its discretion may assess reasonable
costs, including reasonable attorneys' fees, against any party litigant in the
suit, having due regard to the merits and good faith of the claims or defenses
made by the party litigant. This Section 6.11 does not apply to a suit by the
Trustee, a suit by the Company, a suit by a Holder pursuant to Section 6.7 or a
suit by Holders of more than 10% in principal amount of Outstanding Notes.
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ARTICLE VII
TRUSTEE
Section 7.1. Duties of Trustee.
(a) If a Default or an Event of Default has occurred and is
continuing, the Trustee shall exercise the rights and powers vested in it by
this Indenture and use the same degree of care and skill in their exercise as a
prudent man would exercise or use under the circumstances in the conduct of his
own affairs.
(b) Except during the continuance of a Default or an Event of
Default:
(1) the Trustee undertakes to perform such duties and only such
duties as are specifically set forth in this Indenture and no implied
covenants or obligations shall be read into this Indenture against the
Trustee; and
(2) in the absence of bad faith on its part, the Trustee may
conclusively rely, as to the truth of the statements and the correctness
of the opinions expressed therein, upon certificates or opinions furnished
to the Trustee and conforming to the requirements of this Indenture.
However, in the case of any such certificates or opinions which by any
provisions hereof are specifically required to be furnished to the
Trustee, the Trustee shall examine such certificates and opinions to
determine whether or not they conform to the requirements of this
Indenture (but need not confirm or investigate the accuracy of
mathematical calculations or other facts stated therein).
(c) The Trustee may not be relieved from liability for its own
negligent action, its own negligent failure to act or its own willful
misconduct, except that:
(1) this paragraph (c) does not limit the effect of paragraph (b) of
this Section 7.1;
(2) the Trustee shall not be liable for any error of judgment made
in good faith by a Trust Officer unless it is proved that the Trustee was
negligent in ascertaining the pertinent facts; and
(3) the Trustee shall not be liable with respect to any action it
takes or omits to take in good faith in accordance with a direction
received by it pursuant to Section 6.2, 6.4 or 6.5.
(d) 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.
(e) Money held in trust by the Trustee need not be segregated from
other funds except to the extent required by law.
(f) No provision of this Indenture shall require the Trustee to
expend or risk its own funds or otherwise incur financial liability in the
performance of any of its duties hereunder
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or in the exercise of any of its rights or powers, if it shall have reasonable
grounds to believe that repayment of such funds or adequate indemnity against
such risk or liability is not reasonably assured to it.
(g) 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 VII and to the provisions of the TIA.
(h) Unless otherwise specifically provided in this Indenture, any
demand, request, direction or notice from the Company shall be sufficient if
signed by an Officer of the Company.
(i) 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 against the costs, expenses (including
reasonable attorneys' fees and expenses) and liabilities that might be incurred
by it in compliance with such request or direction.
Section 7.2. Rights of Trustee. Subject to Section 7.1:
(a) The Trustee may conclusively rely on any document reasonably
believed by it to be genuine and to have been signed or presented by the proper
person. The Trustee need not investigate any fact or matter stated in the
document.
(b) Before the Trustee acts or refrains from acting, it may require
an Officers' Certificate or an Opinion of Counsel. The Trustee shall not be
liable for any action it takes or omits to take in good faith in reliance on an
Officers' Certificate or Opinion of Counsel.
(c) The Trustee may act through its attorneys and agents and shall
not be responsible for the misconduct or negligence of any agent appointed with
due care.
(d) The Trustee shall not be liable for any action it takes or omits
to take in good faith which it believes to be authorized or within its rights or
powers; provided, however, that the Trustee's conduct does not constitute
willful misconduct or negligence.
(e) The Trustee may consult with counsel of its selection, and the
advice or opinion of counsel with respect to legal matters relating to this
Indenture and the Notes shall be full and complete authorization and protection
from liability in respect to any action taken, omitted or suffered by it
hereunder in good faith and in accordance with the advice or opinion of such
counsel.
(f) If the Trustee shall determine, it shall be entitled to examine
the books, records and premises of the Company, personally or by agent or
attorney.
(g) The Trustee shall not be deemed to have notice of any Default or
Event of Default unless an Officer of the Trustee has actual knowledge thereof
or unless written notice of any event which is in fact such a default is
received by the Trustee at the Corporate Trust Office of the Trustee, and such
notice references the Notes and this Indenture.
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(h) The rights, privileges, protections, immunities and benefits
given to the Trustee, including, without limitation, its right to be
indemnified, are extended to, and shall be enforceable by, the Trustee in each
of its capacities hereunder, and to each agent, custodian and other Person
employed to act hereunder.
(i) The Trustee may request that the Company deliver an Officers'
Certificate setting forth the names of individuals and/or titles of officers
authorized at such time to take specified actions pursuant to this Indenture,
which Officers' Certificate may be signed by any person authorized to sign an
Officers' Certificate, including any person specified as so authorized in any
such certificate previously delivered and not superseded.
Section 7.3. Individual Rights of Trustee. The Trustee in its
individual or any other capacity may become the owner or pledgee of Notes and
may otherwise deal with the Company or any of its Affiliates with the same
rights it would have if it were not Trustee. Any Paying Agent, Registrar or
co-Registrar may do the same with like rights. However, the Trustee must comply
with Sections 7.10 and 7.11.
Section 7.4. Trustee's Disclaimer. The Trustee shall not be
responsible for and makes no representation as to the validity or adequacy of
this Indenture or the Notes, it shall not be accountable for the Company's use
of the proceeds from the Notes, and it shall not be responsible for any
statement of the Company in this Indenture or in any document issued in
connection with the sale of the Notes or in the Notes other than the Trustee's
certificate of authentication.
Section 7.5. Notice of Defaults.
If a Default or Event of Default occurs and is continuing and if a
Trust Officer has actual knowledge thereof, the Trustee shall mail to each
Holder notice of the Default or Event of Default within 90 days after the
occurrence thereof. Except in the case of a Default or Event of Default in
payment of principal of or interest on any Note (including payments pursuant to
the optional redemption or required repurchase provisions of such Note, if any),
the Trustee may withhold the notice if and so long as a committee of its Trust
Officers in good faith determines that withholding the notice is in the
interests of the Holders.
Section 7.6. Reports by Trustee to Holders. The Trustee shall comply
with TIA ss. 313. The Company agrees to notify promptly the Trustee whenever the
Notes become listed on any stock exchange and of any delisting thereof.
Section 7.7. Compensation and Indemnity.
(a) The Company shall pay to the Trustee from time to time such
compensation for its acceptance of this Indenture and services hereunder as the
Company and the Trustee shall from time to time agree in writing. The Trustee's
compensation shall not be limited by any law on compensation of a trustee of an
express trust. The Company shall reimburse the Trustee upon request for all
reasonable out-of-pocket expenses incurred or made by it, including costs of
collection, costs of preparing and reviewing reports, certificates and other
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documents, costs of preparation and mailing of notices to Holders and reasonable
costs of counsel retained by the Trustee in connection with the delivery of an
Opinion of Counsel or otherwise, in addition to the compensation for its
services. Such expenses shall include the reasonable compensation and expenses,
disbursements and advances of the Trustee's agents, counsel, accountants and
experts.
(b) The Company shall indemnify the Trustee against any and all
loss, liability or expense (including reasonable attorneys' fees and expenses)
incurred by it without gross negligence, willful misconduct or bad faith on its
part in connection with the acceptance and administration of this trust and the
performance of its duties hereunder, including the costs and expenses of
enforcing this Indenture (including this Section 7.7) and of defending itself
against any claims (whether asserted by any Holder, the Company or otherwise).
The Trustee shall notify the Company promptly of any claim for which it may seek
indemnity. Failure by the Trustee to so notify the Company shall not relieve the
Company of its obligations hereunder. The Company shall defend the claim and the
Trustee may have separate counsel and the Company shall pay the fees and
expenses of such counsel provided that the Company shall not be required to pay
such fees and expenses if it assumes the Trustee's defense, and, in the
reasonable judgment of outside counsel to the Trustee, there is no conflict of
interest between the Company and the Trustee in connection with such defense.
The Company need not reimburse any expense or indemnify against any loss,
liability or expense incurred by the Trustee through the Trustee's own willful
misconduct, gross negligence or bad faith.
(c) To secure the Company's payment obligations in this Section 7.7,
the Trustee shall have a lien prior to the Notes on all money or property held
or collected by the Trustee other than money or property held in trust to pay
principal of and interest on particular Notes. The Trustee's right to receive
payment of any amounts due under this Section 7.7 shall not be subordinate to
any other liability or Indebtedness of the Company.
(d) The Company's payment obligations pursuant to this Section 7.7
shall survive the discharge of this Indenture and the resignation or removal of
the Trustee. When the Trustee incurs expenses after the occurrence of a Default
specified in Section 6.1(7) or (8) , the expenses are intended to constitute
expenses of administration under any Bankruptcy Law; provided, however, that
this shall not affect the Trustee's rights as set forth in this Section 7.7 or
Section 6.10.
Section 7.8. Replacement of Trustee.
(a) The Trustee may resign at any time by so notifying the Company.
The Holders of a majority in principal amount of the Outstanding Notes may
remove the Trustee by so notifying the Trustee and may appoint a successor
Trustee reasonably acceptable to the Company. The Company shall remove the
Trustee if:
(1) the Trustee fails to comply with Section 7.10;
(2) the Trustee is adjudged bankrupt or insolvent;
(3) a receiver or other public officer takes charge of the Trustee
or its property; or
(4) the Trustee otherwise becomes incapable of acting.
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(b) If the Trustee resigns or is removed by the Company or by the
Holders of a majority in principal amount of the Outstanding Notes and such
Holders do not reasonably promptly appoint a successor Trustee, or if a vacancy
exists in the office of the Trustee for any reason (the Trustee in such event
being referred to herein as the retiring Trustee), the Company shall promptly
appoint a successor Trustee.
(c) A successor Trustee shall deliver a written acceptance of its
appointment to the retiring Trustee and to the Company. Thereupon the
resignation or removal of the retiring Trustee shall become effective, and the
successor Trustee shall have all the rights, powers and duties of the Trustee
under this Indenture. The successor Trustee shall mail a notice of its
succession to Holders. The retiring Trustee shall promptly transfer all property
held by it as Trustee to the successor Trustee, subject to the lien provided for
in Section 7.7.
(d) If a successor Trustee does not take office within 30 days after
the retiring Trustee resigns or is removed, the retiring Trustee or the Holders
of 10% in principal amount of the Outstanding Notes may petition, at the
Company's expense, any court of competent jurisdiction for the appointment of a
successor Trustee.
(e) If the Trustee fails to comply with Section 7.10, any Holder may
petition any court of competent jurisdiction for the removal of the Trustee and
the appointment of a successor Trustee.
(f) Notwithstanding the replacement of the Trustee pursuant to this
Section 7.8, the Company's obligations under Section 7.7 shall continue for the
benefit of the retiring Trustee.
Section 7.9. Successor Trustee by Merger.
(a) If the Trustee consolidates with, merges or converts into, or
transfers all or substantially all its corporate trust business or assets to,
another corporation or banking association, the resulting, surviving or
transferee corporation without any further act shall be the successor Trustee.
(b) In case at the time such successor or successors to the Trustee
shall succeed to the trusts created by this Indenture, any of the Notes shall
have been authenticated but not delivered, any such successor to the Trustee may
adopt the certificate of authentication of any predecessor trustee, and deliver
such Notes so authenticated; and in case at that time any of the Notes shall not
have been authenticated, any successor to the Trustee may authenticate such
Notes either in the name of any predecessor hereunder or in the name of the
successor to the Trustee; and in all such cases such certificates shall have the
full force which it is anywhere in the Notes or in this Indenture provided that
the certificate of the Trustee shall have.
Section 7.10. Eligibility; Disqualification. The Trustee shall at
all times satisfy the requirements of TIA ss. 310(a). The Trustee shall have a
combined capital and surplus of at least $50 million as set forth in its most
recent published annual report of condition. The Trustee shall comply with TIA
ss. 310(b); provided, however, that there shall be excluded from the operation
of TIA ss. 310(b)(1) any indenture or indentures under which other securities or
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certificates of interest or participation in other securities of the Company are
outstanding if the requirements for such exclusion set forth in TIA ss.
310(b)(1) are met.
Section 7.11. Preferential Collection of Claims Against Company. The
Trustee shall comply with TIA ss. 311(a), excluding any creditor relationship
listed in TIA ss. 311(b). A Trustee who has resigned or been removed shall be
subject to TIA ss. 311(a) to the extent indicated.
Section 7.12. Appointment of Co-Trustee. (a) Notwithstanding any
other provisions in this Indenture, at any time, solely for the purpose of
meeting the legal requirements of any jurisdiction, the Trustee shall have the
power and may execute and deliver all instruments necessary to appoint one or
more Persons to act as separate trustee or trustees or as co-trustee or
co-trustees, and to vest in such Person or Persons, in such capacity and subject
to the other provisions of this Indenture, such powers, duties, obligations and
rights as the Trustee may consider necessary or desirable. No co-trustee
hereunder shall be required to meet the terms of eligibility as a successor
trustee under this Indenture and no notice to holders of Notes of the
appointment of a separate trustee or co-trustee shall be required under this
Indenture.
(b) Every separate trustee or co-trustee shall, to the extent
permitted by law, be appointed and act subject to the following provisions and
conditions:
(i) all rights, powers, duties and obligations conferred or imposed
upon the Trustee shall be conferred or imposed upon and exercised or
performed by the Trustee and such separate trustee or co-trustee jointly
(it being understood that such separate trustee or co-trustee us not
authorized to act separately without the Trustee joining in such act),
except to the extent that under any law of any jurisdiction in which any
particular act or acts are to be performed the Trustee shall be
incompetent or unqualified to perform such act or acts, in which event
such rights, powers, duties and obligations shall be exercised and
performed singly by such co-trustee, but solely at the direction of the
Trustee;
(ii) no trustee hereunder shall be personally liable by reason of
any act or omission of any other trustee hereunder; and
(iii) the Trustee may at any time accept the resignation of or
remove any separate trustee or co-trustee.
(c) Any notice, request or other writing given to the Trustee shall
be deemed to have been given to each of the then separate trustees or
co-trustees, as effectively as if given to each of them. Every instrument
appointing any separate trustee or co-trustee shall refer to this
Indenture and the conditions of this Article VII. Each separate trustee or
co-trustee, upon its acceptance of the trusts conferred, shall be vested
with the estates or property specified in its instrument of appointment,
jointly with the Trustee, subject to all the provisions of this Indenture,
specifically including every provision of this Indenture relating to the
conduct of, affecting the liability of, or affording protection or rights
(including the rights to compensation, reimbursement and indemnification
hereunder) to, the Trustee. Every such instrument shall be filed with the
Trustee.
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(d) Any separate trustee or co-trustee may at any time constitute
the Trustee or its agent or attorney-in-fact with full power and authority, to
the extent not prohibited by law, to do any lawful act under or in respect of
this Indenture on its behalf and in its name. If any separate trustee or
co-trustee shall die, become incapable of acting, resign or be removed, all of
its estates, properties, rights, remedies and trusts shall vest in and be
exercised by the Trustee, to the extent permitted by law, without the
appointment of a new or successor trustee.
ARTICLE VIII
DEFEASANCE; DISCHARGE OF INDENTURE
Section 8.1. Legal Defeasance and Covenant Defeasance.
(a) The Company may, at its option, at any time, elect to have
either paragraph (b) or (c) of this Section 8.1 be applied to all Outstanding
Notes upon compliance with the conditions set forth in Section 8.2.
(b) Upon the Company's exercise under paragraph (a) of this Section
8.1 of the option applicable to this paragraph (b), the Company shall, subject
to the satisfaction of the conditions set forth in Section 8.2, be deemed to
have paid and been discharged from its obligations with respect to all
Outstanding Notes on the date all of the conditions set forth in Section 8.2
(including Section 8.2(4)(b)) are satisfied (hereinafter, "Legal Defeasance").
For this purpose, Legal Defeasance means that the Company shall be deemed to
have paid and discharged the entire Indebtedness represented by the Outstanding
Notes, which shall thereafter be deemed to be Outstanding only for the purposes
of Section 8.3 and the other Sections of this Indenture referred to in clause
(i) or (ii) of this paragraph (b), and to have satisfied all its other
obligations under such Notes and this Indenture (and the Trustee, on demand of
and at the expense of the Company, shall execute proper instruments
acknowledging the same), except for the following provisions, which shall
survive until otherwise terminated or discharged hereunder:
(i) the rights of Holders of Outstanding Notes to receive solely
from the trust fund described in Section 8.3, and as more fully set forth
in Section 8.3, payments in respect of the principal of and interest on
such Notes when such payments are due,
(ii) the Company's obligations with respect to such Notes under
Article II and Section 3.2,
(iii) the rights, powers, trusts, duties and immunities of the
Trustee hereunder and the Company's obligations in connection therewith,
and
(iv) this Article VIII.
Subject to compliance with this Article VIII, the Company may exercise its
option under this paragraph (b) notwithstanding the prior exercise of its option
under paragraph (c) of this Section 8.1.
(c) Upon the Company's exercise under paragraph (a) of this Section
8.1 of the option applicable to this paragraph (c), the Company shall, subject
to the satisfaction of the
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applicable conditions set forth in Section 8.2, be released from its obligations
under the covenants contained in Sections 3.4, 3.5, 3.8 to 3.18 and 4.1 with
respect to the Outstanding Notes on and after the date the conditions set forth
below are satisfied (hereinafter, "Covenant Defeasance"), and the Notes shall
thereafter be deemed not Outstanding for the purposes of any direction, waiver,
consent or declaration or act of Holders (and the consequences of any thereof)
in connection with such covenants, but shall continue to be Outstanding for all
other purposes hereunder (it being understood that such Notes shall not be
deemed Outstanding for accounting purposes). For this purpose, such Covenant
Defeasance means that, with respect to the Outstanding Notes, the Company may
omit to comply with and shall have no liability in respect of any term,
condition or limitation set forth in any such covenant, whether directly or
indirectly, by reason of any reference elsewhere herein to any such covenant or
by reason of any reference in any such covenant to any other provision herein or
in any other document and such omission to comply shall not constitute a Default
or an Event or Default under Section 6.1(3) to (6), but, except as specified
above, the remainder of this Indenture and such Notes shall be unaffected
thereby.
Section 8.2. Conditions to Defeasance. The Company may exercise its
Legal Defeasance option or its Covenant Defeasance option only if:
(1) the Company irrevocably deposits with the Trustee, in trust for
the benefit of the Holders, Euros, European Union Obligations or a
combination thereof in such amounts as will be sufficient without
reinvestment, in the opinion of a nationally recognized firm of
independent public accountants, to pay the principal of and interest on
the Notes on the stated date for payment thereof or on the applicable
redemption date, as the case may be, and the Trustee has a perfected first
priority security interest under applicable law in such Euros and European
Union Obligations;
(2) in the case of Legal Defeasance, the Company shall have
delivered to the Trustee an Opinion of Counsel in the United States
reasonably acceptable to the Trustee to the effect that: (A) the Company
has received from, or there has been published by, the Internal Revenue
Service a ruling or (B) since the Issue Date, there has been a change in
the applicable federal income tax law, in either case to the effect that,
and based thereon such Opinion of Counsel shall state that, the Holders
will not recognize income, gain or loss for federal income tax purposes as
a result of such Legal Defeasance and will be subject to federal income
tax on the same amounts, in the same manner and at the same times as would
have been the case if such Legal Defeasance had not occurred;
(3) in the case of Covenant Defeasance, the Company shall have
delivered to the Trustee an Opinion of Counsel in the United States
reasonably acceptable to the Trustee to the effect that the Holders will
not recognize income, gain or loss for federal income tax purposes as a
result of such Covenant Defeasance and will be subject to federal income
tax on the same amounts, in the same manner and at the same times as would
have been the case if such Covenant Defeasance had not occurred;
(4) the Trustee shall have received, on the date of the deposit
pursuant to paragraph (1) above and on the 91st day after such date, an
Officers' Certificate stating that (a) no Default or Event of Default
shall have occurred and be continuing on the date
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of the deposit pursuant to paragraph (1) above (except any Default or
Event of Default resulting from the failure to comply with Section 3.10
hereof as a result of the borrowing of the funds required to effect such
deposit) and, (b) insofar as Events of Default from bankruptcy or
insolvency events are concerned, no Default or Event of Default shall have
occurred at any time in the period ending on the 91st day after the date
of deposit and, in the case of Legal Defeasance, no such Default or Event
of Default shall have occurred and be continuing on such 91st day;
(5) the Trustee shall have received an Officers' Certificate stating
that such Legal Defeasance or Covenant Defeasance shall not result in a
breach or violation of, or constitute a default under this Indenture or
any other material agreement or instrument to which the Company or any of
its Restricted Subsidiaries is a party or by which the Company or any of
its Subsidiaries is bound;
(6) the Company shall have delivered to the Trustee an Officers'
Certificate stating that the deposit was not made by the Company with the
intent of preferring the Holders over any other creditors of the Company
or any Subsidiary of the Company or with the intent of defeating,
hindering, delaying or defrauding any other creditors of the Company or
others;
(7) the Company shall have delivered to the Trustee an Officers'
Certificate and an Opinion of Counsel, each stating that all conditions
precedent provided for or relating to the Legal Defeasance or the Covenant
Defeasance have been complied with;
(8) the Company shall have delivered to the Trustee an Opinion of
Counsel to the effect that after the 91st day following the deposit, the
trust funds will not be subject to the effect of any applicable
bankruptcy, insolvency, reorganization or similar laws affecting
creditors' rights generally; and
(9) the Company shall have delivered to the Trustee an Opinion of
Counsel (subject to customary assumptions and exclusions) to the effect
that the trust resulting from the deposit does not constitute, or is
qualified as, a regulated investment company under the Investment Company
Act of 1940.
Section 8.3. Application of Trust Money. The Trustee shall hold in
trust Euros or European Union Obligations deposited with it pursuant to this
Article VIII. It shall apply the deposited money and the Euros from European
Union Obligations through the Paying Agent and in accordance with this Indenture
to the payment of principal of and interest on the Notes.
Section 8.4. Repayment to Company.
(a) The Trustee and the Paying Agent shall promptly turn over to the
Company upon request any excess money or securities held by them upon payment of
all the obligations under this Indenture.
(b) Subject to any applicable abandoned property law, the Trustee
and the Paying Agent shall pay to the Company upon request any money held by
them for the payment of
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principal of or interest on the Notes that remains unclaimed for two years, and,
thereafter, Holders entitled to the money must look to the Company for payment
as general creditors.
Section 8.5. Indemnity for European Union Obligations The Company
shall pay and shall indemnify the Trustee against any tax, fee or other charge
imposed on or assessed against deposited European Union Obligations or the
principal and interest received on such European Union Obligations.
Section 8.6. Reinstatement. If the Trustee or Paying Agent is unable
to apply any Euros or European Union Obligations in accordance with this Article
VIII 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 obligations of the Company under this
Indenture and the Notes shall be revived and reinstated as though no deposit had
occurred pursuant to this Article VIII until such time as the Trustee or Paying
Agent is permitted to apply all such Euros or European Union Obligations in
accordance with this Article VIII; provided, however, that, if the Company has
made any payment of interest on or principal of 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 Euros or European
Union Obligations held by the Trustee or Paying Agent.
Section 8.7. Satisfaction and Discharge. The Indenture will be
discharged and will cease to be of further effect (except as to surviving rights
or registration of transfer or exchange of the Notes, as expressly provided for
in the Indenture) as to all Outstanding Notes when:
(a) either:
(1) all the Notes theretofor executed, authenticated and delivered
(except lost, stolen or destroyed Notes which have been replaced or paid
and Notes for whose payment money has theretofor been deposited in trust
or segregated and held in trust by the Company and thereafter repaid to
the Company or discharged from such trust) have been delivered to the
Trustee for cancellation; or
(2) all Notes not theretofor delivered to the Trustee for
cancellation have become due and payable, and the Company has irrevocably
deposited or caused to be deposited with the Trustee Euros or European
Union Obligations sufficient to pay and discharge the entire Indebtedness
on the Notes not theretofor delivered to the Trustee for cancellation, for
principal of and interest on the Notes to the date of deposit, together
with irrevocable instructions from the Company directing the Trustee to
apply such funds to the payment;
(b) the Company has paid all other sums payable under this Indenture
and the Notes by the Company; and
(c) the Company has delivered to the Trustee an Officers'
Certificate stating that all conditions precedent under this Indenture relating
to the satisfaction and discharge of this Indenture have been complied with.
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ARTICLE IX
AMENDMENTS
Section 9.1. Without Consent of Holders.
(a) The Company and the Trustee may amend this Indenture or the
Notes without notice to or consent of any Holder:
(1) to cure any ambiguity, omission, defect or inconsistency;
(2) to comply with Article IV in respect of the assumption by a
Surviving Entity of the obligations of the Company under the Notes and
this Indenture;
(3) to provide for uncertificated Notes in addition to or in place
of certificated Notes; provided, however, that the uncertificated Notes
are issued in registered form for purposes of Section 163(f) of the Code;
(4) to add guarantees with respect to the Notes or to secure the
Notes;
(5) to add to the covenants of the Company for the benefit of the
Holders or to surrender any right or power herein conferred upon the
Company;
(6) to comply with any requirements of the SEC in connection with
qualifying this Indenture under the TIA;
(7) to make any change that does not, in the opinion of the Trustee,
adversely affect the rights of any Holder in any material respect; or
(8) to provide for the issuance of the Exchange Notes and Private
Exchange Notes, which will have terms substantially identical to the other
Outstanding Notes except for the requirement of a Private Placement Legend
and related transfer restrictions under the Securities Act and this
Indenture and as to the applicability of additional interest payable as
provided in Section 2.14, and which will be treated, together with any
other Outstanding Notes, as a single issue of securities.
(b) After an amendment under this Section 9.1 becomes effective, the
Company shall mail to Holders a notice briefly describing such amendment. The
failure to give such notice to all Holders, or any defect therein, shall not
impair or affect the validity of an amendment under this Section 9.1.
Section 9.2. With Consent of Holders.
(a) The Company and the Trustee may amend this Indenture or the
Notes without notice to any Holder but with the written consent of the Holders
of at least a majority in principal amount of the then Outstanding Notes
(including, without limitation, consents obtained in connection with a purchase
of, or tender offer or exchange offer for, Notes). However, without the consent
of each Holder affected, an amendment may not:
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(1) reduce the amount of Notes whose Holders must consent to an
amendment or waiver;
(2) reduce the rate of or change or have the effect of changing the
time for payment of interest, including Defaulted Interest, on any Notes;
(3) reduce the principal of or change or have the effect of changing
the fixed maturity of any Notes, or change the date on which any Notes may
be subject to redemption, or reduce the redemption price therefor;
(4) make any Notes payable in money other than that stated in the
Notes;
(5) make any change in the provisions of this Indenture entitling
each Holder to receive payment of principal of and interest on such Notes
on or after the due date thereof or to bring suit to enforce such payment,
or permitting Holders of a majority in principal amount of Outstanding
Notes to waive Defaults or Events of Default;
(6) amend, change or modify in any material respect any obligation
of the Company to make and consummate a Change of Control Offer in respect
of a Change of Control that has occurred or make and consummate an Asset
Sale Offer with respect to any Asset Sale that has been consummated; or
(7) amend, change or modify the seniority of the Notes or eliminate,
release or modify any guarantee or security for the Notes except in
accordance with the terms of the Notes or this Indenture.
(b) It shall not be necessary for the consent of the Holders under
this Section 9.2 to approve the particular form of any proposed amendment, but
it shall be sufficient if such consent approves the substance thereof.
(c) After an amendment under this Section 9.2 becomes effective, the
Company shall mail to Holders a notice briefly describing such amendment. The
failure to give such notice to all Holders, or any defect therein, shall not
impair or affect the validity of an amendment under this Section 9.2.
Section 9.3. Compliance with Trust Indenture Act. Every amendment to
this Indenture or the Notes shall comply with the TIA as then in effect.
Section 9.4. Revocation and Effect of Consents and Waivers.
(a) A consent to an amendment or a waiver by a Holder of a Note
shall bind the Holder and every subsequent Holder of that Note or portion of the
Note that evidences the same debt as the consenting Holder's Note, even if
notation of the consent or waiver is not made on the Note. However, any such
Holder or subsequent Holder may revoke the consent or waiver as to such Holder's
Note or portion of the Note if the Trustee receives the notice of revocation
before the date the amendment or waiver becomes effective. After an amendment or
waiver becomes effective, it shall bind every Holder. An amendment or waiver
shall become effective upon receipt by the Trustee of the requisite number of
written consents under Section 9.2.
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(b) The Company may, but shall not be obligated to, fix a record
date for the purpose of determining the Holders entitled to give their consent
or take any other action described above or required or permitted to be taken
pursuant to this Indenture. If a record date is fixed, then notwithstanding the
immediately preceding paragraph, those Persons who were Holders at such record
date (or their duly designated proxies), and only those Persons, shall be
entitled to give such consent or to revoke any consent previously given or to
take any such action, whether or not such Persons continue to be Holders after
such record date. No such consent shall become valid or effective more than 90
days after such record date.
Section 9.5. Notation on or Exchange of Notes. If an amendment
changes the terms of a Note, the Trustee may require the Holder of the Note to
deliver it to the Trustee. The Trustee may place an appropriate notation on the
Note regarding the changed terms and return it to the Holder. Alternatively, if
the Company or the Trustee so determines, the Company in exchange for the Note
will execute and upon Company Order the Trustee will authenticate a new Note
that reflects the changed terms. Failure to make the appropriate notation or to
issue a new Note shall not affect the validity of such amendment.
Section 9.6. Trustee to Sign Amendments. The Trustee shall sign any
amendment authorized pursuant to this Article IX if the amendment does not
adversely affect the rights, duties, liabilities or immunities of the Trustee.
If it does, the Trustee may but need not sign it. In signing such amendment the
Trustee shall be entitled to receive indemnity reasonably satisfactory to it and
to receive, and (subject to Sections 7.1 and 7.2) shall be fully protected in
relying upon, such evidence as it deems appropriate, including, without
limitation, solely on an Opinion of Counsel stating that such amendment is
authorized or permitted by this Indenture.
ARTICLE X
MISCELLANEOUS
Section 10.1. Trust Indenture Act Controls. If any provision of this
Indenture limits, qualifies or conflicts with another provision which is
required to be included in this Indenture by the TIA, the provision required by
the TIA shall control.
Section 10.2. Notices.
(a) Any notice or communication shall be in writing and delivered in
person or mailed by first-class mail addressed as follows:
if to the Company:
FLAG Telecom Holdings Limited
3rd Floor, 103 Mount Street
London W1Y 5HE
Facsimile: (44) 171-317-0808
Attention: Stuart Rubin, General Counsel
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if to the Trustee:
The Bank of New York
101 Barclay Street
Floor 21 West
New York, New York 10286
Attention: Corporate Trust Administration-Global Finance Unit
Telephone: (212) 815-5381
Facsimile: (212) 815-5915; and
The Bank of New York
One Canada Square
London E14 5AL
ENGLAND
Attention: Corporate Trust Services
Telephone: (44) 171- 893 -6315
Facsimile: (44) 171- 893 -6399
The Luxembourg Paying Agent's address is:
Kredietbank SA Luxembourgeoise
43 Boulevard Royal
L-2955 Luxembourg
Attention: Coupons Department
Telephone: (352) 4797 13
Facsimile: (352) 4797 5270
The Company or the Trustee by notice to the other may designate additional or
different addresses for subsequent notices or communications.
(b) So long as the Notes are listed on the Luxembourg Stock Exchange and the
rules of the Luxembourg Stock Exchange so require, all notices regarding the
Notes shall be published in English in a leading newspaper with general
circulation in Luxembourg or, if such publication is not practicable, in one
leading English language daily newspaper with general circulation in Europe,
such newspaper being published each Business Day in a morning edition, whether
or not it shall be published in Saturday, Sunday or holiday editions.
(c) Any notice or communication mailed to a registered Holder shall
be mailed to the Holder at the Holder's address as it appears on the
registration books of the Registrar and shall be sufficiently given if so mailed
within the time prescribed.
(d) Failure to mail a notice or communication to a Holder or any
defect in it shall not affect its sufficiency with respect to other Holders. If
a notice or communication is mailed in the manner provided above, it is duly
given, whether or not the addressee receives it.
Section 10.3. Communication by Holders with Other Holders. Holders
may communicate pursuant to TIA ss. 312(b) with other Holders with respect to
their rights under this
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Indenture or the Notes. The Company, the Trustee, the Registrar and anyone else
shall have the protection of TIA ss. 312(c).
Section 10.4. Certificate and Opinion as to Conditions Precedent.
Upon any request or application by the Company to the Trustee to take or refrain
from taking any action under this Indenture, the Company shall furnish to the
Trustee:
(1) an Officers' Certificate in form and substance reasonably
satisfactory to the Trustee 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
(2) an Opinion of Counsel 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.
Section 10.5. Statements Required in Certificate or Opinion. Each
certificate or opinion with respect to compliance with a covenant or condition
provided for in this Indenture shall include:
(1) a statement that the individual making such certificate or
opinion has read such covenant or condition;
(2) a brief statement as to the nature and scope of the examination
or investigation upon which the statements or opinions contained in such
certificate or opinion are based;
(3) a statement that, in the opinion of such individual, he has made
such examination or investigation as is necessary to enable him to express
an informed opinion as to whether or not such covenant or condition has
been complied with; and
(4) a statement as to whether or not, in the opinion of such
individual, such covenant or condition has been complied with.
In giving such Opinion of Counsel, counsel may rely as to factual matters on an
Officers' Certificate or on certificates of public officials.
Section 10.6. Rules by Trustee, Paying Agent and Registrar. The
Trustee may make reasonable rules for action by, or a meeting of, Holders. The
Registrar and the Paying Agent may make reasonable rules for their functions.
Section 10.7. Currency Indemnity.
(a) Euros are the sole currency of account and payment for all sums
payable by the Company under or in connection with the Notes or this Indenture,
including damages. Any amount received or recovered in currency other than Euro
in respect of the Notes (whether as a result of, or of the enforcement of, a
judgment or order of a court of any jurisdiction, in the winding-up or
dissolution of the Company, any Subsidiary or otherwise) by any Holder of the
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Notes in respect of any sum expressed to be due to it from the Company or its
Subsidiaries shall only constitute a discharge of the Company and its
Subsidiaries under the Notes and this Indenture only to the extent of the Euro
amount which the recipient is able to purchase with the amount so received or
recovered in that other currency on the date of that receipt or recovery (or, if
it is not practicable to make that purchase on that date, on the first date on
which it is practicable to do so). If that Euro amount is less than the Euro
amount expressed to be due to the recipient under the Notes or this Indenture,
the Company shall indemnify and hold harmless the recipient against any loss or
cost sustained by it in making any such purchase. For the purposes of this
Section 10.7, it will be sufficient for the Holder of a Note to certify that it
would have suffered a loss had an actual purchase of Euros been made with the
amount so received in that other currency on the date of receipt or recovery
(or, if a purchase of Euros on such date had not been practicable, on the first
date on which it would have been practicable).
(b) The indemnities of the Company contained in this Section 10.7,
to the extent permitted by law: (i) constitute a separate and independent
obligation from the other obligations of the Company under this Indenture and
the Notes; (ii) shall give rise to a separate and independent cause of action
against the Company; (iii) shall apply irrespective of any waiver granted by any
Holder of the Notes or the Trustee from time to time; and (iv) shall continue in
full force and effect notwithstanding any other judgment, order, claim or proof
of claim for a liquidated amount in respect of any sum due under the Notes or
this Indenture or any other judgment or order.
Section 10.8. Legal Holidays. A "Legal Holiday" is a Saturday, a
Sunday or other day on which commercial banking institutions are authorized or
required to be closed in New York City. If a payment date is a Legal Holiday,
payment shall be made on the next succeeding day that is not a Legal Holiday,
and no interest shall accrue for the intervening period. If a regular record
date is a Legal Holiday, the record date shall not be affected.
Section 10.9. Governing Law, etc. THIS INDENTURE AND THE NOTES SHALL
BE GOVERNED BY, AND CONSTRUED IN ACCORDANCE WITH, THE LAW OF THE STATE OF NEW
YORK, BUT WITHOUT GIVING EFFECT TO APPLICABLE PRINCIPLES OF CONFLICTS OF LAW TO
THE EXTENT THAT THE APPLICATION OF THE LAW OF ANOTHER JURISDICTION WOULD BE
REQUIRED THEREBY. THE PARTIES HERETO EACH HEREBY WAIVE ANY RIGHT TO TRIAL BY
JURY IN ANY ACTION, PROCEEDING OR COUNTERCLAIM ARISING OUT OF OR RELATING TO
THIS INDENTURE OR THE NOTES OR ANY TRANSACTION RELATED HERETO OR THERETO.
Section 10.10. No Recourse Against Others. An incorporator,
director, officer, employee, stockholder or controlling person, as such, of the
Company shall not have any liability for any obligations of the Company under
the Notes, this Indenture or for any claim based on, in respect of or by reason
of such obligations or their creation. By accepting a Note, each Holder shall
waive and release all such liability. The waiver and release shall be part of
the consideration for the issue of the Notes.
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Section 10.11. Successors. All agreements of the Company in this
Indenture and the Notes shall bind its successors. All agreements of the Trustee
in this Indenture shall bind its successors.
Section 10.12. Duplicate and Counterpart Originals. The parties may
sign any number of copies of this Indenture. One signed copy is enough to prove
this Indenture. This Indenture may be executed in any number of counterparts,
each of which so executed shall be an original, but all of them together
represent the same agreement.
Section 10.13. Severability. In case any provision in this Indenture
or in the Notes shall be invalid, illegal or unenforceable, the validity,
legality and enforceability of the remaining provisions shall not in any way be
affected or impaired thereby.
Section 10.14. Qualification of Indenture. The Company shall qualify
this Indenture under the TIA in accordance with the terms and conditions of the
Registration Agreement and shall pay all reasonable costs and expenses
(including attorneys' fees and expenses for the Company, the Trustee and the
Holders) incurred in connection therewith, including, but not limited to, costs
and expenses of qualification of this Indenture and the Notes and printing this
Indenture and the Notes. The Trustee shall be entitled to receive from the
Company any such Officers' Certificates, Opinions of Counsel or other
documentation as it may reasonably request in connection with any such
qualification of this Indenture under the TIA.
Section 10.15. Table of Contents; Headings. The table of contents
and headings of the Articles and Sections of this Indenture have been inserted
for convenience of reference only, are not intended to be considered a part
hereof and shall not modify or restrict any of the terms or provisions hereof.
Section 10.16. Agent for Service; Submission to Jurisdiction; Waiver
of Immunities.
The Company agrees that any suit, action or proceeding against the
Company brought by any Holder or the Trustee arising out of or based upon this
Indenture or the Notes may be instituted in any state or federal court in the
Borough of Manhattan, The City of New York, New York, United States, any court
of competent jurisdiction in Bermuda or England and Wales and any appellate
court from any thereof. The Company hereby irrevocably submits to the
non-exclusive jurisdiction of such courts for such purpose and waives, to the
fullest extent permitted by law, trial by jury and any objection it may now or
hereafter have to the laying of venue of any such proceeding, and any claim it
may now or hereafter have that any proceeding in any such court is brought in an
inconvenient forum. The Company has appointed FLAG Telecom Holdings Ltd., 570
Lexington Avenue, New York, New York 10020 as its authorized agent (the
"Authorized Agent") upon whom all writs, process and summonses may be served in
any suit, action or proceeding arising out of or based upon this Indenture or
the Notes which may be instituted in any state or federal court in the Borough
of Manhattan, The City of New York, New York. The Company hereby represents and
warrants that the Authorized Agent has accepted such appointment and has agreed
to act as said agent for service of process, and the Company agrees to take any
and all action, including the filing of any and all documents, that may be
necessary to continue each such appointment in full force and effect as
aforesaid so long
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as the Notes remain outstanding. The Company agrees that the appointment of the
Authorized Agent shall be irrevocable so long as any of the Notes remain
outstanding or until the irrevocable appointment by the Company of a successor
agent in The City of New York, New York as its authorized agent for such purpose
and the acceptance of such appointment by such successor. Service of process
upon the Authorized Agent shall be deemed, in every respect, effective service
of process upon the Company.
To the extent that the Company has or hereafter may acquire any
immunity (sovereign or otherwise) from any legal action, suit or proceeding,
from jurisdiction of any court or from set-off or any legal process (whether
service or notice, attachment in aid or otherwise) with respect to itself or any
of its property, the Company hereby irrevocably waives and agrees not to plead
or claim such immunity in respect of its obligations under this Indenture or the
Notes.
Nothing in this Section 10.16 shall affect the right of the Trustee
or any Holder of the Notes to serve process in any other manner permitted by
law.
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IN WITNESS WHEREOF, the parties have caused this Indenture to be
duly executed as of the date first written above.
FLAG TELECOM HOLDINGS LIMITED
By:
-----------------------------------
Name:
Title:
THE BANK OF NEW YORK,
as Trustee
By:
-----------------------------------
Name:
Title:
KREDIETBANK SA LUXEMBOURGEOISE
as Luxembourg Paying Agent
By:
-----------------------------------
Name:
Title:
<PAGE>
EXHIBIT A
FORM OF NOTE
THE NOTE IS ONE OF THE GLOBAL NOTES WITHIN THE MEANING OF THE INDENTURE
HEREINAFTER REFERRED TO.
THIS GLOBAL NOTE IS HELD BY THE DEPOSITARY (AS DEFINED IN THE INDENTURE
GOVERNING THIS NOTE) OR ITS NOMINEE IN CUSTODY FOR THE BENEFIT OF THE
BENEFICIAL OWNERS HEREOF, AND IS NOT TRANSFERABLE TO ANY PERSON UNDER ANY
CIRCUMSTANCES EXCEPT FOR TRANSFERS OR EXCHANGES PERMITTED BY THE INDENTURE
AND EXCEPT THAT THIS GLOBAL NOTE MAY BE TRANSFERRED TO A NOMINEE OF THE
DEPOSITARY OR A SUCCESSOR DEPOSITARY WITH THE PRIOR WRITTEN CONSENT OF THE
COMPANY.
[Include the following legend on all Notes that are Restricted Notes:]
THIS NOTE HAS NOT BEEN REGISTERED UNDER THE U.S. SECURITIES ACT OF 1933,
AS AMENDED (THE "SECURITIES ACT"), AND ACCORDINGLY, MAY NOT BE OFFERED OR
SOLD WITHIN THE UNITED STATES OR TO, OR FOR THE ACCOUNT OR BENEFIT OF,
U.S. PERSONS EXCEPT AS SET FORTH IN THE FOLLOWING SENTENCE. BY ITS
ACQUISITION HEREOF, THE HOLDER (1) REPRESENTS THAT (A) IT IS A "QUALIFIED
INSTITUTIONAL BUYER" (AS DEFINED IN RULE 144A ADOPTED UNDER THE SECURITIES
ACT) OR (B) IT IS NOT A U.S. PERSON AND IS ACQUIRING THIS NOTE IN AN
OFFSHORE TRANSACTION IN COMPLIANCE WITH REGULATION S ADOPTED UNDER THE
SECURITIES ACT; (2) AGREES THAT IT WILL NOT WITHIN TWO YEARS AFTER THE
ORIGINAL ISSUANCE OF THIS NOTE RESELL OR OTHERWISE TRANSFER THIS NOTE
EXCEPT (A) TO THE COMPANY OR ANY SUBSIDIARY THEREOF, (B) INSIDE THE UNITED
STATES TO A QUALIFIED INSTITUTIONAL BUYER IN COMPLIANCE WITH RULE 144A
ADOPTED UNDER THE SECURITIES ACT, (C) OUTSIDE THE UNITED STATES IN
COMPLIANCE WITH REGULATION S UNDER THE SECURITIES ACT, (D) PURSUANT TO THE
EXEMPTION FROM REGISTRATION PROVIDED BY RULE 144 ADOPTED UNDER THE
SECURITIES ACT (IF AVAILABLE) OR ANOTHER AVAILABLE EXEMPTION UNDER THE
SECURITIES ACT, OR (E) PURSUANT TO AN EFFECTIVE REGISTRATION STATEMENT
UNDER THE SECURITIES ACT; AND (3) AGREES THAT IT WILL GIVE TO EACH PERSON
TO WHOM THIS NOTE IS TRANSFERRED A NOTICE SUBSTANTIALLY TO THE EFFECT OF
THIS LEGEND. IN CONNECTION WITH ANY TRANSFER OF THIS NOTE WITHIN TWO YEARS
AFTER THE ORIGINAL ISSUANCE OF THIS NOTE, THE HOLDER MUST, PRIOR TO SUCH
TRANSFER, FURNISH TO THE TRUSTEE AND THE COMPANY SUCH CERTIFICATIONS,
LEGAL OPINIONS OR OTHER INFORMATION AS MAY BE REQUIRED PURSUANT TO THIS
INDENTURE TO
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CONFIRM THAT SUCH TRANSFER IS BEING MADE PURSUANT TO AN EXEMPTION FROM, OR
IN A TRANSACTION NOT SUBJECT TO, THE REGISTRATION REQUIREMENTS OF THE
SECURITIES ACT. AS USED HEREIN, THE TERMS "OFFSHORE TRANSACTION," "UNITED
STATES" AND "U.S. PERSON" HAVE THE MEANING GIVEN TO THEM BY REGULATION S
UNDER THE SECURITIES ACT.
[Include the following legend on all Certificated Notes that are
Restricted Notes:
"IN CONNECTION WITH ANY TRANSFER, THE HOLDER WILL DELIVER TO THE REGISTRAR
SUCH OPINIONS OF COUNSEL, CERTIFICATES AND/OR OTHER INFORMATION AS IT MAY
REASONABLY REQUIRE IN FORM REASONABLY SATISFACTORY TO IT AS PROVIDED FOR
IN THE INDENTURE TO CONFIRM THAT THE TRANSFER COMPLIED WITH THE FOREGOING
RESTRICTIONS AS PROVIDED FOR IN THE INDENTURE."]
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FORM OF FACE OF NOTE
No. [___] Principal Amount Euro [______________]
[If the Note is a Global Note include the following two lines:
as revised by the Schedule of Increases and
Decreases in Global Note attached hereto]
ISIN NO. ____________]
FLAG Telecom Holdings Limited, a Bermuda corporation, promises to pay to
[___________], or registered assigns, the principal sum of [__________________]
Euros [If the Note is a Global Note, add the following, as revised by the
Schedule of Increases and Decreases in Global Note attached hereto], on March
30, 2010.
Interest Payment Dates: March 30 and September 30
Record Dates: March 15 and September 15
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Additional provisions of this Note are set forth on the other side
of this Note.
FLAG Telecom Holdings Limited
By:_______________________________
Name:
Title:
By:_______________________________
Name:
Title:
TRUSTEE'S CERTIFICATE OF
AUTHENTICATION
The Bank of New York, as Trustee, certifies that this is one of the 11.625%
Senior Euro Notes due 2010 referred to in the Indenture.
By: ______________________ Date: ___________________
Authorized Signatory
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FORM OF REVERSE SIDE OF NOTE
11.625% Senior Euro Notes Due 2010
1. Interest
FLAG Telecom Holdings Limited, a Bermuda corporation (such
corporation, and its successors and assigns under the Indenture hereinafter
referred to, being herein called the "Company"), promises to pay interest on the
principal amount of this Note at the rate per annum shown above.
The Company will pay interest semiannually in arrears on each
Interest Payment Date of each year commencing September 30, 2000. Interest on
the Notes will accrue from the most recent date to which interest has been paid
on the Notes or, if no interest has been paid, from the Issue Date. The Company
shall pay interest on overdue principal (plus interest on such interest to the
extent lawful), at the rate borne by the Notes to the extent lawful. Interest
will be computed on the basis of a 360-day year of twelve 30-day months.
The Company shall pay interest (including post-petition interest in
any proceeding under any Bankruptcy Law) on overdue principal and, to the extent
such payments are lawful, interest on overdue installments of interest
("Defaulted Interest") without regard to any applicable grace periods at the
rate of 2.0% per annum in excess of the rate shown on this Note, as provided in
the Indenture.
All payments made by the Company in respect of the Notes will be
made free and clear of and without deduction or withholding for or on account of
any Taxes imposed or levied by or on behalf of any Taxing Authority, unless such
withholding or deduction is required by law or by the interpretation or
administration thereof. In that event, the Company will pay to each Holder of
the Notes Additional Amounts as provided in the Indenture subject to the
limitations set forth in the Indenture.
2. Method of Payment
By at least 10:00 a.m. (New York City time) on the date on which any
principal of or interest on any Note is due and payable, the Company shall
irrevocably deposit with the Trustee or the Paying Agent money sufficient to pay
such principal and/or interest. The Company will pay interest (except Defaulted
Interest) to the Persons who are registered Holders of Notes at the close of
business on the Record Date preceding the Interest Payment Date even if Notes
are canceled, repurchased or redeemed after the Record Date and on or before the
relevant Interest Payment Date. Holders must surrender Notes to a Paying Agent
to collect principal payments. The Company will pay principal and interest in
Euros.
The Notes will be payable as to principal, premium, if any, and
interest (including Additional Amounts, if any) in Euros at the offices or
agencies of the Company maintained for such purposes within the Borough of
Manhattan, The City of New York, New York and London, England or, at the option
of the Company, payment of interest may be made by check mailed to
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Holders of the Notes at their respective addresses set forth in the register of
Holders. If a Holder so requests, principal, premium, if any, and interest
(including Additional Amounts /, if any) may be paid by wire transfer of
immediately available funds to an account previously specified in writing by
such Holder to the Company and the Trustee. Such payments shall be in Euros.
Until otherwise designated by the Company, the Company's office or agency in The
City of New York and London, England, respectively, will be the corporate trust
offices of the Trustee maintained for such purpose, which are The Bank of New
York, 101 Barclay Street, Floor 21 West, New York, New York, 10286 and The Bank
of New York, One Canada Square, London E14 5AL, respectively. In addition, so
long as the Notes are listed on the Luxembourg Stock Exchange and the rules of
the Luxembourg Stock Exchange so require, an agent for making payments on, and
transfers of, Notes will be maintained in Luxembourg, which initially shall be
Kredietbank SA Luxembourgeoise, 43 Boulevard Royal, L-2955, Luxembourg.
3. Paying Agent and Registrar
The Trustee will act as principal Paying Agent and Registrar at its
office in the City of New York, New York and as Paying Agent at its office in
London, England. The Company may change any Paying Agent or Registrar without
prior notice. The Company or any of its Affiliates may act in any such capacity.
4. Indenture
The Company issued the Notes under an Indenture, dated as of March
17, 2000 (as it may be amended or supplemented from time to time in accordance
with the terms thereof, the "Indenture"), between the Company, the Trustee and
Kredietbank SA Luxembourgeoise, as Luxembourg Paying Agent. 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 of 1939 (15 U.S.C. ss.ss. 77aaa-77bbbb)
as in effect on the date of the Indenture (the "Act"). Capitalized terms used
herein and not defined herein have the meanings ascribed thereto in the
Indenture. The Notes are subject to all such terms, and Holders are referred to
the Indenture and the Act for a statement of those terms. Each Holder by
accepting a Note, agrees to be bound by all of the terms and provisions of the
Indenture, as amended from time to time.
The Notes are senior unsecured obligations of the Company, ranking
pari passu in right of payment with each other, the US Dollar Senior Notes and
with all senior unsecured Indebtedness of the Company and senior in right of
payment to all Subordinated Indebtedness. The Notes are limited to Euro 300
million aggregate principal amount.
The Indenture imposes certain limitations on, among other things,
the ability of the Company and its Restricted Subsidiaries to: incur
Indebtedness, make Restricted Payments, incur Liens, issue or sell Capital
Interests of Restricted Subsidiaries, consummate Asset Sales, enter into
transactions with Affiliates, or consolidate or merge or transfer or convey all
or substantially all of the Company's and its Restricted Subsidiaries' assets.
5. Redemption
Optional Redemption. Except as stated below, the Company may not
redeem the Notes prior to March 30, 2005. The Company may redeem the Notes, at
its option, in whole at
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any time or in part from time to time, on and after March 30, 2005, at the
following redemption prices, expressed as percentages of the principal amount
thereof, plus accrued and unpaid interest to the date of redemption, if redeemed
during the twelve-month period commencing on March 30 of any year set forth
below:
YEAR PERCENTAGE
2005................................................... 105.813%
2006................................................... 103.875%
2007................................................... 101.938%
2008 and thereafter.................................... 100.000%
Optional Redemption Upon Public Equity Offerings. At any time, or
from time to time, on or prior to March 30, 2003 the Company may, at its option,
use the net cash proceeds of one or more Public Equity Offerings to redeem in
the aggregate up to 35% of the aggregate principal amount of the Notes
originally issued at a redemption price equal to 111.625% of the principal
amount thereof, plus accrued and unpaid interest thereon to the date of
redemption, provided, that:
(1) after giving effect to any such redemption at least 65% of the
aggregate principal amount of the Notes, originally issued remains
outstanding; and
(2) the Company shall make such redemption not more than 90 days
after the consummation of such Public Equity Offering.
Optional Tax Redemption. The Notes will be subject to redemption at
the option of the Company or a successor corporation at any time, in whole but
not in part, upon not less than 30 nor more than 60 days' notice, at a
redemption price equal to the principal amount thereof plus accrued and unpaid
interest to the redemption date if, as a result of any change in or amendment to
the laws or any regulations or rulings promulgated thereunder of:
(1) Bermuda or any political subdivision or governmental authority
thereof or therein having power to tax,
(2) any jurisdiction, other than the United States, the United
Kingdom or Luxembourg, from or through which payment on the Notes is made
by the Company or a successor corporation, or its paying agent in its
capacity as such, or any political subdivision or governmental authority
thereof or therein having the power to tax, or
(3) any other jurisdiction, other than the United States, in which
the Company or a successor corporation is organized, or any political
subdivision or governmental authority thereof or therein having the power
to tax, or any Change in Tax Law, which becomes effective on or after the
date of the Offering Memorandum, the Company or a successor corporation is
or would be required on the next succeeding Interest Payment Date to pay
Additional Amounts with respect to the Notes, and the payment of such
Additional Amounts cannot be avoided by the use of any reasonable measures
available to the Company or the successor corporation.
A-7
<PAGE>
In the case of any partial redemption, selection of the Notes for
redemption will be made in accordance with Article V of the Indenture. On and
after the redemption date, interest will cease to accrue on Notes or portions
thereof called for redemption as long as the Company has deposited with the
Paying Agent funds in satisfaction of the applicable redemption price pursuant
to the Indenture.
6. Repurchase Provisions
Change Of Control Offer. Upon the occurrence of a Change of Control,
each Holder of Notes will have the right to require that the Company purchase
all or a portion (in integral multiples of Euro 1,000) of the Holder's Notes at
a purchase price equal to 101% of the principal amount thereof, plus accrued and
unpaid interest through the date of purchase. Within 30 days following the date
upon which the Change of Control occurred, the Company must send, by first-class
mail, a notice to each Holder of Notes, with a copy to the Trustee, offering to
purchase such Notes as described in the preceding sentence (a "Change of Control
Offer"). The Change of Control Offer shall state, among other things, the
purchase date, which must be no earlier than 30 days nor later than 60 days from
the date the notice is mailed, other than as may be required by law (the "Change
of Control Payment Date").
Asset Sale Offer. The Indenture imposes certain limitations on the
ability of the Company and its Restricted Subsidiaries to sell assets. In the
event the proceeds from a permitted Asset Sale exceed certain amounts, as
specified in the Indenture, the Company generally will be required either to
reinvest the proceeds of such Asset Sale in a Permitted Business, use such
proceeds to retire debt, or to make an Asset Sale Offer to purchase a certain
amount of each Holder's Notes at 100% of the principal amount thereof, plus
accrued interest (if any) to the Asset Sale Offer Payment Date, as more fully
set forth in the Indenture.
7. Denominations; Transfer; Exchange
The Notes are in fully registered form without coupons, and only in
denominations of principal amount of Euro 1,000 and any integral multiple
thereof. A Holder may transfer or exchange Notes in accordance with the
Indenture. The Registrar may require a Holder, among other things, to furnish
appropriate endorsements or transfer documents and to pay any taxes and fees
required by law or permitted by the Indenture. The Registrar need not register
the transfer of or exchange (i) any Notes selected for redemption (except, in
the case of a Note to be redeemed in part, the portion of the Note not to be
redeemed) for a period beginning 15 days before the mailing of a notice of Notes
to be redeemed and ending on the date of such mailing or (ii) any Notes for a
period beginning 15 days before an interest payment date and ending on such
interest payment date.
8. Persons Deemed Owners
The registered holder of this Note may be treated as the owner of it
for all purposes.
A-8
<PAGE>
9. Unclaimed Money
If money for the payment of principal or interest remains unclaimed
for two years, the Trustee or Paying Agent shall pay the money back to the
Company at its request unless an abandoned property law designates another
Person. After any such payment, Holders entitled to the money must look only to
the Company and not to the Trustee for payment.
10. Discharge Prior to Redemption or Maturity
Subject to certain conditions set forth in the Indenture, the
Company at any time may terminate some or all of its obligations under the Notes
and the Indenture if the Company deposits with the Trustee Euros or European
Union Obligations for the payment of principal of and interest on the Notes to
redemption or maturity, as the case may be.
11. Amendment, Waiver
Subject to certain exceptions set forth in the Indenture, (i) the
Indenture or the Notes may be amended with the written consent of the Holders of
at least a majority in principal amount of the then Outstanding Notes and (ii)
any default (other than with respect to nonpayment or in respect of a provision
that cannot be amended without the written consent of each Holder affected) or
noncompliance with any provision may be waived with the written consent of the
Holders of a majority in principal amount of the then Outstanding Notes. Subject
to certain exceptions set forth in the Indenture, without the consent of any
Holder, the Company and the Trustee may amend the Indenture or the Notes to,
among other things, cure any ambiguity, omission, defect or inconsistency, or to
comply with Article IV of the Indenture, or to provide for uncertificated Notes
in addition to or in place of certificated Notes, or to add guarantees with
respect to the Notes or to secure the Notes, or to add additional covenants or
surrender rights and powers conferred on the Company, or to comply with any
request of the SEC in connection with qualifying the Indenture under the Act, or
to make any change that does not adversely affect the rights of any Holder, or
to provide for the issuance of Exchange Notes.
12. Defaults and Remedies
If an Event of Default 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 immediately. Certain events of bankruptcy or
insolvency are Events of Default which will result in the Notes being due and
payable immediately upon the occurrence of such Events of Default.
Holders may not enforce the Indenture or the Notes except as
provided in the Indenture. The Trustee may refuse to enforce the Indenture or
the Notes unless it receives reasonable indemnity or security. Subject to
certain limitations, Holders of a majority in principal amount of the
Outstanding Notes may direct the Trustee in its exercise of any trust or power.
The Trustee may withhold from Holders notice of any continuing Default or Event
of Default (except a Default or Event of Default in payment of principal or
interest) if it determines that withholding notice is in their interest.
A-9
<PAGE>
13. Trustee Dealings with the Company
Subject to certain limitations set forth in the Indenture, the
Trustee under the Indenture, in its individual or any other capacity, may become
the owner or pledgee of Notes and may otherwise deal with and collect
obligations owed to it by the Company or its Affiliates and may otherwise deal
with the Company or its affiliates with the same rights it would have if it were
not Trustee.
14. No Recourse Against Others
An incorporator, director, officer, employee, stockholder or
controlling person, as such, of the Company shall not have any liability for any
obligations of the Company under the Notes, the Indenture or for any claim based
on, in respect of or by reason of such obligations or their creation. By
accepting a Note, each Holder waives and releases all such liability. The waiver
and release are part of the consideration for the issue of the Notes.
15. Authentication
This Note shall not be valid until an authorized signatory of the
Trustee (or an authenticating agent acting on its behalf) manually signs the
certificate of authentication on the other side of this Note.
16. Abbreviations
Customary abbreviations may be used in the name of a Holder or an
assignee, such as TEN COM (=tenants in common), TEN ENT (=tenants by the
entirety), JT TEN (=joint tenants with rights of survivorship and not as tenants
in common), CUST (=custodian) and U/G/M/A (=Uniform Gift to Minors Act).
17. ISIN Numbers
The Company has caused ISIN numbers to be printed on the Notes and
has directed the Trustee to use ISIN numbers in notices of redemption as a
convenience to Holders. No representation is made as to the accuracy of such
numbers either as printed on the Notes or as contained in any notice of
redemption and reliance may be placed only on the other identification numbers
placed thereon.
18. Governing Law
This Note shall be governed by, and construed in accordance with,
the laws of the State of New York, but without giving effect to applicable
principles of conflicts of law to the extent that the application of the law of
another jurisdiction would be required thereby.
19. Currency of Account; Conversion of Currency.
Euros are the sole currency of account and payment for all sums
payable by the Company under or in connection with the Notes or the Indenture,
including damages. The
A-10
<PAGE>
Company will indemnify the Holders pursuant to Section 10.7 of the Indenture in
respect of the conversion of currency relating to the Notes and the Indenture.
20. Agent for Service; Submission to Jurisdiction; Waiver of Immunities.
The Company has agreed that any suit, action or proceeding against
the Company brought by any Holder or the Trustee arising out of or based upon
the Indenture or the Notes may be instituted in any state or federal court in
the Borough of Manhattan, The City of New York, New York, United States, and any
appellate court from any thereof. The Company has irrevocably submitted to the
non-exclusive jurisdiction of such courts for such purpose and waived, to the
fullest extent permitted by law, trial by jury and any objection it may now or
hereafter have to the laying of venue of any such proceeding, and any claim it
may now or hereafter have that any proceeding in any such court is brought in an
inconvenient forum. The Company has appointed FLAG Telecom Holdings Ltd. as its
authorized agent upon whom all writs, process and summonses may be served in any
suit, action or proceeding arising out of or based upon the Indenture or the
Notes which may be instituted in any state or federal court in the Borough of
Manhattan, The City of New York, New York. To the extent that the Company has or
hereafter may acquire any immunity (sovereign or otherwise) from any legal
action, suit or proceeding, from jurisdiction of any court or from set-off or
any legal process (whether service or notice, attachment in aid or otherwise)
with respect to itself or any of its property, the Company has irrevocably
waived and agreed not to plead or claim such immunity in respect of its
obligations under the Indenture or the Notes.
The Company will furnish to any Holder upon written request and
without charge to the Holder a copy of the Indenture which has in it the text of
this Note in larger type. Requests may be made to:
FLAG Telecom Holdings Limited
3rd Floor, 103 Mount Street
London W1Y 5HE
Facsimile No.: (44) 171-317-0808
Attention: Stuart Rubin, General Counsel
A-11
<PAGE>
ASSIGNMENT FORM
To assign this Note, fill in the form below:
I or we assign and transfer this Note to
(Print or type assignee's name, address and zip code)
(Insert assignee's Social Security or Tax I.D. Number)
and irrevocably appoint agent to transfer this Note on the books of the Company.
The agent may substitute another to act for him.
Date:____________________ Your Signature:___________________
Signature Guarantee:___________________________________________
(Signature must be guaranteed)
______________________________________________________________________________
Sign exactly as your name appears on the other side of this Note.
The signature(s) should be guaranteed by an eligible guarantor institution
(banks, stockbrokers, savings and loan associations and credit unions with
membership in an approved signature guarantee medallion program), pursuant to
SEC Rule 17Ad-15.
A-12
<PAGE>
[To be attached to Global Notes only:
SCHEDULE OF INCREASES OR DECREASES IN GLOBAL NOTE
The following increases or decreases in this Global Note have been
made:
Principal
Amount of Amount of Amount of this Signature of
decrease in increase in Global Note authorized
Principal Principal following such signatory of
Date of Amount of this Amount of this decrease or Trustee or Note
Exchange Global Note Global Note increase Custodian
- -------------------------------------------------------------------------------
A-13
<PAGE>
OPTION OF HOLDER TO ELECT PURCHASE
If you want to elect to have this Note purchased by the Company
pursuant to Sections 3.8 or 3.15 of the Indenture, check either box:
|_| |_|
Section 3.8 Section 3.15
If you want to elect to have only part of this Note purchased by the
Company pursuant to Sections 3.8 or 3.15 of the Indenture, state the principal
amount (which must be an integral multiple of Euro 1,000) that you want to have
purchased by the Company: Euro
Date: __________ Your Signature ____________________________
(Sign exactly as your name appears on the
other side of the Note)
Signature Guarantee: __________________________________________________
(Signature must be guaranteed)
The signature(s) should be guaranteed by an eligible guarantor institution
(banks, stockbrokers, savings and loan associations and credit unions with
membership in an approved signature guarantee medallion program), pursuant to
SEC Rule 17Ad-15.
A-14
<PAGE>
EXHIBIT B
FORM OF TRANSFER CERTIFICATE FOR TRANSFER TO QIB
[Date]
The Bank of New York
[Address of Trustee]
Re: FLAG Telecom Holdings Limited (the "Company")
11.625% Senior Euro Notes Due 2010 (the "Notes")
Ladies and Gentlemen:
Reference is hereby made to the Indenture, dated as of March 17,
2000 (as amended and supplemented from time to time, the "Indenture"), between
the Company, as issuer, and The Bank of New York, as Trustee. Capitalized terms
used but not defined herein shall have the meanings given them in the Indenture.
This letter relates to Euro _______ aggregate principal amount of
Notes which represent an interest in a Regulation S Global Note beneficially
owned by the undersigned (the "Transferor") to effect the transfer of such Notes
in exchange for an equivalent beneficial interest in the Rule 144A Global Note.
In connection with such request, and with respect to such Notes, the
Transferor does hereby certify that such Notes are being transferred in
accordance with Rule 144A under the Securities Act of 1933, as amended ("Rule
144A"), to a transferee that the Transferor reasonably believes is purchasing
the Notes for its own account or an account with respect to which the transferee
exercises sole investment discretion, and the transferee, as well as any such
account, is a "qualified institutional buyer" within the meaning of Rule 144A,
in a transaction meeting the requirements of Rule 144A and in accordance with
applicable securities laws of any state of the United States or any other
jurisdiction.
B-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.
Very truly yours,
[Name of Transferor]
By:____________________________
_______________________________
Authorized Signature
B-2
<PAGE>
EXHIBIT C
FORM OF CERTIFICATE TO BE DELIVERED IN CONNECTION WITH TRANSFERS
PURSUANT TO REGULATION S
[Date]
The Bank of New York
101 Barclay Street
Floor 21 West
New York, New York 10286
Attn: Corporate Trust Administration - Global Finance Unit
Re: FLAG Telecom Holdings Limited (the "Company")
11.625% Senior Euro Notes Due 2010 (the "Notes")
Ladies and Gentlemen:
Reference is hereby made to the Indenture, dated as of March __,
2000 (as amended and supplemented from time to time, the "Indenture"), between
the Company, as issuer, and The Bank of New York, as Trustee. Capitalized terms
used but not defined herein shall have the meanings given them in the Indenture.
In connection with our proposed sale of Euro ________ aggregate
principal amount of the Notes, which represent an interest in a 144A Global Note
beneficially owned by the undersigned ("Transferor"), we confirm that such sale
has been effected pursuant to and in accordance with Regulation S under the
Securities Act of 1933, as amended (the "Securities Act"), and, accordingly, we
represent that:
(a) the offer of the Notes was not made to a person in the United
States;
(b) either (i) 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 or (ii) the transaction was executed in, on or through the
facilities of a designated off-shore securities market and neither we nor
any person acting on our behalf knows that the transaction has been
pre-arranged with a buyer in the United States;
(c) no directed selling efforts have been made in the United States
in contravention of the requirements of Rule 903(b) or Rule 904(b) of
Regulation S, as applicable;
(d) the transaction is not part of a plan or scheme to evade the
registration requirements of the Securities Act; and
(e) we are the beneficial owner of the principal amount of Notes
being transferred.
C-1
<PAGE>
In addition, if the sale is made during a Distribution Compliance
Period and the provisions of Rule 904(b)(1) or Rule 904(b)(2) of Regulation S
are applicable thereto, we confirm that such sale has been made in accordance
with the applicable provisions of Rule 904(b)(1) or Rule 904(b)(2), as the case
may be.
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 letter have the
meanings set forth in Regulation S.
Very truly yours,
[Name of Transferor]
By:____________________________
____________________________
Authorized Signature
C-2
<PAGE>
EXHIBIT D
FORM OF RULE 144 CERTIFICATION
[Date]
The Bank of New York
101 Barclay Street
Floor 21 West
New York, New York 10286
Attn: Corporate Trust Administration - Global Finance Unit
Re: FLAG Telecom Holdings Limited (the "Company")
11.625% Senior Euro Notes Due 2010 (the "Notes")
Ladies and Gentlemen:
Reference is hereby made to the Indenture, dated as of March 17,
2000 (as amended and supplemented from time to time, the "Indenture"), between
the Company, as issuer, and The Bank of New York, as Trustee. Capitalized terms
used but not defined herein shall have the meanings given them in the Indenture.
In connection with our proposed sale of Euro ________ aggregate
principal amount of the Notes, which represent an interest in a 144A Global Note
beneficially owned by the undersigned ("Transferor"), we confirm that such sale
has been effected pursuant to and in accordance with Rule 144 under the
Securities Act.
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 Transferor]
By:____________________________
____________________________
Authorized Signature
FLAG TELECOM HOLDINGS LIMITED
AND
THE BANK OF NEW YORK,
as TRUSTEE
11.625% SENIOR DOLLAR NOTES DUE 2010
INDENTURE
Dated as of March 17, 2000
<PAGE>
TABLE OF CONTENTS
Page
----
ARTICLE I
DEFINITIONS AND INCORPORATION BY REFERENCE
Section 1.1. Definitions. ..................................................1
Section 1.2. Incorporation by Reference of Trust Indenture Act ............26
Section 1.3. Rules of Construction ........................................27
ARTICLE II
THE NOTES
Section 2.1. Form and Dating ..............................................27
Section 2.2. Execution and Authentication..................................28
Section 2.3. Registrar and Paying Agent ...................................29
Section 2.4. Paying Agent to Hold Money in Trust ..........................29
Section 2.5. Holder Lists .................................................30
Section 2.6. Global Note Provisions .......................................30
Section 2.7. Legends ......................................................31
Section 2.8. Transfer and Exchange ........................................31
Section 2.9. Mutilated, Destroyed, Lost or Stolen Notes ...................35
Section 2.10. Temporary Notes ..............................................35
Section 2.11. Cancellation .................................................35
Section 2.12. Defaulted Interest ...........................................36
Section 2.14. Additional Interest Under Registration Agreements ............36
ARTICLE III
COVENANTS
Section 3.1. Payment of Notes .............................................37
Section 3.2. Maintenance of Office or Agency ..............................37
Section 3.3. Corporate Existence ..........................................37
Section 3.4. Payment of Taxes and Other Claim..............................38
Section 3.5. Compliance Certificate........................................38
Section 3.6. Further Instruments and Acts .................................38
Section 3.7. Waiver of Stay, Extension or Usury Laws.......................38
Section 3.8. Change Of Control ............................................39
Section 3.9. Additional Amounts ...........................................40
Section 3.10. Limitation On Incurrence Of Additional Indebtedness And
Preferred Stock .............................................42
Section 3.11. Limitation On Restricted Payments ............................43
Section 3.12. Limitation on Designation of Unrestricted Subsidiaries........47
Section 3.13. Limitation on Liens ..........................................48
Section 3.14. Limitation On Dividend And Other Payment Restrictions
Affecting Restricted Subsidiaries ...........................48
Section 3.15. Limitation On Asset Sales ....................................50
Section 3.16. Limitation On Transactions With Affiliates....................52
<PAGE>
Section 3.17. Limitation On Business Activities.............................54
Section 3.18. Reports To Holders............................................54
ARTICLE IV
SURVIVING ENTITY
Section 4.1. Merger, Consolidation and Sale of Assets......................54
ARTICLE V
OPTIONAL REDEMPTION OF NOTES
Section 5.1. Optional Redemption...........................................55
Section 5.2. Election to Redeem............................................55
Section 5.3. Notice of Redemption..........................................55
Section 5.4. Selection of Notes to Be Redeemed in Part.....................57
Section 5.5. Deposit of Redemption Price...................................57
Section 5.6. Notes Payable on Redemption Date..............................57
Section 5.7. Unredeemed Portions of Partially Redeemed Note................57
ARTICLE VI
DEFAULTS AND REMEDIES
Section 6.1. Events of Default.............................................58
Section 6.2. Acceleration..................................................59
Section 6.3. Other Remedies................................................60
Section 6.4. Waiver of Past Defaults.......................................60
Section 6.5. Control by Majority...........................................60
Section 6.6. Limitation on Suits...........................................61
Section 6.7. Rights of Holders to Receive Payment .........................61
Section 6.8. Collection Suit by Trustee ...................................62
Section 6.9. Trustee May File Proofs of Claim, etc. .......................62
Section 6.10. Priorities ...................................................62
Section 6.11. Undertaking for Costs ........................................63
ARTICLE VII
TRUSTEE
Section 7.1. Duties of Trustee ............................................63
Section 7.2. Rights of Trustee ............................................64
Section 7.3. Individual Rights of Trustee .................................65
Section 7.4. Trustee's Disclaimer .........................................65
Section 7.5. Notice of Defaults ...........................................65
Section 7.6. Reports by Trustee to Holders ................................66
Section 7.7. Compensation and Indemnity ...................................66
Section 7.8. Replacement of Trustee .......................................67
Section 7.9. Successor Trustee by Merger...................................67
Section 7.10. Eligibility; Disqualification.................................68
Section 7.11. Preferential Collection of Claims Against Company.............68
Section 7.12. Appointment of Co-Trustee.....................................68
<PAGE>
ARTICLE VIII
DEFEASANCE; DISCHARGE OF INDENTURE
Section 8.1. Legal Defeasance and Covenant Defeasance .....................69
Section 8.2. Conditions to Defeasance .....................................70
Section 8.3. Application of Trust Money ...................................72
Section 8.4. Repayment to Company .........................................72
Section 8.5. Indemnity for U.S. Government Obligations ....................72
Section 8.6. Reinstatement ................................................72
Section 8.7. Satisfaction and Discharge ...................................72
ARTICLE IX
AMENDMENTS
Section 9.1. Without Consent of Holders ...................................73
Section 9.2. With Consent of Holders ......................................74
Section 9.3. Compliance with Trust Indenture Act ..........................75
Section 9.4. Revocation and Effect of Consents and Waivers ................75
Section 9.5. Notation on or Exchange of Notes .............................75
Section 9.6. Trustee to Sign Amendments ...................................75
ARTICLE X
MISCELLANEOUS
Section 10.1. Trust Indenture Act Controls ................................76
Section 10.2. Notices .....................................................76
Section 10.3. Communication by Holders with Other Holders .................76
Section 10.4. Certificate and Opinion as to Conditions Precedent ..........76
Section 10.5. Statements Required in Certificate or Opinion ...............77
Section 10.6. Rules by Trustee, Paying Agent and Registrar ................77
Section 10.7. Currency Indemnity...........................................77
Section 10.8. Legal Holidays ..............................................78
Section 10.9. Governing Law, etc. .........................................78
Section 10.10. No Recourse Against Others ..................................78
Section 10.11. Successors ..................................................78
Section 10.12. Duplicate and Counterpart Originals .........................78
Section 10.13. Severability ................................................79
Section 10.14. Qualification of Indenture ..................................79
Section 10.15 Table of Contents; Headings .................................79
Section 10.16. Agent for Service; Submission to Jurisdiction; Waiver of
Immunities .................................................79
<PAGE>
EXHIBIT A FORM OF FACE OF NOTE
EXHIBIT B FORM OF TRANSFER CERTIFICATE FOR TRANSFER TO QIB
EXHIBIT C FORM OF CERTIFICATE FOR TRANSFER PURSUANT TO REGULATION S
EXHIBIT D FORM OF RULE 144 CERTIFICATION
<PAGE>
INDENTURE, dated as of March 17, 2000, between FLAG Telecom Holdings
Limited, a Bermuda company (the "Company") and The Bank of New York, a New York
banking corporation (the "Trustee"), as Trustee.
Each party agrees as follows for the benefit of the other parties
and for the equal and ratable benefit of the Holders of the Company's 11.625%
Senior Dollar Notes Due 2010 issued hereunder.
ARTICLE I
DEFINITIONS AND INCORPORATION BY REFERENCE
Section 1.1. Definitions.
"Acquired Indebtedness" means Indebtedness of a Person or any of its
Subsidiaries existing at the time such Person becomes a Restricted Subsidiary or
at the time it merges with or into or consolidates with the Company or any of
its Restricted Subsidiaries or is assumed in connection with the acquisition of
assets from such Person and in each case not Incurred in connection with, or in
anticipation or contemplation of, such acquisition, merger or consolidation.
Such Indebtedness shall be deemed to have been Incurred at the time such Person
becomes a Restricted Subsidiary or at the time it merges or consolidates with
the Company or a Restricted Subsidiary or at the time such Indebtedness is
assumed in connection with the acquisition of assets from such Person.
"Additional Amounts" has the meaning set forth in Section 3.9.
"Acquired Preferred Stock" means Preferred Stock of a Person or any
of its Subsidiaries existing at the time such Person becomes a Restricted
Subsidiary or merges with or into or consolidates with a Restricted Subsidiary,
in each case not issued in connection with, or in anticipation or contemplation
of, such acquisition, merger or consolidation. Such Preferred Stock shall be
deemed to have been issued at the time such Person becomes a Restricted
Subsidiary or at the time it merges or consolidates with a Restricted
Subsidiary.
"Affiliate" means, with respect to any specified Person, any other
Person who directly or indirectly through one or more intermediaries controls,
or is controlled by, or is under common control with, such specified Person. The
term "control" means the possession, directly or indirectly, of the power to
direct or cause the direction of the management and policies of a Person,
whether through the ownership of voting securities, by contract or otherwise;
provided, that for purposes of Section 3.16 only, beneficial ownership of 10% or
more of the Voting Stock of a Person shall be deemed to be control. For purposes
of this definition, the terms "controlling," "controlled by" and "under common
control with" have correlative meanings.
"Agent Members" has the meaning assigned to it in Section 2.6(b).
"Approved Jurisdiction" means any state of the United States or the
District of Columbia or any Member State of the European Union 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.
1
<PAGE>
"Asset Acquisition" means:
(1) an Investment by the Company or any Restricted Subsidiary in any
other Person pursuant to which such Person shall become a Restricted
Subsidiary, or shall be merged with or into the Company or any Restricted
Subsidiary;
(2) the acquisition by the Company or any Restricted Subsidiary of
the assets of any Person (other than a Subsidiary of the Company) which
constitute all or substantially all of the assets of such Person or
comprises any division or line of business of such Person or any other
properties or assets of such Person other than in the ordinary course of
business; or
(3) any Revocation with respect to an Unrestricted Subsidiary.
"Asset Sale" means any direct or indirect sale, disposition,
issuance, conveyance, transfer, lease, assignment or other transfer, including a
Sale and Leaseback Transaction (each, a "Disposition") by the Company or any
Restricted Subsidiary of:
(a) any Capital Stock other than any Capital Stock of the
Company and Capital Stock issued by Subsidiaries pursuant to
employee benefit plans, stock option plans or similar arrangements;
or
(b) any property or assets (other than cash, Cash Equivalents
or Capital Stock) of the Company or any Restricted Subsidiary.
Notwithstanding the preceding, the following items shall not be
deemed to be Asset Sales:
(1) the Disposition of all or substantially all of the assets of the
Company and its Restricted Subsidiaries as permitted under Section 4.1;
(2) a Disposition of inventory or obsolete or worn-out equipment, in
each case in the ordinary course of business;
(3) Dispositions of assets in any fiscal year with a Fair Market
Value not to exceed $5 million in the aggregate;
(4) for purposes of Section 3.15 only, the making of a Restricted
Payment permitted under Section 3.11;
(5) a Disposition to the Company or a Restricted Subsidiary,
including a Person that is or will become a Restricted Subsidiary
immediately after the Disposition;
(6) a Disposition in the ordinary course of business of capacity,
fiber, space, minutes, packets or other related facilities or services on
any fiber optic cable system or telecommunications network owned,
controlled, resold or operated by the Company or any Restricted Subsidiary
or of telecommunications capacity, transmission rights, conduit or
rights-of-way acquired by the Company or any Restricted Subsidiary for use
in a
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Telecommunications Business of the Company or any Restricted Subsidiary or
of telecommunications services on any property owned, controlled or
operated by the Company or any Restricted Subsidiary; and
(7) a Disposition to a landing party pursuant to and in accordance
with the provisions of the Construction and Maintenance Agreement, dated
as of December 14, 1994, among FLAG Limited and each of the landing
parties signatory thereto.
"Asset Sale Offer" has the meaning set forth in Section 3.15.
"Asset Sale Offer Notice" means notice of an Asset Sale Offer which
shall be mailed first class, postage prepaid, to the record Holders as shown on
the Note Register within 30 days following the 360th day after the receipt of
Net Cash Proceeds of any Asset Sale, with a copy to the Trustee which notice
shall govern the terms of the Asset Sale Offer, and state:
(1) the terms and conditions of the Asset Sale, that an Asset Sale
Offer is being made pursuant to Section 3.15 and that all Notes that are
timely tendered will be accepted for payment;
(2) the Asset Sale Offer Amount and the Asset Sale Offer Payment
Date, which date shall be a Business Day no earlier than 30 days nor later
than 60 days from the date the Asset Sale Offer notice is mailed (other
than as may be required by law);
(3) that any Notes or portions thereof not tendered or accepted for
payment will continue to accrue interest;
(4) that, unless the Company defaults in the payment of the Asset
Sale Offer Amount with respect thereto, all Notes or portions thereof
accepted for payment pursuant to the Asset Sale Offer shall cease to
accrue interest from and after the Asset Sale Offer Payment Date;
(5) that any Holder electing to have any Notes or portions thereof
purchased pursuant to the Asset Sale Offer will be required to surrender
such Notes, with the form entitled "Option of Holder to Elect Purchase" on
the reverse of such Notes completed, to the Paying Agent at the address
specified in the notice prior to the close of business on the third
Business Day preceding the Asset Sale Offer Payment Date;
(6) that any Holder shall be entitled to withdraw such election if
the Paying Agent receives, not later than the close of business on the
second Business Day preceding the Asset Sale Offer Payment Date, a
facsimile transmission or letter, setting forth the name of the Holder,
the principal amount of Notes delivered for purchase, and a statement that
such Holder is withdrawing such Holder's election to have such Notes or
portions thereof purchased pursuant to the Asset Sale Offer;
(7) that any Holder electing to have Notes purchased pursuant to the
Asset Sale Offer must specify the principal amount that is being tendered
for purchase, which principal amount must be $1,000 or an integral
multiple thereof;
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(8) that any Holder of Certificated Notes whose Certificated Notes
are being purchased only in part will be issued new Certificated Notes
equal in principal amount to the unpurchased portion of the Certificated
Note or Notes surrendered, which unpurchased portion will be equal in
principal amount to $1,000 or an integral multiple thereof;
(9) that the Trustee will return to the Holder of a Global Note that
is being purchased in part, such Global Note with a notation on the
schedule of increases or decreases thereof adjusting the principal amount
thereof to be equal to the unpurchased portion of such Global Note; and
(10) any other information necessary to enable any Holder to tender
Notes and to have such Notes purchased pursuant to Section 3.15.
"Authenticating Agent" has the meaning assigned to it in Section
2.2(d).
"Bankruptcy Law" means Title 11, U.S. Code or any similar Federal,
state or foreign law for the relief of debtors.
"Board Of Directors" means, as to any Person, the board of
directors, management committee or similar governing body of such Person or any
duly authorized committee thereof.
"Board Resolution" means, with respect to any Person, a copy of a
resolution certified by the Secretary or an Assistant Secretary of such Person
to have been duly adopted by the Board of Directors of such Person and to be in
full force and effect on the date of such certification, and delivered to the
Trustee.
"Business Day" means a day other than a Saturday, Sunday or other
day on which commercial banking institutions are authorized or required by law
to close in New York City.
"Capitalized Lease Obligations" means, as to any Person, the
obligations of such Person under a lease that are required to be classified and
accounted for as capital lease obligations under GAAP. For purposes of this
definition, the amount of such obligations at any date shall be the capitalized
amount of such obligations at such date, determined in accordance with GAAP.
"Capital Stock" means:
(1) with respect to any Person that is a corporation, any and all
shares, interests, participations or other equivalents (however designated
and whether or not voting) of corporate stock, including each class of
Common Stock and Preferred Stock of such Person;
(2) with respect to any Person that is not a corporation, any and
all partnership, limited liability or other equity or ownership interests
of such Person; and
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(3) any warrants, rights or options to purchase any of the
instruments or interests referred to in clause (1) or (2) above;
provided, that Capital Stock does not include debt instruments
convertible into Capital Stock.
"Cash Equivalents" means:
(1) marketable direct obligations issued by, or unconditionally
guaranteed by, the government of the United States, the United Kingdom,
France or Germany or any European Union central bank or issued by any
agency of any such government and backed by the full faith and credit of
such government, in each case maturing within six months from the date of
acquisition thereof;
(2) marketable direct obligations issued by any state of the United
States of America or any political subdivision of any such state or any
public instrumentality thereof maturing within six months from the date of
acquisition thereof and, at the time of acquisition, having one of the two
highest ratings obtainable from either Standard & Poor's Corporation
("S&P") or Moody's Investors Service, Inc. ("Moody's");
(3) commercial paper maturing within 270 days from the date of
creation thereof and, at the time of acquisition, rated at least "A-2" or
the equivalent thereof or "P-2" or the equivalent thereof by S&P and
Moody's, respectively;
(4) certificates of deposit or bankers' acceptances maturing within
six months from the date of acquisition thereof issued by any bank
organized under the laws of the United States of America or any state
thereof or the District of Columbia or any country of the European Union
or any U.S. branch of a foreign bank having at the date of acquisition
thereof combined capital and surplus of not less than $500 million (or the
equivalent) and Thompson Bank Rating Watch of "B" or better;
(5) repurchase obligations with a term of not more than seven days
for underlying securities of the types described in clause (1) above
entered into with any bank meeting the qualifications specified in clause
(4) above; and
(6) investments in money market funds which invest substantially all
their assets in securities of the types described in clauses (1) through
(5) above.
"Certificated Note" means any Note issued in fully-registered
certificated form (other than a Global Note), which shall be substantially in
the form of Exhibit A, with appropriate legends as specified in Section 2.7 and
Exhibit A.
"Change Of Control" means the occurrence of one or more of the
following events:
(1) any "person" or "group" other than a Permitted Holder is or
becomes the "beneficial owner" (as such terms are used in Section 13(d)(3)
of the Exchange Act, except that a person shall be deemed to have
"beneficial ownership" of all securities that
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such person has the right to acquire, whether such right is exercisable
immediately or only after the passage of time), directly or indirectly, of
50% or more of the Voting Stock (measured by voting power rather than
number of shares) of the Company,
(2) during any period of two consecutive years, individuals who at
the beginning of such period constituted the Board of Directors of the
Company, together with any new directors whose election by such Board of
Directors or whose nomination for election by the shareholders of the
Company was approved by a vote of a majority of the directors of the
Company then still in office who were either directors at the beginning of
such period or whose election or nomination for election was previously so
approved or is a designee of any one of the Permitted Holders or any
combination thereof or was so nominated or elected by any such Permitted
Holder or Permitted Holders or any of their designees, cease for any
reason to constitute a majority of the Board of Directors of the Company
then in office; or
(3) the Company consolidates or merges with or into any other Person
or sells, assigns, conveys, transfers leases or otherwise disposes of all
or substantially all of its assets to any other Person, other than a
consolidation or merger or disposition of assets:
(a) of or by the Company into or to a Wholly Owned Restricted
Subsidiary of the Company,
(b) into or to a Permitted Holder, or
(c) pursuant to a transaction in which the outstanding Voting
Stock of the Company is changed into or exchanged for securities or
other property with the effect that the beneficial owners of the
outstanding Voting Stock of the Company immediately prior to such
transaction, beneficially own, directly or indirectly, at least a
majority of the Voting Stock (measured by voting power rather than
number of shares) of the surviving corporation or the Person to whom
the Company's assets are transferred immediately following such
transaction.
"Change of Control Notice" means a notice which the Company must
send, by first-class mail, postage prepaid, to each Holder within 30 days
following the date upon which a Change of Control occurred, with a copy to the
Trustee which notice shall govern the terms of the Change of Control Offer and
state:
(1) that a Change of Control has occurred, the circumstances or
events causing such Change of Control and that a Change of Control Offer
is being made pursuant to Section 3.8, and that all Notes that are timely
tendered will be accepted for payment;
(2) the Change of Control Payment, and the Change of Control Payment
Date, which date shall be a Business Day no earlier than 30 calendar days
nor later than 60 calendar days subsequent to the date such notice is
mailed (other than as may be required by law);
(3) that any Notes or portions thereof not tendered or accepted for
payment will continue to accrue interest;
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(4) that, unless the Company defaults in the payment of the Change
of Control Payment with respect thereto, all Notes or portions thereof
accepted for payment pursuant to the Change of Control Offer shall cease
to accrue interest from and after the Change of Control Payment Date;
(5) that any Holder electing to have any Notes or portions thereof
purchased pursuant to a Change of Control Offer will be required to tender
such Notes, with the form entitled "Option of Holder to Elect Purchase" on
the reverse of such Notes completed, to the Paying Agent at the address
specified in the notice prior to the close of business on the third
Business Day preceding the Change of Control Payment Date;
(6) that any Holder shall be entitled to withdraw such election if
the Paying Agent receives, not later than the close of business on the
second Business Day preceding the Change of Control Payment Date, a
facsimile transmission or letter, setting forth the name of the Holder,
the principal amount of Notes delivered for purchase, and a statement that
such Holder is withdrawing such Holder's election to have such Notes or
portions thereof purchased pursuant to the Change of Control Offer;
(7) that any Holder electing to have Notes purchased pursuant to the
Change of Control Offer must specify the principal amount that is being
tendered for purchase, which principal amount must be $1,000 or an
integral multiple thereof;
(8) that any Holder of Certificated Notes whose Certificated Notes
are being purchased only in part will be issued new Certificated Notes
equal in principal amount to the unpurchased portion of the Certificated
Note or Notes surrendered, which unpurchased portion will be equal in
principal amount to $1,000 or an integral multiple thereof;
(9) that the Trustee will return to the Holder of a Global Note that
is being purchased in part, such Global Note with a notation on Schedule A
thereof adjusting the principal amount thereof to be equal to the
unpurchased portion of such Global Note; and
(10) any other information necessary to enable any Holder to tender
Notes and to have such Notes purchased pursuant to Section 3.8.
"Clearstream Luxembourg" means Clearstream Banking S.A., societe
anonyme, as operator of Clearstream, Luxembourg, or its successor in such
capacity.
"Code" means the Internal Revenue Code of 1986, as amended.
"Commission" means the Securities and Exchange Commission, or any
successor agency thereto with respect to the regulation or registration of
securities.
"Common Stock" of any Person means any and all shares, interests or
other participations in, and other equivalents (however designated and whether
voting or non-voting) of such Person's common equity interests, whether
outstanding on the Issue Date or issued after the Issue Date, and includes,
without limitation, all series and classes of such common equity interests and
any warrants, rights or options to purchase any such common equity interests.
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"Company" means the party named as such in the introductory
paragraph to this Indenture and its successors and assigns, including any
Surviving Entity which becomes such in accordance with Article IV.
"Company Order" has the meaning assigned to it in Section 2.2(c).
"Consolidated Capital Ratio" means, as of any date of determination,
the ratio of:
(1) the aggregate amount of Consolidated Indebtedness outstanding as
of such date to
(2) the Consolidated Net Worth for such date.
"Consolidated Cash Flow" means, for any period, Consolidated Net
Income for such period, plus or minus the following, as the case may be:
(1) to the extent deducted in calculating such Consolidated Net
Income, Consolidated Income Tax Expense for such period; plus
(2) to the extent deducted in calculating such Consolidated Net
Income, Consolidated Interest Expense for such period; plus or minus
(3) any change in Deferred Revenues; plus
(4) to the extent deducted in calculating such Consolidated Net
Income, Consolidated Non-cash Charges for such period; and minus
(5) (a) all non-cash credits and gains increasing Consolidated Net
Income for such period (excluding non-cash credits and gains excluded in
the determination of Consolidated Net Income for such period) and (b) all
cash payments during such period relating to non-cash charges that were
added back in determining Consolidated Cash Flow in any prior period.
Notwithstanding the foregoing, Consolidated Income Tax Expense,
Consolidated Non-cash Charges and change in Deferred Revenues of a Restricted
Subsidiary of the Company shall be added to Consolidated Net Income to compute
Consolidated Cash Flow of the Company only to the extent that a corresponding
amount would be permitted at the date of determination to be dividended to the
Company by such Restricted Subsidiary without prior governmental approval (that
has not been obtained), and without direct or indirect restriction pursuant to
the terms of its charter and all agreements, instruments, judgments, decrees,
orders, statutes, rules and governmental regulations applicable to that
Restricted Subsidiary or its shareholders.
"Consolidated Income Tax Expense" means, for any period, the
provision for Federal, state, local and foreign income taxes payable by the
Company and its Restricted Subsidiaries for such period as determined on a
consolidated basis in accordance with GAAP.
"Consolidated Indebtedness" means, as of any date of determination,
an amount equal to the aggregate amount of all Indebtedness of the Company and
the Restricted
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Subsidiaries and Preferred Stock of the Restricted Subsidiaries, other than
Preferred Stock held by the Company or by any Restricted Subsidiary, outstanding
at such time.
"Consolidated Interest Expense" means, for any period, the sum of,
without duplication determined on a consolidated basis in accordance with GAAP:
(1) the aggregate of cash and non-cash interest expense of the
Company and its Restricted Subsidiaries for such period determined on a
consolidated basis in accordance with GAAP, including, without limitation
(whether or not classified as interest expense in accordance with GAAP):
(a) any amortization or accretion of debt discount or any interest
paid on Indebtedness of the Company in the form of additional
Indebtedness,
(b) any amortization of deferred financing costs,
(c) the net costs under Hedging Obligations (including amortization
of fees),
(d) all capitalized interest,
(e) the interest portion of any deferred payment obligation,
(f) commissions, discounts and other fees and charges Incurred in
respect of letters of credit or bankers' acceptances, and
(g) any interest expense on Indebtedness of another Person that is
guaranteed by such Person or one of its Restricted Subsidiaries or secured
by a Lien on the assets of such Person or one of its Restricted
Subsidiaries (whether or not such guarantee or Lien is called upon);
(2) the interest component of Capitalized Lease Obligations paid,
accrued and/or scheduled to be paid or accrued by the Company and its
Restricted Subsidiaries during such period;
(3) the amount of all cash and non-cash dividend payments or
distributions on any series of Preferred Stock or Disqualified Capital
Stock of any Restricted Subsidiary (other than dividends payable to the
Company or any Restricted Subsidiary) paid, accrued or scheduled to be
paid or accrued during such period; and
(4) the cash contributions to any employee stock ownership plan or
similar trust to the extent such contributions are used by such plan or
trust to pay interest or fees to any Person (other than the Company) in
connection with Indebtedness Incurred by such plan or trust.
"Consolidated Leverage Ratio" means, as of any date of
determination, the ratio of the aggregate amount of Consolidated Indebtedness as
of such date to Consolidated Cash Flow for the four most recent full fiscal
quarters for which financial statements are available ending prior to the date
of such determination (the "Four Quarter Period"). For purposes of this
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definition, "Consolidated Indebtedness" and "Consolidated Cash Flow" shall be
calculated after giving effect on a pro forma basis in accordance with
Regulation S-X under the Securities Act for the period of such calculation to:
(1) the Incurrence or repayment or redemption of any Indebtedness of
the Company or any of its Restricted Subsidiaries (and the application of
the proceeds thereof), including the Incurrence of any Indebtedness (and
the application of the proceeds thereof) giving rise to the need to make
such determination, occurring during such Four Quarter Period or at any
time subsequent to the last day of such Four Quarter Period and on or
prior to such date of determination, to the extent, in the case of an
Incurrence, such Indebtedness is outstanding on the date of determination,
as if such Incurrence or repayment, as the case may be (and the
application of the proceeds thereof), occurred on the first day of such
Four Quarter Period; and
(2) any Asset Sale or Asset Acquisition (including, without
limitation, any Asset Acquisition giving rise to the need to make such
determination as a result of the Company or one of its Restricted
Subsidiaries (including any Person who becomes a Restricted Subsidiary as
a result of the Asset Acquisition) Incurring Acquired Indebtedness and
including, without limitation, by giving pro forma effect to any
Consolidated Cash Flow (provided that such pro forma Consolidated Cash
Flow shall be calculated in a manner consistent with the exclusions in the
definition of "Consolidated Net Income") attributable to the assets which
are the subject of the Asset Sale or Asset Acquisition during the Four
Quarter Period) occurring during the Four Quarter Period or at any time
subsequent to the last day of the Four Quarter Period and on or prior to
such date of determination, as if such Asset Sale or Asset Acquisition
(including the Incurrence of any such Acquired Indebtedness) occurred on
the first day of the Four Quarter Period.
In addition, the amount of Indebtedness under any revolving credit
facility will be computed based on:
(a) the average daily balance of such Indebtedness during such Four
Quarter Period, or
(b) if such facility was created after the end of such Four Quarter
Period, the average daily balance of such Indebtedness during the period
from the date of creation of such facility to the date of such
calculation,
in each case giving pro forma effect to any borrowings related to any
transaction referred to in clause (2) above.
"Consolidated Net Income" means, for any period, the aggregate net
income (or loss) of the Company and its Restricted Subsidiaries for such period
on a consolidated basis, determined in accordance with GAAP; provided, that
there shall be excluded therefrom:
(1) net after-tax gains or losses from Asset Sales or abandonments
or reserves relating thereto;
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(2) net after-tax items classified as extraordinary gains or losses;
(3) for purposes of calculating Consolidated Cash Flow pursuant to
clause (3) of the first paragraph of Section 3.11 only, the net income of
any Person acquired in a "pooling of interests" transaction accrued prior
to the date it becomes a Restricted Subsidiary or is merged or
consolidated with the Company or any Restricted Subsidiary;
(4) the net income (but not loss) of any Restricted Subsidiary to
the extent that the declaration of dividends or similar distributions by
that Restricted Subsidiary of that income is restricted by contract,
operation of law or otherwise;
(5) the net income (or loss, but only in the case of Unrestricted
Subsidiaries) of any Person, other than the Company or a Restricted
Subsidiary, except to the extent of cash dividends or distributions paid
to the Company or to a Restricted Subsidiary by such Person which are not
included pursuant to clause (C) of the first paragraph of Section 3.11;
(6) any increase (but not decrease) in net income attributable to
minority interests in any Restricted Subsidiary;
(7) any restoration to income of any contingency reserve, except to
the extent that provision for such reserve was made out of Consolidated
Net Income accrued at any time following the Issue Date;
(8) the cumulative effect of changes in accounting principles; and
(9) for purposes of calculating Consolidated Cash Flow pursuant to
clause 3(A) of the first paragraph of Section 3.11 only, any earnings of a
Surviving Entity prior to assuming the Company's obligations under this
Indenture and the Notes pursuant to Section 3.11.
"Consolidated Net Worth" means, as of any date of determination, the
excess (if any) of:
(1) the total amounts shown on the balance sheet of the Company and
its Restricted Subsidiaries, determined on a consolidated basis in
accordance with GAAP, as of the end of the most recent fiscal quarter for
which financial statements are available ending prior to such date as the
aggregate paid-in capital relating to the Company's Capital Stock
(excluding Disqualified Stock), after giving pro forma effect to any
issuance, repurchase or redemption of the Company's Capital Stock since
the end of such most recent fiscal quarter, over
(2) the amount of Restricted Investments (including Designation
Amounts, but excluding Restricted Investments in Permitted Joint Ventures)
made by the Company or its Restricted Subsidiaries since the Issue Date.
"Consolidated Non-Cash Charges" means, for any period, the aggregate
depreciation, amortization (including amortization of goodwill and other
intangibles and the
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amount of capacity available for sale charged to cost of sales, but excluding
amortization of prepaid cash expenses that were paid in a prior period) and
other non-cash expenses or losses (including non-cash charges related to any
employee stock ownership or option plan) of the Company and its Restricted
Subsidiaries for such period, determined on a consolidated basis in accordance
with GAAP (excluding any such charge which constitutes an accrual of or a
reserve for cash charges for any future period or the amortization of a prepaid
cash expense paid in a prior period).
"Corporate Trust Office" has the meaning assigned to it in Section
2.3(c).
"Covenant Defeasance" has the meaning assigned to it in Section
8.1(c).
"Currency Agreement" means, in respect of any Person, any foreign
exchange contract, currency swap agreement or other similar agreement as to
which such Person is a party relating to foreign currency denominated
Indebtedness.
"Custodian" means any receiver, trustee, assignee, liquidator,
sequestrator or similar official under any Bankruptcy Law.
"Default" means an event or condition the occurrence of which is, or
with the lapse of time or the giving of notice or both would be, an Event of
Default.
"Defaulted Interest" has the meaning assigned to it in Exhibit A.
"Deferred Revenue" means amounts appearing as a liability on the
balance sheet of the Company and its Restricted Subsidiaries (determined on a
consolidated basis in accordance with GAAP) classified as deferred revenues to
the extent of cash received in connection therewith or to the extent a
receivable with terms customary in the industry or otherwise commercially
reasonable is recorded on the balance sheet, as of the end of the most recent
fiscal quarter for which financial statements are available ending prior to the
date of determination.
"Designation" and "Designation Amount" have the meanings set forth
in Section 3.11.
"Disqualified Capital Stock" means that portion of any Capital Stock
which, by its terms (or by the terms of any security into which it is
convertible or for which it is exchangeable at the option of the holder
thereof), or upon the happening of any event, matures or is mandatorily
redeemable, pursuant to a sinking fund obligation or otherwise, or is redeemable
at the sole option of the holder thereof, in any case, on or prior to the 91st
day after the final maturity date of the Notes; provided, however, that any
Capital Stock that would constitute Disqualified Stock solely because the
holders thereof have the right to require the Company to repurchase such Capital
Stock upon the occurrence of a Change of Control or an Asset Sale shall not
constitute Disqualified Stock if the terms of such Capital Stock provide that
the Company may not repurchase or redeem any such Capital Stock pursuant to such
provisions unless such repurchase or redemption complies with Section 3.11 and
until such time as the Company has satisfied its obligations to the Holders of
Notes pursuant to Section 3.8.
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"Distribution Compliance Period" means, in respect of any Regulation
S Global Note, the 40 consecutive days beginning on and including the later of
(a) the day on which any Notes represented thereby are offered to persons other
than distributors (as defined in Regulation S under the Securities Act) pursuant
to Regulation S and (b) the issue date for such Notes.
"DTC" means The Depository Trust Company, its nominees and their
respective successors and assigns, or such other depositary institution
hereinafter appointed by the Company that is a clearing agency registered under
the Exchange Act.
"Euro Notes" means the 11.625% Senior Euro Notes due 2010 of the
Company, and any exchange notes issued therefor.
"European Union" means the member nations to the third stage of
European Monetary Union pursuant to the Treaty of Rome establishing the European
Community, as amended by the Treaty on European Union, signed at Maastricht on
February 7, 1992.
"Euroclear" means Morgan Guaranty Trust Company of New York,
Brussels Office, as operator of the Euroclear System, or its successor in such
capacity.
"Event of Default" has the meaning assigned to it in Section 6.1.
"Exchange Act" means the Securities Exchange Act of 1934, as
amended; or any successor statute or statutes thereto.
"Exchange Notes" means Notes issued in a Registered Exchange Offer
in exchange for a like principal amount of Notes originally issued pursuant to
an exemption from registration under the Securities Act, and replacement Notes
issued therefor in accordance with this Indenture.
"Fair Market Value" means, with respect to any asset, the price
(after taking into account any liabilities relating to such assets) which could
be negotiated in an arm's-length free market transaction, for cash, between a
willing seller and a willing and able buyer, neither of which is under any
compulsion to complete the transaction; provided, that the Fair Market Value of
any such asset or assets shall be determined conclusively by the Board of
Directors of the Company acting in good faith, and shall be evidenced by a Board
Resolution.
"FLAG Limited Credit Agreement" means the credit agreement, dated as
of January 28, 1998, among FLAG Limited, the Term Lenders thereto, the Revolving
Lenders thereto, Barclays Bank plc and International Trust Company of Bermuda,
as amended.
"Four Quarter Period" has the meaning set forth in the definition of
"Consolidated Leverage Ratio" above.
"GAAP" means generally accepted accounting principles set forth in
the opinions and pronouncements of the Accounting Principles Board of the
American Institute of Certified Public Accountants and statements and
pronouncements of the Financial Accounting Standards Board or in such other
statements by such other entity as may be approved by a significant
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segment of the accounting profession of the United States, which are in effect
as of the Issue Date.
"Global Note" means any Note issued in fully-registered certificated
form to DTC (or its nominee), as depositary for the beneficial owners thereof,
which shall be substantially in the form of Exhibit A, with appropriate legends
as specified in Section 2.7 and Exhibit A.
"Guarantee" means any obligation, contingent or otherwise, of any
Person directly or indirectly guaranteeing any Indebtedness of any other Person:
(a) to purchase or pay, or advance or supply funds for the purchase
or payment of, such Indebtedness of such other Person, whether arising by
virtue of partnership arrangements, or by agreement to keep-well, to
purchase assets, goods, securities or services, to take-or-pay, or to
maintain financial statement conditions or otherwise, or
(b) 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 "Guarantee" shall not include endorsements for collection or
deposit in the ordinary course of business. The term "Guarantee" used as a
verb has a corresponding meaning.
"Hedging Obligations" means the obligations of any Person pursuant
to any Interest Rate Agreement or Currency Agreement.
"Holder" means the Person in whose name a Note is registered in the
Note Register.
"Incur" means, with respect to any Indebtedness, Lien or other
obligation of any Person, to create, issue, incur (including by conversion,
exchange or otherwise), assume, Guarantee or otherwise become liable in respect
of such Indebtedness or other obligation on the balance sheet of such Person or
Lien (and "Incurrence," "Incurred" and "Incurring" shall have meanings
correlative to the preceding); provided, however, that a change in GAAP that
results in an obligation of such person that exists at such time becoming
Indebtedness shall not be deemed an Incurrence of such Indebtedness and that
neither the accrual of interest nor the accretion of original issue discount
shall be deemed an Incurrence of Indebtedness. Any Indebtedness or Lien of any
Person outstanding at the time such Person becomes a Restricted Subsidiary
(including upon Revocation) or is merged with or into or consolidates with the
Company or a Restricted Subsidiary, whether or not such Indebtedness or Lien was
Incurred in connection with or in anticipation thereof, shall be deemed Incurred
at the time it becomes a Restricted Subsidiary.
"Indebtedness" means with respect to any Person, without
duplication:
(1) the principal amount (or, if less, the accreted value) of all
obligations of such Person for borrowed money;
(2) the principal amount (or, if less, the accreted value) of all
obligations of such Person evidenced by bonds, debentures, notes or other
similar instruments;
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(3) all Capitalized Lease Obligations of such Person;
(4) all obligations of such Person issued or assumed as the deferred
purchase price of property, all conditional sale obligations and all
obligations under any title retention agreement (but excluding trade
accounts payable and other accrued liabilities arising in the ordinary
course of business that are not overdue by 90 days or more or are being
contested in good faith by appropriate proceedings promptly instituted and
diligently conducted);
(5) all letters of credit, banker's acceptances or similar credit
transactions, including reimbursement obligations in respect thereof;
(6) Guarantees of such Person in respect of Indebtedness referred to
in clauses (1) through (5) above and clauses (8) and (9) below;
(7) all Indebtedness of any other Person of the type referred to in
clauses (1) through (6) which is secured by any Lien on any property or
asset of such Person, the amount of such Indebtedness being deemed to be
the lesser of the Fair Market Value of such property or asset or the
amount of the Indebtedness so secured;
(8) all obligations under Hedging Obligations of such Person; and
(9) all Disqualified Capital Stock issued by such Person with the
amount of Indebtedness represented by such Disqualified Capital Stock
being equal to the greater of its voluntary or involuntary liquidation
preference and its maximum fixed repurchase price, but excluding accrued
dividends, if any; provided, that:
(a) if the Disqualified Capital Stock does not have a fixed
repurchase price, such maximum fixed repurchase price shall be calculated
in accordance with the terms of the Disqualified Capital Stock as if the
Disqualified Capital Stock were purchased on any date on which
Indebtedness shall be required to be determined pursuant to this
Indenture, and
(b) if the maximum fixed repurchase price is based upon, or measured
by, the fair market value of the Disqualified Capital Stock, the fair
market value shall be the Fair Market Value thereof.
"Indenture" means this Indenture as amended or supplemented from
time to time.
"Independent Financial Advisor" means an accounting firm, appraisal
firm, investment banking firm or consultant of nationally recognized standing
that is, in the judgment of the Company's Board of Directors, qualified to
perform the task for which it has been engaged and which is independent in
connection with the relevant transaction.
"Interest Payment Date" means the stated due date of an installment
of interest on the Notes as specified in Exhibit A.
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"Interest Rate Agreement" of any Person means any interest rate
protection agreement (including, without limitation, interest rate swaps, caps,
floors, collars, derivative instruments and similar agreements) and/or other
types of interest hedging agreements.
"Investment" means, with respect to any Person, any:
(1) direct or indirect loan or other extension of credit (including,
without limitation, a guarantee),
(2) capital contribution to (by means of any transfer of cash or
other property to others or any payment for property or services for the
account or use of others), or
(3) any purchase or acquisition by such Person of any Capital Stock,
bonds, notes, debentures or other securities or evidences of Indebtedness
issued by, any other Person.
"Investment" shall exclude (A) accounts receivable or deposits
arising in the ordinary course of business; (B) payroll, travel and similar
advances to cover matters that are expected at the time of such advances
ultimately to be treated as expenses for accounting purposes and that are made
in the ordinary course of business; (C) loans or advances to employees made in
the ordinary course of business consistent with past practices of the Company or
such Restricted Subsidiary; and (D) stock, obligations or securities received in
settlement of debts created in the ordinary course of business and owing to the
Company or any Restricted Subsidiary or in satisfaction of judgments. Any
property transferred to or from an Unrestricted Subsidiary will be valued at its
Fair Market Value at the time of such transfer. If the Company or any Restricted
Subsidiary sells or otherwise disposes of any Common Stock of a Restricted
Subsidiary (including any issuance and sale of Capital Stock by a Restricted
Subsidiary) such that, after giving effect to any such sale or disposition, such
Restricted Subsidiary would cease to be a Subsidiary of the Company, the Company
shall be deemed to have made an Investment on the date of any such sale or
disposition equal to sum of the Fair Market Value of the Capital Stock of such
former Restricted Subsidiary held by the Company or any Restricted Subsidiary
immediately following such sale or other disposition and the amount of any
Indebtedness of such former Restricted Subsidiary Guaranteed by the Company or
any Restricted Subsidiary or owed to the Company or any other Restricted
Subsidiary immediately following such sale or other disposition.
"Issue Date" means March 17, 2000.
"Legal Defeasance" has the meaning assigned to it in Section 8.1(b).
"Legal Holiday" has the meaning assigned to it in Section 11.7.
"Lien" means any lien, mortgage, deed of trust, pledge, security
interest, charge or encumbrance of any kind (including any conditional sale or
other title retention agreement, any lease in the nature thereof and any
agreement to give any security interest).
"Maturity Date" means March 30, 2010.
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"Net Cash Proceeds" means, with respect to any Asset Sale, the
proceeds in the form of cash or Cash Equivalents, including payments in respect
of deferred payment obligations when received in the form of cash or Cash
Equivalents received by the Company or any of its Restricted Subsidiaries from
such Asset Sale, net of:
(1) reasonable out-of-pocket expenses and fees relating to such
Asset Sale (including, without limitation, legal, accounting and
investment banking fees and sales commissions);
(2) taxes paid or payable in respect of such Asset Sale after taking
into account any reduction in consolidated tax liability due to available
tax credits or deductions and any tax sharing arrangements;
(3) repayment of Indebtedness secured by a Lien on the asset
disposed of in such Asset Sale permitted under this Indenture that is
required to be repaid in connection with such Asset Sale; and
(4) appropriate amounts to be provided by the Company or any
Restricted Subsidiary, as the case may be, as a reserve, in accordance
with GAAP, against any liabilities associated with such Asset Sale and
retained by the Company or any Restricted Subsidiary, as the case may be,
after such Asset Sale, including, without limitation, pension and other
post-employment benefit liabilities, liabilities related to environmental
matters and liabilities under any indemnification obligations associated
with such Asset Sale.
"Non-U.S. Person" means a person who is not a U.S. person, as
defined in Regulation S.
"Note Custodian" means the custodian with respect to any Global Note
appointed by DTC, or any successor Person thereto, and shall initially be the
Trustee.
"Note Register" has the meaning assigned to it in Section 2.3(a).
"Notes" means any of the Company's 11.625% Senior Dollar Notes Due
2010 issued and authenticated pursuant to this Indenture.
"Officer" means, when used in connection with any action to be taken
by the Company, the Chairman of the Board, the Chief Executive Officer, the
Chief Operating Officer, the Chief Financial Officer or the Treasurer of the
Company.
"Officers' Certificate" means, when used in connection with any
action to be taken by the Company, a certificate signed by two Officers of the
Company and delivered to the Trustee.
"Opinion of Counsel" means a written opinion of counsel, who may be
an employee of or counsel for the Company and who shall be reasonably acceptable
to the Trustee.
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"Outstanding" means, as of the date of determination, all Notes
theretofor authenticated and delivered under this Indenture, except:
(i) Notes theretofor canceled by the Trustee or delivered to the
Trustee for cancellation;
(ii) Notes, or portions thereof, for whose payment or redemption
money in the necessary amount has been theretofor deposited with the
Trustee or any Paying Agent (other than the Company) in trust or set aside
and segregated in trust by the Company (if the Company shall act as its
own Paying Agent) for the Holders of such Notes; provided that, if the
Notes are to be redeemed, notice of such redemption has been duly given
pursuant to this Indenture or provision therefor satisfactory to the
Trustee has been made;
(iii) Notes which have been surrendered pursuant to Section 2.9 or
in exchange for or in lieu of which other Notes have been authenticated
and delivered pursuant to this Indenture, other than any such Notes in
respect of which there shall have been presented to the Trustee proof
satisfactory to it that such Notes are held by a bona fide purchaser in
whose hands such Notes are valid obligations of the Company; and
(iv) Solely to the extent provided in Article VIII, Notes which are
subject to Legal Defeasance or Covenant Defeasance as provided in Article
VIII.
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 Trust 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.
"Paying Agent" has the meaning assigned to it in Section 2.3(a).
"Permitted Credit Facility" means one or more credit agreements,
loan agreements or similar facilities in the bank credit market (which may
include institutional investor participation), secured or unsecured, providing
for revolving credit loans, term loans and/or letters of credit, including the
FLAG Limited Credit Agreement, entered into from time to time by the Company and
its Restricted Subsidiaries, and including any related notes, Guarantees,
collateral documents, instruments and agreements executed in connection
therewith, as the same may be amended, supplemented, modified, restated or
replaced from time to time.
"Permitted Holders" means Bell Atlantic Corporation, Dallah Albaraka
Holding Company and their respective Affiliates.
"Permitted Investments" means:
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(1) Investments by the Company or any Restricted Subsidiary in any
Person that is, or that result in any Person becoming, immediately after
such Investment, a Restricted Subsidiary or constituting a merger or
consolidation of such Person into the Company or with or into a Restricted
Subsidiary;
(2) Investments by any Restricted Subsidiary in the Company;
(3) Investments in cash and Cash Equivalents;
(4) any extension, modification or renewal of any Investments
existing as of the Issue Date (but not Investments involving additional
advances, contributions or other investments of cash or property or other
increases thereof, other than as a result of the accrual or accretion of
interest or original issue discount or payment-in-kind pursuant to the
terms of such Investment as of the Issue Date);
(5) Investments received as a result of the bankruptcy or
reorganization of any Person or taken in settlement of or other resolution
of claims or disputes, and, in each case, extensions, modifications and
renewals thereof; and
(6) Investments made by the Company or its Restricted Subsidiaries
as a result of non-cash consideration permitted to be received in
connection with an Asset Sale made in compliance with Section 3.15.
"Permitted Joint Venture" means a Person engaged in the
Telecommunications Business as to which the Company exercises no less than a
veto right over material operating, financial and strategic actions and owns at
least 30% of the Voting Stock and Capital Stock and no more than 50% of the
Voting Stock and Capital Stock; provided, however, that neither the Company nor
any Restricted Subsidiary will at any time:
(1) provide credit support for, subject any of its property or
assets (other than the Capital Stock of any Permitted Joint Venture) to
the satisfaction of, or guarantee, any Indebtedness of any Permitted Joint
Venture (including any undertaking, agreement or instrument evidencing
such Indebtedness);
(2) be directly or indirectly liable for any Indebtedness of any
Permitted Joint Venture; or
(3) be directly or indirectly liable for any Indebtedness which
provides that the holder thereof may (upon notice, lapse of time or both)
declare a default thereon or cause the payment thereof to be accelerated
or payable prior to its final scheduled maturity upon the occurrence of a
default with respect to any Indebtedness of any Permitted Joint Venture;
except, in the case of (1), (2) or (3), (x) Guarantees provided on a
several, but not joint, basis, or loans, in each case, in proportion to
the Company's ownership interest in the relevant Permitted Joint Venture
or (y) any non-recourse guarantee given solely to support the pledge by
the Company or any Restricted Subsidiary of the Capital Stock of any
Permitted Joint Venture.
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"Permitted Liens" means any of the following:
(1) Liens securing Indebtedness Incurred in accordance with clause
2(d), (e) or (f) of Section 3.10, provided that:
(a) Liens securing Indebtedness Incurred pursuant to such
clause 2(e)(x) shall cover only the assets acquired with the
proceeds of such Indebtedness and shall be created within 180 days
of such acquisition; and
(b) Liens securing Indebtedness pursuant to such clause 2(f)
shall only cover the property securing the Indebtedness to which the
relevant Hedging Obligations relate;
(2) Liens in favor of the Company or any Restricted Subsidiary;
(3) Liens:
(a) on property of a Person existing at the time such Person
is merged with or into or consolidated with the Company or any of
its Restricted Subsidiaries (including Liens Securing Acquired
Indebtedness), provided that such Liens were in existence prior to
the contemplation of such merger or consolidation and do not extend
to any assets other than those of the Person merged into or
consolidated with the Company or such Restricted Subsidiary and if
such Liens secure Subordinated Indebtedness, such Liens shall be
junior and subordinate to Liens on the same property securing the
Notes;
(b) Liens on property existing at the time of acquisition
thereof by the Company or any of its Restricted Subsidiaries,
provided that such Liens were in existence prior to the
contemplation of such acquisition;
(4) Liens to secure the performance of statutory obligations, surety
or appeal bonds, performance bonds or other obligations of a like nature
incurred in the ordinary course of business;
(5) Liens existing on the Issue Date and Liens to secure any
Permitted Refinancing Indebtedness which is Incurred to Refinance any
Indebtedness which has been secured by a Lien permitted under Section 3.13
and which Indebtedness has been Incurred in accordance with Section 3.10;
provided, that such new Liens:
(a) are no less favorable to the Holders of Notes and are not
more favorable to the lienholders with respect to such Liens than
the Liens in respect of the Indebtedness being Refinanced; and
(b) do not extend to any property or assets other than the
property or assets securing the Indebtedness Refinanced by such
Refinancing Indebtedness;
(6) Liens for taxes, assessments or governmental charges or claims
that are not yet delinquent or that are being contested in good faith by
appropriate proceedings
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promptly instituted and diligently concluded, provided that any reserve or
other appropriate provision as shall be required in conformity with GAAP
shall have been made therefor;
(7) zoning restrictions, rights-of-way, easements and similar
charges or encumbrances incurred in the ordinary course which in the
aggregate do not detract from the value of the property thereof;
(8) Liens arising by reason of operation of law in favor of
mechanics, materialmen, laborers, employees or suppliers, Incurred in the
ordinary course of business for sums which are not yet delinquent or are
being contested in good faith by appropriate proceedings which suspend the
collection thereof; and
(9) Liens incurred in the ordinary course of business of the Company
or any of its Restricted Subsidiaries with respect to obligations that do
not exceed $15 million at any one time outstanding and that:
(a) are not Incurred in connection with the borrowing of money
or the obtaining of advances or credit (other than trade credit in
the ordinary course of business); and
(b) do not in the aggregate materially detract from the value
of the property or materially impair the use thereof in the
operation of business by the Company or such Restricted Subsidiary.
"Permitted Refinancing Indebtedness" means Refinancing Indebtedness
in respect of:
(1) Indebtedness (other than Indebtedness owed to the Company or any
Subsidiary) Incurred pursuant to paragraph (1) of Section 3.10, or
(2) Indebtedness Incurred pursuant to paragraph 2(a) or 2(i) of
Section 3.10.
"Person" means an individual, partnership, corporation, limited
liability company, unincorporated organization, trust or joint venture, or a
governmental agency or political subdivision thereof.
"Preferred Stock" of any Person means any Capital Stock of such
Person that has preferential rights over any other Capital Stock of such Person
with respect to profits, dividends, distributions or redemptions or upon
liquidation.
"Private Exchange Notes" shall have the meaning assigned to such
term in the Registration Agreement.
"Private Placement Legend" has the meaning assigned to it in Section
2.7(b).
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"Public Equity Offering" means an underwritten public offering of
Common Stock of the Company (other than Disqualified Stock) for cash resulting
in gross proceeds to the Company of at least $50 million.
"Purchase Money Indebtedness" means Indebtedness (including Acquired
Indebtedness and Acquired Preferred Stock) of the Company or any Restricted
Subsidiary Incurred for the purpose of financing all or any part of the purchase
price, or other cost of construction, development, leasing or improvement of any
property (excluding a Sale and Leaseback Transaction involving property
previously owned by the Company or any Restricted Subsidiary); provided that the
aggregate principal amount of such Indebtedness or liquidation value of such
Preferred Stock does not exceed the lesser of the Fair Market Value of such
property or such purchase price or cost at the time of purchase, construction,
development, lease or improvement, as determined in accordance with GAAP in good
faith by the Board of Directors of the Company, including any Refinancing
Indebtedness for such Indebtedness.
"QIB" means any "qualified institutional buyer" (as defined in Rule
144A).
"Qualified Capital Stock" means any Capital Stock that is not
Disqualified Capital Stock and any warrants, rights or options to purchase or
acquire Capital Stock that is not Disqualified Capital Stock and that is not
convertible into or exchangeable into Disqualified Capital Stock.
"Record Date" has the meaning assigned to it in Exhibit A.
"Redemption Date" means, with respect to any redemption of Notes,
the date of redemption with respect thereto.
"Refinance" means, in respect of any security or Indebtedness, to
refinance, extend, renew, refund, repay, prepay, redeem, defease or retire, or
to issue a security or Indebtedness in exchange or replacement for, such
security or Indebtedness in whole or in part. "Refinanced" and "Refinancing"
shall have correlative meanings.
"Refinancing Indebtedness" means any Refinancing by the Company or
any Restricted Subsidiary, to the extent that such Refinancing does not:
(1) result in an increase in the aggregate principal amount (or
accreted value, if less) of the Indebtedness of such Person as of the date
of such proposed Refinancing (plus the amount of any premium required to
be paid under the terms of the instrument governing such Indebtedness and
plus the amount of reasonable expenses incurred by the Company in
connection with such Refinancing); or
(2) create Indebtedness with:
(a) a Weighted Average Life to Maturity that is less than the
Weighted Average Life to Maturity of the Indebtedness being
Refinanced; or
(b) a final maturity earlier than the final maturity of the
Indebtedness being Refinanced; provided, that:
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(x) if such Indebtedness being Refinanced is
Indebtedness of the Company, then such Refinancing
Indebtedness shall be Indebtedness of the Company, and
(y) if such Indebtedness being Refinanced is
Subordinated Indebtedness, then such Refinancing Indebtedness
shall be subordinate to the Notes at least to the same extent
and in the same manner as the indebtedness being Refinanced.
"Registered Exchange Offer" means an exchange offer by the Company
registered under the Securities Act pursuant to which Notes originally issued
pursuant to an exemption from registration under the Securities Act are
exchanged for Notes of like principal amount not bearing the Private Placement
Legend.
"Registrar" has the meaning assigned to it in Section 2.3(a).
"Registration Agreement" means the Registration Agreement, dated as
of March 17, 2000, among the Company and Salomon Smith Barney Inc., Morgan
Stanley & Co. International Limited, Deutsche Bank Securities Inc. and Bear
Stearns & Co. Inc., as Initial Purchasers.
"Registration Statement" means an effective shelf registration
statement under the Securities Act that registers the resale by Holders (and
beneficial owners) of Notes (or beneficial interests therein).
"Regulation S" means Regulation S under the Securities Act or any
successor regulation.
"Regulation S Global Note" has the meaning assigned to it in Section
2.1(e).
"Replacement Assets" has the meaning set forth under Section 3.15.
"Resale Restriction Termination Date" means, for any Restricted Note
(or beneficial interest therein), two years (or such other period specified in
Rule 144(k)) from the Issue Date.
"Restricted Investment" means any Investment (other than a Permitted
Investment).
"Restricted Note" means any Note (or beneficial interest therein) or
any Exchange Note, until such time as:
(i) such Note (or beneficial interest therein) has been transferred
pursuant to a Registration Statement;
(ii) the Resale Restriction Termination Date therefor has passed;
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(iii) such Note is a Regulation S Global Note and the Distribution
Compliance Period therefor has terminated; or
(iv) the Private Placement Legend therefor has otherwise been
removed pursuant to Section 2.8(d) or, in the case of a beneficial
interest in a Global Note, such beneficial interest has been exchanged for
an interest in a Global Note not bearing a Private Placement Legend.
"Restricted Payment" has the meaning set forth under Section 3.11.
"Restricted Subsidiary" means any Subsidiary of the Company which at
the time of determination is not an Unrestricted Subsidiary.
"Rule 144" means Rule 144 under the Securities Act (or any successor
rule).
"Rule 144A" means Rule 144A under the Securities Act (or any
successor rule).
"Rule 144A Global Note" has the meaning assigned to it in Section
2.1(d).
"Sale And Leaseback Transaction" means any direct or indirect
arrangement with any Person or to which any such Person is a party providing for
the leasing to the Company or a Restricted Subsidiary of any property, whether
owned by the Company or any Restricted Subsidiary at the Issue Date or later
acquired, which has been or is to be sold or transferred by the Company or such
Restricted Subsidiary to such Person or to any other Person by whom funds have
been or are to be advanced on the security of such Property.
"SEC" means the Securities and Exchange Commission.
"Securities Act" means the Securities Act of 1933, as amended.
"Senior Indebtedness" means the Notes and any other Indebtedness of
the Company which ranks equal in right of payment with the Notes.
"Significant Subsidiary" shall mean a Restricted Subsidiary of the
Company constituting a "Significant Subsidiary" in accordance with Rule 1-02(w)
of Regulation S-X under the Securities Act.
"Special Record Date" has the meaning assigned to it in Section
2.12(A).
"Stated Maturity" means, with respect to any security, the date
specified in such security as the fixed date on which payment of principal of
such security is due and payable, including pursuant to any mandatory redemption
provision (but excluding any provision providing for the repurchase of such
security at the option of the holder thereof upon the happening of any
contingency).
"Subordinated Indebtedness" means any Indebtedness of the Company
which is expressly subordinated in right of payment to the Notes.
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"Subsidiary", with respect to any Person, mean any other Person of
which such Person owns, directly or indirectly, more than 50% of the voting
power of the other Person's outstanding Voting Stock.
"Surviving Entity" has the meaning assigned to it in Section 4.1.
"Telecommunications Assets" means all assets, rights (contractual or
otherwise) and properties, whether tangible or intangible, used by the Company
and its Restricted Subsidiaries in the Telecommunications Business owned and
operated by the Company and its Restricted Subsidiaries; provided that Capital
Stock shall constitute Telecommunications Assets only to the extent it
represents Capital Stock of a Person engaged in a Telecommunications Business
and such Person becomes a Restricted Subsidiary as a result of the acquisition
of such Capital Stock by the Company or another Restricted Subsidiary.
"Telecommunications Business" means the business of:
(1) transmitting, or providing services relating to the transmission
of, voice, video or data through owned or leased transmission facilities,
(2) constructing, creating, developing or marketing communications
networks, related network transmission equipment, software and other
devices for use in a telecommunications business,
(3) maintaining, operating or repairing communications networks,
including ownership of the assets necessary to engage in the
aforementioned activities,
(4) providing data center management or co-location services, or
(5) evaluating, participating or pursuing any other activity or
opportunity that is primarily related to those identified in (1) through
(4) above, provided that the determination of what constitutes a
Telecommunications Business shall be made in good faith by the Board of
Directors of the Company.
"TIA" or "Trust Indenture Act" means the Trust Indenture Act of
1939, as amended, as in effect on the date of this Indenture (except as
otherwise provided in this Indenture).
"Trustee" means the party named as such in the introductory
paragraph of this Indenture until a successor replaces it in accordance with the
terms of this Indenture and, thereafter, means the successor.
"Trust Officer" means, when used with respect to the Trustee, any
officer within the corporate trust department of the Trustee, including any vice
president, assistant vice president, assistant treasurer, trust officer or any
other officer of the Trustee who customarily performs functions similar to those
performed by the Persons who at the time shall be such officers, respectively,
or to whom any corporate trust matter is referred because of such person's
knowledge of and familiarity with the particular subject and who shall have
direct responsibility for the administration of this Indenture.
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"Unrestricted Subsidiary" means any Subsidiary of the Company
designated as such pursuant to Section 3.11. Any such Designation may be revoked
by a Board Resolution of the Company, subject to the provisions of Section 3.11.
"U.S. Government Obligations" means direct obligations (or
certificates representing an ownership interest in such obligations) of the
United States of America (including any agency or instrumentality thereof) for
the payment of which the full faith and credit of the United States of America
is pledged and which are not callable or redeemable at the issuer's option.
"U.S. Legal Tender" means such coin or currency of the United States
of America as at the time of payment shall be legal tender for the payment of
public and private debts.
"Vendor Facility" means any agreements between the Company or any
Restricted Subsidiary and one or more vendors or lessors of equipment or other
capital assets (or their affiliated financial providers) to the Company or any
Restricted Subsidiary for use by them in the Telecommunications Business
providing financing to the Company or any Restricted Subsidiary for the lease or
purchase of such equipment or other capital assets.
"Voting Stock" with respect to any Person, means securities of any
class of Capital Stock of such Person entitling the holders thereof (whether at
all times or only so long as no senior class of stock has voting power by reason
of any contingency) to vote in the election of members of the Board of Directors
(or equivalent governing body) of such Person.
"Weighted Average Life To Maturity" means, when applied to any
Indebtedness at any date, the number of years obtained by dividing:
(1) the then outstanding aggregate principal amount or liquidation
preference, as the case may be, of such Indebtedness into
(2) the sum of the total of the products obtained by multiplying:
(a) the amount of each then remaining installment, sinking
fund, serial maturity or other required payment of principal or
liquidation preference, as the case may be, including payment at
final maturity, in respect thereof, by
(b) the number of years (calculated to the nearest
one-twelfth) which will elapse between such date and the making of
such payment.
"Wholly Owned Restricted Subsidiary" of the Company means any
Restricted Subsidiary of which all the outstanding Capital Stock (other than in
the case of a foreign Restricted Subsidiary, directors' qualifying shares or an
immaterial amount of shares required to be owned by other Persons pursuant to
applicable law) are owned by the Company or any Wholly Owned Restricted
Subsidiary.
Section 1.2. Incorporation by Reference of Trust Indenture Act. If
any provision of this Indenture limits, qualifies or conflicts with the duties
that would be imposed by any of
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Sections 310 to 317 of the TIA through operation of Section 318(c) thereof on
any person if this Indenture were qualified under the TIA, such imposed duties
shall control.
"obligor" on the indenture securities means the Company and any
other obligor on the indenture securities.
All other TIA terms used in this Indenture that are defined by the
TIA, defined in the TIA by reference to another statute or defined by SEC rule
have the meanings assigned to them by such definitions.
Section 1.3. Rules of Construction. Unless the context otherwise
requires:
(1) a term has the meaning assigned to it;
(2) an accounting term not otherwise defined has the meaning
assigned to it in accordance with GAAP;
(3) "or" is not exclusive;
(4) "including" means including without limitation;
(5) words in the singular include the plural and words in the plural
include the singular;
(6) references to the payment of principal of the Notes shall
include applicable premium, if any; and
(7) references to the payment of interest on the Notes shall include
Additional Amounts and amounts payable under the Registration Agreement,
if any.
ARTICLE II
THE NOTES
Section 2.1. Form and Dating.
(a) The Notes are being originally offered and sold by the Company
pursuant to a Purchase Agreement, dated as of March 14, 2000, among the Company
and Salomon Smith Barney Inc., Morgan Stanley & Co. International Limited,
Deutsche Bank Securities Inc. and Bear Stearns & Co. Inc. The Notes will be
issued in fully-registered certificated form without coupons, and only in
denominations of $1,000 and any integral multiple thereof. The Notes and the
Trustee's certificate of authentication shall be substantially in the form of
Exhibit A.
(b) The terms and provisions of the Notes, the form of which is in
Exhibit A, shall constitute, and are hereby expressly made, a part of this
Indenture, and, to the extent applicable, the Company and the Trustee, by their
execution and delivery of this Indenture expressly agree to such terms and
provisions and to be bound thereby. Except as otherwise expressly permitted in
this Indenture, all Notes shall be identical in all respects. Notwithstanding
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any differences among them, all Notes issued under this Indenture shall vote and
consent together on all matters as one class.
(c) The Notes may have notations, legends or endorsements as
specified in Section 2.7 or as otherwise required by law, stock exchange rule or
DTC rule or usage. The Company and the Trustee shall approve the form of the
Notes and any notation, legend or endorsement on them. Each Note shall be dated
the date of its authentication.
(d) Notes originally offered and sold to QIBs in reliance on Rule
144A will be issued in the form of one or more permanent Global Notes (a "Rule
144A Global Note").
(e) Notes originally offered and sold outside the United States of
America will be issued in the form of one or more permanent Global Notes (the
"Regulation S Global Note").
Section 2.2. Execution and Authentication.
(a) Two Officers, one of whom shall be the Chairman of the Board,
the President, the Chief Executive Officer or the Chief Financial Officer of the
Company, shall sign the Notes for the Company by manual or facsimile signature.
If an Officer whose signature is on a Note no longer holds that office at the
time the Trustee authenticates the Note, the Note shall be valid nevertheless.
(b) A Note shall not be valid until an authorized signatory of the
Trustee manually authenticates the Note. The signature of the Trustee on a Note
shall be conclusive evidence that such Note has been duly and validly
authenticated and issued under this Indenture.
(c) At any time and from time to time after the execution and
delivery of this Indenture, the Trustee shall authenticate and make available
for delivery Notes upon a written order of the Company signed by two Officers or
by an Officer and either an Assistant Treasurer or an Assistant Secretary of the
Company (the "Company Order"). A Company Order shall specify the amount of the
Notes to be authenticated and the date on which the original issue of Notes is
to be authenticated. The aggregate principal amount of Notes that may be
authenticated and delivered under this Indenture is limited to $300 million.
(d) The Trustee may appoint an agent (the "Authenticating Agent")
reasonably acceptable to the Company to authenticate the Notes. Unless limited
by the terms of such appointment, any such Authenticating Agent may authenticate
Notes whenever the Trustee may do so. Each reference in this Indenture to
authentication by the Trustee includes authentication by the Authenticating
Agent.
(e) In case the Company:
(i) shall be consolidated with or merged into any other Person, or
(ii) shall convey, transfer, lease or otherwise dispose of its
properties and assets substantially as an entirety to any Person,
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and the Surviving Entity resulting from such consolidation, or surviving such
merger, or which shall have received a conveyance, transfer, lease or other
disposition as aforesaid, shall have executed an indenture supplemental hereto
with the Trustee pursuant to Article IV, any of the Notes authenticated or
delivered prior to such transaction may, from time to time, at the request of
the Surviving Entity, be exchanged for other Notes executed in the name of the
Surviving Entity with such changes in phraseology and form as may be
appropriate, but otherwise identical to the Notes surrendered for such exchange
and of like principal amount; and the Trustee, upon Company Order of the
Surviving Entity, shall authenticate and deliver Notes as specified in such
order for the purpose of such exchange. If Notes shall at any time be
authenticated and delivered in any new name of a Surviving Entity pursuant to
this Section 2.2 in exchange or substitution for or upon registration of
transfer of any Notes, such Surviving Entity, at the option of the Holders but
without expense to them, shall provide for the exchange of all Notes at the time
Outstanding for Notes authenticated and delivered in such new name.
Section 2.3. Registrar and Paying Agent.
(a) The Company shall maintain an office or agency in the Borough of
Manhattan, City of New York, where Notes may be presented for registration of
transfer or for exchange (the "Registrar"), where Notes may be presented for
payment (the "Paying Agent") and for the service of notices and demands to or
upon the Company in respect of the Notes and this Indenture. The Registrar shall
keep a register of the Notes and of their transfer and exchange (the "Note
Register"). The Company may have one or more co-Registrars and one or more
additional paying agents. The term "Paying Agent" includes any additional paying
agent.
(b) The Company shall enter into an appropriate agency agreement
with any Registrar, Paying Agent or co-Registrar not a party to this Indenture,
which shall incorporate the terms of the TIA. The agreement shall implement the
provisions of this Indenture that relate to such agent. The Company shall notify
the Trustee of the name and address of each such agent. If the Company fails to
maintain a Registrar or Paying Agent, the Trustee shall act as such and shall be
entitled to appropriate compensation therefor pursuant to Section 7.7. The
Company may act as Paying Agent, Registrar, co-Registrar or transfer agent.
(c) The Company initially appoints the Trustee at its principal
corporate trust office in the Borough of Manhattan, City of New York (the
"Corporate Trust Office") as Registrar, Paying Agent and agent for service of
demands and notices in connection with the Notes and this Indenture, until such
time as another Person is appointed as such.
Section 2.4. Paying Agent to Hold Money in Trust. The Company shall
require each Paying Agent (other than the Trustee) to agree in writing that such
Paying Agent shall hold in trust for the benefit of Holders or the Trustee all
money held by such Paying Agent for the payment of principal of or interest on
the Notes and shall notify the Trustee in writing of any default by the Company
in making any such payment. If the Company or an Affiliate of the Company acts
as Paying Agent, it shall segregate the money held by it as Paying Agent and
hold it as a separate trust fund. The Company at any time may require a Paying
Agent (other than the Trustee) to pay all money held by it to the Trustee and to
account for any funds disbursed by such Paying Agent. Upon complying with this
Section 2.4, the Paying Agent (if other than the Company) shall have no further
liability for the money delivered to the Trustee. Upon any
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proceeding under any Bankruptcy Law with respect to the Company or any Affiliate
of the Company, if the Company or such Affiliate is then acting as Paying Agent,
the Trustee shall replace the Company or such Affiliate as Paying Agent.
Section 2.5. Holder Lists. The Trustee shall preserve in as current
a form as is reasonably practicable the most recent list available to it of the
names and addresses of Holders. If the Trustee is not the Registrar, or to the
extent otherwise required under the TIA, the Company shall furnish to the
Trustee, in writing at least seven Business Days before each Interest Payment
Date and at such other times as the Trustee may request in writing, a list in
such form and as of such date as the Trustee may reasonably require of the names
and addresses of Holders.
Section 2.6. Global Note Provisions.
(a) Each Global Note initially shall: (i) be registered in the name
of DTC or the nominee of DTC, (ii) be delivered to the Note Custodian, and (iii)
bear the appropriate legend, as set forth in Section 2.7 and Exhibit A. Any
Global Note may be represented by more than one certificate. The aggregate
principal amount of each Global Note may from time to time be increased or
decreased by adjustments made on the records of the Note Custodian, as provided
in this Indenture.
(b) Members of, or participants in, DTC ("Agent Members") shall have
no rights under this Indenture with respect to any Global Note held on their
behalf by DTC or by the Note Custodian under such Global Note, and DTC may be
treated by the Company, the Trustee, the Paying Agent and the Registrar and any
of their agents as the absolute owner of such Global Note for all purposes
whatsoever (except with respect to determination of Additional Amounts).
Notwithstanding the foregoing, nothing herein shall prevent the Company, the
Trustee, the Paying Agent or the Registrar or any of their agents from giving
effect to any written certification, proxy or other authorization furnished by
DTC or impair, as between DTC and its Agent Members, the operation of customary
practices of DTC governing the exercise of the rights of an owner of a
beneficial interest in any Global Note. 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 Members, to take any action
that a Holder is entitled to take under this Indenture or the Notes.
(c) Except as provided below, owners of beneficial interests in
Global Notes will not be entitled to receive Certificated Notes. Certificated
Notes shall be issued to all owners of beneficial interests in a Global Note in
exchange for such interests if:
(i) DTC notifies the Company that it is unwilling or unable to
continue as depositary for such Global Note or DTC ceases to be a clearing
agency registered under the Exchange Act, at a time when DTC is required
to be so registered in order to act as depositary, and in each case a
successor depositary is not appointed by the Company within 90 days of
such notice,
(ii) the Company executes and delivers to the Trustee and Registrar
an Officers' Certificate stating that such Global Note shall be so
exchangeable, or
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(iii) an Event of Default has occurred and is continuing and the
Registrar has received a request from DTC.
In connection with the exchange of an entire Global Note for Certificated Notes
pursuant to this paragraph (c), such Global Note shall be deemed to be
surrendered to the Trustee for cancellation, and the Company shall execute, and
upon Company Order the Trustee shall authenticate and deliver, to each
beneficial owner identified by DTC in exchange for its beneficial interest in
such Global Note, an equal aggregate principal amount of Certificated Notes of
authorized denominations.
(d) In the event of the occurrence of the events specified in
Section 2.6(c), the Company will promptly make available to the Trustee a
reasonable supply of certificated Notes in definitive, fully registered form
without interest coupons.
Section 2.7. Legends.
(a) Each Global Note shall bear the legend specified therefor in
Exhibit A on the face thereof.
(b) Each Restricted Note shall bear the private placement legend
specified therefor in Exhibit A on the face thereof (together with, if
applicable, the legend specified in paragraph (c) of this Section 2.7, the
"Private Placement Legend").
(c) Each Certificated Note that is a Restricted Note shall bear the
legend specified therefor in Exhibit A on the face thereof.
Section 2.8. Transfer and Exchange.
(a) If (1) the owner of a beneficial interest in a Rule 144A Global
Note that is a Restricted Note wishes to transfer such interest (or portion
thereof) to a Non-U.S. Person pursuant to Regulation S and (2) such Non-U.S.
Person wishes to hold its interest in the Notes through a beneficial interest in
the Regulation S Global Note, (x) upon receipt by the Note Custodian and
Registrar of:
(A) instructions from the Holder of the Rule 144A Global
Note directing the Note Custodian and Registrar to credit or
cause to be credited a beneficial interest in the Regulation S
Global Note equal to the principal amount of the beneficial
interest in the Rule 144A Global Note to be transferred, and
(B) a certificate in the form of Exhibit C from the
transferor,
and (y) subject to the rules and procedures of DTC, the Note Custodian and
Registrar shall increase the Regulation S Global Note and decrease the Rule 144A
Global Note by such amount in accordance with the foregoing.
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(b) If the owner of an interest in a Regulation S Global Note wishes
to transfer such interest (or any portion thereof) to a QIB pursuant to Rule
144A prior to the expiration of the Distribution Compliance Period therefor, (x)
upon receipt by the Note Custodian and Registrar of:
(A) instructions from the Custodian and Holder of the
Regulation S Global Note directing the Note Registrar to
credit or cause to be credited a beneficial interest in the
Rule 144A Global Note equal to the principal amount of the
beneficial interest in the Regulation S Global Note to be
transferred, and
(B) a certificate in the form of Exhibit B duly executed
by the transferor,
and (y) in accordance with the rules and procedures of DTC, the Note Custodian
and Registrar shall increase the Rule 144A Global Note and decrease the
Regulation S Global Note by such amount in accordance with the foregoing.
(c) Other Transfers. Any transfer of Restricted Notes not described
above (other than a transfer of a beneficial interest in a Global Note that does
not involve an exchange of such interest for a Certificated Note or a beneficial
interest in another Global Note, which must be effected in accordance with
applicable law and the rules and procedures of DTC, but is not subject to any
procedure required by this Indenture) shall be made only upon receipt by the
Registrar of such opinions of counsel, certificates and/or other information
reasonably required by and satisfactory to it in order to ensure compliance with
the Securities Act or in accordance with paragraph (d) of this Section 2.8.
(d) Use and Removal of Private Placement Legends. Upon the transfer,
exchange or replacement of Notes (or beneficial interests in a Global Note) not
bearing a Private Placement Legend, the Note Custodian and Registrar shall
exchange such Notes (or beneficial interests) for beneficial interests in a
Global Note (or Certificated Notes if they have been issued pursuant to Section
2.6(c)) that does not bear a Private Placement Legend. Upon the transfer,
exchange or replacement of Notes (or beneficial interests in a Global Note)
bearing a Private Placement Legend, the Note Custodian and Registrar shall
deliver only Notes (or beneficial interests in a Global Note) that bear a
Private Placement Legend unless:
(i) such Notes (or beneficial interests) are exchanged in a
Registered Exchange Offer;
(ii) such Notes (or beneficial interests) are transferred pursuant
to a Registration Statement;
(iii) such Notes (or beneficial interests) are transferred pursuant
to Rule 144 upon delivery to the Registrar of a certificate of the
transferor in the form of Exhibit D and an Opinion of Counsel reasonably
satisfactory to the Registrar;
(iv) such Notes (or beneficial interests) are transferred, replaced
or exchanged after the Resale Restriction Termination Date therefor; or
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(v) in connection with such transfer, exchange or replacement the
Registrar shall have received an Opinion of Counsel and other evidence
reasonably satisfactory to it to the effect that neither such Private
Placement Legend nor the related restrictions on transfer are required in
order to maintain compliance with the provisions of the Securities Act.
The Private Placement Legend on any Note shall be removed at the request of the
Holder on or after the Resale Restriction Termination Date therefor. The Holder
of a Global Note may exchange an interest therein for an equivalent interest in
a Global Note not bearing a Private Placement Legend (other than a Regulation S
Global Note) upon transfer of such interest pursuant to any of clauses (i)
through (v) of this paragraph (e). The Company shall deliver to the Trustee an
Officers' Certificate promptly upon effectiveness, withdrawal or suspension of
any Registration Statement.
(e) Consolidation of Global Notes and Exchange of Certificated Notes
for Beneficial Interests in Global Notes. If a Global Note not bearing a Private
Placement Legend (other than a Regulation S Global Note) is Outstanding at the
time of a Registered Exchange Offer, any interests in a Global Note exchanged in
such Registered Exchange Offer shall be exchanged for interests in such
Outstanding Global Note.
(f) Retention of Documents. The Registrar shall retain copies of all
letters, notices and other written communications received pursuant to this
Article II. 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.
(g) Execution, Authentication of Notes, etc.
(i) Subject to the other provisions of this Section 2.8, when Notes
are presented to the Registrar or a co-Registrar with a request to
register the transfer of such Notes or to exchange such Notes for an equal
principal amount of Notes of other authorized denominations, the Registrar
or co-Registrar shall register the transfer or make the exchange as
requested if its requirements for such transaction are met; provided that
any Notes presented or surrendered for registration of transfer or
exchange shall be duly endorsed or accompanied by a written instrument of
transfer in form satisfactory to the Registrar or co-Registrar, duly
executed by the Holder thereof or his attorney duly authorized in writing.
To permit registrations of transfers and exchanges and subject to the
other terms and conditions of this Article II, the Company will execute
and upon Company Order the Trustee will authenticate Certificated Notes
and Global Notes at the Registrar's or co-Registrar's request. In
accordance with the Registration Agreement, the Company will execute and
upon Company Order the Trustee will authenticate Exchange Notes or Private
Exchange Notes, as the case may be in exchange for Notes.
(ii) No service charge shall be made to a Holder for any
registration of transfer or exchange, but the Company may require payment
of a sum sufficient to cover any transfer tax, assessments, or similar
governmental charge payable in connection therewith (other than any such
transfer taxes, assessments or similar governmental
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charges payable upon exchange or transfer pursuant to a Registered
Exchange Offer, or Sections 5.1, 3.8, 3.15 or 9.5).
(iii) The Registrar or co-Registrar shall not be required to
register the transfer of or exchange of any Note for a period beginning:
(1) 15 days before the mailing of a notice of an offer to repurchase or
redeem Notes and ending at the close of business on the day of such
mailing or (2) 15 days before an Interest Payment Date and ending on such
Interest Payment Date.
(iv) Prior to the due presentation for registration of transfer of
any Note, the Company, the Trustee, the Paying Agent, the Registrar or any
co-Registrar may deem and treat the person in whose name a Note is
registered as the absolute owner of such Note for the purpose of receiving
payment of principal of and interest on such Note and for all other
purposes whatsoever, whether or not such Note is overdue, and none of the
Company, the Trustee, the Paying Agent, the Registrar or any co-Registrar
shall be affected by notice to the contrary.
(v) All Notes issued upon any transfer or exchange pursuant to the
terms of this Indenture shall evidence the same debt and shall be entitled
to the same benefits under this Indenture as the Notes surrendered upon
such transfer or exchange.
(h) No Obligation of the Trustee.
(i) The Trustee shall have no responsibility or obligation to any
beneficial owner of interest in a Global Note, a member of, or a
participant in, DTC or other Person with respect to the accuracy of the
records of DTC or its nominee or of any participant or member thereof,
with respect to any ownership interest in the Notes or with respect to the
delivery to any participant, member, beneficial owner or other Person
(other than DTC) of any notice (including any notice of redemption) or the
payment of any amount or delivery of any Notes (or other security or
property) under or with respect to such Notes. All notices and
communications to be given to the Holders and all payments to be made to
Holders in respect of the Notes shall be given or made only to or upon the
order of the registered Holders (which shall be DTC or its nominee in the
case of a Global Note). The Trustee may rely and shall be fully protected
in relying upon information furnished by DTC with respect to its members,
participants and any beneficial owners.
(ii) The Trustee shall have no obligation or duty to monitor,
determine or inquire as to compliance with any restrictions on transfer
imposed under this Indenture or under applicable law with respect to any
transfer of any interest in any Note (including any transfers between or
among DTC participants, members or beneficial owners in any Global Note)
other than to require delivery of such certificates and other
documentation or evidence as are expressly required by, and to do so if
and when expressly required by, the terms of this Indenture, and to
examine the same to determine substantial compliance as to form with the
express requirements hereof.
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Section 2.9. Mutilated, Destroyed, Lost or Stolen Notes.
(a) If a mutilated Note is surrendered to the Registrar or if the
Holder of a Note claims that the Note has been lost, destroyed or wrongfully
taken, the Company shall execute and upon Company Order the Trustee shall
authenticate a replacement Note if the requirements of Section 8-405 of the
Uniform Commercial Code are met and the Holder satisfies any other reasonable
requirements of the Trustee. If required by the Trustee or the Company, such
Holder shall furnish an affidavit of loss and indemnity bond sufficient in the
judgment of the Company and the Trustee to protect the Company, the Trustee, the
Paying Agent, the Registrar and any co-Registrar from any loss that any of them
may suffer if a Note is replaced, and, in the absence of notice to the Company
or the Trustee that such Note has been acquired by a bona fide purchaser, the
Company shall execute and upon Company Order the Trustee shall authenticate and
make available for delivery, in exchange for any such mutilated Note or in lieu
of any such destroyed, lost or stolen Note, a new Note of like tenor and
principal amount, bearing a number not contemporaneously Outstanding.
(b) Upon the issuance of any new Note under this Section 2.9, the
Company may require the payment of a sum sufficient to cover any tax or other
governmental charge that may be imposed in relation thereto and any other
expenses (including the fees and expenses of the Trustee) in connection
therewith.
(c) Every new Note issued pursuant to this Section 2.9 in exchange
for any mutilated Note, or in lieu of any destroyed, lost or stolen Note, shall
constitute an original additional contractual obligation of the Company and any
other obligor upon the Notes, whether or not the mutilated, destroyed, lost or
stolen Note shall be at any time enforceable by anyone, and shall be entitled to
all benefits of this Indenture equally and proportionately with any and all
other Notes duly issued hereunder.
Section 2.10. Temporary Notes. Until definitive Notes are ready for
delivery, the Company may execute and upon Company Order the Trustee will
authenticate temporary Notes. Temporary Notes will be substantially in the form
of definitive Notes but may have variations that the Company considers
appropriate for temporary Notes. Without unreasonable delay, the Company will
prepare and execute and upon Company Order the Trustee will authenticate
definitive Notes. After the preparation of definitive Notes, the temporary Notes
will be exchangeable for definitive Notes upon surrender of the temporary Notes
at any office or agency maintained by the Company for that purpose and such
exchange shall be without charge to the Holder. Upon surrender for cancellation
of any one or more temporary Notes, the Company will execute and upon Company
Order the Trustee will authenticate and make available for delivery in exchange
therefor one or more definitive Notes representing an equal principal amount of
Notes. Until so exchanged, the Holder of temporary Notes shall in all respects
be entitled to the same benefits under this Indenture as a Holder of definitive
Notes.
Section 2.11. Cancellation. The Company at any time may deliver
Notes to the Trustee for cancellation. The Registrar and the Paying Agent shall
forward to the Trustee any Notes surrendered to them for registration of
transfer, exchange or payment. The Trustee and no one else shall cancel and
dispose of cancelled Notes in accordance with its policy of disposal or return
to the Company all Notes surrendered for registration of transfer, exchange,
payment or
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cancellation. The Company may not issue new Notes to replace Notes it has paid
or delivered to the Trustee for cancellation for any reason other than in
connection with a transfer or exchange upon Company Order.
Section 2.12. Defaulted Interest. When any installment of interest
becomes Defaulted Interest, such installment shall forthwith cease to be payable
to the Holders in whose names the Notes were registered on the Record Date
applicable to such installment of interest. Defaulted Interest (including any
interest on such Defaulted Interest) may be paid by the Company, at its
election, as provided in clause (A) or (B) below.
(A) The Company may elect to make payment of any Defaulted Interest
(including any interest on such Defaulted Interest) to the Holders in
whose names the Notes are registered at the close of business on a special
record date for the payment of such Defaulted Interest (a "Special Record
Date"), which shall be fixed in the following manner. The Company shall
notify the Trustee in writing of the amount of Defaulted Interest proposed
to be paid and the date of the proposed payment, and at the same time the
Company shall deposit with the Trustee an amount of money equal to the
aggregate amount proposed to be paid in respect of such Defaulted Interest
or shall make arrangements satisfactory to the Trustee for such deposit
prior to the date of the proposed payment, such money when deposited to be
held in trust for the benefit of the Holders entitled to such Defaulted
Interest as provided in this clause (A). Thereupon the Trustee shall fix a
Special Record Date for the payment of such Defaulted Interest, which
shall be not more than 15 calendar days and not less than ten calendar
days prior to the date of the proposed payment and not less than ten
calendar days after the receipt by the Trustee of the notice of the
proposed payment. The Trustee shall promptly notify the Company of such
Special Record Date and, in the name and at the expense of the Company,
shall cause notice of the proposed payment of such Defaulted Interest and
the Special Record Date therefor to be sent, first-class mail, postage
prepaid, to each Holder at such Holder's address as it appears in the
registration books of the Registrar, not less than ten calendar days prior
to such Special Record Date. Notice of the proposed payment of such
Defaulted Interest and the Special Record Date therefor having been mailed
as aforesaid, such Defaulted Interest shall be paid to the Holders in
whose names the Notes are registered at the close of business on such
Special Record Date and shall no longer be payable pursuant to the
following clause (B).
(B) Alternatively, the Company may make payment of any Defaulted
Interest (including any interest on such Defaulted Interest) in any other
lawful manner not inconsistent with the requirements of any securities
exchange on which the Notes may be listed, and upon such notice as may be
required by such exchange, if, after notice given by the Company to the
Trustee of the proposed payment pursuant to this clause (B), such manner
of payment shall be deemed practicable by the Trustee.
Section 2.13. Additional Interest Under Registration Agreements.
Under certain circumstances, the Company may be obligated to pay additional
interest to Holders, all as and to the extent set forth in the Registration
Agreement. The terms thereof are hereby incorporated herein by reference and
such additional interest is deemed to be interest for purposes of this
Indenture.
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ARTICLE III
COVENANTS
Section 3.1. Payment of Notes.
(a) The Company shall pay the principal of and interest (including
Defaulted Interest) on the Notes in U.S. Legal Tender on the dates and in the
manner provided in the Notes and in this Indenture. By at least 10:00 a.m. (New
York City time) on the date on which any principal of or interest on any Note is
due and payable, the Company shall irrevocably deposit with the Trustee or the
Paying Agent in immediately available funds U.S. Legal Tender sufficient to make
cash payments due on such Interest Payment Date or Maturity Date, as the case
may be. If the Company or an Affiliate of the Company is acting as Paying Agent,
the Company or such Affiliate shall, prior to 10:00 a.m. on each Interest
Payment Date and the Maturity Date, segregate and hold in trust U.S. Legal
Tender sufficient to make cash payments due on such Interest Payment Date or
Maturity Date, as the case may be. Principal and interest shall be considered
paid on the date due if on such date the Trustee or the Paying Agent (other than
the Company or an Affiliate of the Company) holds in accordance with this
Indenture U.S. Legal Tender designated for and sufficient to pay all principal
and interest then due and the Trustee or the Paying Agent, as the case may be,
is not prohibited from paying such money to the Holders on that date pursuant to
the terms of this Indenture.
(b) Notwithstanding anything to the contrary contained in this
Indenture, the Company may, to the extent it is required to do so by law, deduct
or withhold income or other similar taxes imposed by the United States of
America from principal or interest payments hereunder.
Section 3.2. Maintenance of Office or Agency.
(a) The Company shall maintain each office or agency required under
Section 2.3. The Company will give prompt written notice to the Trustee of any
change in the location of any such office or agency. If at any time the Company
shall fail to maintain any such required office or agency or shall fail to
furnish the Trustee with the address thereof, such presentations, surrenders,
notices and demands may be made or served at the Corporate Trust Office of the
Trustee, and the Company hereby appoints the Trustee as its agent to receive all
such presentations, surrenders, notices and demands.
(b) The Company may also from time to time designate one or more
other offices or agencies (in or outside of The City of New York) where the
Notes may be presented or surrendered for any or all such purposes and may from
time to time rescind any such designation; provided, however, that no such
designation or rescission shall in any manner relieve the Company of its
obligation to maintain an office or agency in The City of New York for such
purposes. The Company will give prompt written notice to the Trustee of any such
designation or rescission and any change in the location of any such other
office or agency.
Section 3.3. Corporate Existence. Subject to Article IV, the Company
will do or cause to be done all things necessary to preserve and keep in full
force and effect its corporate existence.
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Section 3.4. Payment of Taxes and Other Claim. The Company will pay
or discharge or cause to be paid or discharged, before the same shall become
delinquent, (i) all taxes, assessments and governmental charges levied or
imposed upon the Company or any Restricted Subsidiary or for which it or any of
them are otherwise liable, or upon the income, profits or property of the
Company or any Restricted Subsidiary and (ii) all lawful claims for labor,
materials and supplies, which, if unpaid, might by law become a liability or
Lien upon the property of the Company or any Restricted Subsidiary; provided,
however, that the Company shall not be required to pay or discharge or cause to
be paid or discharged any such tax, assessment, charge or claim whose amount,
applicability or validity is being contested in good faith by appropriate
proceedings and for which appropriate reserves, if necessary (in the good faith
judgment of management of the Company), are being maintained in accordance with
GAAP or where the failure to effect such payment will not be disadvantageous to
the Holders.
Section 3.5. Compliance Certificate. (a) The Company shall deliver
to the Trustee within 90 days after the end of each fiscal year of the Company,
commencing with fiscal year 2000, an Officers' Certificate stating that in the
course of the performance by the signers of their duties as Officers of the
Company they would normally have knowledge of any Default or Event of Default
and whether or not the signers know of any Default or Event of Default that
occurred during such period. If they do, the certificate shall describe the
Default or Event of Default, its status and what action the Company is taking or
proposes to take with respect thereto. The Company also shall comply with TIA
ss. 314(a)(4).
(b) So long as not contrary to the then current recommendations of
the American Institute of Certified Public Accountants or to the policies of the
Company's independent accountants, the annual Officers' Certificate delivered
pursuant to this Section 3.5 to the Trustee shall be accompanied by a written
report of the Company's independent accountants (who shall be a firm of
established national reputation) that in conducting their audit of the financial
statements of the Company for the most recent fiscal year nothing has come to
their attention that would lead them to believe that a Default or Event of
Default under this Indenture has occurred insofar as they relate to accounting
matters or, if any such violation has occurred, specifying the nature and period
of existence thereof, it being understood that such accountants shall not be
liable directly or indirectly to any Person for any failure to obtain knowledge
of any such violation that would not be disclosed in the course of an audit
examination conducted in accordance with GAAP.
Section 3.6. Further Instruments and Acts. The Company will execute
and deliver such further instruments and do such further acts as may be
reasonably necessary or proper or as the Trustee may reasonably request to carry
out more effectively the purpose of this Indenture.
Section 3.7. 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, 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 or interest on the Notes as contemplated herein, wherever enacted,
now or at any time hereafter in force, or which may affect the covenants or the
performance of this Indenture. The Company hereby expressly waives (to the
extent that it may lawfully do so)
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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 3.8. Change Of Control.
(a) Upon the occurrence of a Change of Control, each Holder of Notes
will have the right to require that the Company purchase all or a portion (in
integral multiples of $1,000) of the Holder's Notes at a purchase price equal to
101% of the principal amount thereof, plus accrued and unpaid interest through
the date of purchase (the "Change of Control Payment").
(b) Within 30 days following the date upon which the Change of
Control occurred, the Company must send a Change of Control Notice to each
Holder of Notes, with a copy to the Trustee, offering to purchase such Notes as
described above (a "Change of Control Offer"). The Change of Control Offer shall
state, among other things, the purchase date, which must be no earlier than 30
days nor later than 60 days from the date the notice is mailed, other than as
may be required by law (the "Change of Control Payment Date").
(c) On the Change of Control Payment Date, the Company will, to the
extent lawful:
(1) accept for payment all Notes or portions thereof properly
tendered pursuant to a Change of Control Offer (or, if the Trustee is
acting as agent for the Company, direct the Trustee to so accept);
(2) deposit with the Paying Agent funds in an amount equal to the
Change of Control Payment in respect of all Notes or portions thereof so
tendered; and
(3) deliver or cause to be delivered to the Trustee (including by
designating the Trustee as its agent for acceptance of Notes) the Notes so
accepted together with an Officers' Certificate stating the aggregate
principal amount of Notes or portions thereof being purchased by the
Company.
(d) If only a portion of a Note is purchased pursuant to a Change of
Control Offer, a new Note in a principal amount equal to the portion thereof not
purchased will be issued in the name of the Holder thereof upon cancellation of
the original Note (or appropriate adjustments to the amount and beneficial
interests in the applicable Global Note will be made, as appropriate).
(e) The Company will comply with the requirements of Rule 14e-1
under the Exchange Act and any other applicable securities laws and regulations
in connection with the purchase of Notes in connection with any Change of
Control Offer. To the extent that the provisions of any securities laws or
regulations conflict with this Section 3.8, the Company will comply with the
applicable securities laws and regulations and will not be deemed to have
breached its obligations under such Indenture by doing so.
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Section 3.9. Additional Amounts.
(a) If any deduction or withholding for any present or future taxes,
assessments or other governmental charges of:
(1) Bermuda or any political subdivision or governmental authority
thereof or therein having power to tax,
(2) any jurisdiction, other than the United States, the United
Kingdom or Luxembourg, from or through which payment on the Notes is made
by the Company or a successor corporation, or its paying agent in its
capacity as such, or any political subdivision or governmental authority
thereof or therein having the power to tax, or
(3) any other jurisdiction, other than the United States, in which
the Company or a successor corporation is organized, or any political
subdivision or governmental authority thereof or therein having the power
to tax
shall at any time be required by such jurisdiction (or any such political
subdivision or taxing authority) in respect of any amounts to be paid by the
Company or a successor corporation under the Notes, the Company or a successor
corporation will pay each holder of such a Note as additional interest, such
additional amounts ("Additional Amounts") as may be necessary in order that the
net amounts paid to such Holder who, with respect to any such tax, assessment or
other governmental charge, is not resident in, or a citizen of, such
jurisdiction, after deduction or withholding, shall be not less than the amount
specified in such Note to which such Holder is entitled; provided, however, the
Company or a successor corporation shall not be required to make any payment of
Additional Amounts for or on account of:
(i) any tax, assessment or other governmental charge which would not
have been imposed but for:
(x) the existence of any present or former connection
between such Holder (or between a fiduciary, settlor,
beneficiary, member or shareholder of, or possessor of a power
over, such Holder, if such Holder is an estate, trust,
partnership, limited liability company or corporation) and the
taxing jurisdiction or any political subdivision or territory
or possession thereof or area subject to its jurisdiction
(other than the mere receipt of such payment or the ownership
or holding of such Note), including, without limitation, such
Holder (or such fiduciary, settlor, beneficiary, member,
shareholder or possessor) being or having been a citizen or
resident thereof or being or having been present or engaged in
trade or business therein or having or having had a permanent
establishment therein,
(y) the presentation of a Note (where presentation is
required) for payment on a date more than 30 days after (A)
the date on which such payment became due and payable or (B)
the
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date on which payment thereof is duly provided for, whichever
occurs later, or
(z) the presentation of a Note for payment in Bermuda or
any political subdivision thereof or therein, unless such Note
could not have been presented for payment elsewhere;
(ii) any estate, inheritance, gift, sales, transfer, personal
property or similar tax, assessment or other governmental charge; (iii)
any tax, assessment or other governmental charge which is payable
otherwise than by withholding from a payment of the principal of, premium,
if any, or any interest on, the Notes;
(iv) any tax, assessment or other governmental charge that is
imposed or withheld by reason of the failure by the Holder or the
beneficial owner of the Note to comply with a request of the Company
addressed to the Holder:
(x) to provide information, documents or other evidence concerning
the nationality, residence or identity of the Holder or such
beneficial owner; or
(y) to make and deliver any declaration or other similar claim
(other than a claim for refund of a tax, assessment or other
governmental charge withheld by the Company) or satisfy any
information or reporting requirements,
which, in the case of (x) or (y), is required or imposed by a statute, treaty,
regulation or administrative practice of the taxing jurisdiction as a
precondition to exemption from all or part of such tax, assessment or other
governmental charge; or
(v) any combination of items (i), (ii), (iii) and (iv) above, nor
shall Additional Amounts be paid with respect to any payment of the principal
of, or any premium or interest on, any Note to any Holder who is a fiduciary or
partnership or limited liability company or other than the sole beneficial owner
of such payment to the extent such payment would be required by the laws of:
(1) Bermuda or any political subdivision or governmental authority
thereof or therein having the power to tax;
(2) any jurisdiction, other than the United States, the United
Kingdom or Luxembourg, from or through which payment on the Notes is made
by the Company or a successor corporation, or its paying agent in its
capacity as such, or any political subdivision or governmental authority
thereof or therein having the power to tax; or
(3) any other jurisdiction, other than the United States, in which
the Company or a successor corporation is organized, or any political
subdivision or governmental authority having the power to tax
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to be included in the income for tax purposes of a beneficiary or settlor with
respect to such fiduciary or a member of such partnership or limited liability
company or a beneficial owner who would not have been entitled to such
Additional Amounts had it been the holder of such Note.
(b) The Company shall provide the Trustee with the official
acknowledgment of the relevant taxing authority (or, if such acknowledgment is
not available, a certified copy thereof) evidencing the payment of the
withholding taxes, if any, by the Company. Copies of such documentation shall be
made available to the holders of the Notes or the Paying Agents, as applicable,
upon request therefor.
Section 3.10. Limitation On Incurrence Of Additional Indebtedness
And Preferred Stock.
(1) The Company will not, and will not cause or permit any
Restricted Subsidiaries to, directly or indirectly, Incur any Indebtedness,
including Acquired Indebtedness, or permit any Restricted Subsidiary to Incur
Preferred Stock, except that the Company may Incur Indebtedness, including
Acquired Indebtedness, and any Restricted Subsidiary may Incur Acquired
Indebtedness or Acquired Preferred Stock, if, at the time of and immediately
after giving pro forma effect to the Incurrence thereof and the application of
the proceeds therefrom:
(a) the Consolidated Leverage Ratio is less than 6.0 to 1.0, or
(b) the Consolidated Capital Ratio is less than 2.5 to 1.0.
(2) Clause (1) will not prohibit the Incurrence of any of the
following items of Indebtedness or Preferred Stock of Restricted Subsidiaries
(collectively, "Permitted Indebtedness"):
(a) the Notes, the Exchange Notes and the Euro Notes;
(b) Indebtedness Incurred by the Company to any Restricted
Subsidiary or Indebtedness or Preferred Stock Incurred or issued by any
Restricted Subsidiary to the Company or any Restricted Subsidiary
(provided, however, that (x) upon a Disposition by a Restricted Subsidiary
or the Company of any Indebtedness so Incurred to a Person other than the
Company or another Restricted Subsidiary or (y) if for any reason a
Restricted Subsidiary that is either an issuer or lender of such
Indebtedness ceases to be a Restricted Subsidiary, the provisions of this
clause (b) shall no longer be applicable to such Indebtedness); provided
that any such Indebtedness of the Company shall be unsecured and
subordinated in all respects to the Company's obligations pursuant to the
Notes;
(c) Indebtedness of the Company in an aggregate amount outstanding
at any time of up to $50 million;
(d) Indebtedness of the Company or any Restricted Subsidiary
pursuant to any Permitted Credit Facility in an aggregate amount
outstanding at any time pursuant to this clause (d) of up to $350 million,
minus the amount of any such Indebtedness:
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(x) permanently repaid with the Net Cash Proceeds from any
Asset Sale pursuant to Section 3.15; or
(y) assumed by a transferee in an Asset Sale;
(e) (x) Purchase Money Indebtedness of the Company in respect of
Telecommunications Assets, or
(y) Purchase Money Indebtedness of any Restricted Subsidiary
in respect of Telecommunications Assets Incurred pursuant to any
Permitted Credit Facility or Vendor Facility;
(f) Hedging Obligations of the Company or any Restricted Subsidiary
in respect of Indebtedness that is permitted by the terms of the relevant
Indenture to be outstanding; provided that the notional amount of any such
Hedging Obligation does not exceed the amount of Indebtedness to which
such Hedging Obligation relates;
(g) Indebtedness of the Company or any Restricted Subsidiary solely
in respect of bankers acceptances, letters of credit and performance
bonds, in each case Incurred in the ordinary course of business;
(h) Permitted Refinancing Indebtedness; and
(i) Indebtedness outstanding on the Issue Date ("Existing
Indebtedness"), other than Indebtedness described in clause 2(d) of this
Section 3.10.
(3) For purposes of determining compliance with, and the outstanding
principal amount of any particular Indebtedness Incurred pursuant to, and in
compliance with, this covenant, the amount of Indebtedness issued at a price
that is less than the principal amount thereof will be equal to the amount of
the liability in respect thereof determined in accordance with GAAP. Accrual of
interest, the accretion or amortization of original issue discount, the payment
of regularly scheduled interest in the form of additional Indebtedness of the
same instrument or the payment of regularly scheduled dividends on Disqualified
Stock in the form of additional Disqualified Stock with the same terms will not
be deemed to be an Incurrence of Indebtedness for purposes of this Section 3.10.
(4) The Company will not, directly or indirectly, Incur any
Indebtedness that is subordinate in right of payment to any other Indebtedness,
unless such Indebtedness is expressly subordinate in right of payment to the
Notes to the same extent and on the same terms as such Indebtedness is
subordinate to such other Indebtedness.
Section 3.11. Limitation On Restricted Payments.
The Company will not, and will not cause or permit any of its
Restricted Subsidiaries to, directly or indirectly, take any of the following
actions (each, a "Restricted Payment"):
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(a) declare or pay any dividend or return of capital or make any
other payment or distribution on or in respect of shares of Capital Stock of the
Company or any Restricted Subsidiary to holders of such Capital Stock, other
than:
(x) dividends or distributions payable in Qualified Capital Stock of
the Company, or
(y) dividends or distributions payable to the Company and/or a
Restricted Subsidiary;
(b) purchase, redeem or otherwise acquire or retire for value any
Capital Stock of the Company or any direct or indirect parent of the Company,
(c) make any principal payment on, purchase, defease, redeem,
prepay, decrease or otherwise acquire or retire for value, prior to the Stated
Maturity thereof, any Subordinated Indebtedness; or
(d) make any Restricted Investment;
if at the time of the Restricted Payment immediately after giving
effect thereto:
(1) a Default or an Event of Default shall have occurred and be
continuing;
(2) the Company is not able to Incur at least $1.00 of additional
Indebtedness pursuant to clause (1) of Section 3.10; or
(3) the aggregate amount (the amount expended for these purposes, if
other than in cash, being the Fair Market Value of the relevant property)
of Restricted Payments, including the proposed Restricted Payment, made
subsequent to the Issue Date shall exceed the sum of:
(A) the excess (or deficit) of:
o the cumulative Consolidated Cash Flow of the Company over (or
under)
o 150% of the cumulative Consolidated Interest Expense of the
Company,
accrued during the period, treated as one accounting period, beginning on the
first full fiscal quarter after the Issue Date to the end of the most recent
fiscal quarter for which consolidated financial information of the Company is
available; plus
(B) 100% of the aggregate net cash proceeds received by the Company
from any Person from any:
(x) contribution to the equity capital of the Company not
representing an interest in Disqualified Capital Stock or issuance and
sale of Qualified Capital Stock of the Company, in each case, subsequent
to the Issue Date, or
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(y) issuance and sale subsequent to the Issue Date of any
Disqualified Stock or debt securities of the Company that have been
converted into or exchanged for Qualified Capital Stock of the Company
plus the amount of net cash proceeds received by the Company upon such
conversion or exchange, excluding, in each case, any net cash proceeds:
(a) received from a Subsidiary of the Company, or
(b) used to redeem Notes pursuant to Article V with respect to
Public Equity Offerings; or
(c) applied in accordance with clause (2) or (3) of the second
paragraph of this Section 3.11 below; plus (C) without duplication of any
amounts included in clause (A) above or
(D) below, in the case of any Restricted Investment made after the
Issue Date:
(x) the disposition of such Restricted Investment (other than to a
Subsidiary of the Company) by, or repayment of such Restricted Investment
to, the Company or a Restricted Subsidiary, or
(y) the receipt by the Company or any Restricted Subsidiary of any
dividends or distributions from such Restricted Investment, or
(z) if such Investment was a Guarantee, the release in full of the
Guarantee, an amount equal to the lesser of:
o the amount of such Investment treated as a Restricted Payment
pursuant to clause (d) above, and
o the amount in cash received by the Company or any Restricted
Subsidiary upon such disposition, repayment, dividend or
distribution or, in the case of a released Guarantee, the amount of
such Guarantee less any payments made in respect thereof; plus
(E) so long as the Designation of an Unrestricted Subsidiary was
treated as a Restricted Payment made after the Issue Date, in the case of
a Revocation with respect to any Unrestricted Subsidiary after the Issue
Date in accordance with Section 3.12, an amount equal to the lesser of:
(x) the Company's Investment in such Unrestricted Subsidiary
at the time of such Revocation;
(y) that portion of the Fair Market Value of the net assets of
such Unrestricted Subsidiary at the time of such Revocation that is
proportionate to the Company's equity interest in such Unrestricted
Subsidiary at the time of the Revocation; and
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(z) the Designation Amount with respect to such Unrestricted
Subsidiary upon its Designation which was treated as a Restricted
Payment plus any Investment made after Designation and prior to
Revocation that was treated as a Restricted Payment, in each case
less any amounts included in clause (A) or (C) above.
Notwithstanding the preceding, this Section 3.11 does not prohibit:
(1) the payment of any dividend within 60 days after the date of
declaration of such dividend if the dividend would have been permitted on
the date of declaration;
(2) if no Default or Event of Default shall have occurred and be
continuing, the acquisition of any shares of Capital Stock of the Company,
(a) in exchange for Qualified Capital Stock of the Company, or
(b) through the application of the net cash proceeds received by the
Company from a substantially concurrent sale of Qualified Capital Stock of the
Company or a contribution to the equity capital of the Company not representing
an interest in Disqualified Capital Stock, in each case not received from a
Subsidiary of the Company; provided, that the value of any such Qualified
Capital Stock issued in exchange for such acquired Capital Stock and any such
net cash proceeds shall be excluded from clause (3)(B) of the first paragraph of
this Section 3.11;
(3) if no Default or Event of Default shall have occurred and be
continuing, the voluntary prepayment, purchase, defeasance, redemption or other
acquisition or retirement for value of any Subordinated Indebtedness solely in
exchange for, or through the application of net cash proceeds of a substantially
concurrent sale, other than to a Subsidiary of the Company, of:
(x) Qualified Capital Stock of the Company, or
(y) Permitted Refinancing Indebtedness for such Subordinated
Indebtedness;
provided, that the value of any Qualified Capital Stock issued in exchange for
Subordinated Indebtedness and any net cash proceeds referred to above shall be
excluded from clause (3)(B) of the first paragraph of this Section 3.11;
(4) the payment of any dividend or other distribution by a
Restricted Subsidiary to the holders of its Capital Stock on a pro rata basis;
(5) the repurchase, redemption or other acquisition or retirement
for value of any Capital Stock (other than Disqualified Stock) of the Company or
any of its Restricted Subsidiaries held by any member of the Company's or such
Restricted Subsidiary's management; provided, that the aggregate price paid for
all such repurchased, redeemed, acquired or retired Capital Stock shall not
exceed $5 million in any fiscal year (with unused amounts being carried over to
succeeding fiscal years, subject to a maximum of $10 million in any fiscal
year);
(6) Investments in any Permitted Joint Venture; and
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(7) Investments in any Person engaged, except to a de minimis
extent, in a Telecommunications Business, the aggregate Fair Market Value of
which (measured on the date each such Investment was made or returned, as
applicable), when taken together with all other Investments made pursuant to
this clause (7) that are at any time outstanding, does not exceed the sum of:
(x) $50 million, plus
(y) the amount then available for the making of Restricted Payments
pursuant to clause (3) of the preceding paragraph without giving effect to
subclause (A) thereof.
Each Restricted Payment permitted pursuant to clauses (1), (4), (5),
(6) and (7) of this paragraph shall be included, and each Restricted Payment
permitted pursuant to clauses (2) and (3) of this paragraph shall be excluded
(except as specifically set forth in each such clause), for all purposes when
performing the calculation set forth in clause (3) of the first paragraph of
this Section 3.11.
Section 3.12. Limitation on Designation of Unrestricted
Subsidiaries.
(a) The Board of Directors may not designate a Subsidiary of the
Company (other than a newly created Subsidiary in which no Investment has
previously been made (other than any de minimus amount required to capitalize
such Subsidiary in connection with its organization)) as an Unrestricted
Subsidiary (a "Designation") if:
(1) a Default or Event of Default shall have occurred and be
continuing at the time of or after giving effect to such Designation, and
(2) the Company would be prohibited under this Indenture from making
a Restricted Investment at the time of such Designation (assuming the
effectiveness of such Designation for purposes of this Section 3.12) in an
amount equal to the Designation Amount (as defined below).
(b) Any Designation shall be made by Board Resolution. In the event
of any such Designation, all outstanding Investments owned by the Company and
its Restricted Subsidiaries in the Subsidiary at Designation will be deemed to
be a Restricted Investment made as of the time of such Designation and will
reduce the amount available for Restricted Payments under the first or second
paragraph of this Section 3.12. All such outstanding Investments will be deemed
to constitute Restricted Payments in an amount equal to the Fair Market Value of
such Investments at the time of such Designation (the "Designation Amount").
(c) A Designation may be revoked and an Unrestricted Subsidiary may
thus be redesignated as a Restricted Subsidiary (a "Revocation") by Board
Resolution, provided that the Company will not make any Revocation unless after
giving pro forma effect to such Revocation:
(1) no Default or Event of Default shall have occurred and be
continuing;
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(2) all Liens of such Unrestricted Subsidiary outstanding
immediately following such Revocation would, if Incurred at such time,
have been permitted to be Incurred at such time for all purposes under
this Indenture; and
(3) the Company could Incur $1 of additional Indebtedness pursuant
to clause (1) Section 3.10.
(d) Neither the Company nor any Restricted Subsidiary will at any
time:
(1) provide credit support for, subject any of its property or
assets (other than the Capital Stock of any Unrestricted Subsidiary) to
the satisfaction of, or guarantee, any Indebtedness of any Unrestricted
Subsidiary (including any undertaking, agreement or instrument evidencing
such Indebtedness);
(2) be directly or indirectly liable for any Indebtedness of any
Unrestricted Subsidiary; or
(3) be directly or indirectly liable for any Indebtedness which
provides that the holder thereof may (upon notice, lapse of time or both)
declare a default thereon or cause the payment thereof to be accelerated
or payable prior to its final scheduled maturity upon the occurrence of a
default with respect to any Indebtedness of any Unrestricted Subsidiary,
except for any non-recourse guarantee given solely to support the pledge
by the Company or any Restricted Subsidiary of the Capital Stock of any
Unrestricted Subsidiary.
Section 3.13. Limitation on Liens.
The Company will not, and will not cause or permit any Restricted
Subsidiary to, directly or indirectly, Incur or suffer to exist or become
effective any Liens of any kind (except for Permitted Liens) against or upon any
of their respective properties or assets, whether owned on the Issue Date or
acquired after the Issue Date, or any income, profits or proceeds therefrom,
unless contemporaneously therewith effective provision is made by the Company to
secure the Notes and all other amounts due under the relevant Indenture equally
and ratably with such Indebtedness with a Lien on the same properties and assets
securing such Indebtedness for so long as such Indebtedness is secured by such
Lien; provided, that no such Lien may secure Subordinated Indebtedness except as
permitted by clause 3(a) of the definition of "Permitted Liens."
Section 3.14. Limitation On Dividend And Other Payment Restrictions
Affecting Restricted Subsidiaries.
(a) Except as provided in clause (b) below, the Company will not,
and will not cause or permit any of its Restricted Subsidiaries to, directly or
indirectly, create or otherwise cause or permit to exist or become effective any
encumbrance or restriction on the ability of any Restricted Subsidiary to:
(1) pay dividends or make any other distributions on or in respect
of its Capital Stock or with respect to any other interest or
participation, or measured by its profits, to
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the Company or any other Restricted Subsidiary or pay any Indebtedness
owed to the Company or any other Restricted Subsidiary;
(2) make loans or advances to, or guarantee any Indebtedness or
other obligations of, or make any Investment in, the Company or any other
Restricted Subsidiary; or
(3) transfer any of its property or assets to the Company or any
other Restricted Subsidiary.
(b) Clause (a) will not apply to encumbrances or restrictions
existing under or by reason of:
(1) Existing Indebtedness as in effect on the Issue Date;
(2) this Indenture and the Notes;
(3) any Permitted Credit Facility or Vendor Facility, provided that:
(a) the outstanding Indebtedness under such Permitted Credit
Facility or Vendor Facility does not exceed the amounts permitted under clause
2(d) or 2(e)(y), as the case may be, of Section 3.10, and
(b) the Chief Financial Officer of the Company determines in good
faith that:
(x) such encumbrances or restrictions are no more restrictive, taken
as a whole, than those that would be contained in a credit agreement with
terms that are commercially reasonable for a borrower engaged in a
business comparable to the Company that has substantially comparable
Indebtedness, and
(y) any such restrictions will not materially affect the Company's
ability to make principal, premium or interest payments on the Notes
pursuant to the terms of this Indenture,
(4) applicable law,
(5) any instrument governing Indebtedness or Capital Stock of a
Person or assets acquired by the Company or any of its Restricted
Subsidiaries as in effect at the time of such acquisition (except to the
extent such Indebtedness was Incurred in connection with or in
contemplation of such acquisition), which encumbrances or restrictions are
not applicable to any Person, or the properties or assets of any Person,
other than the Person, or the property or assets of the Person, so
acquired, provided that any such Indebtedness or Preferred Stock was
permitted by the terms of this Indenture to be incurred,
(6) customary non-assignment provisions in leases entered into in
the ordinary course of business and consistent with past practices,
(7) any agreement for the sale or other disposition of a Restricted
Subsidiary that restricts distributions by that Restricted Subsidiary
pending its sale or other disposition,
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provided that the consummation of such transaction would not result in a
Default or Event of Default, that such restriction terminates if such
transaction is not consummated and that the consummation or abandonment of
such transaction occurs within one year of the date such agreement was
entered into,
(8) Permitted Refinancing Indebtedness, provided that the
restrictions contained in the agreements governing such Permitted
Refinancing Indebtedness are no more restrictive, taken as a whole, than
those contained in the agreements governing the Indebtedness being
Refinanced,
(9) limitations on the right to dispose of assets subject to a Lien
securing Indebtedness to the extent that such Lien is permitted to be
Incurred pursuant to Section 3.13, and
(10) provisions with respect to the disposition or distribution of
assets or property in joint venture agreements and other similar
agreements entered into in the ordinary course of business.
Section 3.15 Limitation On Asset Sales.
(a) The Company will not, and will not permit any Restricted
Subsidiary to, directly or indirectly, consummate an Asset Sale unless:
(i) the Company or the applicable Restricted Subsidiary, as the case
may be, receives consideration at the time of the Asset Sale at least
equal to the Fair Market Value of the assets sold or otherwise disposed
of, and
(ii) at least 75% of the consideration received for the assets
disposed of by the Company or the Restricted Subsidiary, as the case may
be, in the Asset Sale shall be in the form of:
(1) cash or Cash Equivalents, or
(2) (A) tangible or intangible assets to be used by the Company or
any Restricted Subsidiary in the Telecommunications Business, or
(B) Capital Stock of a Person engaged, except to a de minimis
extent, solely in a Telecommunications Business that will become, upon
purchase, a Restricted Subsidiary (collectively, "Replacement Assets"),
(b) The Company or such Restricted Subsidiary, as the case may be,
may apply the Net Cash Proceeds of any such Asset Sale within 360 days of
receipt thereof to:
(i) permanently repay or repurchase outstanding (without Refinancing
and including a permanent reduction in commitments in the case of a
revolving credit facility) (x) Indebtedness of the Company (other than
Subordinated Indebtedness or Disqualified Stock) that is secured
Indebtedness or which has a final maturity date prior to the final
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maturity date of the Notes or (y) Indebtedness (other than Disqualified
Stock) of any Restricted Subsidiary, or
(ii) purchase Replacement Assets from a Person other than the
Company and its Subsidiaries.
The balance of the Net Cash Proceeds that are not applied or
invested as described in the immediately preceding clauses (i) and (ii), shall
constitute "Excess Proceeds."
(c) When the aggregate amount of Excess Proceeds equals or exceeds
$25 million, taking into account income earned on such Excess Proceeds, the
Company will be required to make a pro rata offer (an "Asset Sale Offer") to all
holders of Notes and of pari passu Indebtedness with comparable provisions
requiring such Indebtedness to be purchased with the proceeds of such Asset Sale
to purchase the maximum principal amount (or accreted value in the case of
Indebtedness issued with original issue discount) (the "Asset Sale Offer
Amount") of Notes and such pari passu Indebtedness that may be purchased with
the Excess Proceeds, at a purchase price in cash in an amount equal to 100% of
the principal amount thereof (or the accreted value thereof in the case of
Indebtedness issued with original issue discount) plus accrued and unpaid
interest or accretion thereon to the date of purchase, subject to the right of
holders on the relevant record date to receive interest due on the relevant
interest payment date, in accordance with the procedures set forth in the
Indenture and the agreements governing such pari passu Indebtedness. To the
extent that any Excess Proceeds remain after consummation of an Asset Sale
Offer, the Company may use such Excess Proceeds for any purpose not otherwise
prohibited by this Indenture. If the aggregate principal amount (or accreted
values) of Notes and pari passu Indebtedness tendered into such Asset Sale Offer
surrendered by holders thereof exceeds the amount of Excess Proceeds, the
Trustee shall select the Notes and pari passu Indebtedness to be purchased on a
pro rata basis in proportion to the respective principal amounts (or accreted
values) of the Notes and such other Indebtedness. Upon completion of such Asset
Sale Offer, the amount of Excess Proceeds shall be reset at zero for purposes of
the first sentence of this paragraph.
(d) Pending application in accordance with this Section 3.15, Net
Cash Proceeds may be applied to temporarily reduce revolving credit borrowings
which can be reborrowed or invested in Cash Equivalents. An Asset Sale Offer
Notice will be mailed first class, postage prepaid, to the record Holders as
shown on the register of Holders within 30 days following such 360th day, with a
copy to the Trustee offering to purchase the Notes as described above. Each
notice of an Asset Sale Offer shall state, among other things, the purchase
date, which must be no earlier than 30 days nor later than 60 days from the date
the notice is mailed, other than as may be required by law (the "Asset Sale
Offer Payment Date"). Upon receiving an Asset Sale Offer Notice, Holders may
elect to tender their Notes in whole or in part in integral multiples of $1,000
in exchange for cash.
(e) On the Asset Sale Offer Payment Date, the Company will, to the
extent lawful:
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(1) accept for payment all Notes or portions thereof properly
tendered pursuant to the Asset Sale Offer (or, if the Trustee is acting as
agent for the Company, direct the Trustee to so accept);
(2) deposit with the Paying Agent funds in an amount equal to the
Asset Sale Offer Amount in respect of all Notes or portions thereof so
tendered; and
(3) deliver or cause to be delivered to the Trustee (including by
designating the Trustee as its agent for acceptance of Notes) the Notes so
accepted together with an Officers' Certificate stating the aggregate
principal amount of Notes or portions thereof being purchased by the
Company.
(f) The Company will comply with the requirements of Rule 14e-1
under the Exchange Act and any other applicable securities laws in connection
with the purchase of Notes pursuant to an Asset Sale Offer. To the extent that
the provisions of any applicable securities laws or regulations conflict with
this Section 3.15, the Company shall comply with these laws and regulations and
shall not be deemed to have breached its obligations under this Section 3.15 by
doing so.
(g) In the event of the transfer of substantially all (but not all)
of the property and assets of the Company and its Restricted Subsidiaries as an
entirety to a Person in a transaction permitted under Section 4.1 the surviving
entity shall be deemed to have sold the properties and assets of the Company and
its Restricted Subsidiaries not so transferred for purposes of this Section
3.15, and shall comply with the provisions of this Section 3.15 with respect to
the deemed sale as if it were an Asset Sale. In addition, the Fair Market Value
of properties and assets of the Company or its Restricted Subsidiaries so deemed
to be sold shall be deemed to be Net Cash Proceeds for purposes of this Section
3.15.
(h) If at any time any non-cash consideration received by the
Company or any Restricted Subsidiary, as the case may be, in connection with any
Asset Sale is converted into or sold or otherwise disposed of for cash (other
than interest received with respect to any non-cash consideration), the
conversion or disposition shall be deemed to constitute an Asset Sale hereunder
and the Net Cash Proceeds thereof shall be applied in accordance with this
Section 3.15 within 360 days of conversion or disposition.
Section 3.16. Limitation On Transactions With Affiliates.
(1) The Company will not, and will not permit any of its Restricted
Subsidiaries to, make any payment to, or sell, lease, transfer or otherwise
dispose of any of its properties or assets to, or purchase any property or
assets from, or enter into or make or amend any transaction, contract,
agreement, understanding, loan, advance or guarantee with, or for the benefit
of, any Affiliate (each of the foregoing, an "Affiliate Transaction"), unless:
(a) such Affiliate Transaction is on terms that are not materially
less favorable to the Company or the relevant Restricted Subsidiary than those
that would have been obtained in a comparable transaction on an arm's length
basis by the Company or such Restricted Subsidiary with a Person that is not an
Affiliate, and
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(b) with respect to any Affiliate Transaction or series of related
Affiliate Transactions:
(x) involving aggregate consideration in excess of $10 million, the
Company delivers to the Trustee a resolution of the Board of Directors set
forth in an Officers' Certificate that such Affiliate Transaction is
approved by a majority of the disinterested members of the Board of
Directors and certifying that such Affiliate Transaction complies with
clause (a) above and is in the best interests of the Company or such
Restricted Subsidiary, or
(y) if involving aggregate consideration in excess of $25 million, a
favorable written opinion as to the fairness to the Company of such
Affiliate Transaction from a financial point of view is also obtained by
the Company from an independent accounting, appraisal or investment
banking firm of national standing and delivered to the Trustee.
(2) Clause (1) will not apply to the following:
(a) the entering into, maintaining or performance of any employment
contract, collective bargaining agreement, benefit plan, program or arrangement,
related trust agreement or any other similar arrangement for or with any
employee, officer or director of the Company or any Restricted Subsidiary
heretofore or hereafter entered into in the ordinary course of business,
including vacation, health, insurance, deferred compensation, retirement,
savings or other similar plans;
(b) the payment of compensation, performance of indemnification or
contribution obligations, or an issuance, grant or award of stock, options, or
other equity-related interests or other securities, to employees, officers or
directors of the Company or any Restricted Subsidiary in the ordinary course of
business;
(c) transactions between or among the Company and/or its Restricted
Subsidiaries;
(d) payment of reasonable fees to directors of the Company;
(e) any sale or other issuance of Capital Stock (other than
Disqualified Stock) of the Company;
(f) Affiliate Transactions in effect or approved by the Board of
Directors on the Issue Date, including any amendments thereto; provided that the
terms of such amendments are not materially less favorable to the Company than
the terms of such agreement prior to such amendment;
(g) Restricted Payments that are permitted by Section 3.11; and
(h) (x) the Primary Supplier Agreement dated January 18, 2000
between Bell Atlantic Global Systems Company and the Company, including any
amendments thereto, provided that the terms of such amendments are not
materially less favorable to the Company than the terms of such agreements prior
to such amendment, or
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(y) any transaction with respect to capacity and/or the provision of
telecommunications services between the Company or any Restricted
Subsidiary and any Affiliates, provided that such transaction complies
with clause (1)(a) of this Section 3.16.
Section 3.17. Limitation On Business Activities.
The Company will not, and will not permit any of its Restricted
Subsidiaries to, engage, to more than a de minimus extent, in any business other
than a Telecommunications Business.
Section 3.18. Reports To Holders.
Whether or not the Company is subject to the reporting requirements
of Section 13 or 15(d) of the Exchange Act, so long as any Notes remain
outstanding, the Company will:
(1) provide the Trustee and the Holders with the annual reports and
information, documents and other reports as are specified in Sections 13 and
15(d) of the Exchange Act subject to such Sections within 15 days after the
times specified for the filing of the information, documents and reports under
such Sections; provided that, whether or not required under such Sections, the
Company shall provide quarterly financial statements (including a balance sheet,
income statement and cash flow statement and notes thereto) and "Management's
Discussion and Analysis of Financial Condition and Results of Operations"
satisfying the requirements therefor established by the Commission; and
(2) file with the Commission, to the extent permitted, the
information, documents and reports referred to in clause (1) within the periods
specified under such Sections; provided that the quarterly information specified
in clause (1) shall be filed within 45 days after the end of the relevant fiscal
quarter or such shorter time established by the Commission.
At any time when the Company is not subject to or is not current in
its reporting obligations under clause (2) of the preceding paragraph, the
Company will make available, upon request, to any holder and any prospective
purchaser of Notes the information required pursuant to Rule 144A(d)(4) under
the Securities Act.
ARTICLE IV
SURVIVING ENTITY
Section 4.1. Merger, Consolidation and Sale of Assets. The Company
will not, directly or indirectly, consolidate or merge with or into (whether or
not the Company is the surviving corporation), or sell, assign, transfer, convey
or otherwise dispose of all or substantially all of its properties or assets, in
one or more related transactions, to another Person unless:
(1) the Company is the surviving corporation or the Person formed by
or surviving any such consolidation or merger (if other than the Company) or to
which such sale,
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assignment, transfer, conveyance or other disposition shall have been made is a
corporation organized or existing under the laws of Bermuda or an Approved
Jurisdiction;
(2) the Person formed by or surviving any such consolidation or
merger (if other than the Company) or the Person to which such sale, assignment,
transfer, conveyance or other disposition shall have been made assumes all the
obligations of the Company under the Registration Agreement, the Notes and this
Indenture pursuant to supplemental indenture in a form reasonably satisfactory
to the Trustee;
(3) no Default or Event of Default shall exist or shall occur
immediately after giving effect on a pro forma basis to such transaction;
(4) except in the case of a merger of the Company with or into a
Wholly Owned Restricted Subsidiary of the Company, the Company or the Person
formed by or surviving any such consolidation or merger (if other than the
Company), or to which such sale, assignment, transfer, conveyance or other
disposition shall have been made will immediately after such transaction and
after giving pro forma effect thereto and any related financing transactions as
if the same had occurred at the beginning of the applicable period, be permitted
to incur at least $1.00 of additional Indebtedness pursuant to paragraph (1) of
Section 3.10;
(5) if, as a result of any such transaction, property or assets of
the Company or any Restricted Subsidiary would become subject to a Lien (other
than a Permitted Lien), the Company or the successor entity to the Company shall
have secured the Notes as required by Section 3.10; and
(6) the Company shall have delivered to the Trustee an Officers'
Certificate and an Opinion of Counsel, each stating that such consolidation,
merger or transfer and such supplemental indenture (if any) comply with this
Indenture.
ARTICLE V
OPTIONAL REDEMPTION OF NOTES
Section 5.1. Optional Redemption. The Company may redeem the Notes,
as a whole or from time to time in part, at any time on or after March 30, 2005,
subject to the conditions and at the redemption prices specified in the form of
Notes in Exhibit A. In addition, at any time prior to March 30, 2003, the
Company may redeem a portion of the Notes at the redemption prices specified in
the form of Notes in Exhibit A with the proceeds of Public Equity Offerings.
Section 5.2. Election to Redeem. The Company shall evidence its
election to redeem any Notes pursuant to Section 5.1 by a Board Resolution.
Section 5.3. Notice of Redemption.
(a) The Company shall give or cause the Trustee to give notice of
redemption, in the manner provided for in Section 11.2, not less than 30 nor
more than 60 days prior to the
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Redemption Date, to each Holder of Notes to be redeemed at its registered
address. If the Company itself gives the notice, it shall also deliver a copy to
the Trustee.
(b) If either (i) the Company is not redeeming all Outstanding
Notes, or (ii) the Company elects to have the Trustee give notice of redemption,
then the Company shall deliver to the Trustee, at least 45 days prior to the
Redemption Date (unless the Trustee is satisfied with a shorter period), an
Officer's Certificate requesting that the Trustee select the Notes to be
redeemed and/or give notice of redemption and setting forth the information
required by paragraph (c) of this Section 5.3 (with the exception of the
identification of the particular Notes, or portions of the particular Notes, to
be redeemed in the case of a partial redemption). If the Company elects to have
the Trustee give notice of redemption, the Trustee shall give the notice in the
name of the Company and at the Company's expense.
(c) All notices of redemption shall state:
(1) the Redemption Date,
(2) the redemption price and the amount of any accrued
interest payable as provided in Section 5.6,
(3) whether or not the Company is redeeming all Outstanding
Notes,
(4) if the Company is not redeeming all Outstanding Notes, the
aggregate principal amount of Notes that the Company is redeeming
and the aggregate principal amount of Notes that will be Outstanding
after the partial redemption, as well as the identification of the
particular Notes, or portions of the particular Notes, that the
Company is redeeming,
(5) if the Company is redeeming only part of a Note, the
notice that relates to that Note shall state that on and after the
Redemption Date, upon surrender of that Note, the Holder will
receive, without charge, a new Note or Notes of authorized
denominations for the principal amount of the Note remaining
unredeemed,
(6) that on the Redemption Date the redemption price and any
accrued interest payable to the Redemption Date as provided in
Section 5.6 will become due and payable in respect of each Note, or
the portion of each Note, to be redeemed, and, unless the Company
defaults in making the redemption payment, that interest on each
Note, or the portion of each Note, to be redeemed, will cease to
accrue on and after the Redemption Date,
(7) the place or places where a Holder must surrender the
Holder's Notes for payment of the redemption price, and
(8) the CUSIP or ISIN number, if any, listed in the notice or
printed on the Notes, and that no representation is made as to the
accuracy or correctness of such CUSIP or ISIN number.
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Section 5.4. Selection of Notes to Be Redeemed in Part. (a) If the
Company is not redeeming all Outstanding Notes, the Trustee shall select the
Notes to be redeemed in compliance with the requirements of the principal
national securities exchange, if any, on which the Notes are listed or, if the
Notes are not then listed on a national securities exchange, on a pro rata
basis, by lot or in another fair and reasonable manner chosen at the discretion
of the Trustee; provided, however, that if a partial redemption is made with the
proceeds of a Public Equity Offering, selection of the Notes, or portions of the
Notes, for redemption shall be made by the Trustee only on a pro rata basis as
is practicable (subject to the procedures of DTC, Euroclear or Clearstream,
Luxembourg, as the case may be), unless that method is prohibited. The Trustee
shall make the selection from the Outstanding Notes not previously called for
redemption. The Trustee shall promptly notify the Company in writing of the
Notes selected for redemption and, in the case of any Notes selected for partial
redemption, the principal amount of the Notes to be redeemed. In the event of a
partial redemption by lot, the Trustee shall select the particular Notes to be
redeemed not less than 30 nor more than 60 days prior to the relevant Redemption
Date from the Outstanding Notes not previously called for redemption. The
Company may redeem Notes in denominations of $1,000 only in whole. The Trustee
may select for redemption portions (equal to $1,000 or any integral multiple of
$1,000) of the principal of Notes that have denominations larger than $1,000.
(b) For all purposes of this Indenture, unless the context otherwise
requires, all provisions relating to redemption of Notes shall relate, in the
case of any Note redeemed or to be redeemed only in part, to the portion of the
principal amount of that Note which has been or is to be redeemed.
Section 5.5. Deposit of Redemption Price. On or prior to 10 a.m. on
the relevant Redemption Date, the Company shall deposit with the Trustee or with
a Paying Agent (or, if the Company is acting as its own Paying Agent, segregate
and hold in trust as provided in Section 2.4) an amount of money in immediately
available funds sufficient to pay the redemption price of, and accrued interest
on, all the Notes that the Company is redeeming on that date.
Section 5.6. Notes Payable on Redemption Date. If the Company, or
the Trustee on behalf of the Company, gives notice of redemption in accordance
with this Article V, the Notes, or the portions of Notes, called for redemption,
shall, on the Redemption Date, become due and payable at the redemption price
specified in the notice (together with accrued and unpaid interest, if any, to
the Redemption Date), and from and after the Redemption Date (unless the Company
shall default in the payment of the redemption price and accrued interest) the
Notes or the portions of Notes shall cease to bear interest. Upon surrender of
any Note for redemption in accordance with the notice, the Company shall pay the
Notes at the redemption price, together with accrued and unpaid interest, if
any, to the Redemption Date (subject to the rights of Holders of record on the
relevant record date to receive interest due on the relevant Interest Payment
Date). If the Company shall fail to pay any Note called for redemption upon its
surrender for redemption, the principal shall, until paid, bear interest from
the Redemption Date at the rate borne by the Notes.
Section 5.7. Unredeemed Portions of Partially Redeemed Note. Upon
surrender of a Note that is to be redeemed in part, the Company shall execute,
and the Trustee shall authenticate and make available for delivery to the Holder
of the Note at the expense of the
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Company, a new Note or Notes, of any authorized denomination as requested by the
Holder, in an aggregate principal amount equal to, and in exchange for, the
unredeemed portion of the principal of the Note surrendered, provided that each
new Note will be in a principal amount of $1,000 or integral multiple of $1,000.
ARTICLE VI
DEFAULTS AND REMEDIES
Section 6.1. Events of Default.
(a) An "Event of Default" occurs if:
(1) default in the payment when due of the principal of or premium,
if any, on any Notes issued under this Indenture, including the failure to
make a required payment to purchase any such Notes tendered pursuant to an
optional redemption, Change of Control Offer or an Asset Sale Offer;
(2) default for 30 days or more in the payment when due of interest
on any Notes issued under this Indenture (including additional interest
payable under the Registration Agreement and Additional Amounts);
(3) the failure to perform or comply with any of the provisions
described under Section 4.1;
(4) the failure by the Company or any Restricted Subsidiary to
comply with any other covenant or agreement contained in this Indenture or
Notes, for 60 days or more after written notice is sent to the Company
from the Trustee or the Holders of at least 25% in aggregate principal
amount of the Notes;
(5) default by the Company or any Restricted Subsidiary under any
Indebtedness which:
(a) is caused by a failure to pay principal of or premium, if any,
or interest on such Indebtedness when due within any applicable grace
period; or
(b) results in the acceleration of such Indebtedness prior to its
Stated Maturity; and the principal amount of Indebtedness covered by (a)
or (b) at the relevant time, aggregates $15 million or more.
(6) failure by the Company or any of its Restricted Subsidiaries to
pay one or more final judgments against any of them or any of their
respective properties (which are not covered by adequate insurance by a
solvent insurer of national or international reputation which has
acknowledged its obligations in writing), aggregating $15 million or more,
which judgment(s) are not paid, discharged or stayed for a period of 60
days or more;
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(7) the entry by a court of competent jurisdiction of: (i) a decree
or order for relief in respect of the Company or any Restricted Subsidiary
of the Company in an involuntary case or proceeding under any Bankruptcy
Law or (ii) a decree or order (A) adjudging the Company or any Restricted
Subsidiary of the Company a bankrupt or insolvent, (B) approving as
properly filed a petition seeking reorganization, arrangement, adjustment
or composition of, or in respect of, the Company or any Restricted
Subsidiary of the Company under any Bankruptcy Law, (C) appointing a
Custodian of the Company or any Restricted Subsidiary of the Company or of
any substantial part of the property of the Company or any Restricted
Subsidiary of the Company, or (D) ordering the winding-up or liquidation
of the affairs of the Company or any Restricted Subsidiary of the Company,
and in each case, the continuance of any such decree or order for relief
or any such other decree or order unstayed and in effect for a period of
60 consecutive calendar days; or
(8) (i) the commencement by the Company or any Restricted Subsidiary
of the Company of a voluntary case or proceeding under any Bankruptcy Law
or of any other case or proceeding to be adjudicated a bankrupt or
insolvent, (ii) the consent by the Company or any Restricted Subsidiary of
the Company to the entry of a decree or order for relief in respect of the
Company or any Restricted Subsidiary of the Company in an involuntary case
or proceeding under any Bankruptcy Law or to the commencement of any
bankruptcy or insolvency case or proceeding against the Company or any
Restricted Subsidiary of the Company, (iii) the filing by the Company or
any Restricted Subsidiary of the Company of a petition or answer or
consent seeking reorganization or relief under any Bankruptcy Law, (iv)
the consent by the Company or any Restricted Subsidiary of the Company to
the filing of such petition or to the appointment of or taking possession
by a Custodian of the Company or any Restricted Subsidiary of the Company
or of any substantial part of the Property of the Company or any
Restricted Subsidiary of the Company, (v) the making by the Company or any
Restricted Subsidiary of the Company of an assignment for the benefit of
creditors, (vi) the admission by the Company or any Restricted Subsidiary
of the Company in writing of its inability to pay its debts generally as
they become due, or (vii) the approval by stockholders of the Company or
any Restricted Subsidiary of the Company of any plan or proposal for the
liquidation or dissolution of the Company or any Restricted Subsidiary of
the Company, or (viii) the taking of corporate action by the Company or
any Restricted Subsidiary of the Company in furtherance of any such
action.
The foregoing will constitute Events of Default whatever the reason for any such
Event of Default and whether it is voluntary or involuntary or is effected by
operation of law or pursuant to any judgment, decree or order of any court or
any order, rule or regulation of any administrative or governmental body.
(b) The Company shall deliver to the Trustee upon becoming aware of
any Default or Event of Default written notice in the form of an Officers'
Certificate of any Default or Event of Default, their status and what action the
Company is taking or proposes to take in respect thereof.
Section 6.2. Acceleration.
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(a) If an Event of Default (other than an Event of Default specified
in clauses (7) and (8) above with respect to the Company) shall occur and be
continuing, the Trustee or the Holders of at least 25% in principal amount of
outstanding Notes may declare the unpaid principal of and accrued and unpaid
interest on all the Notes to be immediately due and payable by notice in writing
to the Company and the Trustee specifying the Event of Default and that it is a
"notice of acceleration." If an Event of Default specified in clauses (7) and
(8) above occurs with respect to the Company, then the unpaid principal of and
accrued and unpaid interest on all the Notes will become immediately due and
payable without any declaration or other act on the part of the Trustee or any
Holder.
(b) At any time after a declaration of acceleration with respect to
the Notes as described in the preceding paragraph, the Holders of a majority in
principal amount of such Notes may rescind and cancel such declaration and its
consequences:
(1) if the rescission would not conflict with any judgment or
decree;
(2) if all existing Events of Default have been cured or waived,
except nonpayment of principal or interest that has become due solely
because of the acceleration;
(3) to the extent the payment of such interest is lawful, interest
on overdue installments of interest and overdue principal, which has
become due otherwise than by such declaration of acceleration, has been
paid; and
(4) if the Company has paid the Trustee its reasonable compensation
and reimbursed the Trustee for its reasonable expenses, disbursements and
advances.
No recission shall affect any subsequent Default or impair any rights relating
thereto.
Section 6.3. Other Remedies.
(a) If an Event of Default occurs and is continuing, the Trustee may
pursue any available remedy to collect the payment of principal of and interest
on the Notes or to enforce the performance of any provision of the Notes or this
Indenture.
(b) The Trustee may maintain a proceeding even if it does not
possess any of the Notes or does not produce any of them in the proceeding. A
delay or omission by the Trustee or any Holder in exercising any right or remedy
accruing upon an Event of Default shall not impair the right or remedy or
constitute a waiver of or acquiescence in the Event of Default. No remedy is
exclusive of any other remedy. All available remedies are cumulative to the
extent permitted by law.
Section 6.4. Waiver of Past Defaults. The Holders of a majority in
principal amount of the Notes may waive any existing Default or Event of
Default, and its consequences, except a default in the payment of the principal
of, premium, if any, or interest on such Notes.
Section 6.5. Control by Majority. The Holders of a majority in
principal amount of the Outstanding Notes may direct the time, method and place
of conducting any proceeding
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for any remedy available to the Trustee or of exercising any trust or power
conferred on the Trustee. Subject to Sections 7.1 and 7.2, however, the Trustee
may refuse to follow any direction that conflicts with law or this Indenture;
provided, however, that the Trustee may take any other action deemed proper by
the Trustee that is not inconsistent with such direction.
Section 6.6. Limitation on Suits. (a) Subject to the provisions of
this Indenture relating to the duties of the Trustee, the Trustee is under no
obligation to exercise any of its rights or powers under this Indenture at the
request, order or direction of any of the Holders of the Notes unless such
Holders have offered to the Trustee reasonable security or indemnity. Subject to
all provisions of this Indenture and applicable law, the Holders of a majority
in aggregate principal amount of the then outstanding Notes have the right to
direct the time, method and place of conducting any proceeding for any remedy
available to the Trustee or exercising any trust or power conferred on the
Trustee.
(b) No Holder of any Notes will have any right to institute any
proceeding with respect to this Indenture or for any remedy thereunder, unless:
(1) such Holder gives to the Trustee written notice of a continuing
Event of Default;
(2) Holders of at least 25% in principal amount of the then
outstanding Dollar Notes or Euro Notes, as the case may be, make a written
request to pursue the remedy;
(3) such Holders of the Dollar Notes or Euro Notes, as the case may
be, provide to the Trustee satisfactory indemnity;
(4) the Trustee does not comply within 60 days; and
(5) during such 60-day period the Holders of a majority in principal
amount of the outstanding Notes do not give the Trustee a written
direction which, in the opinion of the Trustee, is inconsistent with the
request.
Otherwise, no Holder of any Notes will have any right to institute
any proceeding with respect to this Indenture or for any remedy hereunder,
except:
(1) a Holder of Notes may institute suit for enforcement of payment
of the principal of and premium, if any, or interest on such Note held by it on
or after the respective due dates expressed in such Note, or
(2) for the institution of any proceeding with respect to this
Indenture or any remedy hereunder, including, without limitation, acceleration,
by the Holders of a majority in principal amount of the outstanding Notes;
provided, that upon institution of any proceeding or exercise of any remedy,
such Holder or Holders provide the Trustee with prompt notice thereof.
Section 6.7. Rights of Holders to Receive Payment. Notwithstanding
any other provision of this Indenture (including, without limitation, Section
6.6), the right of any Holder to receive payment of principal of or interest on
the Notes held by such Holder, on or after the respective due dates, Redemption
Dates or repurchase date expressed in this Indenture or the
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Notes, or to bring suit for the enforcement of any such payment on or after such
respective dates, shall not be impaired or affected without the consent of such
Holder.
Section 6.8. Collection Suit by Trustee. If an Event of Default
specified in Section 6.1 (1) or (2) occurs and is continuing, the Trustee may
recover judgment in its own name and as trustee of an express trust against the
Company for the whole amount then due and owing (together with applicable
interest on any overdue principal and, to the extent lawful, interest on overdue
interest) and the amounts provided for in Section 7.7.
Section 6.9. Trustee May File Proofs of Claim, etc.
(a) The Trustee may (irrespective of whether the principal of the
Notes is then due):
(i) 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 and
the Holders under this Indenture and the Notes allowed in any bankruptcy,
insolvency, liquidation or other judicial proceedings relative to the
Company or any Subsidiary of the Company or its or their respective
creditors or properties; and
(ii) collect and receive any monies or other property payable or
deliverable in respect of any such claims and distribute them in
accordance with this Indenture.
Any receiver, trustee, liquidator, sequestrator (or other similar official) in
any such proceeding is hereby authorized by each Holder to make such payments to
the Trustee and, in the event that the Trustee shall consent to the making of
such payments directly to the Holders, to pay to the Trustee any amount due to
it for the reasonable compensation, expenses, taxes, disbursements and advances
of the Trustee, its agent and counsel, and any other amounts due to the Trustee
pursuant to Section 7.7.
(b) Nothing in this Indenture shall be deemed to authorize the
Trustee to authorize or consent to or accept or adopt on behalf of any Holder
any plan of reorganization, arrangement, adjustment or composition affecting the
Notes or the rights of any Holder thereof, or to authorize the Trustee to vote
in respect of the claim of any Holder in any such proceeding.
Section 6.10. Priorities. If the Trustee collects any money or
property pursuant to this Article VI, it shall pay out the money or property in
the following order:
FIRST: to the Trustee for amounts due under Section 7.7;
SECOND: if the Holders proceed against the Company directly without
the Trustee in accordance with this Indenture, to Holders for their
collection costs;
THIRD: to Holders for amounts due and unpaid on the Notes for
principal and interest, ratably, without preference or priority of any
kind, according to the amounts due and payable on the Notes for principal
and interest, respectively; and
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FOURTH: to the Company or to such party as a court of competent
jurisdiction shall direct.
The Trustee may, upon notice to the Company, 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 in its discretion may
require the filing by any party litigant in the suit of an undertaking to pay
the costs of the suit, and the court in its discretion may assess reasonable
costs, including reasonable attorneys' fees, against any party litigant in the
suit, having due regard to the merits and good faith of the claims or defenses
made by the party litigant. This Section 6.11 does not apply to a suit by the
Trustee, a suit by the Company, a suit by a Holder pursuant to Section 6.7 or a
suit by Holders of more than 10% in principal amount of Outstanding Notes.
ARTICLE VII
TRUSTEE
Section 7.1. Duties of Trustee.
(a) If a Default or an Event of Default has occurred and is
continuing, the Trustee shall exercise the rights and powers vested in it by
this Indenture and use the same degree of care and skill in their exercise as a
prudent man would exercise or use under the circumstances in the conduct of his
own affairs.
(b) Except during the continuance of a Default or an Event of
Default:
(1) the Trustee undertakes to perform such duties and only such
duties as are specifically set forth in this Indenture and no implied
covenants or obligations shall be read into this Indenture against the
Trustee; and
(2) in the absence of bad faith on its part, the Trustee may
conclusively rely, as to the truth of the statements and the correctness
of the opinions expressed therein, upon certificates or opinions furnished
to the Trustee and conforming to the requirements of this Indenture.
However, in the case of any such certificates or opinions which by any
provisions hereof are specifically required to be furnished to the
Trustee, the Trustee shall examine such certificates and opinions to
determine whether or not they conform to the requirements of this
Indenture (but need not confirm or investigate the accuracy of
mathematical calculations or other facts stated therein).
(c) The Trustee may not be relieved from liability for its own
negligent action, its own negligent failure to act or its own willful
misconduct, except that:
(1) this paragraph (c) does not limit the effect of paragraph (b) of
this Section 7.1;
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(2) the Trustee shall not be liable for any error of judgment made
in good faith by a Trust Officer unless it is proved that the Trustee was
negligent in ascertaining the pertinent facts; and
(3) the Trustee shall not be liable with respect to any action it
takes or omits to take in good faith in accordance with a direction
received by it pursuant to Section 6.2, 6.4 or 6.5.
(d) 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.
(e) Money held in trust by the Trustee need not be segregated from
other funds except to the extent required by law.
(f) No provision of this Indenture shall require the Trustee to
expend or risk its own funds or otherwise incur 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 to believe that repayment
of such funds or adequate indemnity against such risk or liability is not
reasonably assured to it.
(g) 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 VII and to the provisions of the TIA.
(h) Unless otherwise specifically provided in this Indenture, any
demand, request, direction or notice from the Company shall be sufficient if
signed by an Officer of the Company.
(i) 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 against the costs, expenses (including
reasonable attorneys' fees and expenses) and liabilities that might be incurred
by it in compliance with such request or direction.
Section 7.2. Rights of Trustee. Subject to Section 7.1:
(a) The Trustee may conclusively rely on any document reasonably
believed by it to be genuine and to have been signed or presented by the proper
person. The Trustee need not investigate any fact or matter stated in the
document.
(b) Before the Trustee acts or refrains from acting, it may require
an Officers' Certificate or an Opinion of Counsel. The Trustee shall not be
liable for any action it takes or omits to take in good faith in reliance on an
Officers' Certificate or Opinion of Counsel.
(c) The Trustee may act through its attorneys and agents and shall
not be responsible for the misconduct or negligence of any agent appointed with
due care.
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(d) The Trustee shall not be liable for any action it takes or omits
to take in good faith which it believes to be authorized or within its rights or
powers; provided, however, that the Trustee's conduct does not constitute
willful misconduct or negligence.
(e) The Trustee may consult with counsel of its selection, and the
advice or opinion of counsel with respect to legal matters relating to this
Indenture and the Notes shall be full and complete authorization and protection
from liability in respect to any action taken, omitted or suffered by it
hereunder in good faith and in accordance with the advice or opinion of such
counsel.
(f) If the Trustee shall determine, it shall be entitled to examine
the books, records and premises of the Company, personally or by agent or
attorney.
(g) The Trustee shall not be deemed to have notice of any Default or
Event of Default unless an Officer of the Trustee has actual knowledge thereof
or unless written notice of any event which is in fact such a default is
received by the Trustee at the Corporate Trust Office of the Trustee, and such
notice references the Notes and this Indenture.
(h) The rights, privileges, protections, immunities and benefits
given to the Trustee, including, without limitation, its right to be
indemnified, are extended to, and shall be enforceable by, the Trustee in each
of its capacities hereunder, and to each agent, custodian and other Person
employed to act hereunder.
(i) The Trustee may request that the Company deliver an Officers'
Certificate setting forth the names of individuals and/or titles of officers
authorized at such time to take specified actions pursuant to this Indenture,
which Officers' Certificate may be signed by any person authorized to sign an
Officers' Certificate, including any person specified as so authorized in any
such certificate previously delivered and not superseded.
Section 7.3. Individual Rights of Trustee. The Trustee in its
individual or any other capacity may become the owner or pledgee of Notes and
may otherwise deal with the Company or any of its Affiliates with the same
rights it would have if it were not Trustee. Any Paying Agent, Registrar or
co-Registrar may do the same with like rights. However, the Trustee must comply
with Sections 7.10 and 7.11.
Section 7.4. Trustee's Disclaimer. The Trustee shall not be
responsible for and makes no representation as to the validity or adequacy of
this Indenture or the Notes, it shall not be accountable for the Company's use
of the proceeds from the Notes, and it shall not be responsible for any
statement of the Company in this Indenture or in any document issued in
connection with the sale of the Notes or in the Notes other than the Trustee's
certificate of authentication.
Section 7.5. Notice of Defaults.
If a Default or Event of Default occurs and is continuing and if a
Trust Officer has actual knowledge thereof, the Trustee shall mail to each
Holder notice of the Default or Event of Default within 90 days after the
occurrence thereof. Except in the case of a Default or Event of Default in
payment of principal of or interest on any Note (including payments pursuant to
the
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optional redemption or required repurchase provisions of such Note, if any), the
Trustee may withhold the notice if and so long as a committee of its Trust
Officers in good faith determines that withholding the notice is in the
interests of the Holders.
Section 7.6. Reports by Trustee to Holders. The Trustee shall comply
with TIA ss. 313. The Company agrees to notify promptly the Trustee whenever the
Notes become listed on any stock exchange and of any delisting thereof.
Section 7.7. Compensation and Indemnity.
(a) The Company shall pay to the Trustee from time to time such
compensation for its acceptance of this Indenture and services hereunder as the
Company and the Trustee shall from time to time agree in writing. The Trustee's
compensation shall not be limited by any law on compensation of a trustee of an
express trust. The Company shall reimburse the Trustee upon request for all
reasonable out-of-pocket expenses incurred or made by it, including costs of
collection, costs of preparing and reviewing reports, certificates and other
documents, costs of preparation and mailing of notices to Holders and reasonable
costs of counsel retained by the Trustee in connection with the delivery of an
Opinion of Counsel or otherwise, in addition to the compensation for its
services. Such expenses shall include the reasonable compensation and expenses,
disbursements and advances of the Trustee's agents, counsel, accountants and
experts.
(b) The Company shall indemnify the Trustee against any and all
loss, liability or expense (including reasonable attorneys' fees and expenses)
incurred by it without gross negligence, willful misconduct or bad faith on its
part in connection with the acceptance and administration of this trust and the
performance of its duties hereunder, including the costs and expenses of
enforcing this Indenture (including this Section 7.7) and of defending itself
against any claims (whether asserted by any Holder, the Company or otherwise).
The Trustee shall notify the Company promptly of any claim for which it may seek
indemnity. Failure by the Trustee to so notify the Company shall not relieve the
Company of its obligations hereunder. The Company shall defend the claim and the
Trustee may have separate counsel and the Company shall pay the fees and
expenses of such counsel provided that the Company shall not be required to pay
such fees and expenses if it assumes the Trustee's defense, and, in the
reasonable judgment of outside counsel to the Trustee, there is no conflict of
interest between the Company and the Trustee in connection with such defense.
The Company need not reimburse any expense or indemnify against any loss,
liability or expense incurred by the Trustee through the Trustee's own willful
misconduct, gross negligence or bad faith.
(c) To secure the Company's payment obligations in this Section 7.7,
the Trustee shall have a lien prior to the Notes on all money or property held
or collected by the Trustee other than money or property held in trust to pay
principal of and interest on particular Notes. The Trustee's right to receive
payment of any amounts due under this Section 7.7 shall not be subordinate to
any other liability or Indebtedness of the Company.
(d) The Company's payment obligations pursuant to this Section 7.7
shall survive the discharge of this Indenture and the resignation or removal of
the Trustee. When the Trustee incurs expenses after the occurrence of a Default
specified in Section 6.1(7) or (8) , the expenses are intended to constitute
expenses of administration under any Bankruptcy Law; provided,
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however, that this shall not affect the Trustee's rights as set forth in this
Section 7.7 or Section 6.10.
Section 7.8. Replacement of Trustee.
(a) The Trustee may resign at any time by so notifying the Company.
The Holders of a majority in principal amount of the Outstanding Notes may
remove the Trustee by so notifying the Trustee and may appoint a successor
Trustee reasonably acceptable to the Company. The Company shall remove the
Trustee if:
(1) the Trustee fails to comply with Section 7.10;
(2) the Trustee is adjudged bankrupt or insolvent;
(3) a receiver or other public officer takes charge of the Trustee
or its property; or
(4) the Trustee otherwise becomes incapable of acting.
(b) If the Trustee resigns or is removed by the Company or by the
Holders of a majority in principal amount of the Outstanding Notes and such
Holders do not reasonably promptly appoint a successor Trustee, or if a vacancy
exists in the office of the Trustee for any reason (the Trustee in such event
being referred to herein as the retiring Trustee), the Company shall promptly
appoint a successor Trustee.
(c) A successor Trustee shall deliver a written acceptance of its
appointment to the retiring Trustee and to the Company. Thereupon the
resignation or removal of the retiring Trustee shall become effective, and the
successor Trustee shall have all the rights, powers and duties of the Trustee
under this Indenture. The successor Trustee shall mail a notice of its
succession to Holders. The retiring Trustee shall promptly transfer all property
held by it as Trustee to the successor Trustee, subject to the lien provided for
in Section 7.7.
(d) If a successor Trustee does not take office within 30 days after
the retiring Trustee resigns or is removed, the retiring Trustee or the Holders
of 10% in principal amount of the Outstanding Notes may petition, at the
Company's expense, any court of competent jurisdiction for the appointment of a
successor Trustee.
(e) If the Trustee fails to comply with Section 7.10, any Holder may
petition any court of competent jurisdiction for the removal of the Trustee and
the appointment of a successor Trustee.
(f) Notwithstanding the replacement of the Trustee pursuant to this
Section 7.8, the Company's obligations under Section 7.7 shall continue for the
benefit of the retiring Trustee.
Section 7.9. Successor Trustee by Merger.
(a) If the Trustee consolidates with, merges or converts into, or
transfers all or substantially all its corporate trust business or assets to,
another corporation or banking
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association, the resulting, surviving or transferee corporation without any
further act shall be the successor Trustee.
(b) In case at the time such successor or successors to the Trustee
shall succeed to the trusts created by this Indenture, any of the Notes shall
have been authenticated but not delivered, any such successor to the Trustee may
adopt the certificate of authentication of any predecessor trustee, and deliver
such Notes so authenticated; and in case at that time any of the Notes shall not
have been authenticated, any successor to the Trustee may authenticate such
Notes either in the name of any predecessor hereunder or in the name of the
successor to the Trustee; and in all such cases such certificates shall have the
full force which it is anywhere in the Notes or in this Indenture provided that
the certificate of the Trustee shall have.
Section 7.10. Eligibility; Disqualification. The Trustee shall at
all times satisfy the requirements of TIA ss. 310(a). The Trustee shall have a
combined capital and surplus of at least $50 million as set forth in its most
recent published annual report of condition. The Trustee shall comply with TIA
ss. 310(b); provided, however, that there shall be excluded from the operation
of TIA ss. 310(b)(1) any indenture or indentures under which other securities or
certificates of interest or participation in other securities of the Company are
outstanding if the requirements for such exclusion set forth in TIA ss.
310(b)(1) are met.
Section 7.11. Preferential Collection of Claims Against Company. The
Trustee shall comply with TIA ss. 311(a), excluding any creditor relationship
listed in TIA ss. 311(b). A Trustee who has resigned or been removed shall be
subject to TIA ss. 311(a) to the extent indicated.
Section 7.12. Appointment of Co-Trustee. (a) Notwithstanding any
other provisions in this Indenture, at any time, solely for the purpose of
meeting the legal requirements of any jurisdiction, the Trustee shall have the
power and may execute and deliver all instruments necessary to appoint one or
more Persons to act as separate trustee or trustees or as co-trustee or
co-trustees, and to vest in such Person or Persons, in such capacity and subject
to the other provisions of this Indenture, such powers, duties, obligations and
rights as the Trustee may consider necessary or desirable. No co-trustee
hereunder shall be required to meet the terms of eligibility as a successor
trustee under this Indenture and no notice to holders of Notes of the
appointment of a separate trustee or co-trustee shall be required under this
Indenture.
(b) Every separate trustee or co-trustee shall, to the extent
permitted by law, be appointed and act subject to the following provisions and
conditions:
(i) all rights, powers, duties and obligations conferred or imposed
upon the Trustee shall be conferred or imposed upon and exercised or
performed by the Trustee and such separate trustee or co-trustee jointly
(it being understood that such separate trustee or co-trustee us not
authorized to act separately without the Trustee joining in such act),
except to the extent that under any law of any jurisdiction in which any
particular act or acts are to be performed the Trustee shall be
incompetent or unqualified to perform such act or acts, in which event
such rights, powers, duties and obligations shall be exercised and
performed singly by such co-trustee, but solely at the direction of the
Trustee;
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(ii) no trustee hereunder shall be personally liable by reason of
any act or omission of any other trustee hereunder; and
(iii) the Trustee may at any time accept the resignation of or
remove any separate trustee or co-trustee.
(c) Any notice, request or other writing given to the Trustee shall
be deemed to have been given to each of the then separate trustees or
co-trustees, as effectively as if given to each of them. Every instrument
appointing any separate trustee or co-trustee shall refer to this
Indenture and the conditions of this Article VII. Each separate trustee or
co-trustee, upon its acceptance of the trusts conferred, shall be vested
with the estates or property specified in its instrument of appointment,
jointly with the Trustee, subject to all the provisions of this Indenture,
specifically including every provision of this Indenture relating to the
conduct of, affecting the liability of, or affording protection or rights
(including the rights to compensation, reimbursement and indemnification
hereunder) to, the Trustee. Every such instrument shall be filed with the
Trustee.
(d) Any separate trustee or co-trustee may at any time constitute
the Trustee or its agent or attorney-in-fact with full power and
authority, to the extent not prohibited by law, to do any lawful act under
or in respect of this Indenture on its behalf and in its name. If any
separate trustee or co-trustee shall die, become incapable of acting,
resign or be removed, all of its estates, properties, rights, remedies and
trusts shall vest in and be exercised by the Trustee, to the extent
permitted by law, without the appointment of a new or successor trustee.
ARTICLE VIII
DEFEASANCE; DISCHARGE OF INDENTURE
Section 8.1. Legal Defeasance and Covenant Defeasance.
(a) The Company may, at its option, at any time, elect to have
either paragraph (b) or (c) of this Section 8.1 be applied to all Outstanding
Notes upon compliance with the conditions set forth in Section 8.2.
(b) Upon the Company's exercise under paragraph (a) of this Section
8.1 of the option applicable to this paragraph (b), the Company shall, subject
to the satisfaction of the conditions set forth in Section 8.2, be deemed to
have paid and been discharged from its obligations with respect to all
Outstanding Notes on the date all of the conditions set forth in Section 8.2
(including Section 8.2(4)(b)) are satisfied (hereinafter, "Legal Defeasance").
For this purpose, Legal Defeasance means that the Company shall be deemed to
have paid and discharged the entire Indebtedness represented by the Outstanding
Notes, which shall thereafter be deemed to be Outstanding only for the purposes
of Section 8.3 and the other Sections of this Indenture referred to in clause
(i) or (ii) of this paragraph (b), and to have satisfied all its other
obligations under such Notes and this Indenture (and the Trustee, on demand of
and at the expense of the Company, shall execute proper instruments
acknowledging the same), except for the following provisions, which shall
survive until otherwise terminated or discharged hereunder:
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(i) the rights of Holders of Outstanding Notes to receive solely
from the trust fund described in Section 8.3, and as more fully set forth
in Section 8.3, payments in respect of the principal of and interest on
such Notes when such payments are due,
(ii) the Company's obligations with respect to such Notes under
Article II and Section 3.2,
(iii) the rights, powers, trusts, duties and immunities of the
Trustee hereunder and the Company's obligations in connection therewith,
and
(iv) this Article VIII.
Subject to compliance with this Article VIII, the Company may exercise its
option under this paragraph (b) notwithstanding the prior exercise of its option
under paragraph (c) of this Section 8.1.
(c) Upon the Company's exercise under paragraph (a) of this Section
8.1 of the option applicable to this paragraph (c), the Company shall, subject
to the satisfaction of the applicable conditions set forth in Section 8.2, be
released from its obligations under the covenants contained in Sections 3.4,
3.5, 3.8 to 3.18 and 4.1 with respect to the Outstanding Notes on and after the
date the conditions set forth below are satisfied (hereinafter, "Covenant
Defeasance"), and the Notes shall thereafter be deemed not Outstanding for the
purposes of any direction, waiver, consent or declaration or act of Holders (and
the consequences of any thereof) in connection with such covenants, but shall
continue to be Outstanding for all other purposes hereunder (it being understood
that such Notes shall not be deemed Outstanding for accounting purposes). For
this purpose, such Covenant Defeasance means that, with respect to the
Outstanding Notes, the Company may omit to comply with and shall have no
liability in respect of any term, condition or limitation set forth in any such
covenant, whether directly or indirectly, by reason of any reference elsewhere
herein to any such covenant or by reason of any reference in any such covenant
to any other provision herein or in any other document and such omission to
comply shall not constitute a Default or an Event or Default under Section
6.1(3) to (6), but, except as specified above, the remainder of this Indenture
and such Notes shall be unaffected thereby.
Section 8.2. Conditions to Defeasance. The Company may exercise its
Legal Defeasance option or its Covenant Defeasance option only if:
(1) the Company irrevocably deposits with the Trustee, in trust for
the benefit of the Holders, U.S. Legal Tender, U.S. Government Obligations
or a combination thereof in such amounts as will be sufficient without
reinvestment, in the opinion of a nationally recognized firm of
independent public accountants, to pay the principal of and interest on
the Notes on the stated date for payment thereof or on the applicable
redemption date, as the case may be, and the Trustee has a perfected first
priority security interest under applicable law in such U.S. Legal Tender
and U.S. Government Obligations;
(2) in the case of Legal Defeasance, the Company shall have
delivered to the Trustee an Opinion of Counsel in the United States
reasonably acceptable to the Trustee to the effect that: (A) the Company
has received from, or there has been published by, the
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Internal Revenue Service a ruling or (B) since the Issue Date, there has
been a change in the applicable federal income tax law, in either case to
the effect that, and based thereon such Opinion of Counsel shall state
that, the Holders will not recognize income, gain or loss for federal
income tax purposes as a result of such Legal Defeasance and will be
subject to federal income tax on the same amounts, in the same manner and
at the same times as would have been the case if such Legal Defeasance had
not occurred;
(3) in the case of Covenant Defeasance, the Company shall have
delivered to the Trustee an Opinion of Counsel in the United States
reasonably acceptable to the Trustee to the effect that the Holders will
not recognize income, gain or loss for federal income tax purposes as a
result of such Covenant Defeasance and will be subject to federal income
tax on the same amounts, in the same manner and at the same times as would
have been the case if such Covenant Defeasance had not occurred;
(4) the Trustee shall have received, on the date of the deposit
pursuant to paragraph (1) above and on the 91st day after such date, an
Officers' Certificate stating that (a) no Default or Event of Default
shall have occurred and be continuing on the date of the deposit pursuant
to paragraph (1) above (except any Default or Event of Default resulting
from the failure to comply with Section 3.10 hereof as a result of the
borrowing of the funds required to effect such deposit) and, (b) insofar
as Events of Default from bankruptcy or insolvency events are concerned,
no Default or Event of Default shall have occurred at any time in the
period ending on the 91st day after the date of deposit and, in the case
of Legal Defeasance, no such Default or Event of Default shall have
occurred and be continuing on such 91st day;
(5) the Trustee shall have received an Officers' Certificate stating
that such Legal Defeasance or Covenant Defeasance shall not result in a
breach or violation of, or constitute a default under this Indenture or
any other material agreement or instrument to which the Company or any of
its Restricted Subsidiaries is a party or by which the Company or any of
its Subsidiaries is bound;
(6) the Company shall have delivered to the Trustee an Officers'
Certificate stating that the deposit was not made by the Company with the
intent of preferring the Holders over any other creditors of the Company
or any Subsidiary of the Company or with the intent of defeating,
hindering, delaying or defrauding any other creditors of the Company or
others;
(7) the Company shall have delivered to the Trustee an Officers'
Certificate and an Opinion of Counsel, each stating that all conditions
precedent provided for or relating to the Legal Defeasance or the Covenant
Defeasance have been complied with;
(8) the Company shall have delivered to the Trustee an Opinion of
Counsel to the effect that after the 91st day following the deposit, the
trust funds will not be subject to the effect of any applicable
bankruptcy, insolvency, reorganization or similar laws affecting
creditors' rights generally; and
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(9) the Company shall have delivered to the Trustee an Opinion of
Counsel (subject to customary assumptions and exclusions) to the effect
that the trust resulting from the deposit does not constitute, or is
qualified as, a regulated investment company under the Investment Company
Act of 1940.
Section 8.3. Application of Trust Money. The Trustee shall hold in
trust U.S. Legal Tender or U.S. Government Obligations deposited with it
pursuant to this Article VIII. It shall apply the deposited money and the U.S.
Legal Tender from U.S. Government Obligations through the Paying Agent and in
accordance with this Indenture to the payment of principal of and interest on
the Notes.
Section 8.4. Repayment to Company.
(a) The Trustee and the Paying Agent shall promptly turn over to the
Company upon request any excess money or securities held by them upon payment of
all the obligations under this Indenture.
(b) Subject to any applicable abandoned property law, the Trustee
and the Paying Agent shall pay to the Company upon request any money held by
them for the payment of principal of or interest on the Notes that remains
unclaimed for two years, and, thereafter, Holders entitled to the money must
look to the Company for payment as general creditors.
Section 8.5. Indemnity for U.S. Government Obligations The Company
shall pay and shall indemnify the Trustee against any tax, fee or other charge
imposed on or assessed against deposited U.S. Government Obligations or the
principal and interest received on such U.S. Government Obligations.
Section 8.6. Reinstatement. If the Trustee or Paying Agent is unable
to apply any U.S. Legal Tender or U.S. Government Obligations in accordance with
this Article VIII 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 obligations of the Company under
this Indenture and the Notes shall be revived and reinstated as though no
deposit had occurred pursuant to this Article VIII until such time as the
Trustee or Paying Agent is permitted to apply all such U.S. Legal Tender or U.S.
Government Obligations in accordance with this Article VIII; provided, however,
that, if the Company has made any payment of interest on or principal of any
Notes because of the reinstatement of its obligations, the Company shall be
subrogated to the rights of the Holders of such Notes to receive such payment
from the U.S. Legal Tender or U.S. Government Obligations held by the Trustee or
Paying Agent.
Section 8.7. Satisfaction and Discharge. The Indenture will be
discharged and will cease to be of further effect (except as to surviving rights
or registration of transfer or exchange of the Notes, as expressly provided for
in the Indenture) as to all Outstanding Notes when:
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(a) either:
(1) all the Notes theretofor executed, authenticated and delivered
(except lost, stolen or destroyed Notes which have been replaced or paid
and Notes for whose payment money has theretofor been deposited in trust
or segregated and held in trust by the Company and thereafter repaid to
the Company or discharged from such trust) have been delivered to the
Trustee for cancellation; or
(2) all Notes not theretofor delivered to the Trustee for
cancellation have become due and payable, and the Company has irrevocably
deposited or caused to be deposited with the Trustee U.S. Legal Tender or
U.S. Government Obligations sufficient to pay and discharge the entire
Indebtedness on the Notes not theretofor delivered to the Trustee for
cancellation, for principal of and interest on the Notes to the date of
deposit, together with irrevocable instructions from the Company directing
the Trustee to apply such funds to the payment;
(b) the Company has paid all other sums payable under this Indenture
and the Notes by the Company; and
(c) the Company has delivered to the Trustee an Officers'
Certificate stating that all conditions precedent under this Indenture relating
to the satisfaction and discharge of this Indenture have been complied with.
ARTICLE IX
AMENDMENTS
Section 9.1. Without Consent of Holders.
(a) The Company and the Trustee may amend this Indenture or the
Notes without notice to or consent of any Holder:
(1) to cure any ambiguity, omission, defect or inconsistency;
(2) to comply with Article IV in respect of the assumption by a
Surviving Entity of the obligations of the Company under the Notes and
this Indenture;
(3) to provide for uncertificated Notes in addition to or in place
of certificated Notes; provided, however, that the uncertificated Notes
are issued in registered form for purposes of Section 163(f) of the Code;
(4) to add guarantees with respect to the Notes or to secure the
Notes;
(5) to add to the covenants of the Company for the benefit of the
Holders or to surrender any right or power herein conferred upon the
Company;
(6) to comply with any requirements of the SEC in connection with
qualifying this Indenture under the TIA;
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(7) to make any change that does not, in the opinion of the Trustee,
adversely affect the rights of any Holder in any material respect; or
(8) to provide for the issuance of the Exchange Notes and Private
Exchange Notes, which will have terms substantially identical to the other
Outstanding Notes except for the requirement of a Private Placement Legend
and related transfer restrictions under the Securities Act and this
Indenture and as to the applicability of additional interest payable as
provided in Section 2.14, and which will be treated, together with any
other Outstanding Notes, as a single issue of securities.
(b) After an amendment under this Section 9.1 becomes effective, the
Company shall mail to Holders a notice briefly describing such amendment. The
failure to give such notice to all Holders, or any defect therein, shall not
impair or affect the validity of an amendment under this Section 9.1.
Section 9.2. With Consent of Holders.
(a) The Company and the Trustee may amend this Indenture or the
Notes without notice to any Holder but with the written consent of the Holders
of at least a majority in principal amount of the then Outstanding Notes
(including, without limitation, consents obtained in connection with a purchase
of, or tender offer or exchange offer for, Notes). However, without the consent
of each Holder affected, an amendment may not:
(1) reduce the amount of Notes whose Holders must consent to an
amendment or waiver;
(2) reduce the rate of or change or have the effect of changing the
time for payment of interest, including Defaulted Interest, on any Notes;
(3) reduce the principal of or change or have the effect of changing
the fixed maturity of any Notes, or change the date on which any Notes may
be subject to redemption, or reduce the redemption price therefor;
(4) make any Notes payable in money other than that stated in the
Notes;
(5) make any change in the provisions of this Indenture entitling
each Holder to receive payment of principal of and interest on such Notes
on or after the due date thereof or to bring suit to enforce such payment,
or permitting Holders of a majority in principal amount of Outstanding
Notes to waive Defaults or Events of Default;
(6) amend, change or modify in any material respect any obligation
of the Company to make and consummate a Change of Control Offer in respect
of a Change of Control that has occurred or make and consummate an Asset
Sale Offer with respect to any Asset Sale that has been consummated; or
(7) amend, change or modify the seniority of the Notes or eliminate,
release or modify any guarantee or security for the Notes except in
accordance with the terms of the Notes or this Indenture.
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(b) It shall not be necessary for the consent of the Holders under
this Section 9.2 to approve the particular form of any proposed amendment, but
it shall be sufficient if such consent approves the substance thereof.
(c) After an amendment under this Section 9.2 becomes effective, the
Company shall mail to Holders a notice briefly describing such amendment. The
failure to give such notice to all Holders, or any defect therein, shall not
impair or affect the validity of an amendment under this Section 9.2.
Section 9.3. Compliance with Trust Indenture Act. Every amendment to
this Indenture or the Notes shall comply with the TIA as then in effect.
Section 9.4. Revocation and Effect of Consents and Waivers.
(a) A consent to an amendment or a waiver by a Holder of a Note
shall bind the Holder and every subsequent Holder of that Note or portion of the
Note that evidences the same debt as the consenting Holder's Note, even if
notation of the consent or waiver is not made on the Note. However, any such
Holder or subsequent Holder may revoke the consent or waiver as to such Holder's
Note or portion of the Note if the Trustee receives the notice of revocation
before the date the amendment or waiver becomes effective. After an amendment or
waiver becomes effective, it shall bind every Holder. An amendment or waiver
shall become effective upon receipt by the Trustee of the requisite number of
written consents under Section 9.2.
(b) The Company may, but shall not be obligated to, fix a record
date for the purpose of determining the Holders entitled to give their consent
or take any other action described above or required or permitted to be taken
pursuant to this Indenture. If a record date is fixed, then notwithstanding the
immediately preceding paragraph, those Persons who were Holders at such record
date (or their duly designated proxies), and only those Persons, shall be
entitled to give such consent or to revoke any consent previously given or to
take any such action, whether or not such Persons continue to be Holders after
such record date. No such consent shall become valid or effective more than 90
days after such record date.
Section 9.5. Notation on or Exchange of Notes. If an amendment
changes the terms of a Note, the Trustee may require the Holder of the Note to
deliver it to the Trustee. The Trustee may place an appropriate notation on the
Note regarding the changed terms and return it to the Holder. Alternatively, if
the Company or the Trustee so determines, the Company in exchange for the Note
will execute and upon Company Order the Trustee will authenticate a new Note
that reflects the changed terms. Failure to make the appropriate notation or to
issue a new Note shall not affect the validity of such amendment.
Section 9.6. Trustee to Sign Amendments. The Trustee shall sign any
amendment authorized pursuant to this Article IX if the amendment does not
adversely affect the rights, duties, liabilities or immunities of the Trustee.
If it does, the Trustee may but need not sign it. In signing such amendment the
Trustee shall be entitled to receive indemnity reasonably satisfactory to it and
to receive, and (subject to Sections 7.1 and 7.2) shall be fully protected in
relying upon, such evidence as it deems appropriate, including, without
limitation, solely on an Opinion of Counsel stating that such amendment is
authorized or permitted by this Indenture.
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ARTICLE X
MISCELLANEOUS
Section 10.1. Trust Indenture Act Controls. If any provision of this
Indenture limits, qualifies or conflicts with another provision which is
required to be included in this Indenture by the TIA, the provision required by
the TIA shall control.
Section 10.2. Notices.
(a) Any notice or communication shall be in writing and delivered in
person or mailed by first-class mail addressed as follows:
if to the Company:
FLAG Telecom Holdings Limited
3rd Floor, 103 Mount Street
London W1Y 5HE
Facsimile No.: (44) 171-317-0808
Attention: Stuart Rubin, General Counsel
if to the Trustee:
The Bank of New York
101 Barclay Street
Floor 21 West
New York, New York 10286
Attn: Corporate Trust Administration - Global Finance Unit
The Company or the Trustee by notice to the other may designate additional or
different addresses for subsequent notices or communications.
(b) Any notice or communication mailed to a registered Holder shall
be mailed to the Holder at the Holder's address as it appears on the
registration books of the Registrar and shall be sufficiently given if so mailed
within the time prescribed.
(c) Failure to mail a notice or communication to a Holder or any
defect in it shall not affect its sufficiency with respect to other Holders. If
a notice or communication is mailed in the manner provided above, it is duly
given, whether or not the addressee receives it.
Section 10.3. Communication by Holders with Other Holders. Holders
may communicate pursuant to TIA ss. 312(b) with other Holders with respect to
their rights under this Indenture or the Notes. The Company, the Trustee, the
Registrar and anyone else shall have the protection of TIA ss. 312(c).
Section 10.4. Certificate and Opinion as to Conditions Precedent.
Upon any request or application by the Company to the Trustee to take or refrain
from taking any action under this Indenture, the Company shall furnish to the
Trustee:
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(1) an Officers' Certificate in form and substance reasonably
satisfactory to the Trustee 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
(2) an Opinion of Counsel 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.
Section 10.5. Statements Required in Certificate or Opinion. Each
certificate or opinion with respect to compliance with a covenant or condition
provided for in this Indenture shall include:
(1) a statement that the individual making such certificate or
opinion has read such covenant or condition;
(2) a brief statement as to the nature and scope of the examination
or investigation upon which the statements or opinions contained in such
certificate or opinion are based;
(3) a statement that, in the opinion of such individual, he has made
such examination or investigation as is necessary to enable him to express
an informed opinion as to whether or not such covenant or condition has
been complied with; and
(4) a statement as to whether or not, in the opinion of such
individual, such covenant or condition has been complied with.
In giving such Opinion of Counsel, counsel may rely as to factual matters on an
Officers' Certificate or on certificates of public officials.
Section 10.6. Rules by Trustee, Paying Agent and Registrar. The
Trustee may make reasonable rules for action by, or a meeting of, Holders. The
Registrar and the Paying Agent may make reasonable rules for their functions.
Section 10.7. Currency Indemnity.
(a) U.S. Legal Tender is the sole currency of account and payment
for all sums payable by the Company under or in connection with the Notes or
this Indenture, including damages. Any amount received or recovered in currency
other than U.S. Legal Tender in respect of the Notes (whether as a result of, or
of the enforcement of, a judgment or order of a court of any jurisdiction, in
the winding-up or dissolution of the Company, any Subsidiary or otherwise) by
any Holder of the Notes in respect of any sum expressed to be due to it from the
Company or its Subsidiaries shall only constitute a discharge of the Company and
its Subsidiaries under the Notes and this Indenture only to the extent of the
U.S. Legal Tender amount which the recipient is able to purchase with the amount
so received or recovered in that other currency on the date of that receipt or
recovery (or, if it is not practicable to make that purchase on that date, on
the first date on which it is practicable to do so). If that U.S. Legal Tender
amount is less than the U.S. Legal Tender amount expressed to be due to the
recipient under the Notes or this Indenture, the
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Company shall indemnify and hold harmless the recipient against any loss or cost
sustained by it in making any such purchase. For the purposes of this Section
10.7, it will be sufficient for the Holder of a Note to certify that it would
have suffered a loss had an actual purchase of U.S. Legal Tender been made with
the amount so received in that other currency on the date of receipt or recovery
(or, if a purchase of U.S. Legal Tender on such date had not been practicable,
on the first date on which it would have been practicable).
(b) The indemnities of the Company contained in this Section 10.7,
to the extent permitted by law: (i) constitute a separate and independent
obligation from the other obligations of the Company under this Indenture and
the Notes; (ii) shall give rise to a separate and independent cause of action
against the Company; (iii) shall apply irrespective of any waiver granted by any
Holder of the Notes or the Trustee from time to time; and (iv) shall continue in
full force and effect notwithstanding any other judgment, order, claim or proof
of claim for a liquidated amount in respect of any sum due under the Notes or
this Indenture or any other judgment or order.
Section 10.8. Legal Holidays. A "Legal Holiday" is a Saturday, a
Sunday or other day on which commercial banking institutions are authorized or
required to be closed in New York City. If a payment date is a Legal Holiday,
payment shall be made on the next succeeding day that is not a Legal Holiday,
and no interest shall accrue for the intervening period. If a regular record
date is a Legal Holiday, the record date shall not be affected.
Section 10.9. Governing Law, etc. THIS INDENTURE AND THE NOTES SHALL
BE GOVERNED BY, AND CONSTRUED IN ACCORDANCE WITH, THE LAW OF THE STATE OF NEW
YORK, BUT WITHOUT GIVING EFFECT TO APPLICABLE PRINCIPLES OF CONFLICTS OF LAW TO
THE EXTENT THAT THE APPLICATION OF THE LAW OF ANOTHER JURISDICTION WOULD BE
REQUIRED THEREBY. THE PARTIES HERETO EACH HEREBY WAIVE ANY RIGHT TO TRIAL BY
JURY IN ANY ACTION, PROCEEDING OR COUNTERCLAIM ARISING OUT OF OR RELATING TO
THIS INDENTURE OR THE NOTES OR ANY TRANSACTION RELATED HERETO OR THERETO.
Section 10.10. No Recourse Against Others. An incorporator,
director, officer, employee, stockholder or controlling person, as such, of the
Company shall not have any liability for any obligations of the Company under
the Notes, this Indenture or for any claim based on, in respect of or by reason
of such obligations or their creation. By accepting a Note, each Holder shall
waive and release all such liability. The waiver and release shall be part of
the consideration for the issue of the Notes.
Section 10.11. Successors. All agreements of the Company in this
Indenture and the Notes shall bind its successors. All agreements of the Trustee
in this Indenture shall bind its successors.
Section 10.12. Duplicate and Counterpart Originals. The parties may
sign any number of copies of this Indenture. One signed copy is enough to prove
this Indenture. This Indenture may be executed in any number of counterparts,
each of which so executed shall be an original, but all of them together
represent the same agreement.
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Section 10.13. Severability. In case any provision in this Indenture
or in the Notes shall be invalid, illegal or unenforceable, the validity,
legality and enforceability of the remaining provisions shall not in any way be
affected or impaired thereby.
Section 10.14. Qualification of Indenture. The Company shall qualify
this Indenture under the TIA in accordance with the terms and conditions of the
Registration Agreement and shall pay all reasonable costs and expenses
(including attorneys' fees and expenses for the Company, the Trustee and the
Holders) incurred in connection therewith, including, but not limited to, costs
and expenses of qualification of this Indenture and the Notes and printing this
Indenture and the Notes. The Trustee shall be entitled to receive from the
Company any such Officers' Certificates, Opinions of Counsel or other
documentation as it may reasonably request in connection with any such
qualification of this Indenture under the TIA.
Section 10.15. Table of Contents; Headings. The table of contents
and headings of the Articles and Sections of this Indenture have been inserted
for convenience of reference only, are not intended to be considered a part
hereof and shall not modify or restrict any of the terms or provisions hereof.
Section 10.16. Agent for Service; Submission to Jurisdiction; Waiver
of Immunities.
The Company agrees that any suit, action or proceeding against the
Company brought by any Holder or the Trustee arising out of or based upon this
Indenture or the Notes may be instituted in any state or federal court in the
Borough of Manhattan, The City of New York, New York, United States, any court
of competent jurisdiction in Bermuda or England and Wales and any appellate
court from any thereof. The Company hereby irrevocably submits to the
non-exclusive jurisdiction of such courts for such purpose and waives, to the
fullest extent permitted by law, trial by jury and any objection it may now or
hereafter have to the laying of venue of any such proceeding, and any claim it
may now or hereafter have that any proceeding in any such court is brought in an
inconvenient forum. The Company has appointed FLAG Telecom Holdings Ltd., 570
Lexington Avenue, New York, New York 10020 as its authorized agent (the
"Authorized Agent") upon whom all writs, process and summonses may be served in
any suit, action or proceeding arising out of or based upon this Indenture or
the Notes which may be instituted in any state or federal court in the Borough
of Manhattan, The City of New York, New York. The Company hereby represents and
warrants that the Authorized Agent has accepted such appointment and has agreed
to act as said agent for service of process, and the Company agrees to take any
and all action, including the filing of any and all documents, that may be
necessary to continue each such appointment in full force and effect as
aforesaid so long as the Notes remain outstanding. The Company agrees that the
appointment of the Authorized Agent shall be irrevocable so long as any of the
Notes remain outstanding or until the irrevocable appointment by the Company of
a successor agent in The City of New York, New York as its authorized agent for
such purpose and the acceptance of such appointment by such successor. Service
of process upon the Authorized Agent shall be deemed, in every respect,
effective service of process upon the Company.
To the extent that the Company has or hereafter may acquire any
immunity (sovereign or otherwise) from any legal action, suit or proceeding,
from jurisdiction of any court
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or from set-off or any legal process (whether service or notice, attachment in
aid or otherwise) with respect to itself or any of its property, the Company
hereby irrevocably waives and agrees not to plead or claim such immunity in
respect of its obligations under this Indenture or the Notes.
Nothing in this Section 10.16 shall affect the right of the Trustee or any
Holder of the Notes to serve process in any other manner permitted by law.
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IN WITNESS WHEREOF, the parties have caused this Indenture to be
duly executed as of the date first written above.
FLAG TELECOM HOLDINGS LIMITED
By:_____________________________________
Name:
Title:
THE BANK OF NEW YORK,
as Trustee
By:_____________________________________
Name:
Title:
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EXHIBIT A
FORM OF NOTE
[Include the following legend for Global Notes only:
"THIS IS A GLOBAL NOTE WITHIN THE MEANING OF THE INDENTURE REFERRED TO
HEREINAFTER.
UNLESS THIS CERTIFICATE IS PRESENTED BY AN AUTHORIZED REPRESENTATIVE OF
THE DEPOSITORY TRUST COMPANY, A NEW YORK CORPORATION ("DTC"), NEW YORK,
NEW YORK, TO THE COMPANY OR ITS AGENT FOR REGISTRATION OF TRANSFER,
EXCHANGE OR PAYMENT, AND ANY CERTIFICATE ISSUED IS REGISTERED IN THE NAME
OF CEDE & CO. OR IN SUCH OTHER NAME AS IS REQUESTED BY AN AUTHORIZED
REPRESENTATIVE OF DTC (AND ANY PAYMENT IS MADE TO CEDE & CO. OR TO SUCH
OTHER ENTITY AS IS REQUESTED BY AN AUTHORIZED REPRESENTATIVE OF DTC), ANY
TRANSFER, PLEDGE OR OTHER USE HEREOF FOR VALUE OR OTHERWISE BY OR TO ANY
PERSON IS WRONGFUL INASMUCH AS THE REGISTERED OWNER HEREOF, CEDE & CO.,
HAS AN INTEREST HEREIN.
TRANSFERS OF THIS GLOBAL SECURITY SHALL BE LIMITED TO TRANSFERS IN WHOLE,
BUT NOT IN PART, TO NOMINEES OF DTC OR TO A SUCCESSOR THEREOF OR SUCH
SUCCESSOR'S NOMINEE AND TRANSFERS OF PORTIONS OF THIS GLOBAL SECURITY
SHALL BE LIMITED TO TRANSFERS MADE IN ACCORDANCE WITH THE RESTRICTIONS SET
FORTH IN THE INDENTURE REFERRED TO ON THE REVERSE HEREOF."]
[Include the following legend on all Notes that are Restricted Notes:]
THIS NOTE HAS NOT BEEN REGISTERED UNDER THE U.S. SECURITIES ACT OF 1933,
AS AMENDED (THE "SECURITIES ACT"), AND ACCORDINGLY, MAY NOT BE OFFERED OR
SOLD WITHIN THE UNITED STATES OR TO, OR FOR THE ACCOUNT OR BENEFIT OF,
U.S. PERSONS EXCEPT AS SET FORTH IN THE FOLLOWING SENTENCE. BY ITS
ACQUISITION HEREOF, THE HOLDER (1) REPRESENTS THAT (A) IT IS A "QUALIFIED
INSTITUTIONAL BUYER" (AS DEFINED IN RULE 144A ADOPTED UNDER THE SECURITIES
ACT) OR (B) IT IS NOT A U.S. PERSON AND IS ACQUIRING THIS NOTE IN AN
OFFSHORE TRANSACTION IN COMPLIANCE WITH REGULATION S ADOPTED UNDER THE
SECURITIES ACT; (2) AGREES THAT IT WILL NOT WITHIN TWO YEARS AFTER THE
ORIGINAL ISSUANCE OF THIS NOTE RESELL OR OTHERWISE TRANSFER THIS NOTE
EXCEPT (A) TO THE COMPANY OR ANY SUBSIDIARY THEREOF, (B) INSIDE THE UNITED
STATES TO A QUALIFIED INSTITUTIONAL BUYER IN COMPLIANCE WITH RULE 144A
ADOPTED UNDER THE
1
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SECURITIES ACT, (C) OUTSIDE THE UNITED STATES IN COMPLIANCE WITH
REGULATION S UNDER THE SECURITIES ACT, (D) PURSUANT TO THE EXEMPTION FROM
REGISTRATION PROVIDED BY RULE 144 ADOPTED UNDER THE SECURITIES ACT (IF
AVAILABLE) OR ANOTHER AVAILABLE EXEMPTION UNDER THE SECURITIES ACT, OR (E)
PURSUANT TO AN EFFECTIVE REGISTRATION STATEMENT UNDER THE SECURITIES ACT;
AND (3) AGREES THAT IT WILL GIVE TO EACH PERSON TO WHOM THIS NOTE IS
TRANSFERRED A NOTICE SUBSTANTIALLY TO THE EFFECT OF THIS LEGEND. IN
CONNECTION WITH ANY TRANSFER OF THIS NOTE WITHIN TWO YEARS AFTER THE
ORIGINAL ISSUANCE OF THIS NOTE, THE HOLDER MUST, PRIOR TO SUCH TRANSFER,
FURNISH TO THE TRUSTEE AND THE COMPANY SUCH CERTIFICATIONS, LEGAL OPINIONS
OR OTHER INFORMATION AS MAY BE REQUIRED PURSUANT TO THIS INDENTURE TO
CONFIRM THAT SUCH TRANSFER IS BEING MADE PURSUANT TO AN EXEMPTION FROM, OR
IN A TRANSACTION NOT SUBJECT TO, THE REGISTRATION REQUIREMENTS OF THE
SECURITIES ACT. AS USED HEREIN, THE TERMS "OFFSHORE TRANSACTION," "UNITED
STATES" AND "U.S. PERSON" HAVE THE MEANING GIVEN TO THEM BY REGULATION S
UNDER THE SECURITIES ACT.
[Include the following legend on all Certificated Notes that are
Restricted Notes:
"IN CONNECTION WITH ANY TRANSFER, THE HOLDER WILL DELIVER TO THE REGISTRAR
SUCH OPINIONS OF COUNSEL, CERTIFICATES AND/OR OTHER INFORMATION AS IT MAY
REASONABLY REQUIRE IN FORM REASONABLY SATISFACTORY TO IT AS PROVIDED FOR
IN THE INDENTURE TO CONFIRM THAT THE TRANSFER COMPLIED WITH THE FOREGOING
RESTRICTIONS AS PROVIDED FOR IN THE INDENTURE."]
A-2
<PAGE>
FORM OF FACE OF NOTE
No. [___] Principal Amount $[______________]
[If the Note is a Global Note include the following two lines:
as revised by the Schedule of Increases and
Decreases in Global Note attached hereto]
CUSIP NO. ____________
[If the Note is a Regulation S Global Note, delete the reference to CUSIP NO.
and replace it with:
ISIN NO. ____________]
FLAG Telecom Holdings Limited, a Bermuda corporation, promises to
pay to [___________], or registered assigns, the principal sum of
[__________________] Dollars [If the Note is a Global Note, add the following,
as revised by the Schedule of Increases and Decreases in Global Note attached
hereto], on March 30, 2010.
Interest Payment Dates: March 30 and September 30
Record Dates: March 15 and September 15
A-3
<PAGE>
Additional provisions of this Note are set forth on the other side
of this Note.
FLAG Telecom Holdings Limited
By:_____________________________________
Name:
Title:
By:_____________________________________
Name:
Title:
TRUSTEE'S CERTIFICATE OF
AUTHENTICATION
The Bank of New York,
as Trustee, certifies
that this is one of
the 11.625% Senior Dollar
Notes due 2010 referred
to in the Indenture.
By:________________________________
Authorized Signatory Date: ___________________
A-4
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FORM OF REVERSE SIDE OF NOTE
11.625% Senior Dollar Notes Due 2010
1. Interest
FLAG Telecom Holdings Limited, a Bermuda corporation (such
corporation, and its successors and assigns under the Indenture hereinafter
referred to, being herein called the "Company"), promises to pay interest on the
principal amount of this Note at the rate per annum shown above.
The Company will pay interest semiannually in arrears on each
Interest Payment Date of each year commencing September 30, 2000. Interest on
the Notes will accrue from the most recent date to which interest has been paid
on the Notes or, if no interest has been paid, from the Issue Date. The Company
shall pay interest on overdue principal (plus interest on such interest to the
extent lawful), at the rate borne by the Notes to the extent lawful. Interest
will be computed on the basis of a 360-day year of twelve 30-day months.
The Company shall pay interest (including post-petition interest in
any proceeding under any Bankruptcy Law) on overdue principal and, to the extent
such payments are lawful, interest on overdue installments of interest
("Defaulted Interest") without regard to any applicable grace periods at the
rate of 2.0% per annum in excess of the rate shown on this Note, as provided in
the Indenture.
All payments made by the Company in respect of the Notes will be
made free and clear of and without deduction or withholding for or on account of
any Taxes imposed or levied by or on behalf of any Taxing Authority, unless such
withholding or deduction is required by law or by the interpretation or
administration thereof. In that event, the Company will pay to each Holder of
the Notes Additional Amounts as provided in the Indenture subject to the
limitations set forth in the Indenture.
2. Method of Payment
By at least 10:00 a.m. (New York City time) on the date on which any
principal of or interest on any Note is due and payable, the Company shall
irrevocably deposit with the Trustee or the Paying Agent money sufficient to pay
such principal and/or interest. The Company will pay interest (except Defaulted
Interest) to the Persons who are registered Holders of Notes at the close of
business on the Record Date preceding the Interest Payment Date even if Notes
are canceled, repurchased or redeemed after the Record Date and on or before the
relevant Interest Payment Date. Holders must surrender Notes to a Paying Agent
to collect principal payments. The Company will pay principal and interest in
U.S. Legal Tender.
Payments in respect of Notes represented by a Global Note (including
principal and interest) will be made by the transfer of immediately available
funds to the accounts specified by DTC. The Company will make all payments in
respect of a Certificated Note (including principal and interest) by mailing a
check to the registered address of each Holder
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thereof; provided, however, that payments on the Notes may also be made, in the
case of a Holder of at least $1,000,000 aggregate principal amount of Notes, by
wire transfer to a U.S. dollar account maintained by the payee with a bank in
the United States if such Holder elects payment by wire transfer by giving
written notice to the Trustee or the Paying Agent to such effect designating
such account no later than 15 days immediately preceding the relevant due date
for payment (or such other date as the Trustee may accept in its discretion).
3. Paying Agent and Registrar
Initially, The Bank of New York (the "Trustee"), will act as
Trustee, Paying Agent and Registrar. The Company may appoint and change any
Paying Agent, Registrar or co-registrar without prior notice to any Holder. The
Company may act as Paying Agent, Registrar or co-registrar.
4. Indenture
The Company issued the Notes under an Indenture, dated as of March
17, 2000 (as it may be amended or supplemented from time to time in accordance
with the terms thereof, the "Indenture"), between the Company and the Trustee.
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 of 1939 (15 U.S.C.
ss.ss. 77aaa-77bbbb) as in effect on the date of the Indenture (the "Act").
Capitalized terms used herein and not defined herein have the meanings ascribed
thereto in the Indenture. The Notes are subject to all such terms, and Holders
are referred to the Indenture and the Act for a statement of those terms. Each
Holder by accepting a Note, agrees to be bound by all of the terms and
provisions of the Indenture, as amended from time to time.
The Notes are senior unsecured obligations of the Company, ranking
pari passu in right of payment with each other, the Euro Notes and with all
senior unsecured Indebtedness of the Company and senior in right of payment to
all Subordinated Indebtedness. The Notes are limited to $300 million aggregate
principal amount.
The Indenture imposes certain limitations on, among other things,
the ability of the Company and its Restricted Subsidiaries to: incur
Indebtedness, make Restricted Payments, incur Liens, issue or sell Capital
Interests of Restricted Subsidiaries, consummate Asset Sales, enter into
transactions with Affiliates, or consolidate or merge or transfer or convey all
or substantially all of the Company's and its Restricted Subsidiaries' assets.
5. Redemption
Optional Redemption. Except as stated below, the Company may not
redeem the Notes prior to March 30, 2005. The Company may redeem the Notes, at
its option, in whole at any time or in part from time to time, on and after
March 30, 2005, at the following redemption prices, expressed as percentages of
the principal amount thereof, plus accrued and unpaid interest to the date of
redemption, if redeemed during the twelve-month period commencing on March 30 of
any year set forth below:
A-6
<PAGE>
YEAR PERCENTAGE
2005 .................................................. 105.813%
2006................................................... 103.875%
2007................................................... 101.938%
2008 and thereafter.................................... 100.000%
Optional Redemption Upon Public Equity Offerings. At any time, or
from time to time, on or prior to March 30, 2003 the Company may, at its option,
use the net cash proceeds of one or more Public Equity Offerings to redeem in
the aggregate up to 35% of the aggregate principal amount of the Notes
originally issued at a redemption price equal to 111.625% of the principal
amount thereof, plus accrued and unpaid interest thereon to the date of
redemption, provided, that:
(1) after giving effect to any such redemption at least 65% of the
aggregate principal amount of the Notes, originally issued remains
outstanding; and
(2) the Company shall make such redemption not more than 90 days
after the consummation of such Public Equity Offering.
Optional Tax Redemption. The Notes will be subject to redemption at
the option of the Company or a successor corporation at any time, in whole but
not in part, upon not less than 30 nor more than 60 days' notice, at a
redemption price equal to the principal amount thereof plus accrued and unpaid
interest to the redemption date if, as a result of any change in or amendment to
the laws or any regulations or rulings promulgated thereunder of:
(1) Bermuda or any political subdivision or governmental authority
thereof or therein having power to tax,
(2) any jurisdiction, other than the United States, the United
Kingdom or Luxembourg, from or through which payment on the Notes is made
by the Company or a successor corporation, or its paying agent in its
capacity as such, or any political subdivision or governmental authority
thereof or therein having the power to tax, or
(3) any other jurisdiction, other than the United States, in which
the Company or a successor corporation is organized, or any political
subdivision or governmental authority thereof or therein having the power
to tax, or any Change in Tax Law, which becomes effective on or after the
date of the Offering Memorandum, the Company or a successor corporation is
or would be required on the next succeeding Interest Payment Date to pay
Additional Amounts with respect to the Notes, and the payment of such
Additional Amounts cannot be avoided by the use of any reasonable measures
available to the Company or the successor corporation.
In the case of any partial redemption, selection of the Notes for
redemption will be made in accordance with Article V of the Indenture. On and
after the redemption date, interest will cease to accrue on Notes or portions
thereof called for redemption as long as the Company has deposited with the
Paying Agent funds in satisfaction of the applicable redemption price pursuant
to the Indenture.
A-7
<PAGE>
6. Repurchase Provisions
Change Of Control Offer. Upon the occurrence of a Change of Control,
each Holder of Notes will have the right to require that the Company purchase
all or a portion (in integral multiples of $1,000) of the Holder's Notes at a
purchase price equal to 101% of the principal amount thereof, plus accrued and
unpaid interest through the date of purchase. Within 30 days following the date
upon which the Change of Control occurred, the Company must send, by first-class
mail, a notice to each Holder of Notes, with a copy to the Trustee, offering to
purchase such Notes as described in the preceding sentence (a "Change of Control
Offer"). The Change of Control Offer shall state, among other things, the
purchase date, which must be no earlier than 30 days nor later than 60 days from
the date the notice is mailed, other than as may be required by law (the "Change
of Control Payment Date").
Asset Sale Offer. The Indenture imposes certain limitations on the
ability of the Company and its Restricted Subsidiaries to sell assets. In the
event the proceeds from a permitted Asset Sale exceed certain amounts, as
specified in the Indenture, the Company generally will be required either to
reinvest the proceeds of such Asset Sale in a Permitted Business, use such
proceeds to retire debt, or to make an Asset Sale Offer to purchase a certain
amount of each Holder's Notes at 100% of the principal amount thereof, plus
accrued interest (if any) to the Asset Sale Offer Payment Date, as more fully
set forth in the Indenture.
7. Denominations; Transfer; Exchange
The Notes are in fully registered form without coupons, and only in
denominations of principal amount of $1,000 and any integral multiple thereof. A
Holder may transfer or exchange Notes in accordance with the Indenture. The
Registrar may require a Holder, among other things, to furnish appropriate
endorsements or transfer documents and to pay any taxes and fees required by law
or permitted by the Indenture. The Registrar need not register the transfer of
or exchange (i) any Notes selected for redemption (except, in the case of a Note
to be redeemed in part, the portion of the Note not to be redeemed) for a period
beginning 15 days before the mailing of a notice of Notes to be redeemed and
ending on the date of such mailing or (ii) any Notes for a period beginning 15
days before an interest payment date and ending on such interest payment date.
8. Persons Deemed Owners
The registered holder of this Note may be treated as the owner of it
for all purposes.
9. Unclaimed Money
If money for the payment of principal or interest remains unclaimed
for two years, the Trustee or Paying Agent shall pay the money back to the
Company at its request unless an abandoned property law designates another
Person. After any such payment, Holders entitled to the money must look only to
the Company and not to the Trustee for payment.
A-8
<PAGE>
10. Discharge Prior to Redemption or Maturity
Subject to certain conditions set forth in the Indenture, the
Company at any time may terminate some or all of its obligations under the Notes
and the Indenture if the Company deposits with the Trustee U.S. Legal Tender or
U.S. Government Obligations for the payment of principal of and interest on the
Notes to redemption or maturity, as the case may be.
11. Amendment, Waiver
Subject to certain exceptions set forth in the Indenture, (i) the
Indenture or the Notes may be amended with the written consent of the Holders of
at least a majority in principal amount of the then Outstanding Notes and (ii)
any default (other than with respect to nonpayment or in respect of a provision
that cannot be amended without the written consent of each Holder affected) or
noncompliance with any provision may be waived with the written consent of the
Holders of a majority in principal amount of the then Outstanding Notes. Subject
to certain exceptions set forth in the Indenture, without the consent of any
Holder, the Company and the Trustee may amend the Indenture or the Notes to,
among other things, cure any ambiguity, omission, defect or inconsistency, or to
comply with Article IV of the Indenture, or to provide for uncertificated Notes
in addition to or in place of certificated Notes, or to add guarantees with
respect to the Notes or to secure the Notes, or to add additional covenants or
surrender rights and powers conferred on the Company, or to comply with any
request of the SEC in connection with qualifying the Indenture under the Act, or
to make any change that does not adversely affect the rights of any Holder, or
to provide for the issuance of Exchange Notes.
12. Defaults and Remedies
If an Event of Default 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 immediately. Certain events of bankruptcy or
insolvency are Events of Default which will result in the Notes being due and
payable immediately upon the occurrence of such Events of Default.
Holders may not enforce the Indenture or the Notes except as
provided in the Indenture. The Trustee may refuse to enforce the Indenture or
the Notes unless it receives reasonable indemnity or security. Subject to
certain limitations, Holders of a majority in principal amount of the
Outstanding Notes may direct the Trustee in its exercise of any trust or power.
The Trustee may withhold from Holders notice of any continuing Default or Event
of Default (except a Default or Event of Default in payment of principal or
interest) if it determines that withholding notice is in their interest.
13. Trustee Dealings with the Company
Subject to certain limitations set forth in the Indenture, the
Trustee under the Indenture, in its individual or any other capacity, may become
the owner or pledgee of Notes and may otherwise deal with and collect
obligations owed to it by the Company or its Affiliates and may otherwise deal
with the Company or its affiliates with the same rights it would have if it were
not Trustee.
A-9
<PAGE>
14. No Recourse Against Others
An incorporator, director, officer, employee, stockholder or
controlling person, as such, of the Company shall not have any liability for any
obligations of the Company under the Notes, the Indenture or for any claim based
on, in respect of or by reason of such obligations or their creation. By
accepting a Note, each Holder waives and releases all such liability. The waiver
and release are part of the consideration for the issue of the Notes.
15. Authentication
This Note shall not be valid until an authorized signatory of the
Trustee (or an authenticating agent acting on its behalf) manually signs the
certificate of authentication on the other side of this Note.
16. Abbreviations
Customary abbreviations may be used in the name of a Holder or an
assignee, such as TEN COM (=tenants in common), TEN ENT (=tenants by the
entirety), JT TEN (=joint tenants with rights of survivorship and not as tenants
in common), CUST (=custodian) and U/G/M/A (=Uniform Gift to Minors Act).
17. CUSIP Numbers
Pursuant to a recommendation promulgated by the Committee on Uniform
Security Identification Procedures the Company has caused CUSIP numbers to be
printed on the Notes and has directed the Trustee to use CUSIP numbers in
notices of redemption as a convenience to Holders. No representation is made as
to the accuracy of such numbers either as printed on the Notes or as contained
in any notice of redemption and reliance may be placed only on the other
identification numbers placed thereon.
[If the Note is a Regulation S Global Note, replace 17. with the
following:
17. ISIN Numbers
The Company has caused ISIN numbers to be printed on the Notes and
has directed the Trustee to use ISIN numbers in notices of redemption as a
convenience to Holders. No representation is made as to the accuracy of such
numbers either as printed on the Notes or as contained in any notice of
redemption and reliance may be placed only on the other identification numbers
placed thereon.]
18. Governing Law
This Note shall be governed by, and construed in accordance with,
the laws of the State of New York, but without giving effect to applicable
principles of conflicts of law to the extent that the application of the law of
another jurisdiction would be required thereby.
A-10
<PAGE>
19. Currency of Account; Conversion of Currency.
U.S. Legal Tender is the sole currency of account and payment for
all sums payable by the Company under or in connection with the Notes or the
Indenture, including damages. The Company will indemnify the Holders pursuant to
Section 10.7 of the Indenture in respect of the conversion of currency relating
to the Notes and the Indenture.
20. Agent for Service; Submission to Jurisdiction; Waiver of Immunities.
The Company has agreed that any suit, action or proceeding against
the Company brought by any Holder or the Trustee arising out of or based upon
the Indenture or the Notes may be instituted in any state or federal court in
the Borough of Manhattan, The City of New York, New York, United States, and any
appellate court from any thereof. The Company has irrevocably submitted to the
non-exclusive jurisdiction of such courts for such purpose and waived, to the
fullest extent permitted by law, trial by jury and any objection it may now or
hereafter have to the laying of venue of any such proceeding, and any claim it
may now or hereafter have that any proceeding in any such court is brought in an
inconvenient forum. The Company has appointed FLAG Telecom Holdings Ltd. as its
authorized agent upon whom all writs, process and summonses may be served in any
suit, action or proceeding arising out of or based upon the Indenture or the
Notes which may be instituted in any state or federal court in the Borough of
Manhattan, The City of New York, New York. To the extent that the Company has or
hereafter may acquire any immunity (sovereign or otherwise) from any legal
action, suit or proceeding, from jurisdiction of any court or from set-off or
any legal process (whether service or notice, attachment in aid or otherwise)
with respect to itself or any of its property, the Company has irrevocably
waived and agreed not to plead or claim such immunity in respect of its
obligations under the Indenture or the Notes.
The Company will furnish to any Holder upon written request and
without charge to the Holder a copy of the Indenture which has in it the text of
this Note in larger type. Requests may be made to:
FLAG Telecom Holdings Limited
3rd Floor, 103 Mount Street
London W1Y 5HE
Facsimile No.: (44) 171-317-0808
Attention: Stuart Rubin, General Counsel
A-11
<PAGE>
ASSIGNMENT FORM
To assign this Note, fill in the form below:
I or we assign and transfer this Note to
(Print or type assignee's name, address and zip code)
(Insert assignee's Social Security or Tax I.D. Number)
and irrevocably appoint agent to transfer this Note on the books of the Company.
The agent may substitute another to act for him.
Date:______________________________ Your Signature:_________________________
Signature Guarantee:______________________________
(Signature must be guaranteed)
- --------------------------------------------------------------------------------
Sign exactly as your name appears on the other side of this Note.
The signature(s) should be guaranteed by an eligible guarantor institution
(banks, stockbrokers, savings and loan associations and credit unions with
membership in an approved signature guarantee medallion program), pursuant to
SEC Rule 17Ad-15.
A-12
<PAGE>
[To be attached to Global Notes only:
SCHEDULE OF INCREASES OR DECREASES IN GLOBAL NOTE
The following increases or decreases in this Global Note have been
made:
Principal
Amount of Amount of Amount of this Signature of
decrease in increase in Global Note authorized
Principal Principal following such signatory of
Date of Amount of this Amount of this decrease or Trustee or Note
Exchange Global Note Global Note increase Custodian
- -------- -------------- -------------- -------------- ------------------
]
A-13
<PAGE>
OPTION OF HOLDER TO ELECT PURCHASE
If you want to elect to have this Note purchased by the Company
pursuant to Sections 3.8 or 3.15 of the Indenture, check either box:
|_| |_|
Section 3.8 Section 3.15
If you want to elect to have only part of this Note purchased by the
Company pursuant to Sections 3.8 or 3.15 of the Indenture, state the principal
amount (which must be an integral multiple of $1,000) that you want to have
purchased by the Company: $
Date:____________ Your Signature ____________________________
(Sign exactly as your name appears on the
other side of the Note)
Signature Guarantee: _______________________________________
(Signature must be guaranteed)
The signature(s) should be guaranteed by an eligible guarantor institution
(banks, stockbrokers, savings and loan associations and credit unions with
membership in an approved signature guarantee medallion program), pursuant to
SEC Rule 17Ad-15.
A-14
<PAGE>
EXHIBIT B
FORM OF TRANSFER CERTIFICATE FOR TRANSFER TO QIB
[Date]
The Bank of New York
101 Barclay Street
Floor 21 West
New York, New York 10286
Attn: Corporate Trust Administration - Global Finance Unit
Re: FLAG Telecom Holdings Limited (the "Company") 11.625% Senior
Dollar Notes Due 2010 (the "Notes")
Ladies and Gentlemen:
Reference is hereby made to the Indenture, dated as of March 17,
2000 (as amended and supplemented from time to time, the "Indenture"), between
the Company, as issuer, and The Bank of New York, as Trustee. Capitalized terms
used but not defined herein shall have the meanings given them in the Indenture.
This letter relates to $___________ aggregate principal amount of
which represent an interest in a Regulation S Global Note beneficially owned by
the undersigned (the "Transferor") to effect the transfer of such Notes in
exchange for an equivalent beneficial interest in the Rule 144A Global Note.
In connection with such request, and with respect to such Notes, the
Transferor does hereby certify that such Notes are being transferred in
accordance with Rule 144A under the Securities Act of 1933, as amended ("Rule
144A"), to a transferee that the Transferor reasonably believes is purchasing
the Notes for its own account or an account with respect to which the transferee
exercises sole investment discretion, and the transferee, as well as any such
account, is a "qualified institutional buyer" within the meaning of Rule 144A,
in a transaction meeting the requirements of Rule 144A and in accordance with
applicable securities laws of any state of the United States or any other
jurisdiction.
B-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.
Very truly yours,
[Name of Transferor]
By:____________________________
_______________________________
Authorized Signature
B-2
<PAGE>
EXHIBIT C
FORM OF CERTIFICATE TO BE DELIVERED IN CONNECTION WITH TRANSFERS
PURSUANT TO REGULATION S
[Date]
The Bank of New York
101 Barclay Street
Floor 21 West
New York, New York 10286
Attn: Corporate Trust Administration - Global Finance Unit
Re: FLAG Telecom Holdings Limited (the "Company")
11.625% Senior Dollar Notes Due 2010 (the "Notes")
Ladies and Gentlemen:
Reference is hereby made to the Indenture, dated as of March 17,
2000 (as amended and supplemented from time to time, the "Indenture"), between
the Company, as issuer, and The Bank of New York, as Trustee. Capitalized terms
used but not defined herein shall have the meanings given them in the Indenture.
In connection with our proposed sale of $________ aggregate
principal amount of the Notes, which represent an interest in a 144A Global Note
beneficially owned by the undersigned ("Transferor"), we confirm that such sale
has been effected pursuant to and in accordance with Regulation S under the
Securities Act of 1933, as amended (the "Securities Act"), and, accordingly, we
represent that:
(a) the offer of the Notes was not made to a person in the United
States;
(b) either (i) 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 or (ii) the transaction was executed in, on or through the
facilities of a designated off-shore securities market and neither we nor
any person acting on our behalf knows that the transaction has been
pre-arranged with a buyer in the United States;
(c) no directed selling efforts have been made in the United States
in contravention of the requirements of Rule 903(b) or Rule 904(b) of
Regulation S, as applicable;
(d) the transaction is not part of a plan or scheme to evade the
registration requirements of the Securities Act; and
(e) we are the beneficial owner of the principal amount of Notes
being transferred.
C-1
<PAGE>
In addition, if the sale is made during a Distribution Compliance
Period and the provisions of Rule 904(b)(1) or Rule 904(b)(2) of Regulation S
are applicable thereto, we confirm that such sale has been made in accordance
with the applicable provisions of Rule 904(b)(1) or Rule 904(b)(2), as the case
may be.
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 letter have the
meanings set forth in Regulation S.
Very truly yours,
[Name of Transferor]
By:____________________________
_______________________________
Authorized Signature
C-2
<PAGE>
EXHIBIT D
FORM OF RULE 144 CERTIFICATION
[Date]
The Bank of New York
101 Barclay Street
Floor 21 West
New York, New York 10286
Attn: Corporate Trust Administration - Global Finance Unit
Re: FLAG Telecom Holdings Limited (the "Company")
11.625% Senior Dollar Notes Due 2010 (the "Notes")
Ladies and Gentlemen:
Reference is hereby made to the Indenture, dated as of March 17,
2000 (as amended and supplemented from time to time, the "Indenture"), between
the Company, as issuer, and The Bank of New York, as Trustee. Capitalized terms
used but not defined herein shall have the meanings given them in the Indenture.
In connection with our proposed sale of $________ aggregate
principal amount of the Notes, which represent an interest in a 144A Global Note
beneficially owned by the undersigned ("Transferor"), we confirm that such sale
has been effected pursuant to and in accordance with Rule 144 under the
Securities Act.
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 Transferor]
By:____________________________
_______________________________
Authorized Signature
D-1
REGISTRATION AGREEMENT
Dated as of March 17, 2000
Among
FLAG TELECOM HOLDINGS LIMITED
as Issuer
and
SALOMON SMITH BARNEY INC.
MORGAN STANLEY & CO. INTERNATIONAL LIMITED,
DEUTSCHE BANK SECURITIES INC. and
BEAR, STEARNS & CO. INC.
as Initial Purchasers
11.625% Senior Euro Notes due 2010
<PAGE>
REGISTRATION AGREEMENT
This Registration Agreement (this "Agreement") is dated as of March
17, 2000, by and among FLAG TELECOM HOLDINGS LIMITED, a Bermuda corporation (the
"Company" or the "Issuer), as issuer, and SALOMON SMITH BARNEY INC., MORGAN
STANLEY & CO. INTERNATIONAL LIMITED, DEUTSCHE BANK SECURITIES INC. AND BEAR,
STEARNS & CO. INC., as Initial Purchasers (the "Initial Purchasers").
This Agreement is entered into in connection with the Purchase
Agreement, dated March 14, 2000, by and among the Company and the Initial
Purchasers (the "Purchase Agreement"), which provides for, among other things,
the sale by the Company to the Initial Purchasers of (euro)300 million aggregate
principal amount of the Company's 11.625% Senior Euro Notes due 2010 (the
"Notes") and $300 million aggregate principal amount of the Company's 11.625%
Senior Dollar Notes due 2010. In order to induce the Initial Purchasers to enter
into the Purchase Agreement, the Issuer has agreed to provide the registration
rights set forth in this Agreement for the benefit of the Initial Purchasers and
any subsequent holder or holders of each of the Notes. The execution and
delivery of this Agreement is a condition to the Initial Purchasers' obligation
to purchase the Notes under the Purchase Agreement.
The parties hereby agree as follows:
1. Definitions.
As used in this Agreement, the following terms shall have the
following meanings:
Additional Interest: See Section 4 hereof.
Advice: See Section 5 hereof.
Agreement: See the introductory paragraphs hereto.
Applicable Period: See Section 3 hereof.
Closing: See Purchase Agreement.
Company: See the introductory paragraph hereto.
Effectiveness Date: The Exchange Effectiveness Date or the Initial
Shelf Registration Effectiveness date, as the case may be.
Effectiveness Period: See Section 3 hereof.
1
<PAGE>
Event Date: See Section 4 hereof.
Exchange Act: The Securities Exchange Act of 1934, as amended, and
the rules and regulations of the SEC promulgated thereunder.
Exchange Effectiveness Date: See Section 2 hereof.
Exchange Filing Date: See Section 2 hereof.
Exchange Notes: The 11.625% Senior Euro Notes due 2010, of the
Company, that are identical to the Notes in all material respects, except that
the provisions regarding restrictions on transfer shall be modified, as
appropriate, and the issuance thereof pursuant to the Exchange Offer shall have
been registered pursuant to an effective Registration Statement in compliance
with the Securities Act.
Exchange Offer: See Section 2 hereof.
Exchange Registration Statement: See Section 2 hereof.
Filing Date: The Exchange Filing Date or Initial Shelf Registration
Filing Date, as the case may be.
Holder: Any holder of a Registrable Note.
Indemnified Person: See Section 7(c) hereof.
Indemnifying Person: See Section 7(c) hereof.
Indenture: The Indenture, dated as of March 17, 2000, by and among
the Issuer and The Bank of New York, as Trustee, pursuant to which the Notes are
being issued, as the same may be amended or supplemented from time to time in
accordance with the terms thereof.
Initial Purchasers: See the introductory paragraphs hereto.
Initial Shelf Registration: See Section 3(a) hereof.
Initial Shelf Registration Effectiveness Date: See Section 3(a)
hereof.
Initial Shelf Registration Filing Date: See Section 3(a) hereof.
Inspectors: See Section 5(m) hereof.
2
<PAGE>
Issue Date: March 17, 2000, the date of original issuance of the
Notes.
Issuer: See the introductory paragraphs hereto.
NASD: See Section 5(r) hereof.
Notes: See the introductory paragraphs hereto.
Offering Memorandum: The final offering memorandum of the Issuer
dated March 14, 2000, in respect of the offering of the Notes.
Participant: See Section 7(a) hereof.
Participating Broker-Dealer: See Section 2 hereof.
Person: An individual, trustee, corporation, partnership, joint
stock company, trust, unincorporated association, union, business association,
firm or other legal entity.
Private Exchange: See Section 2 hereof.
Private Exchange Notes: See Section 2 hereof.
Prospectus: The prospectus included in any Registration Statement
(including, without limitation, any prospectus subject to completion and a
prospectus that includes any information previously omitted from a prospectus
filed as part of an effective registration statement in reliance upon Rule 430A
promulgated under the Securities Act and any term sheet filed pursuant to Rule
434 under the Securities Act), as amended or supplemented by any prospectus
supplement, and all other amendments and supplements to the Prospectus,
including post-effective amendments, and all material incorporated by reference
or deemed to be incorporated by reference in such Prospectus.
Purchase Agreement: See the introductory paragraphs hereto.
Records: See Section 5(m) hereof.
Registrable Notes: (a) Each Note upon its original issuance and at
all times subsequent thereto, (b) each Exchange Note as to which Section
2(c)(iv) hereof is applicable upon original issuance and at all times subsequent
thereto and (c) each Private Exchange Note upon original issuance thereof and at
all times subsequent thereto, until (w) a Registration Statement (other than,
with respect to any Exchange Note as to which Section 2(c)(iv) hereof is
applicable, the Exchange Offer Registration Statement) covering such Note,
Exchange Note or Private Exchange Note has been declared effective by the SEC
and such Note, Exchange Note or such Private Exchange Note, as the case may be,
has been disposed of in accordance
3
<PAGE>
with such effective Registration Statement, (x) such Note has been exchanged
pursuant to the Exchange Offer for an Exchange Note or Exchange Notes that may
be resold without complying with the prospectus delivery requirements under the
Securities Act, (y) such Note, Exchange Note or Private Exchange Note, as the
case may be, ceases to be outstanding for purposes of the Indenture or (z) such
Note, Exchange Note or Private Exchange Note, as the case may be, may be resold
without restriction pursuant to Rule 144 under the Securities Act.
Registration Statement: Any registration statement of the Company
that covers any of the Notes, the Exchange Notes or the Private Exchange Notes,
filed with the SEC under the Securities Act, including the Prospectus,
amendments and supplements to such registration statement, including
post-effective amendments, all exhibits, and all material incorporated by
reference or deemed to be incorporated by reference in such registration
statement.
Rule 144: Rule 144 promulgated under the Securities Act, as such
Rule may be amended from time to time, or any similar rule (other than Rule
144A) or regulation hereafter adopted by the SEC providing for offers and sales
of securities made in compliance therewith resulting in offers and sales by
subsequent holders that are not affiliates of the issuer of such securities
being free of the registration and prospectus delivery requirements of the
Securities Act.
Rule 144A: Rule 144A promulgated under the Securities Act, as such
Rule may be amended from time to time, or any similar rule (other than Rule 144)
or regulation hereafter adopted by the SEC.
Rule 415: Rule 415 promulgated under the Securities Act, as such
Rule may be amended from time to time, or any similar rule or regulation
hereafter adopted by the SEC.
SEC: The Securities and Exchange Commission.
Securities Act: The Securities Act of 1933, as amended, and the
rules and regulations of the SEC promulgated thereunder.
Shelf Notice: See Section 2(c) hereof.
Shelf Registration: See Section 3(b) hereof.
Subsequent Shelf Registration: See Section 3(b) hereof.
TIA: The Trust Indenture Act of 1939, as amended.
Trustee: The trustee under the Indenture and the trustee under any
indenture
4
<PAGE>
governing the Exchange Notes and Private Exchange Notes.
Underwritten registration or underwritten offering: A registration
in which securities of the Issuer are sold to an underwriter for reoffering to
the public.
2. Exchange Offer.
(a) The Issuer shall (A) prepare and, on or prior to 60 days after
the Issue Date (the "Exchange Filing Date"), file with the SEC a Registration
Statement under the Securities Act with respect to an offer by the Company to
the holders of the Notes to issue and deliver to such holders, in exchange for
Notes, a like principal amount of Exchange Notes (the "Exchange Offer"), (B) use
its best efforts to cause the Registration Statement relating to the Exchange
Offer to be declared effective by the SEC under the Securities Act on or prior
to 150 days after the Issue Date (the "Exchange Effectiveness Date") and (C)
commence the Exchange Offer and use its best efforts to issue, on or prior to
180 days after the Issue Date, the Exchange Notes. The offer and sale of the
Exchange Notes pursuant to the Exchange Offer shall be registered pursuant to
the Securities Act on the appropriate form (the "Exchange Registration
Statement") and duly registered or qualified under all applicable state
securities or Blue Sky laws and will comply with all applicable tender offer
rules and regulations under the Exchange Act and state securities or Blue Sky
laws. The Exchange Offer shall not be subject to any condition, other than that
the Exchange Offer does not violate any applicable law or interpretation of the
staff of the SEC. Upon consummation of the Exchange Offer in accordance with
this Section 2, the Issuer shall have no further registration obligations other
than with respect to (i) Private Exchange Notes, (ii) Exchange Notes held by
Participating Broker-Dealers and (iii) Notes or Exchange Notes as to which
Section 3 hereof applies. No securities shall be included in the Exchange
Registration Statement other than the Exchange Notes.
(b) The Issuer may require each holder of Notes as a condition to
its participation in the Exchange Offer to represent to the Issuer and its
counsel in writing (which may be contained in the applicable letter of
transmittal) that at the time of the consummation of the Exchange Offer (i) any
Exchange Notes received by such holder will be acquired in the ordinary course
of its business, (ii) 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 Notes and (iii) such holder is not an Affiliate
of the Issuer, or if it is an Affiliate of the Issuer, it will comply with the
registration and prospectus delivery requirements of the Securities Act, to the
extent applicable.
If, prior to consummation of the Exchange Offer, an Initial
Purchaser holds any Notes acquired by it and having, or that are reasonably
likely to be determined to have, the status of an unsold allotment in the
initial distribution, or any other holder of Notes is not entitled to
participate in the Exchange Offer, the Company upon the request of such Initial
Purchaser or any such holder shall, simultaneously with the delivery of the
Exchange Notes in the Exchange Offer, issue and deliver to such Initial
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Purchaser and any such holder, in exchange (the "Private Exchange") for such
Notes held by such Initial Purchaser and any such holder, a like principal
amount of debt securities of the Company, that are identical in all material
respects to the Exchange Notes (the "Private Exchange Notes") (and that are
issued pursuant to the same indenture as the Exchange Notes). The Private
Exchange Notes shall bear the same CUSIP number as the Exchange Notes.
The Issuer and the Initial Purchasers acknowledge that the staff of
the SEC has taken the position that any broker-dealer that owns Exchange Notes
that were received by such broker-dealer for its own account in the Exchange
Offer (a "Participating Broker-Dealer") may be deemed to be an "underwriter"
within the meaning of the Securities Act and must deliver a prospectus meeting
the requirements of the Securities Act in connection with any resale of such
Exchange Notes (other than a resale of an unsold allotment resulting from the
original offering of the Notes).
The Issuer and the Initial Purchasers also acknowledge that it is
the SEC staff's position that if the Prospectus contained in the Exchange
Registration Statement includes a plan of distribution containing a statement to
the above effect and the means by which Participating Broker-Dealers may resell
the Exchange Notes, without naming the Participating Broker-Dealers or
specifying the amount of Exchange Notes owned by them, such Prospectus may be
delivered by Participating Broker-Dealers to satisfy their prospectus delivery
obligations under the Securities Act in connection with resales of Exchange
Notes for their own accounts, so long as the Prospectus otherwise meets the
requirements of the Securities Act.
In light of the foregoing, if requested by a Participating
Broker-Dealer, the Issuer agrees (x) to use its best efforts to keep the
Exchange Registration Statement continuously effective for a period of up to six
months or such earlier date as each Participating Broker-Dealer shall have
notified the Company in writing that such Participating Broker-Dealer has resold
all Exchange Notes acquired in the Exchange Offer, (y) to comply with the
provisions of Section 5 of this Agreement, as they relate to the Exchange Offer
and the Exchange Registration Statement, and (z) to deliver to such
Participating Broker-Dealer a "cold comfort" letter of the independent public
accountants of the Issuer and a legal opinion as to matters reasonably requested
by such Participating Broker-Dealer relating to the Exchange Registration
Statement and the related Prospectus and any amendments or supplements thereto.
Interest on the Exchange Notes and the Private Exchange Notes will
accrue from (A) the later of (i) the last interest payment date on which
interest was paid on the Notes surrendered in exchange therefor and (ii) if the
Notes are surrendered for exchange on a date in a period which includes the
record date for an interest payment date to occur on or after the
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date of such exchange and as to which interest will be paid, the date of such
interest payment date or (B), if no interest has been paid on the Notes, from
the Issue Date.
In connection with each Exchange Offer, the Issuer shall:
(1) mail, or cause to be mailed, to each Holder of record entitled
to participate in the Exchange a copy of the Prospectus forming part of
the Exchange Registration Statement, together with an appropriate letter
of transmittal and related documents;
(2) use their best efforts to keep the Exchange Offer open for not
less than 20 business days after the date that notice of the Exchange
Offer is mailed to Holders (or longer if required by applicable law);
(3) utilize the services of a depositary for the Exchange Offer with
an address in the Borough of Manhattan, The City of New York;
(4) permit Holders to withdraw validly tendered Notes at any time
prior to the close of business, New York time, on the last business day on
which the Exchange Offer shall remain open; and
(5) otherwise comply in all material respects with all applicable
laws, rules and regulations.
As soon as practicable after the close of the applicable Exchange
Offer and the applicable Private Exchange, if any, the Issuer shall:
(1) accept for exchange all Registrable Notes validly tendered and
not validly withdrawn pursuant to the applicable Exchange Offer and the
applicable Private Exchange, if any;
(2) deliver to the Trustee for cancellation all Registrable Notes so
accepted for exchange and cause the Trustee to authenticate and deliver
promptly to each Holder of Registrable Notes, Exchange Notes or Private
Exchange Notes, as the case may be, equal in principal amount to the
securities of such Holder so accepted for exchange.
The Exchange Notes and the Private Exchange Notes shall be issued
under (i) the Indenture or (ii) an indenture identical in all material respects
to the Indenture and that, in either case, has been qualified under the TIA or
is exempt from such qualification and shall provide that (a) the Exchange Notes
shall not be subject to the transfer restrictions
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set forth in the Indenture and (b) the Private Exchange Notes shall be subject
to the transfer restrictions set forth in such indenture. The Indenture or such
indenture shall provide that the Exchange Notes, the Private Exchange Notes and
the Notes shall vote and consent together on all matters as one class and that
none of the Exchange Notes, the Private Exchange Notes or the Notes will have
the right to vote or consent as a separate class on any matter.
(c) If, (i) because of any change in law or in currently prevailing
interpretations of the staff of the SEC, the Issuer is not permitted to effect
the Exchange Offer, (ii) the Exchange Offer is not consummated within 180 days
of the Issue Date, (iii) any holder of any Private Exchange Notes so requests in
writing to the Issuer within 45 days after the consummation of the Exchange
Offer, or (iv) in the case of any Holder that participates in the Exchange
Offer, such Holder does not receive Exchange Notes on the date of the exchange
that may be sold without restriction under state and federal securities laws
(other than due solely to the status of such Holder as an affiliate of the
Issuer within the meaning of the Securities Act), then in the case of each of
clauses (i) to and including (iv) of this sentence, the Issuer shall promptly
deliver to the Holders and the Trustee written notice thereof (the "Shelf
Notice") and shall file a Shelf Registration pursuant to Section 3 hereof.
3. Shelf Registration.
If at any time a Shelf Notice is delivered as contemplated by
Section 2(c) hereof, then:
(a) Shelf Registration. The Issuer shall file with the SEC a
Registration Statement for an offering to be made on a continuous basis pursuant
to Rule 415 covering all of the Registrable Notes not exchanged in the Exchange
Offer, Private Exchange Notes and Exchange Notes as to which Section 2(c)(iv) is
applicable (the "Initial Shelf Registration"). The Issuer shall use its best
efforts to file with the SEC the Initial Shelf Registration on or before the
60th day after the occurrence of any of the events set forth in Section 2(c)
(the "Initial Shelf Registration Filing Date"). The Initial Shelf Registration
shall be on Form F-1 or another appropriate form permitting registration of such
Registrable Notes for resale by Holders in the manner or manners designated by
them (including, without limitation, one or more underwritten offerings). The
Issuer shall not permit any securities other than the Registrable Notes to be
included in the Initial Shelf Registration or any Subsequent Shelf Registration
(as defined below).
The Issuer shall use its best efforts to cause the Initial Shelf
Registration to be declared effective under the Securities Act on or prior to
the 90th day after the Initial Shelf Registration Filing Date (the "Initial
Shelf Registration Effectiveness Date") and to keep the Initial Shelf
Registration continuously effective under the Securities Act until the date
which is the earlier of (a) two years from the Issue Date (the "Effectiveness
Period") and (b) such shorter period ending when (i) all Registrable Notes
covered by the Initial Shelf Registration have been sold in the manner set forth
and as contemplated in the Initial Shelf Registration or
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<PAGE>
(ii) a Subsequent Shelf Registration covering all of the Registrable Notes
covered by and not sold under the Initial Shelf Registration or an earlier
Subsequent Shelf Registration has been declared effective under the Securities
Act (the "Applicable Period"); provided, however, that the Effectiveness Period
in respect of the Initial Shelf Registration shall be extended to the extent
required to permit dealers to comply with the applicable prospectus delivery
requirements of Rule 174 under the Securities Act and as otherwise provided
herein.
(b) Subsequent Shelf Registrations. If the Initial Shelf
Registration or any Subsequent Shelf Registration ceases to be effective for any
reason at any time during the Effectiveness Period (other than because of the
sale of all of the securities registered thereunder), the Issuer shall use its
best efforts to obtain the prompt withdrawal of any order suspending the
effectiveness thereof, and in any event shall within 30 days of such cessation
of effectiveness amend the Initial Shelf Registration in a manner to obtain the
withdrawal of the order suspending the effectiveness thereof, or file an
additional "shelf" Registration Statement pursuant to Rule 415 covering all of
the Registrable Notes covered by and not sold under the Initial Shelf
Registration or an earlier Subsequent Shelf Registration (each, a "Subsequent
Shelf Registration"). If a Subsequent Shelf Registration is filed, the Issuer
shall use its best efforts to cause the Subsequent Shelf Registration to be
declared effective under the Securities Act as soon as practicable after such
filing and to keep such subsequent Shelf Registration continuously effective for
the remainder of the Effectiveness Period. As used herein the term "Shelf
Registration" means the Initial Shelf Registration and any Subsequent Shelf
Registration.
(c) Supplements and Amendments. The Issuer shall promptly supplement
and amend any Shelf Registration if required by the rules, regulations or
instructions applicable to the registration form used for such Shelf
Registration, if required by the Securities Act, or if reasonably requested by
the Holders of a majority in aggregate principal amount of the Registrable Notes
covered by such Registration Statement or by any underwriter of such Registrable
Notes.
4. Additional Interest.
(a) The Issuer and the Initial Purchasers agree that the Holders
will suffer damages if the Issuer fails to fulfill its obligations under Section
2 or Section 3 hereof and that it would not be feasible to ascertain the extent
of such damages with precision. Accordingly, the Issuer agrees to pay, as
liquidated damages, additional interest on the Notes ("Additional Interest")
under the circumstances and to the extent set forth below (each of which shall
be given independent effect):
(i) if (A) neither the Exchange Registration Statement nor the Initial
Shelf Registration has been filed on or prior to the applicable Filing
Date or (B) notwithstanding that the Issuer has consummated or will
consummate the
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Exchange Offer, the Issuer is required to file a Shelf Registration and
such Shelf Registration is not filed on or prior to the Filing Date
applicable thereto, then commencing on the day after any such Filing Date,
Additional Interest shall accrue on the principal amount of the Notes at a
rate of 0.25% per annum for the first 30 days immediately following each
such Filing Date, and such Additional Interest shall increase by an
additional 0.25% per annum at the beginning of each subsequent 30-day
period; or
(ii) if (A) neither the Exchange Registration Statement nor the Initial
Shelf Registration is declared effective by the SEC on or prior to the
relevant Effectiveness Date or (B) notwithstanding that the Issuer has
consummated or will consummate the Exchange Offer, the Issuer is required
to file a Shelf Registration and such Shelf Registration is not declared
effective by the SEC on or prior to the Effectiveness Date in respect of
such Shelf Registration, then, commencing on the day after the applicable
Effectiveness Date, Additional Interest shall accrue on the principal
amount of the Notes at a rate of 0.25% per annum for the first 30 days
immediately following the day after such Effectiveness Date, and the rate
of such Additional Interest shall increase by an additional 0.25% per
annum at the beginning of each subsequent 30-day period; or
(iii) if (A) the Issuer has not exchanged Exchange Notes for all Notes
validly tendered in accordance with the terms of the Exchange Offer on or
prior to the 180th day after the Issue Date or (B) if applicable, a Shelf
Registration has been declared effective and such Shelf Registration
ceases to be effective at any time during the Effectiveness Period (other
than such time as all Notes have been disposed of thereunder), then
Additional Interest shall accrue on the principal amount of the Notes at a
rate of 0.25% per annum for the first 30 days commencing on the (x) 181st
day after such Issue Date, in the case of (A) above, or (y) the day such
Shelf Registration ceases to be effective in the case of (B) above, such
Additional Interest shall increase by an additional 0.25% per annum at the
beginning of each such subsequent 30-day period (it being understood and
agreed that, notwithstanding any provision to the contrary, so long as any
Note that is the subject of a Shelf Notice is then covered by an effective
Shelf Registration, no Additional Interest shall accrue or accumulate on
such Notes);
provided, however, that the rate of Additional Interest that shall accrue on the
Notes may not exceed in the aggregate 1.50% per annum; provided, further,
however, that (1) upon the filing of the applicable Exchange Registration
Statement or the applicable Shelf Registration as required hereunder (in the
case of clause (i) above of this Section 4(a)), (2) upon the effectiveness of
the applicable Exchange Registration Statement or the applicable Shelf
Registration Statement as required hereunder (in the case of clause (ii) of this
Section 4(a)), or (3) upon the exchange of the applicable Exchange Notes for all
Notes tendered (in the case of
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clause (iii)(A) of this Section 4(a), or upon the effectiveness of the
applicable Shelf Registration Statement which had ceased to remain effective (in
the case of (iii)(B) of this Section 4(a)), Additional Interest on the Notes in
respect of which such events relate as a result of such clause (or the relevant
subclause thereof), as the case may be, shall cease to accrue or accumulate, as
the case may be.
(b) The Issuer shall notify the Trustee (who shall be acting under
and protected by the terms of the Indenture) within three business days after
each and every date on which an event occurs in respect of which Additional
Interest is required to be paid (an "Event Date"). Any amounts of Additional
Interest due pursuant to (a)(i), (a)(ii) or (a)(iii) of this Section 4 shall be
payable in cash semiannually on each March 30 and September 30 (to the holders
of record on the March 15 and September 15 immediately preceding such dates),
commencing with the first such date occurring after any such Additional Interest
commences to accrue. The amount of Additional Interest will be determined by
multiplying the applicable rate of Additional Interest by the principal amount
of the Registrable Notes, multiplied by a fraction, the numerator of which is
the number of days such rate of Additional Interest was applicable during such
period (determined on the basis of a 360-day year comprised of twelve 30-day
months and, in the case of a partial month, the actual number of days elapsed),
and the denominator of which is 360.
5. Registration Procedures.
In connection with the filing of any Registration Statement pursuant
to Sections 2 or 3 hereof, the Issuer shall effect such registrations to permit
the sale of the securities covered thereby in accordance with the intended
method or methods of disposition thereof, and pursuant thereto and in connection
with any Registration Statement filed by the Issuer hereunder, the Issuer shall:
(a) Prepare and file with the SEC prior to the applicable Filing
Date, a Registration Statement or Registration Statements as prescribed by
Sections 2 or 3 hereof, and use its best efforts to cause each such Registration
Statement to become effective and remain effective as provided herein; provided,
however, that, if (1) such filing is pursuant to Section 3 hereof, or (2) a
Prospectus contained in the Exchange Registration Statement filed pursuant to
Section 2 hereof is required to be delivered under the Securities Act by any
Participating Broker-Dealer who seeks to sell Exchange Notes during the
Applicable Period relating thereto, before filing any Registration Statement or
Prospectus or any amendments or supplements thereto, the Issuer shall furnish to
and afford the Holders of the Registrable Notes included in such Registration
Statement or each such Participating Broker-Dealer, as the case may be, their
counsel and the managing underwriters, if any, a reasonable opportunity to
review copies of all such documents (including copies of any documents to be
incorporated by reference therein and all exhibits thereto) proposed to be filed
(in each case at least five days prior to such filing, or such later date as is
reasonable under the
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<PAGE>
circumstances). The Issuer shall not file any Registration Statement or
Prospectus or any amendments or supplements thereto if the Holders of a majority
in aggregate principal amount of the Registrable Notes included in such
Registration Statement, or any such Participating Broker-Dealer, as the case may
be, their counsel, or the managing underwriters, if any, shall reasonably object
in writing on a timely basis.
(b) Prepare and file with the SEC such amendments and post-effective
amendments to each Shelf Registration Statement or Exchange Registration
Statement, as the case may be, as may be necessary to keep such Registration
Statement continuously effective for the Effectiveness Period or the Applicable
Period, as the case may be; cause the related Prospectus to be supplemented by
any prospectus supplement required by applicable law, and as so supplemented to
be filed pursuant to Rule 424 (or any similar provisions then in force)
promulgated under the Securities Act; and comply with the provisions of the
Securities Act and the Exchange Act applicable to it with respect to the
disposition of all securities covered by such Registration Statement as so
amended or in such Prospectus as so supplemented and with respect to the
subsequent resale of any securities being sold by a Participating Broker-Dealer
covered by any such Prospectus. The Issuer shall be deemed not to have used its
best efforts to keep a Registration Statement effective during the Effectiveness
Period or the Applicable Period, as the case may be, relating thereto if the
Issuer voluntarily takes any action that would result in selling Holders of the
Registrable Notes covered thereby or Participating Broker-Dealers seeking to
sell Exchange Notes not being able to sell such Registrable Notes or such
Exchange Notes during that period unless such action is required by applicable
law or permitted by this Agreement.
(c) If (1) a Shelf Registration is filed pursuant to Section 3
hereof, or (2) a Prospectus contained in an Exchange Registration Statement
filed pursuant to Section 2 hereof is required to be delivered under the
Securities Act by any Participating Broker-Dealer who seeks to sell Exchange
Notes during the Applicable Period relating thereto from whom the Company has
received written notice that it will be a Participating Broker-Dealer in the
applicable Exchange Offer, notify the selling Holders of Registrable Notes or
each such Participating Broker-Dealer, as the case may be, their counsel and the
managing underwriters, if any, promptly (but in any event within 2 business
days), and confirm such notice in writing, (i) when a Prospectus or any
Prospectus supplement or post-effective amendment has been filed, and, with
respect to a Registration Statement or any post-effective amendment, when the
same has become effective under the Securities Act (including in such notice a
written statement that any Holder may, upon request, obtain, at the sole expense
of the Issuer, one conformed copy of such Registration Statement or
post-effective amendment including financial statements and schedules, documents
incorporated or deemed to be incorporated by reference and exhibits), (ii) of
the issuance by the SEC of any stop order suspending the effectiveness of a
Registration Statement or of any order preventing or suspending the use of any
preliminary prospectus or the initiation of any proceedings for that purpose,
(iii) if at any
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<PAGE>
time when a prospectus is required by the Securities Act to be delivered in
connection with sales of the Registrable Notes or resales of Exchange Notes by
Participating Broker-Dealers the representations and warranties of the Issuer
contained in any agreement (including any underwriting agreement) contemplated
by Section 5(l) hereof cease to be true and correct in all material respects,
(iv) of the receipt by the Issuer of any notification with respect to the
suspension of the qualification or exemption from qualification of a
Registration Statement or any of the Registrable Notes or the Exchange Notes to
be sold by any Participating Broker-Dealer for offer or sale in any
jurisdiction, or the initiation or written threat of any proceeding for such
purpose, (v) of the happening of any event, the existence of any condition or
any information becoming known that makes any statement made in such
Registration Statement or related Prospectus or any document incorporated or
deemed to be incorporated therein by reference untrue in any material respect or
that requires the making of any changes in or amendments or supplements to such
Registration Statement, Prospectus or documents so that, in the case of the
Registration Statement, it will not contain any untrue statement of a material
fact or omit to state any material fact required to be stated therein or
necessary to make the statements therein not misleading, and that in the case of
the Prospectus, it will not contain any untrue statement of a material fact or
omit to state any material fact required to be stated therein or necessary to
make the statements therein, in light of the circumstances under which they were
made, not misleading, and (vi) of the Issuer's determination that a
post-effective amendment to a Registration Statement would be appropriate.
(d) If (1) a Shelf Registration is filed pursuant to Section 3
hereof, or (2) a Prospectus contained in an Exchange Registration Statement
filed pursuant to Section 2 hereof is required to be delivered under the
Securities Act by any Participating Broker-Dealer who seeks to sell Exchange
Notes during the Applicable Period, use its best efforts to prevent the issuance
of any order suspending the effectiveness of a Registration Statement or of any
order preventing or suspending the use of a Prospectus or suspending the
qualification (or exemption from qualification) of any of the Registrable Notes
or the Exchange Notes to be sold by any Participating Broker-Dealer, for sale in
any jurisdiction, and, if any such order is issued, to use its best efforts to
obtain the withdrawal of any such order at the earliest possible moment.
(e) If a Shelf Registration is filed pursuant to Section 3 and if
reasonably requested by the managing underwriter or underwriters (if any), the
Holders of a majority in aggregate principal amount of the Registrable Notes
being sold in connection with an underwritten offering (i) as promptly as
practicable incorporate in a prospectus supplement or post-effective amendment
such information as the managing underwriter or underwriters (if any), such
Holders, or counsel for any of them determine is reasonably necessary to be
included therein, (ii) make all required filings of such prospectus supplement
or such post-effective amendment as soon as practicable after the Issuer has
received notification of the matters to be incorporated in such prospectus
supplement or post-effective amendment, and
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(iii) supplement or make amendments to such Registration Statement.
(f) If (1) a Shelf Registration is filed pursuant to Section 3
hereof, or (2) a Prospectus contained in an Exchange Registration Statement
filed pursuant to Section 2 hereof is required to be delivered under the
Securities Act by any Participating Broker-Dealer who seeks to sell Exchange
Notes during the Applicable Period, furnish to each selling Holder of
Registrable Notes and to each such Participating Broker-Dealer who so requests
and to their respective counsel and each managing underwriter, if any, at the
sole expense of the Issuer, one conformed copy of the Registration Statement or
Registration Statements and each post-effective amendment thereto, including
financial statements and schedules, and, if requested, all documents
incorporated or deemed to be incorporated therein by reference and all exhibits.
(g) If (1) a Shelf Registration is filed pursuant to Section 3
hereof, or (2) a Prospectus contained in an Exchange Registration Statement
filed pursuant to Section 2 hereof is required to be delivered under the
Securities Act by any Participating Broker-Dealer who seeks to sell Exchange
Notes during the Applicable Period, deliver to each selling Holder of
Registrable Notes or each such Participating Broker-Dealer, as the case may be,
their respective counsel, and the underwriters, if any, at the sole expense of
the Issuer, as many copies of the Prospectus or Prospectuses (including each
form of preliminary prospectus) and each amendment or supplement thereto and any
documents incorporated by reference therein as such Persons may reasonably
request; and, subject to the last paragraph of this Section 5, the Issuer hereby
consents to the use of such Prospectus and each amendment or supplement thereto
by each of the selling Holders of Registrable Notes or each such Participating
Broker-Dealer, as the case may be, and the underwriters or agents, if any, and
dealers (if any), in connection with the offering and sale of the Registrable
Notes covered by, or the sale by Participating Broker-Dealers of the Exchange
Notes pursuant to, such Prospectus and any amendment or supplement thereto.
(h) Prior to any public offering of Registrable Notes or any
delivery of a Prospectus contained in the Exchange Registration Statement by any
Participating Broker-Dealer who seeks to sell Exchange Notes during the
Applicable Period, use its best efforts to register or qualify, and to cooperate
with the selling Holders of Registrable Notes or each such Participating
Broker-Dealer, as the case may be, the managing underwriter or underwriters, if
any, and their respective counsel in connection with the registration or
qualification (or exemption from such registration or qualification) of such
Registrable Notes for offer and sale under the securities or Blue Sky laws of
such jurisdictions within the United States as any selling Holder, Participating
Broker-Dealer, or the managing underwriter or underwriters reasonably request in
writing; provided, however, that where Exchange Notes held by Participating
Broker-Dealers or Registrable Notes are offered other than through an
underwritten offering, the Issuer agrees to cause its counsel to perform Blue
Sky
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investigations and file registrations and qualifications required to be filed
pursuant to this Section 5(h), keep each such registration or qualification (or
exemption therefrom) effective during the period such Registration Statement is
required to be kept effective and do any and all other acts or things reasonably
necessary or advisable to enable the disposition in such jurisdictions of the
Exchange held by Participating Broker-Dealers or the Registrable Notes covered
by the Registration Statement; provided, however, that the Issuer shall not be
required to (A) qualify generally to do business in any jurisdiction where it is
not then so qualified, (B) take any action that would subject it to general
service of process in any such jurisdiction where it is not then so subject or
(C) subject itself to taxation in excess of a nominal dollar amount in any such
jurisdiction where it is not then so subject.
(i) If a Shelf Registration is filed pursuant to Section 3 hereof,
cooperate with the selling Holders of Registrable Notes and the managing
underwriter or underwriters, if any, to facilitate the timely preparation and
delivery of certificates representing Registrable Notes to be sold, which
certificates shall not bear any restrictive legends and shall be in a form
eligible for deposit with The Depository Trust Company; and enable such
Registrable Notes to be in such denominations and registered in such names as
the managing underwriter or underwriters, if any, or Holders may reasonably
request.
(j) If (1) a Shelf Registration is filed pursuant to Section 3
hereof, or (2) a Prospectus contained in the Exchange Registration Statement
filed pursuant to Section 2 hereof is required to be delivered under the
Securities Act by any Participating Broker-Dealer who seeks to sell Exchange
Notes during the Applicable Period, upon the occurrence of any event
contemplated by paragraph 5(c)(v) or 5(c)(vi) hereof, as promptly as practicable
prepare and (subject to Section 5(a) hereof) file with the SEC, at the sole
expense of the Issuer, a supplement or post-effective amendment to the
applicable Registration Statement or a supplement to the related Prospectus or
any document incorporated or deemed to be incorporated therein by reference, or
file any other required document so that, as thereafter delivered to the
purchasers of the Registrable Notes being sold thereunder or to the purchasers
of the Exchange Notes to whom such Prospectus will be delivered by a
Participating Broker-Dealer, any such Prospectus 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, in light of the
circumstances under which they were made, not misleading. Notwithstanding the
foregoing, the Issuer shall not be required to amend or supplement a
Registration Statement, any related Prospectus or any document incorporated
therein by reference, in the event that, and for a period not to exceed an
aggregate of 75 days in any calendar year if, (i) an event occurs and is
continuing as a result of which a Shelf Registration would, in the Issuer's good
faith judgment, contain an untrue statement of a material fact or omit to state
a material fact necessary in order to make the statements therein, in the light
of the circumstances under which they were made, not misleading, and (ii) (a)
the Issuer determines in its good faith judgment that the disclosure of such
event at such time would have a material
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adverse effect on the business, operations or prospects of the Issuer or (b) the
disclosure otherwise relates to a pending material business transaction that has
not yet been publicly disclosed.
(k) Prior to the effective date of the first Registration Statement
relating to the Registrable Notes, (i) provide the Trustee with certificates for
the Registrable Notes in a form eligible for deposit with The Depository Trust
Company and (ii) provide a CUSIP number for the Registrable Notes.
(l) in the case of a Shelf Registration, enter into such agreements
(including underwriting agreements) and take all such other appropriate actions
as are reasonably requested in order to expedite or facilitate the registration
or the disposition of such Registrable Notes, and in such connection, (i) make
such representations and warranties to Holders of such Registrable Notes with
respect to the business of the Issuer and its subsidiaries as then conducted and
the Registration Statement, Prospectus and documents, if any, incorporated or
deemed to be incorporated by reference therein, in each case, as are customarily
made by issuers to underwriters in underwritten offerings, and confirm the same
if and when requested; (ii) obtain an opinion of counsel to the Issuer and
updates thereof in form and substance reasonably satisfactory to the Holders of
a majority in principal amount of the Registrable Notes being sold, addressed to
each selling Holder covering the matters customarily covered in opinions
requested in underwritten offerings and such other matters as may be reasonably
requested by such Holders; (iii) obtain "cold comfort" letters and updates
thereof from the independent certified public accountants of the Issuer (and, if
necessary, any other independent certified public accountants of any subsidiary
of the Issuer or of any business acquired by any of the Issuer for which
financial statements and financial data are, or are required to be, included in
the Registration Statement), addressed to the selling Holders of Registrable
Notes that satisfy the applicable requirements of Statement of Accounting
Standards No. 72, such letters to be in customary form and covering matters of
the type customarily covered in "cold comfort" letters in connection with
underwritten offerings and such other matters as reasonably requested by such
selling Holders; and (iv) if an underwriting agreement is entered into, the same
shall contain indemnification provisions and procedures no less favorable than
those set forth in Section 7 hereof (or such other provisions and procedures
acceptable to the Issuer and the Holders of a majority in aggregate principal
amount of Registrable Notes covered by such Registration with respect to all
parties to be indemnified pursuant to said Section including, without
limitation, such selling Holders). The above shall be done at each closing in
respect of the sale of Registrable Notes, or as and to the extent required
thereunder.
(m) If (1) a Shelf Registration is filed pursuant to Section 3
hereof, or (2) a Prospectus contained in an Exchange Registration Statement
filed pursuant to Section 2 hereof is required to be delivered under the
Securities Act by any Participating Broker-Dealer
16
<PAGE>
who seeks to sell Exchange Notes during the Applicable Period, make available
for inspection by any selling Holder of such Registrable Notes being sold, or
each such Participating Broker-Dealer, as the case may be, any underwriter
participating in any such disposition of Registrable Notes, if any, and any
attorney, accountant or other agent retained by any such selling Holder or each
such Participating Broker-Dealer, as the case may be, or underwriter
(collectively, the "Inspectors"), at the offices where normally kept, during
regular business hours and upon reasonable notice, all financial and other
records, pertinent corporate documents and instruments of the Issuer and
subsidiaries of the Issuer (collectively, the "Records") as shall be reasonably
necessary to enable them to exercise any applicable due diligence
responsibilities, and cause the officers, directors and employees of the Issuer
and any of its subsidiaries to supply all information reasonably requested by
any such Inspector in connection with such Registration Statement and
Prospectus. Each Inspector shall agree in writing that it will keep the Records
confidential and that it will not disclose any of the Records that the Issuer
determines, in good faith, to be confidential and notify the Inspectors in
writing are confidential unless (i) the disclosure of such Records is necessary
to avoid or correct a material misstatement or material omission in such
Registration Statement or Prospectus, (ii) the release of such Records is
ordered pursuant to a subpoena or other order from a court of competent
jurisdiction, or (iii) the information in such Records has been made generally
available to the public; provided, however, that prior notice shall be provided
as soon as practicable to the Issuer of the potential disclosure of any
information by such Inspector pursuant to clauses (i) or (ii) of this sentence
to permit the Issuer to obtain a protective order (or waive the provisions of
this paragraph (m)) and that such Inspector shall take such actions as are
reasonably necessary to protect the confidentiality of such information (if
practicable) to the extent such action is otherwise not inconsistent with, an
impairment of or in derogation of the rights and interests of the Holder or any
Inspector.
(n) Provide an indenture trustee for the Registrable Notes or the
Exchange Notes, as the case may be, and cause the Indenture or the trust
indenture provided for in Section 2(a) hereof, as the case may be, to be
qualified under the TIA not later than the effective date of the first
Registration Statement relating to the Registrable Notes; and in connection
therewith, cooperate with the trustee under any such indenture and the Holders
of the Registrable Notes, to effect such changes to such indenture as may be
required for such indenture to be so qualified in accordance with the terms of
the TIA; and execute, and use their best efforts to cause such trustee to
execute, all documents as may be required to effect such changes, and all other
forms and documents required to be filed with the SEC to enable such indenture
to be so qualified in a timely manner.
(o) Comply with all applicable rules and regulations of the SEC and
make generally available to their securityholders with regard to any applicable
Registration Statement, a consolidated earning statement satisfying the
provisions of Section 11(a) of the Securities Act and Rule 158 thereunder (or
any similar rule promulgated under the Securities
17
<PAGE>
Act) no later than 45 days after the end of any twelve-month period (or 90 days
after the end of any 12-month period if such period is a fiscal year) (i)
commencing at the end of any fiscal quarter in which any Registrable Notes are
sold to underwriters in a firm commitment or best efforts underwritten offering
and (ii) if not sold to underwriters in such an offering, commencing on the
first day of the first fiscal quarter of the Issuer after the effective date of
a Registration Statement, which statements shall cover said 12-month periods.
(p) Upon consummation of an Exchange Offer or a Private Exchange,
obtain an opinion of counsel to the Issuer addressed to the Trustee for the
benefit of all Holders of Registrable Notes participating in the Exchange Offer
or Private Exchange, as the case may be, that the Exchange Notes or Private
Exchange Notes as the case may be, and the related indenture constitute legal,
valid and binding obligations of the Issuer, enforceable against it in
accordance with their respective terms subject to customary exceptions and
qualifications.
(q) If the Exchange Offer or a Private Exchange is to be
consummated, upon delivery of the Registrable Notes by Holders to the Issuer (or
to such other Person as directed by the Issuer) in exchange for the Exchange
Notes or the Private Exchange Notes, as the case may be, the Issuer shall mark,
or cause to be marked, on such Registrable Notes that such Registrable Notes are
being canceled in exchange for the Exchange Notes or the Private Exchange Notes,
as the case may be; provided that in no event shall such Registrable Notes be
marked as paid or otherwise satisfied.
(r) Cooperate with each seller of Registrable Notes covered by any
Registration Statement and each underwriter, if any, participating in the
disposition of such Registrable Notes and their respective counsel in connection
with any filings required to be made with the National Association of Securities
Dealers, Inc. (the "NASD").
(s) Use its best efforts to take all other steps reasonably
necessary to effect the registration of the applicable Registrable Notes covered
by a Registration Statement contemplated hereby.
The Issuer may require each seller of any Registrable Notes as to
which any registration is being effected to furnish to the Issuer such
information regarding such seller and the distribution of such Registrable Notes
as the Issuer may, from time to time, reasonably request. The Issuer may exclude
from such registration the Registrable Notes of any seller for so long as such
seller fails to furnish such information within a reasonable time after
receiving such request and in such event shall have no further obligation under
this Agreement (including without limitation the obligation under Section 4)
with respect to such seller or any subsequent holder of such Registrable Notes.
Each seller as to which any Shelf Registration is being effected agrees to
furnish promptly to the Issuer all information required to be disclosed in order
to make the information previously furnished to the Issuer by such
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<PAGE>
seller not materially misleading.
If any such Registration Statement refers to any Holder by name or
otherwise as the holder of any securities of the Issuer, then such Holder shall
have the right to require (i) the insertion therein of language, in form and
substance reasonably satisfactory to such Holder, to the effect that the holding
by such Holder of such securities is not to be construed as a recommendation by
such Holder of the investment quality of the securities covered thereby and that
such holding does not imply that such Holder will assist in meeting any future
financial requirements of the Issuer, or (ii) in the event that such reference
to such Holder by name or otherwise is not required by the Securities Act or any
similar federal statute then in force, the deletion of the reference to such
Holder in any amendment or supplement to the applicable Registration Statement
filed or prepared subsequent to the time that such reference ceases to be
required.
Each Holder of Registrable Notes and each Participating
Broker-Dealer agrees by its acquisition of such Registrable Notes or Exchange
Notes, as the case may be, to be sold by such Participating Broker-Dealer, as
the case may be, that, upon actual receipt of any notice from the Issuer of the
happening of any event of the kind described in Section 5(c)(ii), 5(c)(iv),
5(c)(v), or 5(c)(vi) hereof, such Holder or Participating Broker-Dealer, as the
case may be, will forthwith discontinue disposition of such Registrable Notes or
Exchange Notes, as the case may be, covered by such Registration Statement or
Prospectus until such Holder's or Participating Broker-Dealer's receipt of the
copies of the supplemented or amended Prospectus contemplated by Section 5(j)
hereof, or until it is advised in writing (the "Advice") by the Issuer that the
use of the applicable Prospectus may be resumed, and has received copies of any
amendments or supplements thereto. In the event that the Issuer shall give any
such notice, the Applicable Period shall be extended by the number of days
during such periods from and including the date of the giving of such notice to
and including the date when each seller of Registrable Notes covered by such
Registration Statement or Exchange Notes to be sold by such Participating
Broker-Dealer, as the case may be, shall have received (x) the copies of the
supplemented or amended Prospectus contemplated by Section 5(j) hereof or (y)
the Advice.
6. Registration Expenses.
All fees and expenses incident to the performance of or compliance
with this Agreement by the Issuer (other than any underwriting discounts or
commissions) shall be borne by the Issuer whether or not the Exchange
Registration Statement or any Shelf Registration is filed or becomes effective
or the Exchange Offer is consummated, including, without limitation, (i) all
registration and filing fees (including, without limitation, (A) fees with
respect to filings required to be made with the NASD in connection with an
underwritten offering and (B) fees and expenses of compliance with state
securities or Blue Sky laws (including, without limitation, reasonable fees and
disbursements of counsel in connection
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<PAGE>
with Blue Sky qualifications of the Registrable Notes or Exchange Notes and
determination of the eligibility of the Registrable Notes or Exchange Notes for
investment under the laws of such jurisdictions (x) where the holders of
Registrable Notes or Exchange Notes, as the case may be, are located, or (y) as
provided in Section 5(h) hereof, in the case of Registrable Notes or Exchange
Notes, as the case may be, to be sold by a Participating Broker-Dealer during
the Applicable Period)), (ii) printing expenses, including, without limitation,
expenses of printing certificates for Registrable Notes or Exchange Notes in a
form eligible for deposit with The Depository Trust Company and of printing
prospectuses if the printing of prospectuses is requested by the managing
underwriter or underwriters, if any, by the Holders of a majority in aggregate
principal amount of the Registrable Notes included in any Registration Statement
or to be sold by any Participating Broker-Dealer, as the case may be, (iii)
messenger, telephone and delivery expenses, (iv) fees and disbursements of
counsel for the Issuer and fees and disbursements of one special counsel for all
of the sellers of each of the Registrable Notes (exclusive of any counsel
retained pursuant to Section 7 hereof), (v) fees and disbursements of all
independent certified public accountants referred to in Section 5(l)(iii) hereof
(including, without limitation, the expenses of any special audit and "cold
comfort" letters required by or incident to such performance), (vi) Securities
Act liability insurance, if the Issuer desires such insurance, (vii) fees and
expenses of all other Persons retained by the Issuer, (viii) internal expenses
of the Issuer (including, without limitation, all salaries and expenses of
officers and employees of the Issuer performing legal or accounting duties),
(ix) the expense of any annual audit, (x) any fees and expenses incurred in
connection with the listing of the securities to be registered on any securities
exchange, and the obtaining of a rating of the securities, in each case, if
applicable, and (xi) the expenses relating to printing, word processing and
distributing all Registration Statements, underwriting agreements, indentures
and any other documents necessary in order to comply with this Agreement.
7. Indemnification and Contribution.
(a) The Issuer agrees to indemnify and hold harmless each Holder of
the Registrable Notes and each Participating Broker-Dealer selling the Exchange
Notes during the Applicable Period, the affiliates, officers and directors of
each such Person, and each Person, if any, who controls any such Person within
the meaning of either Section 15 of the Securities Act or Section 20 of the
Exchange Act (each, a "Participant"), from and against any and all losses,
claims, damages, judgments, liabilities and expenses (including, without
limitation, the legal fees and other expenses actually incurred in connection
with any suit, action or proceeding or any claim asserted) caused by, arising
out of or based upon any untrue statement or alleged untrue statement of a
material fact contained in any Registration Statement (or any amendment thereto)
or Prospectus (as amended or supplemented if the Issuer shall have furnished any
amendments or supplements thereto) or any preliminary prospectus, or caused by,
arising out of or based upon any omission or alleged omission to state therein a
material fact required to be stated therein or necessary to make the statements
20
<PAGE>
therein, in the case of the Prospectus in the light of the circumstances under
which they were made, not misleading, except insofar as such losses, claims,
damages or liabilities are caused by any untrue statement or omission or alleged
untrue statement or omission made in reliance upon and in conformity with
information relating to any Participant furnished to the Issuer in writing by
such Participant expressly for use therein and with respect to any preliminary
Prospectus, to the extent that any such loss, claim, damage or liability arises
solely from the fact that any Participant sold Registrable Notes or Exchange
Notes to a person to whom there was not sent or given a copy of the Prospectus
(as amended or supplemented) at or prior to the written confirmation of such
sale if the Issuer shall have previously furnished copies thereof to the
Participant in accordance herewith and the Prospectus (as amended or
supplemented) would have corrected any such untrue statement or omission.
(b) Each Participant agrees, severally and not jointly, to indemnify
and hold harmless the Issuer, the affiliates, officers and directors of the
Issuer and each Person who controls the Issuer within the meaning of Section 15
of the Securities Act or Section 20 of the Exchange Act to the same extent (but
on a several, and not joint, basis) as the foregoing indemnity from the Issuer
to each Participant, but only with reference to information relating to such
Participant furnished to the Issuer in writing by or on behalf of such
Participant expressly for use in any Registration Statement or Prospectus, any
amendment or supplement thereto, or any preliminary prospectus. The liability of
any Participant under this paragraph shall in no event exceed the proceeds
received by such Participant from sales of Registrable Notes or Exchange Notes
giving rise to such obligations.
(c) If any suit, action, proceeding (including any governmental or
regulatory investigation), claim or demand shall be brought or asserted against
any Person in respect of which indemnity may be sought pursuant to either of the
two preceding paragraphs, such Person (the "Indemnified Person") shall promptly
notify the Persons against whom such indemnity may be sought (the "Indemnifying
Persons") in writing, and the Indemnifying Persons, upon request of the
Indemnified Person, shall retain counsel reasonably satisfactory to the
Indemnified Person to represent the Indemnified Person and any others the
Indemnifying Persons may reasonably designate in such proceeding and shall pay
the fees and expenses actually incurred by such counsel related to such
proceeding; provided, however, that the failure to so notify the Indemnifying
Persons will not relieve it from any liability under paragraph (a) or (b) above
unless and to the extent such failure results in the forfeiture by the
Indemnifying Person of substantial rights and defenses and the Indemnifying
Person was not otherwise aware of such action or claim. In any such proceeding,
any Indemnified Person shall have the right to retain its own counsel, but the
fees and expenses of such counsel shall be at the expense of such Indemnified
Person unless (i) the Indemnifying Persons and the Indemnified Person shall have
mutually agreed to the contrary, (ii) the Indemnifying Persons shall have failed
within a reasonable period of time to retain counsel reasonably satisfactory to
the Indemnified Person or (iii) the named parties in any such proceeding
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<PAGE>
(including any impleaded parties) include both any Indemnifying Person and the
Indemnified Person or any affiliate thereof and representation of both parties
by the same counsel would be inappropriate due to actual or potential differing
interests between them. It is understood that the Indemnifying Persons shall
not, in connection with such proceeding or separate but substantially similar
related proceedings in the same jurisdiction arising out of the same general
allegations, be liable for the fees and expenses of more than one separate firm
(in addition to any local counsel) for all Indemnified Persons, and that all
such fees and expenses shall be reimbursed promptly as they are incurred. Any
such separate firm for the Participants and such control Persons of Participants
shall be designated in writing by Participants who sold a majority in interest
of Registrable Notes and Exchange Notes sold by all such Participants and shall
be reasonably acceptable to the Issuer, and any such separate firm for the
Issuer, their affiliates, officers, directors, representatives, employees and
agents and such control Persons of the Issuer shall be designated in writing by
the Issuer and shall be reasonably acceptable to the Holders.
The Indemnifying Persons shall not be liable for any settlement of
any proceeding effected without its prior written consent (which consent shall
not be unreasonably withheld or delayed), but if settled with such consent or if
there be a final non-appealable judgment for the plaintiff for which the
Indemnified Person is entitled to indemnification pursuant to this Agreement,
each of the Indemnifying Persons agrees to indemnify and hold harmless each
Indemnified Person from and against any loss or liability by reason of such
settlement or judgment. No Indemnifying Person shall, without the prior written
consent of the Indemnified Persons (which consent shall not be unreasonably
withheld or delayed), effect any settlement or compromise of any pending or
threatened proceeding in respect of which any Indemnified Person is or could
have been a party, or indemnity could have been sought hereunder by such
Indemnified Person, unless such settlement (A) includes an unconditional written
release of such Indemnified Person, in form and substance reasonably
satisfactory to such Indemnified Person, from all liability on claims that are
the subject matter of such proceeding and (B) does not include any statement as
to an admission of fault, culpability or failure to act by or on behalf of such
Indemnified Person.
(d) If the indemnification provided for in the first and second
paragraphs of this Section 7 is for any reason unavailable to, or insufficient
to hold harmless, an Indemnified Person in respect of any losses, claims,
damages or liabilities referred to therein, then each Indemnifying Person under
such paragraphs, in lieu of indemnifying such Indemnified Person thereunder and
in order to provide for just and equitable contribution, shall contribute to the
amount paid or payable by such Indemnified Person as a result of such losses,
claims, damages or liabilities in such proportion as is appropriate to reflect
the relative fault of the Indemnifying Person or Persons on the one hand and the
Indemnified Person or Persons on the other in connection with the statements or
omissions or alleged statements or omissions that resulted in such losses,
claims, damages or liabilities (or actions in respect thereof) as
22
<PAGE>
well as any other relevant equitable considerations. The relative fault of the
parties shall be determined by reference to, among other things, whether the
untrue or alleged untrue statement of a material fact or the omission or alleged
omission to state a material fact relates to information supplied by the Issuer
on the one hand or such Participant or such other Indemnified Person, as the
case may be, on the other, the parties' relative intent, knowledge, access to
information and opportunity to correct or prevent such statement or omission,
and any other equitable considerations appropriate in the circumstances.
(e) The parties agree that it would not be just and equitable if
contribution pursuant to this Section 7 were determined by pro rata allocation
(even if the Participants were treated as one entity for such purpose) or by any
other method of allocation that does not take account of the equitable
considerations referred to in the immediately preceding paragraph. The amount
paid or payable by an Indemnified Person as a result of the losses, claims,
damages, judgments, liabilities and expenses referred to in the immediately
preceding paragraph shall be deemed to include, subject to the limitations set
forth above, any reasonable legal or other expenses actually incurred by such
Indemnified Person in connection with investigating or defending any such action
or claim. Notwithstanding the provisions of this Section 7, in no event shall a
Participant be required to contribute any amount in excess of the amount by
which proceeds received by such Participant from sales of Registrable Notes or
Exchange Notes, as the case may be, exceeds the amount of any damages that such
Participant has otherwise been required to pay or has paid 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.
(f) The indemnity and contribution agreements contained in this
Section 7 will be in addition to any liability that the Indemnifying Persons may
otherwise have to the Indemnified Persons referred to above.
8. Rules 144 and 144A.
The Issuer covenants and agrees that it will file the reports
required to be filed by it under the Securities Act and the Exchange Act and the
rules and regulations adopted by the SEC thereunder in a timely manner in
accordance with the requirements of the Securities Act and the Exchange Act and,
if at any time the Issuer is not required to file such reports, the Issuer will,
upon the request of any Holder or beneficial owner of Registrable Notes, make
available such information necessary to permit sales pursuant to Rule 144A under
the Securities Act. The Issuer further covenants and agrees, for so long as any
Registrable Notes remain outstanding that it will take such further action as
any Holder of Registrable Notes may reasonably request, all to the extent
required from time to time to enable such holder to sell Registrable Notes
without registration under the Securities Act within the limitation of the
23
<PAGE>
exemptions provided by (a) Rule 144(k) and Rule 144A under the Securities Act,
as such Rules may be amended from time to time, or (b) any similar rule or
regulation hereafter adopted by the SEC.
9. Miscellaneous.
(a) No Inconsistent Agreements. The Issuer has not, as of the date
hereof, and the Issuer shall not, after the date of this Agreement, enter into
any agreement with respect to any of their securities that is inconsistent with
the rights granted to the Holders of Registrable Notes in this Agreement or
otherwise conflicts with the provisions hereof. The rights granted to the
Holders hereunder do not in any way conflict with and are not inconsistent with
the rights granted to the holders of the Issuer's other issued and outstanding
securities under any such agreements. The Issuer will not enter into any
agreement with respect to any of its securities which will grant to any Person
piggy-back registration rights with respect to any Registration Statement.
(b) Adjustments Affecting Registrable Securities. The Issuer shall
not, directly or indirectly, take any action with respect to the Registrable
Notes that would adversely affect the ability of the Holders of Registrable
Notes to include such Registrable Notes in a registration undertaken pursuant to
this Agreement.
(c) Amendments and Waivers. The provisions of this Agreement may not
be amended, modified or supplemented, and waivers or consents to departures from
the provisions hereof may not be given, otherwise than with the prior written
consent of (I) the Issuer and (II)(A) the Holders of not less than a majority in
aggregate principal amount of the then outstanding Registrable Notes and (B) in
circumstances that would adversely affect the Participating Broker-Dealers, the
Participating Broker-Dealers holding not less than a majority in aggregate
principal amount or liquidation preference, as the case may be, of the Exchange
Notes held by all Participating Broker-Dealers; provided, however, that Section
7 and this Section 10(c) may not be amended, modified or supplemented without
the prior written consent of each Holder and each Participating Broker-Dealer
(including any person who was a Holder or Participating Broker-Dealer of
Registrable Notes or Exchange Notes, as the case may be, disposed of pursuant to
any Registration Statement) affected by any such amendment, modification or
supplement. Notwithstanding the foregoing, a waiver or consent to depart from
the provisions hereof with respect to a matter that relates exclusively to the
rights of Holders of Registrable Notes whose securities are being sold pursuant
to a Registration Statement and that does not directly or indirectly affect,
impair, limit or compromise the rights of other Holders of Registrable Notes may
be given by Holders of at least a majority in aggregate principal amount of the
Registrable Notes being sold pursuant to such Registration Statement.
(d) Notices. All notices and other communications (including,
without
24
<PAGE>
limitation, any notices or other communications to the Trustee) provided for or
permitted hereunder shall be made in writing by hand-delivery, registered
first-class mail, next-day air courier or facsimile:
(i) if to a Holder of Registrable Notes or any Participating
Broker-Dealer, at the most current address of such Holder or Participating
Broker-Dealer, as the case may be, set forth on the records of the
registrar under the Indenture, the Exchange Indenture or of the Issuer, as
appropriate.
(ii) if to the Issuer, at the address as follows:
FLAG Telecom Holdings Limited
3rd Floor, 103 Mount Street
London W1Y 5HE
Facsimile No.: (44) 171-317-0808
Attention: Stuart Rubin, General Counsel
All such notices and communications shall be deemed to have been
duly given: when delivered by hand, if personally delivered; five business days
after being deposited in the mail, postage prepaid, if mailed; one business day
after being timely delivered to a next-day air courier; and when receipt is
acknowledged by the addressee, if sent by facsimile.
Copies of all such notices, demands or other communications shall be
concurrently delivered by the Person giving the same to the Trustee at the
address and in the manner specified in the Indenture if such communication
relates to the Notes, Exchange Notes or Private Exchange Notes.
(e) Successors and Assigns. This Agreement shall inure to the
benefit of and be binding upon the successors and assigns of each of the parties
hereto, the Holders and the Participating Broker-Dealers; provided, however,
that this Agreement shall not inure to the benefit of or be binding upon a
successor or assign of a Holder or a Participating Broker-Dealer unless and to
the extent such successor or assign holds Registrable Notes.
(f) Counterparts. This Agreement may be executed in any number of
counterparts and by the parties hereto in separate counterparts, each of which
when so executed shall be deemed to be an original and all of which taken
together shall constitute one and the same agreement.
(g) Headings. The headings in this Agreement are for convenience of
reference only and shall not limit or otherwise affect the meaning hereof.
(h) Governing Law. THIS AGREEMENT SHALL BE GOVERNED
25
<PAGE>
BY AND CONSTRUED IN ACCORDANCE WITH THE LAWS OF THE STATE OF NEW YORK, AS
APPLIED TO CONTRACTS MADE AND PERFORMED ENTIRELY WITHIN THE STATE OF NEW YORK,
WITHOUT REGARD TO PRINCIPLES OF CONFLICTS OF LAW. EACH OF THE PARTIES HERETO
AGREES 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 AGREEMENT.
(i) Severability. If any term, provision, covenant or restriction of
this Agreement is held by a court of competent jurisdiction to be invalid,
illegal, void or unenforceable, the remainder of the terms, provisions,
covenants and restrictions set forth herein shall remain in full force and
effect and shall in no way be affected, impaired or invalidated, and the parties
hereto shall use their best efforts to find and employ an alternative means to
achieve the same or substantially the same result as that contemplated by such
term, provision, covenant or restriction. It is hereby stipulated and declared
to be the intention of the parties that they would have executed the remaining
terms, provisions, covenants and restrictions without including any of such that
may be hereafter declared invalid, illegal, void or unenforceable.
(j) Securities Held by the Issuer or Its Affiliates. Whenever the
consent or approval of Holders of a specified percentage of Registrable Notes is
required hereunder, Registrable Notes held by the Issuer or its affiliates (as
such term is defined in Rule 405 under the Securities Act) shall not be counted
in determining whether such consent or approval was given by the Holders of such
required percentage.
(k) Third-Party Beneficiaries. Holders of Registrable Notes, and
Participating Broker-Dealers are intended third-party beneficiaries of this
Agreement, and this Agreement may be enforced by such Persons.
(l) Entire Agreement. This Agreement, the Purchase Agreement and the
Indenture are intended by the parties as a final and exclusive statement of the
agreement and understanding of the parties hereto in respect of the subject
matter contained herein and therein and any and all prior oral or written
agreements, representations, or warranties, contracts, understandings,
correspondence, conversations and memoranda between the Holders on the one hand
and the Issuer on the other, or between or among any agents, representatives,
parents, subsidiaries, affiliates, predecessors in interest or successors in
interest with respect to the subject matter hereof and thereof are merged herein
and replaced hereby.
[REST OF PAGE INTENTIONALLY LEFT BLANK]
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<PAGE>
IN WITNESS WHEREOF, the parties have executed this Agreement as of
the date first written above.
FLAG TELECOM HOLDINGS LIMITED
By:_____________________________________
Name:
Title:
The foregoing Agreement is hereby confirmed
and accepted as of the date first above written.
Salomon Smith Barney Inc.
By:________________________________
Name:
Title:
Morgan Stanley & Co. International Limited
By:________________________________
Name:
Title:
Deutsche Bank Securities Inc.
By:________________________________
Name:
Title:
Bear, Stearns & Co. Inc.
By:________________________________
Name:
Title:
For themselves and the other Initial
Purchasers named in Schedule I to
the foregoing Agreement
27
REGISTRATION AGREEMENT
Dated as of March 17, 2000
Among
FLAG TELECOM HOLDINGS LIMITED
as Issuer
and
SALOMON SMITH BARNEY INC.
MORGAN STANLEY & CO. INTERNATIONAL LIMITED,
DEUTSCHE BANK SECURITIES INC. and
BEAR, STEARNS & CO. INC.
as Initial Purchasers
11.625% Senior Dollar Notes due 2010
<PAGE>
REGISTRATION AGREEMENT
This Registration Agreement (this "Agreement") is dated as of March
17, 2000, by and among FLAG TELECOM HOLDINGS LIMITED, a Bermuda corporation (the
"Company" or the "Issuer), as issuer, and SALOMON SMITH BARNEY INC., MORGAN
STANLEY & CO. INTERNATIONAL LIMITED, DEUTSCHE BANK SECURITIES INC. AND BEAR,
STEARNS & CO. INC., as Initial Purchasers (the "Initial Purchasers").
This Agreement is entered into in connection with the Purchase
Agreement, dated March 14, 2000, by and among the Company and the Initial
Purchasers (the "Purchase Agreement"), which provides for, among other things,
the sale by the Company to the Initial Purchasers of $300 million aggregate
principal amount of the Company's 11.625% Senior Dollar Notes due 2010 (the
"Notes") and (euro)300 million aggregate principal amount of the Company's
11.625% Senior Euro Notes due 2010. In order to induce the Initial Purchasers to
enter into the Purchase Agreement, the Issuer has agreed to provide the
registration rights set forth in this Agreement for the benefit of the Initial
Purchasers and any subsequent holder or holders of each of the Notes. The
execution and delivery of this Agreement is a condition to the Initial
Purchasers' obligation to purchase the Notes under the Purchase Agreement.
The parties hereby agree as follows:
1. Definitions.
As used in this Agreement, the following terms shall have the
following meanings:
Additional Interest: See Section 4 hereof.
Advice: See Section 5 hereof.
Agreement: See the introductory paragraphs hereto.
Applicable Period: See Section 3 hereof.
Closing: See Purchase Agreement.
Company: See the introductory paragraph hereto.
Effectiveness Date: The Exchange Effectiveness Date or the Initial
Shelf Registration Effectiveness date, as the case may be.
Effectiveness Period: See Section 3 hereof.
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Event Date: See Section 4 hereof.
Exchange Act: The Securities Exchange Act of 1934, as amended, and
the rules and regulations of the SEC promulgated thereunder.
Exchange Effectiveness Date: See Section 2 hereof.
Exchange Filing Date: See Section 2 hereof.
Exchange Notes: The 11.625% Senior Dollar Notes due 2010, of the
Company, that are identical to the Notes in all material respects, except that
the provisions regarding restrictions on transfer shall be modified, as
appropriate, and the issuance thereof pursuant to the Exchange Offer shall have
been registered pursuant to an effective Registration Statement in compliance
with the Securities Act.
Exchange Offer: See Section 2 hereof.
Exchange Registration Statement: See Section 2 hereof.
Filing Date: The Exchange Filing Date or Initial Shelf Registration
Filing Date, as the case may be.
Holder: Any holder of a Registrable Note.
Indemnified Person: See Section 7(c) hereof.
Indemnifying Person: See Section 7(c) hereof.
Indenture: The Indenture, dated as of March 17, 2000, by and among
the Issuer and The Bank of New York, as Trustee, pursuant to which the Notes are
being issued, as the same may be amended or supplemented from time to time in
accordance with the terms thereof.
Initial Purchasers: See the introductory paragraphs hereto.
Initial Shelf Registration: See Section 3(a) hereof.
Initial Shelf Registration Effectiveness Date: See Section 3(a)
hereof.
Initial Shelf Registration Filing Date: See Section 3(a) hereof.
Inspectors: See Section 5(m) hereof.
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Issue Date: March 17, 2000, the date of original issuance of the
Notes.
Issuer: See the introductory paragraphs hereto.
NASD: See Section 5(r) hereof.
Notes: See the introductory paragraphs hereto.
Offering Memorandum: The final offering memorandum of the Issuer
dated March 14, 2000, in respect of the offering of the Notes.
Participant: See Section 7(a) hereof.
Participating Broker-Dealer: See Section 2 hereof.
Person: An individual, trustee, corporation, partnership, joint
stock company, trust, unincorporated association, union, business association,
firm or other legal entity.
Private Exchange: See Section 2 hereof.
Private Exchange Notes: See Section 2 hereof.
Prospectus: The prospectus included in any Registration Statement
(including, without limitation, any prospectus subject to completion and a
prospectus that includes any information previously omitted from a prospectus
filed as part of an effective registration statement in reliance upon Rule 430A
promulgated under the Securities Act and any term sheet filed pursuant to Rule
434 under the Securities Act), as amended or supplemented by any prospectus
supplement, and all other amendments and supplements to the Prospectus,
including post-effective amendments, and all material incorporated by reference
or deemed to be incorporated by reference in such Prospectus.
Purchase Agreement: See the introductory paragraphs hereto.
Records: See Section 5(m) hereof.
Registrable Notes: (a) Each Note upon its original issuance and at
all times subsequent thereto, (b) each Exchange Note as to which Section
2(c)(iv) hereof is applicable upon original issuance and at all times subsequent
thereto and (c) each Private Exchange Note upon original issuance thereof and at
all times subsequent thereto, until (w) a Registration Statement (other than,
with respect to any Exchange Note as to which Section 2(c)(iv) hereof is
applicable, the Exchange Offer Registration Statement) covering such Note,
Exchange Note or Private Exchange Note has been declared effective by the SEC
and such Note, Exchange Note or such Private Exchange Note, as the case may be,
has been disposed of in accordance
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with such effective Registration Statement, (x) such Note has been exchanged
pursuant to the Exchange Offer for an Exchange Note or Exchange Notes that may
be resold without complying with the prospectus delivery requirements under the
Securities Act, (y) such Note, Exchange Note or Private Exchange Note, as the
case may be, ceases to be outstanding for purposes of the Indenture or (z) such
Note, Exchange Note or Private Exchange Note, as the case may be, may be resold
without restriction pursuant to Rule 144 under the Securities Act.
Registration Statement: Any registration statement of the Company
that covers any of the Notes, the Exchange Notes or the Private Exchange Notes,
filed with the SEC under the Securities Act, including the Prospectus,
amendments and supplements to such registration statement, including
post-effective amendments, all exhibits, and all material incorporated by
reference or deemed to be incorporated by reference in such registration
statement.
Rule 144: Rule 144 promulgated under the Securities Act, as such
Rule may be amended from time to time, or any similar rule (other than Rule
144A) or regulation hereafter adopted by the SEC providing for offers and sales
of securities made in compliance therewith resulting in offers and sales by
subsequent holders that are not affiliates of the issuer of such securities
being free of the registration and prospectus delivery requirements of the
Securities Act.
Rule 144A: Rule 144A promulgated under the Securities Act, as such
Rule may be amended from time to time, or any similar rule (other than Rule 144)
or regulation hereafter adopted by the SEC.
Rule 415: Rule 415 promulgated under the Securities Act, as such
Rule may be amended from time to time, or any similar rule or regulation
hereafter adopted by the SEC.
SEC: The Securities and Exchange Commission.
Securities Act: The Securities Act of 1933, as amended, and the
rules and regulations of the SEC promulgated thereunder.
Shelf Notice: See Section 2(c) hereof.
Shelf Registration: See Section 3(b) hereof.
Subsequent Shelf Registration: See Section 3(b) hereof.
TIA: The Trust Indenture Act of 1939, as amended.
Trustee: The trustee under the Indenture and the trustee under any
indenture
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governing the Exchange Notes and Private Exchange Notes.
Underwritten registration or underwritten offering: A registration
in which securities of the Issuer are sold to an underwriter for reoffering to
the public.
2. Exchange Offer.
(a) The Issuer shall (A) prepare and, on or prior to 60 days after
the Issue Date (the "Exchange Filing Date"), file with the SEC a Registration
Statement under the Securities Act with respect to an offer by the Company to
the holders of the Notes to issue and deliver to such holders, in exchange for
Notes, a like principal amount of Exchange Notes (the "Exchange Offer"), (B) use
its best efforts to cause the Registration Statement relating to the Exchange
Offer to be declared effective by the SEC under the Securities Act on or prior
to 150 days after the Issue Date (the "Exchange Effectiveness Date") and (C)
commence the Exchange Offer and use its best efforts to issue, on or prior to
180 days after the Issue Date, the Exchange Notes. The offer and sale of the
Exchange Notes pursuant to the Exchange Offer shall be registered pursuant to
the Securities Act on the appropriate form (the "Exchange Registration
Statement") and duly registered or qualified under all applicable state
securities or Blue Sky laws and will comply with all applicable tender offer
rules and regulations under the Exchange Act and state securities or Blue Sky
laws. The Exchange Offer shall not be subject to any condition, other than that
the Exchange Offer does not violate any applicable law or interpretation of the
staff of the SEC. Upon consummation of the Exchange Offer in accordance with
this Section 2, the Issuer shall have no further registration obligations other
than with respect to (i) Private Exchange Notes, (ii) Exchange Notes held by
Participating Broker-Dealers and (iii) Notes or Exchange Notes as to which
Section 3 hereof applies. No securities shall be included in the Exchange
Registration Statement other than the Exchange Notes.
(b) The Issuer may require each holder of Notes as a condition to
its participation in the Exchange Offer to represent to the Issuer and its
counsel in writing (which may be contained in the applicable letter of
transmittal) that at the time of the consummation of the Exchange Offer (i) any
Exchange Notes received by such holder will be acquired in the ordinary course
of its business, (ii) 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 Notes and (iii) such holder is not an Affiliate
of the Issuer, or if it is an Affiliate of the Issuer, it will comply with the
registration and prospectus delivery requirements of the Securities Act, to the
extent applicable.
If, prior to consummation of the Exchange Offer, an Initial
Purchaser holds any Notes acquired by it and having, or that are reasonably
likely to be determined to have, the status of an unsold allotment in the
initial distribution, or any other holder of Notes is not entitled to
participate in the Exchange Offer, the Company upon the request of such Initial
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Purchaser or any such holder shall, simultaneously with the delivery of the
Exchange Notes in the Exchange Offer, issue and deliver to such Initial
Purchaser and any such holder, in exchange (the "Private Exchange") for such
Notes held by such Initial Purchaser and any such holder, a like principal
amount of debt securities of the Company, that are identical in all material
respects to the Exchange Notes (the "Private Exchange Notes") (and that are
issued pursuant to the same indenture as the Exchange Notes). The Private
Exchange Notes shall bear the same CUSIP number as the Exchange Notes.
The Issuer and the Initial Purchasers acknowledge that the staff of
the SEC has taken the position that any broker-dealer that owns Exchange Notes
that were received by such broker-dealer for its own account in the Exchange
Offer (a "Participating Broker-Dealer") may be deemed to be an "underwriter"
within the meaning of the Securities Act and must deliver a prospectus meeting
the requirements of the Securities Act in connection with any resale of such
Exchange Notes (other than a resale of an unsold allotment resulting from the
original offering of the Notes).
The Issuer and the Initial Purchasers also acknowledge that it is
the SEC staff's position that if the Prospectus contained in the Exchange
Registration Statement includes a plan of distribution containing a statement to
the above effect and the means by which Participating Broker-Dealers may resell
the Exchange Notes, without naming the Participating Broker-Dealers or
specifying the amount of Exchange Notes owned by them, such Prospectus may be
delivered by Participating Broker-Dealers to satisfy their prospectus delivery
obligations under the Securities Act in connection with resales of Exchange
Notes for their own accounts, so long as the Prospectus otherwise meets the
requirements of the Securities Act.
In light of the foregoing, if requested by a Participating
Broker-Dealer, the Issuer agrees (x) to use its best efforts to keep the
Exchange Registration Statement continuously effective for a period of up to six
months or such earlier date as each Participating Broker-Dealer shall have
notified the Company in writing that such Participating Broker-Dealer has resold
all Exchange Notes acquired in the Exchange Offer, (y) to comply with the
provisions of Section 5 of this Agreement, as they relate to the Exchange Offer
and the Exchange Registration Statement, and (z) to deliver to such
Participating Broker-Dealer a "cold comfort" letter of the independent public
accountants of the Issuer and a legal opinion as to matters reasonably requested
by such Participating Broker-Dealer relating to the Exchange Registration
Statement and the related Prospectus and any amendments or supplements thereto.
Interest on the Exchange Notes and the Private Exchange Notes will
accrue from (A) the later of (i) the last interest payment date on which
interest was paid on the Notes surrendered in exchange therefor and (ii) if the
Notes are surrendered for exchange on a date in a period which includes the
record date for an interest payment date to occur on or after the
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date of such exchange and as to which interest will be paid, the date of such
interest payment date or (B), if no interest has been paid on the Notes, from
the Issue Date.
In connection with each Exchange Offer, the Issuer shall:
(1) mail, or cause to be mailed, to each Holder of record entitled
to participate in the Exchange a copy of the Prospectus forming part of
the Exchange Registration Statement, together with an appropriate letter
of transmittal and related documents;
(2) use their best efforts to keep the Exchange Offer open for not
less than 20 business days after the date that notice of the Exchange
Offer is mailed to Holders (or longer if required by applicable law);
(3) utilize the services of a depositary for the Exchange Offer with
an address in the Borough of Manhattan, The City of New York;
(4) permit Holders to withdraw validly tendered Notes at any time
prior to the close of business, New York time, on the last business day on
which the Exchange Offer shall remain open; and
(5) otherwise comply in all material respects with all applicable
laws, rules and regulations.
As soon as practicable after the close of the applicable Exchange
Offer and the applicable Private Exchange, if any, the Issuer shall:
(1) accept for exchange all Registrable Notes validly tendered and
not validly withdrawn pursuant to the applicable Exchange Offer and the
applicable Private Exchange, if any;
(2) deliver to the Trustee for cancellation all Registrable Notes so
accepted for exchange and cause the Trustee to authenticate and deliver
promptly to each Holder of Registrable Notes, Exchange Notes or Private
Exchange Notes, as the case may be, equal in principal amount to the
securities of such Holder so accepted for exchange.
The Exchange Notes and the Private Exchange Notes shall be issued
under (i) the Indenture or (ii) an indenture identical in all material respects
to the Indenture and that, in either case, has been qualified under the TIA or
is exempt from such qualification and shall provide that (a) the Exchange Notes
shall not be subject to the transfer restrictions set forth in the Indenture and
(b) the Private Exchange Notes shall be subject to the transfer restrictions
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set forth in such indenture. The Indenture or such indenture shall provide that
the Exchange Notes, the Private Exchange Notes and the Notes shall vote and
consent together on all matters as one class and that none of the Exchange
Notes, the Private Exchange Notes or the Notes will have the right to vote or
consent as a separate class on any matter.
(c) If, (i) because of any change in law or in currently prevailing
interpretations of the staff of the SEC, the Issuer is not permitted to effect
the Exchange Offer, (ii) the Exchange Offer is not consummated within 180 days
of the Issue Date, (iii) any holder of any Private Exchange Notes so requests in
writing to the Issuer within 45 days after the consummation of the Exchange
Offer, or (iv) in the case of any Holder that participates in the Exchange
Offer, such Holder does not receive Exchange Notes on the date of the exchange
that may be sold without restriction under state and federal securities laws
(other than due solely to the status of such Holder as an affiliate of the
Issuer within the meaning of the Securities Act), then in the case of each of
clauses (i) to and including (iv) of this sentence, the Issuer shall promptly
deliver to the Holders and the Trustee written notice thereof (the "Shelf
Notice") and shall file a Shelf Registration pursuant to Section 3 hereof.
3. Shelf Registration.
If at any time a Shelf Notice is delivered as contemplated by
Section 2(c) hereof, then:
(a) Shelf Registration. The Issuer shall file with the SEC a
Registration Statement for an offering to be made on a continuous basis pursuant
to Rule 415 covering all of the Registrable Notes not exchanged in the Exchange
Offer, Private Exchange Notes and Exchange Notes as to which Section 2(c)(iv) is
applicable (the "Initial Shelf Registration"). The Issuer shall use its best
efforts to file with the SEC the Initial Shelf Registration on or before the
60th day after the occurrence of any of the events set forth in Section 2(c)
(the "Initial Shelf Registration Filing Date"). The Initial Shelf Registration
shall be on Form F-1 or another appropriate form permitting registration of such
Registrable Notes for resale by Holders in the manner or manners designated by
them (including, without limitation, one or more underwritten offerings). The
Issuer shall not permit any securities other than the Registrable Notes to be
included in the Initial Shelf Registration or any Subsequent Shelf Registration
(as defined below).
The Issuer shall use its best efforts to cause the Initial Shelf
Registration to be declared effective under the Securities Act on or prior to
the 90th day after the Initial Shelf Registration Filing Date (the "Initial
Shelf Registration Effectiveness Date") and to keep the Initial Shelf
Registration continuously effective under the Securities Act until the date
which is the earlier of (a) two years from the Issue Date (the "Effectiveness
Period") and (b) such shorter period ending when (i) all Registrable Notes
covered by the Initial Shelf Registration have been sold in the manner set forth
and as contemplated in the Initial Shelf Registration or
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(ii) a Subsequent Shelf Registration covering all of the Registrable Notes
covered by and not sold under the Initial Shelf Registration or an earlier
Subsequent Shelf Registration has been declared effective under the Securities
Act (the "Applicable Period"); provided, however, that the Effectiveness Period
in respect of the Initial Shelf Registration shall be extended to the extent
required to permit dealers to comply with the applicable prospectus delivery
requirements of Rule 174 under the Securities Act and as otherwise provided
herein.
(b) Subsequent Shelf Registrations. If the Initial Shelf
Registration or any Subsequent Shelf Registration ceases to be effective for any
reason at any time during the Effectiveness Period (other than because of the
sale of all of the securities registered thereunder), the Issuer shall use its
best efforts to obtain the prompt withdrawal of any order suspending the
effectiveness thereof, and in any event shall within 30 days of such cessation
of effectiveness amend the Initial Shelf Registration in a manner to obtain the
withdrawal of the order suspending the effectiveness thereof, or file an
additional "shelf" Registration Statement pursuant to Rule 415 covering all of
the Registrable Notes covered by and not sold under the Initial Shelf
Registration or an earlier Subsequent Shelf Registration (each, a "Subsequent
Shelf Registration"). If a Subsequent Shelf Registration is filed, the Issuer
shall use its best efforts to cause the Subsequent Shelf Registration to be
declared effective under the Securities Act as soon as practicable after such
filing and to keep such subsequent Shelf Registration continuously effective for
the remainder of the Effectiveness Period. As used herein the term "Shelf
Registration" means the Initial Shelf Registration and any Subsequent Shelf
Registration.
(c) Supplements and Amendments. The Issuer shall promptly supplement
and amend any Shelf Registration if required by the rules, regulations or
instructions applicable to the registration form used for such Shelf
Registration, if required by the Securities Act, or if reasonably requested by
the Holders of a majority in aggregate principal amount of the Registrable Notes
covered by such Registration Statement or by any underwriter of such Registrable
Notes.
4. Additional Interest.
(a) The Issuer and the Initial Purchasers agree that the Holders
will suffer damages if the Issuer fails to fulfill its obligations under Section
2 or Section 3 hereof and that it would not be feasible to ascertain the extent
of such damages with precision. Accordingly, the Issuer agrees to pay, as
liquidated damages, additional interest on the Notes ("Additional Interest")
under the circumstances and to the extent set forth below (each of which shall
be given independent effect):
(i) if (A) neither the Exchange Registration Statement nor the
Initial Shelf Registration has been filed on or prior to the applicable
Filing Date or (B) notwithstanding that the Issuer has consummated or will
consummate the
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Exchange Offer, the Issuer is required to file a Shelf Registration and
such Shelf Registration is not filed on or prior to the Filing Date
applicable thereto, then commencing on the day after any such Filing Date,
Additional Interest shall accrue on the principal amount of the Notes at a
rate of 0.25% per annum for the first 30 days immediately following each
such Filing Date, and such Additional Interest shall increase by an
additional 0.25% per annum at the beginning of each subsequent 30-day
period; or
(ii) if (A) neither the Exchange Registration Statement nor the
Initial Shelf Registration is declared effective by the SEC on or prior to
the relevant Effectiveness Date or (B) notwithstanding that the Issuer has
consummated or will consummate the Exchange Offer, the Issuer is required
to file a Shelf Registration and such Shelf Registration is not declared
effective by the SEC on or prior to the Effectiveness Date in respect of
such Shelf Registration, then, commencing on the day after the applicable
Effectiveness Date, Additional Interest shall accrue on the principal
amount of the Notes at a rate of 0.25% per annum for the first 30 days
immediately following the day after such Effectiveness Date, and the rate
of such Additional Interest shall increase by an additional 0.25% per
annum at the beginning of each subsequent 30-day period; or
(iii) if (A) the Issuer has not exchanged Exchange Notes for all
Notes validly tendered in accordance with the terms of the Exchange Offer
on or prior to the 180th day after the Issue Date or (B) if applicable, a
Shelf Registration has been declared effective and such Shelf Registration
ceases to be effective at any time during the Effectiveness Period (other
than such time as all Notes have been disposed of thereunder), then
Additional Interest shall accrue on the principal amount of the Notes at a
rate of 0.25% per annum for the first 30 days commencing on the (x) 181st
day after such Issue Date, in the case of (A) above, or (y) the day such
Shelf Registration ceases to be effective in the case of (B) above, such
Additional Interest shall increase by an additional 0.25% per annum at the
beginning of each such subsequent 30-day period (it being understood and
agreed that, notwithstanding any provision to the contrary, so long as any
Note that is the subject of a Shelf Notice is then covered by an effective
Shelf Registration, no Additional Interest shall accrue or accumulate on
such Notes);
provided, however, that the rate of Additional Interest that shall accrue on the
Notes may not exceed in the aggregate 1.50% per annum; provided, further,
however, that (1) upon the filing of the applicable Exchange Registration
Statement or the applicable Shelf Registration as required hereunder (in the
case of clause (i) above of this Section 4(a)), (2) upon the effectiveness of
the applicable Exchange Registration Statement or the applicable Shelf
Registration Statement as required hereunder (in the case of clause (ii) of this
Section 4(a)), or (3) upon the exchange of the applicable Exchange Notes for all
Notes tendered (in the case of
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clause (iii)(A) of this Section 4(a), or upon the effectiveness of the
applicable Shelf Registration Statement which had ceased to remain effective (in
the case of (iii)(B) of this Section 4(a)), Additional Interest on the Notes in
respect of which such events relate as a result of such clause (or the relevant
subclause thereof), as the case may be, shall cease to accrue or accumulate, as
the case may be.
(b) The Issuer shall notify the Trustee (who shall be acting under
and protected by the terms of the Indenture) within three business days after
each and every date on which an event occurs in respect of which Additional
Interest is required to be paid (an "Event Date"). Any amounts of Additional
Interest due pursuant to (a)(i), (a)(ii) or (a)(iii) of this Section 4 shall be
payable in cash semiannually on each March 30 and September 30 (to the holders
of record on the March 15 and September 15 immediately preceding such dates),
commencing with the first such date occurring after any such Additional Interest
commences to accrue. The amount of Additional Interest will be determined by
multiplying the applicable rate of Additional Interest by the principal amount
of the Registrable Notes, multiplied by a fraction, the numerator of which is
the number of days such rate of Additional Interest was applicable during such
period (determined on the basis of a 360-day year comprised of twelve 30-day
months and, in the case of a partial month, the actual number of days elapsed),
and the denominator of which is 360.
5. Registration Procedures.
In connection with the filing of any Registration Statement pursuant
to Sections 2 or 3 hereof, the Issuer shall effect such registrations to permit
the sale of the securities covered thereby in accordance with the intended
method or methods of disposition thereof, and pursuant thereto and in connection
with any Registration Statement filed by the Issuer hereunder, the Issuer shall:
(a) Prepare and file with the SEC prior to the applicable Filing
Date, a Registration Statement or Registration Statements as prescribed by
Sections 2 or 3 hereof, and use its best efforts to cause each such Registration
Statement to become effective and remain effective as provided herein; provided,
however, that, if (1) such filing is pursuant to Section 3 hereof, or (2) a
Prospectus contained in the Exchange Registration Statement filed pursuant to
Section 2 hereof is required to be delivered under the Securities Act by any
Participating Broker-Dealer who seeks to sell Exchange Notes during the
Applicable Period relating thereto, before filing any Registration Statement or
Prospectus or any amendments or supplements thereto, the Issuer shall furnish to
and afford the Holders of the Registrable Notes included in such Registration
Statement or each such Participating Broker-Dealer, as the case may be, their
counsel and the managing underwriters, if any, a reasonable opportunity to
review copies of all such documents (including copies of any documents to be
incorporated by reference therein and all exhibits thereto) proposed to be filed
(in each case at least five days prior to such filing, or such later date as is
reasonable under the
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circumstances). The Issuer shall not file any Registration Statement or
Prospectus or any amendments or supplements thereto if the Holders of a majority
in aggregate principal amount of the Registrable Notes included in such
Registration Statement, or any such Participating Broker-Dealer, as the case may
be, their counsel, or the managing underwriters, if any, shall reasonably object
in writing on a timely basis.
(b) Prepare and file with the SEC such amendments and post-effective
amendments to each Shelf Registration Statement or Exchange Registration
Statement, as the case may be, as may be necessary to keep such Registration
Statement continuously effective for the Effectiveness Period or the Applicable
Period, as the case may be; cause the related Prospectus to be supplemented by
any prospectus supplement required by applicable law, and as so supplemented to
be filed pursuant to Rule 424 (or any similar provisions then in force)
promulgated under the Securities Act; and comply with the provisions of the
Securities Act and the Exchange Act applicable to it with respect to the
disposition of all securities covered by such Registration Statement as so
amended or in such Prospectus as so supplemented and with respect to the
subsequent resale of any securities being sold by a Participating Broker-Dealer
covered by any such Prospectus. The Issuer shall be deemed not to have used its
best efforts to keep a Registration Statement effective during the Effectiveness
Period or the Applicable Period, as the case may be, relating thereto if the
Issuer voluntarily takes any action that would result in selling Holders of the
Registrable Notes covered thereby or Participating Broker-Dealers seeking to
sell Exchange Notes not being able to sell such Registrable Notes or such
Exchange Notes during that period unless such action is required by applicable
law or permitted by this Agreement.
(c) If (1) a Shelf Registration is filed pursuant to Section 3
hereof, or (2) a Prospectus contained in an Exchange Registration Statement
filed pursuant to Section 2 hereof is required to be delivered under the
Securities Act by any Participating Broker-Dealer who seeks to sell Exchange
Notes during the Applicable Period relating thereto from whom the Company has
received written notice that it will be a Participating Broker-Dealer in the
applicable Exchange Offer, notify the selling Holders of Registrable Notes or
each such Participating Broker-Dealer, as the case may be, their counsel and the
managing underwriters, if any, promptly (but in any event within 2 business
days), and confirm such notice in writing, (i) when a Prospectus or any
Prospectus supplement or post-effective amendment has been filed, and, with
respect to a Registration Statement or any post-effective amendment, when the
same has become effective under the Securities Act (including in such notice a
written statement that any Holder may, upon request, obtain, at the sole expense
of the Issuer, one conformed copy of such Registration Statement or
post-effective amendment including financial statements and schedules, documents
incorporated or deemed to be incorporated by reference and exhibits), (ii) of
the issuance by the SEC of any stop order suspending the effectiveness of a
Registration Statement or of any order preventing or suspending the use of any
preliminary prospectus or the initiation of any proceedings for that purpose,
(iii) if at any
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time when a prospectus is required by the Securities Act to be delivered in
connection with sales of the Registrable Notes or resales of Exchange Notes by
Participating Broker-Dealers the representations and warranties of the Issuer
contained in any agreement (including any underwriting agreement) contemplated
by Section 5(l) hereof cease to be true and correct in all material respects,
(iv) of the receipt by the Issuer of any notification with respect to the
suspension of the qualification or exemption from qualification of a
Registration Statement or any of the Registrable Notes or the Exchange Notes to
be sold by any Participating Broker-Dealer for offer or sale in any
jurisdiction, or the initiation or written threat of any proceeding for such
purpose, (v) of the happening of any event, the existence of any condition or
any information becoming known that makes any statement made in such
Registration Statement or related Prospectus or any document incorporated or
deemed to be incorporated therein by reference untrue in any material respect or
that requires the making of any changes in or amendments or supplements to such
Registration Statement, Prospectus or documents so that, in the case of the
Registration Statement, it will not contain any untrue statement of a material
fact or omit to state any material fact required to be stated therein or
necessary to make the statements therein not misleading, and that in the case of
the Prospectus, it will not contain any untrue statement of a material fact or
omit to state any material fact required to be stated therein or necessary to
make the statements therein, in light of the circumstances under which they were
made, not misleading, and (vi) of the Issuer's determination that a
post-effective amendment to a Registration Statement would be appropriate.
(d) If (1) a Shelf Registration is filed pursuant to Section 3
hereof, or (2) a Prospectus contained in an Exchange Registration Statement
filed pursuant to Section 2 hereof is required to be delivered under the
Securities Act by any Participating Broker-Dealer who seeks to sell Exchange
Notes during the Applicable Period, use its best efforts to prevent the issuance
of any order suspending the effectiveness of a Registration Statement or of any
order preventing or suspending the use of a Prospectus or suspending the
qualification (or exemption from qualification) of any of the Registrable Notes
or the Exchange Notes to be sold by any Participating Broker-Dealer, for sale in
any jurisdiction, and, if any such order is issued, to use its best efforts to
obtain the withdrawal of any such order at the earliest possible moment.
(e) If a Shelf Registration is filed pursuant to Section 3 and if
reasonably requested by the managing underwriter or underwriters (if any), the
Holders of a majority in aggregate principal amount of the Registrable Notes
being sold in connection with an underwritten offering (i) as promptly as
practicable incorporate in a prospectus supplement or post-effective amendment
such information as the managing underwriter or underwriters (if any), such
Holders, or counsel for any of them determine is reasonably necessary to be
included therein, (ii) make all required filings of such prospectus supplement
or such post-effective amendment as soon as practicable after the Issuer has
received notification of the matters to be incorporated in such prospectus
supplement or post-effective amendment, and
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(iii) supplement or make amendments to such Registration Statement.
(f) If (1) a Shelf Registration is filed pursuant to Section 3
hereof, or (2) a Prospectus contained in an Exchange Registration Statement
filed pursuant to Section 2 hereof is required to be delivered under the
Securities Act by any Participating Broker-Dealer who seeks to sell Exchange
Notes during the Applicable Period, furnish to each selling Holder of
Registrable Notes and to each such Participating Broker-Dealer who so requests
and to their respective counsel and each managing underwriter, if any, at the
sole expense of the Issuer, one conformed copy of the Registration Statement or
Registration Statements and each post-effective amendment thereto, including
financial statements and schedules, and, if requested, all documents
incorporated or deemed to be incorporated therein by reference and all exhibits.
(g) If (1) a Shelf Registration is filed pursuant to Section 3
hereof, or (2) a Prospectus contained in an Exchange Registration Statement
filed pursuant to Section 2 hereof is required to be delivered under the
Securities Act by any Participating Broker-Dealer who seeks to sell Exchange
Notes during the Applicable Period, deliver to each selling Holder of
Registrable Notes or each such Participating Broker-Dealer, as the case may be,
their respective counsel, and the underwriters, if any, at the sole expense of
the Issuer, as many copies of the Prospectus or Prospectuses (including each
form of preliminary prospectus) and each amendment or supplement thereto and any
documents incorporated by reference therein as such Persons may reasonably
request; and, subject to the last paragraph of this Section 5, the Issuer hereby
consents to the use of such Prospectus and each amendment or supplement thereto
by each of the selling Holders of Registrable Notes or each such Participating
Broker-Dealer, as the case may be, and the underwriters or agents, if any, and
dealers (if any), in connection with the offering and sale of the Registrable
Notes covered by, or the sale by Participating Broker-Dealers of the Exchange
Notes pursuant to, such Prospectus and any amendment or supplement thereto.
(h) Prior to any public offering of Registrable Notes or any
delivery of a Prospectus contained in the Exchange Registration Statement by any
Participating Broker-Dealer who seeks to sell Exchange Notes during the
Applicable Period, use its best efforts to register or qualify, and to cooperate
with the selling Holders of Registrable Notes or each such Participating
Broker-Dealer, as the case may be, the managing underwriter or underwriters, if
any, and their respective counsel in connection with the registration or
qualification (or exemption from such registration or qualification) of such
Registrable Notes for offer and sale under the securities or Blue Sky laws of
such jurisdictions within the United States as any selling Holder, Participating
Broker-Dealer, or the managing underwriter or underwriters reasonably request in
writing; provided, however, that where Exchange Notes held by Participating
Broker-Dealers or Registrable Notes are offered other than through an
underwritten offering, the Issuer agrees to cause its counsel to perform Blue
Sky
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investigations and file registrations and qualifications required to be filed
pursuant to this Section 5(h), keep each such registration or qualification (or
exemption therefrom) effective during the period such Registration Statement is
required to be kept effective and do any and all other acts or things reasonably
necessary or advisable to enable the disposition in such jurisdictions of the
Exchange held by Participating Broker-Dealers or the Registrable Notes covered
by the Registration Statement; provided, however, that the Issuer shall not be
required to (A) qualify generally to do business in any jurisdiction where it is
not then so qualified, (B) take any action that would subject it to general
service of process in any such jurisdiction where it is not then so subject or
(C) subject itself to taxation in excess of a nominal dollar amount in any such
jurisdiction where it is not then so subject.
(i) If a Shelf Registration is filed pursuant to Section 3 hereof,
cooperate with the selling Holders of Registrable Notes and the managing
underwriter or underwriters, if any, to facilitate the timely preparation and
delivery of certificates representing Registrable Notes to be sold, which
certificates shall not bear any restrictive legends and shall be in a form
eligible for deposit with The Depository Trust Company; and enable such
Registrable Notes to be in such denominations and registered in such names as
the managing underwriter or underwriters, if any, or Holders may reasonably
request.
(j) If (1) a Shelf Registration is filed pursuant to Section 3
hereof, or (2) a Prospectus contained in the Exchange Registration Statement
filed pursuant to Section 2 hereof is required to be delivered under the
Securities Act by any Participating Broker-Dealer who seeks to sell Exchange
Notes during the Applicable Period, upon the occurrence of any event
contemplated by paragraph 5(c)(v) or 5(c)(vi) hereof, as promptly as practicable
prepare and (subject to Section 5(a) hereof) file with the SEC, at the sole
expense of the Issuer, a supplement or post-effective amendment to the
applicable Registration Statement or a supplement to the related Prospectus or
any document incorporated or deemed to be incorporated therein by reference, or
file any other required document so that, as thereafter delivered to the
purchasers of the Registrable Notes being sold thereunder or to the purchasers
of the Exchange Notes to whom such Prospectus will be delivered by a
Participating Broker-Dealer, any such Prospectus 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, in the light of the
circumstances under which they were made, not misleading. Notwithstanding the
foregoing, the Issuer shall not be required to amend or supplement a
Registration Statement, any related Prospectus or any document incorporated
therein by reference, in the event that, and for a period not to exceed an
aggregate of 75 days in any calendar year if, (i) an event occurs and is
continuing as a result of which a Shelf Registration would, in the Issuer's good
faith judgment, contain an untrue statement of a material fact or omit to state
a material fact necessary in order to make the statements therein, in the light
of the circumstances under which they were made, not misleading, and (ii) (a)
the Issuer determines in its good faith judgment that the disclosure of such
event at such time would
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<PAGE>
have a material adverse effect on the business, operations or prospects of the
Issuer or (b) the disclosure otherwise relates to a pending material business
transaction that has not yet been publicly disclosed.
(k) Prior to the effective date of the first Registration Statement
relating to the Registrable Notes, (i) provide the Trustee with certificates for
the Registrable Notes in a form eligible for deposit with The Depository Trust
Company and (ii) provide a CUSIP number for the Registrable Notes.
(l) in the case of a Shelf Registration, enter into such agreements
(including underwriting agreements) and take all such other appropriate actions
as are reasonably requested in order to expedite or facilitate the registration
or the disposition of such Registrable Notes, and in such connection, (i) make
such representations and warranties to Holders of such Registrable Notes with
respect to the business of the Issuer and its subsidiaries as then conducted and
the Registration Statement, Prospectus and documents, if any, incorporated or
deemed to be incorporated by reference therein, in each case, as are customarily
made by issuers to underwriters in underwritten offerings, and confirm the same
if and when requested; (ii) obtain an opinion of counsel to the Issuer and
updates thereof in form and substance reasonably satisfactory to the Holders of
a majority in principal amount of the Registrable Notes being sold, addressed to
each selling Holder covering the matters customarily covered in opinions
requested in underwritten offerings and such other matters as may be reasonably
requested by such Holders; (iii) obtain "cold comfort" letters and updates
thereof from the independent certified public accountants of the Issuer (and, if
necessary, any other independent certified public accountants of any subsidiary
of the Issuer or of any business acquired by any of the Issuer for which
financial statements and financial data are, or are required to be, included in
the Registration Statement), addressed to the selling Holders of Registrable
Notes that satisfy the applicable requirements of Statement of Accounting
Standards No. 72, such letters to be in customary form and covering matters of
the type customarily covered in "cold comfort" letters in connection with
underwritten offerings and such other matters as reasonably requested by such
selling Holders; and (iv) if an underwriting agreement is entered into, the same
shall contain indemnification provisions and procedures no less favorable than
those set forth in Section 7 hereof (or such other provisions and procedures
acceptable to the Issuer and the Holders of a majority in aggregate principal
amount of Registrable Notes covered by such Registration with respect to all
parties to be indemnified pursuant to said Section including, without
limitation, such selling Holders). The above shall be done at each closing in
respect of the sale of Registrable Notes, or as and to the extent required
thereunder.
(m) If (1) a Shelf Registration is filed pursuant to Section 3
hereof, or (2) a Prospectus contained in an Exchange Registration Statement
filed pursuant to Section 2 hereof is required to be delivered under the
Securities Act by any Participating Broker-Dealer
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who seeks to sell Exchange Notes during the Applicable Period, make available
for inspection by any selling Holder of such Registrable Notes being sold, or
each such Participating Broker-Dealer, as the case may be, any underwriter
participating in any such disposition of Registrable Notes, if any, and any
attorney, accountant or other agent retained by any such selling Holder or each
such Participating Broker-Dealer, as the case may be, or underwriter
(collectively, the "Inspectors"), at the offices where normally kept, during
regular business hours and upon reasonable notice, all financial and other
records, pertinent corporate documents and instruments of the Issuer and
subsidiaries of the Issuer (collectively, the "Records") as shall be reasonably
necessary to enable them to exercise any applicable due diligence
responsibilities, and cause the officers, directors and employees of the Issuer
and any of its subsidiaries to supply all information reasonably requested by
any such Inspector in connection with such Registration Statement and
Prospectus. Each Inspector shall agree in writing that it will keep the Records
confidential and that it will not disclose any of the Records that the Issuer
determines, in good faith, to be confidential and notify the Inspectors in
writing are confidential unless (i) the disclosure of such Records is necessary
to avoid or correct a material misstatement or material omission in such
Registration Statement or Prospectus, (ii) the release of such Records is
ordered pursuant to a subpoena or other order from a court of competent
jurisdiction, or (iii) the information in such Records has been made generally
available to the public; provided, however, that prior notice shall be provided
as soon as practicable to the Issuer of the potential disclosure of any
information by such Inspector pursuant to clauses (i) or (ii) of this sentence
to permit the Issuer to obtain a protective order (or waive the provisions of
this paragraph (m)) and that such Inspector shall take such actions as are
reasonably necessary to protect the confidentiality of such information (if
practicable) to the extent such action is otherwise not inconsistent with, an
impairment of or in derogation of the rights and interests of the Holder or any
Inspector.
(n) Provide an indenture trustee for the Registrable Notes or the
Exchange Notes, as the case may be, and cause the Indenture or the trust
indenture provided for in Section 2(a) hereof, as the case may be, to be
qualified under the TIA not later than the effective date of the first
Registration Statement relating to the Registrable Notes; and in connection
therewith, cooperate with the trustee under any such indenture and the Holders
of the Registrable Notes, to effect such changes to such indenture as may be
required for such indenture to be so qualified in accordance with the terms of
the TIA; and execute, and use their best efforts to cause such trustee to
execute, all documents as may be required to effect such changes, and all other
forms and documents required to be filed with the SEC to enable such indenture
to be so qualified in a timely manner.
(o) Comply with all applicable rules and regulations of the SEC and
make generally available to their securityholders with regard to any applicable
Registration Statement, a consolidated earning statement satisfying the
provisions of Section 11(a) of the Securities Act and Rule 158 thereunder (or
any similar rule promulgated under the Securities
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Act) no later than 45 days after the end of any twelve-month period (or 90 days
after the end of any 12-month period if such period is a fiscal year) (i)
commencing at the end of any fiscal quarter in which any Registrable Notes are
sold to underwriters in a firm commitment or best efforts underwritten offering
and (ii) if not sold to underwriters in such an offering, commencing on the
first day of the first fiscal quarter of the Issuer after the effective date of
a Registration Statement, which statements shall cover said 12-month periods.
(p) Upon consummation of an Exchange Offer or a Private Exchange,
obtain an opinion of counsel to the Issuer addressed to the Trustee for the
benefit of all Holders of Registrable Notes participating in the Exchange Offer
or Private Exchange, as the case may be, that the Exchange Notes or Private
Exchange Notes as the case may be, and the related indenture constitute legal,
valid and binding obligations of the Issuer, enforceable against it in
accordance with their respective terms subject to customary exceptions and
qualifications.
(q) If the Exchange Offer or a Private Exchange is to be
consummated, upon delivery of the Registrable Notes by Holders to the Issuer (or
to such other Person as directed by the Issuer) in exchange for the Exchange
Notes or the Private Exchange Notes, as the case may be, the Issuer shall mark,
or cause to be marked, on such Registrable Notes that such Registrable Notes are
being canceled in exchange for the Exchange Notes or the Private Exchange Notes,
as the case may be; provided that in no event shall such Registrable Notes be
marked as paid or otherwise satisfied.
(r) Cooperate with each seller of Registrable Notes covered by any
Registration Statement and each underwriter, if any, participating in the
disposition of such Registrable Notes and their respective counsel in connection
with any filings required to be made with the National Association of Securities
Dealers, Inc. (the "NASD").
(s) Use its best efforts to take all other steps reasonably
necessary to effect the registration of the applicable Registrable Notes covered
by a Registration Statement contemplated hereby.
The Issuer may require each seller of any Registrable Notes as to
which any registration is being effected to furnish to the Issuer such
information regarding such seller and the distribution of such Registrable Notes
as the Issuer may, from time to time, reasonably request. The Issuer may exclude
from such registration the Registrable Notes of any seller for so long as such
seller fails to furnish such information within a reasonable time after
receiving such request and in such event shall have no further obligation under
this Agreement (including without limitation the obligation under Section 4)
with respect to such seller or any subsequent holder of such Registrable Notes.
Each seller as to which any Shelf Registration is being effected agrees to
furnish promptly to the Issuer all information required to be disclosed in order
to make the information previously furnished to the Issuer by such
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seller not materially misleading.
If any such Registration Statement refers to any Holder by name or
otherwise as the holder of any securities of the Issuer, then such Holder shall
have the right to require (i) the insertion therein of language, in form and
substance reasonably satisfactory to such Holder, to the effect that the holding
by such Holder of such securities is not to be construed as a recommendation by
such Holder of the investment quality of the securities covered thereby and that
such holding does not imply that such Holder will assist in meeting any future
financial requirements of the Issuer, or (ii) in the event that such reference
to such Holder by name or otherwise is not required by the Securities Act or any
similar federal statute then in force, the deletion of the reference to such
Holder in any amendment or supplement to the applicable Registration Statement
filed or prepared subsequent to the time that such reference ceases to be
required.
Each Holder of Registrable Notes and each Participating
Broker-Dealer agrees by its acquisition of such Registrable Notes or Exchange
Notes, as the case may be, to be sold by such Participating Broker-Dealer, as
the case may be, that, upon actual receipt of any notice from the Issuer of the
happening of any event of the kind described in Section 5(c)(ii), 5(c)(iv),
5(c)(v), or 5(c)(vi) hereof, such Holder or Participating Broker-Dealer, as the
case may be, will forthwith discontinue disposition of such Registrable Notes or
Exchange Notes, as the case may be, covered by such Registration Statement or
Prospectus until such Holder's or Participating Broker-Dealer's receipt of the
copies of the supplemented or amended Prospectus contemplated by Section 5(j)
hereof, or until it is advised in writing (the "Advice") by the Issuer that the
use of the applicable Prospectus may be resumed, and has received copies of any
amendments or supplements thereto. In the event that the Issuer shall give any
such notice, the Applicable Period shall be extended by the number of days
during such periods from and including the date of the giving of such notice to
and including the date when each seller of Registrable Notes covered by such
Registration Statement or Exchange Notes to be sold by such Participating
Broker-Dealer, as the case may be, shall have received (x) the copies of the
supplemented or amended Prospectus contemplated by Section 5(j) hereof or (y)
the Advice.
6. Registration Expenses.
All fees and expenses incident to the performance of or compliance
with this Agreement by the Issuer (other than any underwriting discounts or
commissions) shall be borne by the Issuer whether or not the Exchange
Registration Statement or any Shelf Registration is filed or becomes effective
or the Exchange Offer is consummated, including, without limitation, (i) all
registration and filing fees (including, without limitation, (A) fees with
respect to filings required to be made with the NASD in connection with an
underwritten offering and (B) fees and expenses of compliance with state
securities or Blue Sky laws (including, without limitation, reasonable fees and
disbursements of counsel in connection
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with Blue Sky qualifications of the Registrable Notes or Exchange Notes and
determination of the eligibility of the Registrable Notes or Exchange Notes for
investment under the laws of such jurisdictions (x) where the holders of
Registrable Notes or Exchange Notes, as the case may be, are located, or (y) as
provided in Section 5(h) hereof, in the case of Registrable Notes or Exchange
Notes, as the case may be, to be sold by a Participating Broker-Dealer during
the Applicable Period)), (ii) printing expenses, including, without limitation,
expenses of printing certificates for Registrable Notes or Exchange Notes in a
form eligible for deposit with The Depository Trust Company and of printing
prospectuses if the printing of prospectuses is requested by the managing
underwriter or underwriters, if any, by the Holders of a majority in aggregate
principal amount of the Registrable Notes included in any Registration Statement
or to be sold by any Participating Broker-Dealer, as the case may be, (iii)
messenger, telephone and delivery expenses, (iv) fees and disbursements of
counsel for the Issuer and fees and disbursements of one special counsel for all
of the sellers of each of the Registrable Notes (exclusive of any counsel
retained pursuant to Section 7 hereof), (v) fees and disbursements of all
independent certified public accountants referred to in Section 5(l)(iii) hereof
(including, without limitation, the expenses of any special audit and "cold
comfort" letters required by or incident to such performance), (vi) Securities
Act liability insurance, if the Issuer desires such insurance, (vii) fees and
expenses of all other Persons retained by the Issuer, (viii) internal expenses
of the Issuer (including, without limitation, all salaries and expenses of
officers and employees of the Issuer performing legal or accounting duties),
(ix) the expense of any annual audit, (x) any fees and expenses incurred in
connection with the listing of the securities to be registered on any securities
exchange, and the obtaining of a rating of the securities, in each case, if
applicable, and (xi) the expenses relating to printing, word processing and
distributing all Registration Statements, underwriting agreements, indentures
and any other documents necessary in order to comply with this Agreement.
7. Indemnification and Contribution.
(a) The Issuer agrees to indemnify and hold harmless each Holder of
the Registrable Notes and each Participating Broker-Dealer selling the Exchange
Notes during the Applicable Period, the affiliates, officers and directors of
each such Person, and each Person, if any, who controls any such Person within
the meaning of either Section 15 of the Securities Act or Section 20 of the
Exchange Act (each, a "Participant"), from and against any and all losses,
claims, damages, judgments, liabilities and expenses (including, without
limitation, the legal fees and other expenses actually incurred in connection
with any suit, action or proceeding or any claim asserted) caused by, arising
out of or based upon any untrue statement or alleged untrue statement of a
material fact contained in any Registration Statement (or any amendment thereto)
or Prospectus (as amended or supplemented if the Issuer shall have furnished any
amendments or supplements thereto) or any preliminary prospectus, or caused by,
arising out of or based upon any omission or alleged omission to state therein a
material fact required to be stated therein or necessary to make the statements
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therein, in the case of the Prospectus in the light of the circumstances under
which they were made, not misleading, except insofar as such losses, claims,
damages or liabilities are caused by any untrue statement or omission or alleged
untrue statement or omission made in reliance upon and in conformity with
information relating to any Participant furnished to the Issuer in writing by
such Participant expressly for use therein and with respect to any preliminary
Prospectus, to the extent that any such loss, claim, damage or liability arises
solely from the fact that any Participant sold Registrable Notes or Exchange
Notes to a person to whom there was not sent or given a copy of the Prospectus
(as amended or supplemented) at or prior to the written confirmation of such
sale if the Issuer shall have previously furnished copies thereof to the
Participant in accordance herewith and the Prospectus (as amended or
supplemented) would have corrected any such untrue statement or omission.
(b) Each Participant agrees, severally and not jointly, to indemnify
and hold harmless the Issuer, the affiliates, officers and directors of the
Issuer and each Person who controls the Issuer within the meaning of Section 15
of the Securities Act or Section 20 of the Exchange Act to the same extent (but
on a several, and not joint, basis) as the foregoing indemnity from the Issuer
to each Participant, but only with reference to information relating to such
Participant furnished to the Issuer in writing by or on behalf of such
Participant expressly for use in any Registration Statement or Prospectus, any
amendment or supplement thereto, or any preliminary prospectus. The liability of
any Participant under this paragraph shall in no event exceed the proceeds
received by such Participant from sales of Registrable Notes or Exchange Notes
giving rise to such obligations.
(c) If any suit, action, proceeding (including any governmental or
regulatory investigation), claim or demand shall be brought or asserted against
any Person in respect of which indemnity may be sought pursuant to either of the
two preceding paragraphs, such Person (the "Indemnified Person") shall promptly
notify the Persons against whom such indemnity may be sought (the "Indemnifying
Persons") in writing, and the Indemnifying Persons, upon request of the
Indemnified Person, shall retain counsel reasonably satisfactory to the
Indemnified Person to represent the Indemnified Person and any others the
Indemnifying Persons may reasonably designate in such proceeding and shall pay
the fees and expenses actually incurred by such counsel related to such
proceeding; provided, however, that the failure to so notify the Indemnifying
Persons will not relieve it from any liability under paragraph (a) or (b) above
unless and to the extent such failure results in the forfeiture by the
Indemnifying Person of substantial rights and defenses and the Indemnifying
Person was not otherwise aware of such action or claim. In any such proceeding,
any Indemnified Person shall have the right to retain its own counsel, but the
fees and expenses of such counsel shall be at the expense of such Indemnified
Person unless (i) the Indemnifying Persons and the Indemnified Person shall have
mutually agreed to the contrary, (ii) the Indemnifying Persons shall have failed
within a reasonable period of time to retain counsel reasonably satisfactory to
the Indemnified Person or (iii) the named parties in any such proceeding
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(including any impleaded parties) include both any Indemnifying Person and the
Indemnified Person or any affiliate thereof and representation of both parties
by the same counsel would be inappropriate due to actual or potential differing
interests between them. It is understood that the Indemnifying Persons shall
not, in connection with such proceeding or separate but substantially similar
related proceedings in the same jurisdiction arising out of the same general
allegations, be liable for the fees and expenses of more than one separate firm
(in addition to any local counsel) for all Indemnified Persons, and that all
such fees and expenses shall be reimbursed promptly as they are incurred. Any
such separate firm for the Participants and such control Persons of Participants
shall be designated in writing by Participants who sold a majority in interest
of Registrable Notes and Exchange Notes sold by all such Participants and shall
be reasonably acceptable to the Issuer, and any such separate firm for the
Issuer, their affiliates, officers, directors, representatives, employees and
agents and such control Persons of the Issuer shall be designated in writing by
the Issuer and shall be reasonably acceptable to the Holders.
The Indemnifying Persons shall not be liable for any settlement of
any proceeding effected without its prior written consent (which consent shall
not be unreasonably withheld or delayed), but if settled with such consent or if
there be a final non-appealable judgment for the plaintiff for which the
Indemnified Person is entitled to indemnification pursuant to this Agreement,
each of the Indemnifying Persons agrees to indemnify and hold harmless each
Indemnified Person from and against any loss or liability by reason of such
settlement or judgment. No Indemnifying Person shall, without the prior written
consent of the Indemnified Persons (which consent shall not be unreasonably
withheld or delayed), effect any settlement or compromise of any pending or
threatened proceeding in respect of which any Indemnified Person is or could
have been a party, or indemnity could have been sought hereunder by such
Indemnified Person, unless such settlement (A) includes an unconditional written
release of such Indemnified Person, in form and substance reasonably
satisfactory to such Indemnified Person, from all liability on claims that are
the subject matter of such proceeding and (B) does not include any statement as
to an admission of fault, culpability or failure to act by or on behalf of such
Indemnified Person.
(d) If the indemnification provided for in the first and second
paragraphs of this Section 7 is for any reason unavailable to, or insufficient
to hold harmless, an Indemnified Person in respect of any losses, claims,
damages or liabilities referred to therein, then each Indemnifying Person under
such paragraphs, in lieu of indemnifying such Indemnified Person thereunder and
in order to provide for just and equitable contribution, shall contribute to the
amount paid or payable by such Indemnified Person as a result of such losses,
claims, damages or liabilities in such proportion as is appropriate to reflect
the relative fault of the Indemnifying Person or Persons on the one hand and the
Indemnified Person or Persons on the other in connection with the statements or
omissions or alleged statements or omissions that resulted in such losses,
claims, damages or liabilities (or actions in respect thereof) as
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well as any other relevant equitable considerations. The relative fault of the
parties shall be determined by reference to, among other things, whether the
untrue or alleged untrue statement of a material fact or the omission or alleged
omission to state a material fact relates to information supplied by the Issuer
on the one hand or such Participant or such other Indemnified Person, as the
case may be, on the other, the parties' relative intent, knowledge, access to
information and opportunity to correct or prevent such statement or omission,
and any other equitable considerations appropriate in the circumstances.
(e) The parties agree that it would not be just and equitable if
contribution pursuant to this Section 7 were determined by pro rata allocation
(even if the Participants were treated as one entity for such purpose) or by any
other method of allocation that does not take account of the equitable
considerations referred to in the immediately preceding paragraph. The amount
paid or payable by an Indemnified Person as a result of the losses, claims,
damages, judgments, liabilities and expenses referred to in the immediately
preceding paragraph shall be deemed to include, subject to the limitations set
forth above, any reasonable legal or other expenses actually incurred by such
Indemnified Person in connection with investigating or defending any such action
or claim. Notwithstanding the provisions of this Section 7, in no event shall a
Participant be required to contribute any amount in excess of the amount by
which proceeds received by such Participant from sales of Registrable Notes or
Exchange Notes, as the case may be, exceeds the amount of any damages that such
Participant has otherwise been required to pay or has paid 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.
(f) The indemnity and contribution agreements contained in this
Section 7 will be in addition to any liability that the Indemnifying Persons may
otherwise have to the Indemnified Persons referred to above.
8. Rules 144 and 144A.
The Issuer covenants and agrees that it will file the reports
required to be filed by it under the Securities Act and the Exchange Act and the
rules and regulations adopted by the SEC thereunder in a timely manner in
accordance with the requirements of the Securities Act and the Exchange Act and,
if at any time the Issuer is not required to file such reports, the Issuer will,
upon the request of any Holder or beneficial owner of Registrable Notes, make
available such information necessary to permit sales pursuant to Rule 144A under
the Securities Act. The Issuer further covenants and agrees, for so long as any
Registrable Notes remain outstanding that it will take such further action as
any Holder of Registrable Notes may reasonably request, all to the extent
required from time to time to enable such holder to sell Registrable Notes
without registration under the Securities Act within the limitation of the
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exemptions provided by (a) Rule 144(k) and Rule 144A under the Securities Act,
as such Rules may be amended from time to time, or (b) any similar rule or
regulation hereafter adopted by the SEC.
9. Miscellaneous.
(a) No Inconsistent Agreements. The Issuer has not, as of the date
hereof, and the Issuer shall not, after the date of this Agreement, enter into
any agreement with respect to any of their securities that is inconsistent with
the rights granted to the Holders of Registrable Notes in this Agreement or
otherwise conflicts with the provisions hereof. The rights granted to the
Holders hereunder do not in any way conflict with and are not inconsistent with
the rights granted to the holders of the Issuer's other issued and outstanding
securities under any such agreements. The Issuer will not enter into any
agreement with respect to any of its securities which will grant to any Person
piggy-back registration rights with respect to any Registration Statement.
(b) Adjustments Affecting Registrable Securities. The Issuer shall
not, directly or indirectly, take any action with respect to the Registrable
Notes that would adversely affect the ability of the Holders of Registrable
Notes to include such Registrable Notes in a registration undertaken pursuant to
this Agreement.
(c) Amendments and Waivers. The provisions of this Agreement may not
be amended, modified or supplemented, and waivers or consents to departures from
the provisions hereof may not be given, otherwise than with the prior written
consent of (I) the Issuer and (II)(A) the Holders of not less than a majority in
aggregate principal amount of the then outstanding Registrable Notes and (B) in
circumstances that would adversely affect the Participating Broker-Dealers, the
Participating Broker-Dealers holding not less than a majority in aggregate
principal amount or liquidation preference, as the case may be, of the Exchange
Notes held by all Participating Broker-Dealers; provided, however, that Section
7 and this Section 10(c) may not be amended, modified or supplemented without
the prior written consent of each Holder and each Participating Broker-Dealer
(including any person who was a Holder or Participating Broker-Dealer of
Registrable Notes or Exchange Notes, as the case may be, disposed of pursuant to
any Registration Statement) affected by any such amendment, modification or
supplement. Notwithstanding the foregoing, a waiver or consent to depart from
the provisions hereof with respect to a matter that relates exclusively to the
rights of Holders of Registrable Notes whose securities are being sold pursuant
to a Registration Statement and that does not directly or indirectly affect,
impair, limit or compromise the rights of other Holders of Registrable Notes may
be given by Holders of at least a majority in aggregate principal amount of the
Registrable Notes being sold pursuant to such Registration Statement.
(d) Notices. All notices and other communications (including,
without
24
<PAGE>
limitation, any notices or other communications to the Trustee) provided for or
permitted hereunder shall be made in writing by hand-delivery, registered
first-class mail, next-day air courier or facsimile:
(i) if to a Holder of Registrable Notes or any Participating
Broker-Dealer, at the most current address of such Holder or Participating
Broker-Dealer, as the case may be, set forth on the records of the
registrar under the Indenture, the Exchange Indenture or of the Issuer, as
appropriate.
(ii) if to the Issuer, at the address as follows:
FLAG Telecom Holdings Limited
3rd Floor, 103 Mount Street
London W1Y 5HE
Facsimile No.: (44) 171-317-0808
Attention: Stuart Rubin, General Counsel
All such notices and communications shall be deemed to have been
duly given: when delivered by hand, if personally delivered; five business days
after being deposited in the mail, postage prepaid, if mailed; one business day
after being timely delivered to a next-day air courier; and when receipt is
acknowledged by the addressee, if sent by facsimile.
Copies of all such notices, demands or other communications shall be
concurrently delivered by the Person giving the same to the Trustee at the
address and in the manner specified in the Indenture if such communication
relates to the Notes, Exchange Notes or Private Exchange Notes.
(e) Successors and Assigns. This Agreement shall inure to the
benefit of and be binding upon the successors and assigns of each of the parties
hereto, the Holders and the Participating Broker-Dealers; provided, however,
that this Agreement shall not inure to the benefit of or be binding upon a
successor or assign of a Holder or a Participating Broker-Dealer unless and to
the extent such successor or assign holds Registrable Notes.
(f) Counterparts. This Agreement may be executed in any number of
counterparts and by the parties hereto in separate counterparts, each of which
when so executed shall be deemed to be an original and all of which taken
together shall constitute one and the same agreement.
(g) Headings. The headings in this Agreement are for convenience of
reference only and shall not limit or otherwise affect the meaning hereof.
(h) Governing Law. THIS AGREEMENT SHALL BE GOVERNED
25
<PAGE>
BY AND CONSTRUED IN ACCORDANCE WITH THE LAWS OF THE STATE OF NEW YORK, AS
APPLIED TO CONTRACTS MADE AND PERFORMED ENTIRELY WITHIN THE STATE OF NEW YORK,
WITHOUT REGARD TO PRINCIPLES OF CONFLICTS OF LAW. EACH OF THE PARTIES HERETO
AGREES 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 AGREEMENT.
(i) Severability. If any term, provision, covenant or restriction of
this Agreement is held by a court of competent jurisdiction to be invalid,
illegal, void or unenforceable, the remainder of the terms, provisions,
covenants and restrictions set forth herein shall remain in full force and
effect and shall in no way be affected, impaired or invalidated, and the parties
hereto shall use their best efforts to find and employ an alternative means to
achieve the same or substantially the same result as that contemplated by such
term, provision, covenant or restriction. It is hereby stipulated and declared
to be the intention of the parties that they would have executed the remaining
terms, provisions, covenants and restrictions without including any of such that
may be hereafter declared invalid, illegal, void or unenforceable.
(j) Securities Held by the Issuer or Its Affiliates. Whenever the
consent or approval of Holders of a specified percentage of Registrable Notes is
required hereunder, Registrable Notes held by the Issuer or its affiliates (as
such term is defined in Rule 405 under the Securities Act) shall not be counted
in determining whether such consent or approval was given by the Holders of such
required percentage.
(k) Third-Party Beneficiaries. Holders of Registrable Notes, and
Participating Broker-Dealers are intended third-party beneficiaries of this
Agreement, and this Agreement may be enforced by such Persons.
(l) Entire Agreement. This Agreement, the Purchase Agreement and the
Indenture are intended by the parties as a final and exclusive statement of the
agreement and understanding of the parties hereto in respect of the subject
matter contained herein and therein and any and all prior oral or written
agreements, representations, or warranties, contracts, understandings,
correspondence, conversations and memoranda between the Holders on the one hand
and the Issuer on the other, or between or among any agents, representatives,
parents, subsidiaries, affiliates, predecessors in interest or successors in
interest with respect to the subject matter hereof and thereof are merged herein
and replaced hereby.
[REST OF PAGE INTENTIONALLY LEFT BLANK]
26
<PAGE>
IN WITNESS WHEREOF, the parties have executed this Agreement as of
the date first written above.
FLAG TELECOM HOLDINGS LIMITED
By:_____________________________________
Name:
Title:
The foregoing Agreement is hereby confirmed
and accepted as of the date first above written.
Salomon Smith Barney Inc.
By_________________________________
Name:
Title:
Morgan Stanley & Co. International Limited
By_________________________________
Name:
Title:
Deutsche Bank Securities Inc.
By_________________________________
Name:
Title:
Bear, Stearns & Co. Inc.
By_________________________________
Name:
Title:
For themselves and the other Initial
Purchasers named in Schedule I to
the foregoing Agreement
27
N E W S R E L E A S E [Logo]
FOR IMMEDIATE RELEASE
FLAG TELECOM HOLDINGS LIMITED CLOSES HIGH YIELD OFFERING WITH SALE OF $588
MILLION IN 10-YEAR SENIOR NOTES
London, 17 March 2000 - FLAG Telecom (Nasdaq: FTHL; LSE: FTL), a leading global
carriers' carrier, today announced the company has successfully sold $300
million of 10-year senior notes and 300 million Euro ($288 million) of 10-year
senior notes, at a rate of 11.625% for both currencies. The notes were offered
to qualified institutional buyers in the United States within the meaning of the
Securities Act of 1933 and to non-United States persons overseas pursuant to
Regulation S under the Securities Act. The notes have not been registered under
the Securities Act and may not be offered or sold in the United States absent
registration or an applicable exemption from registration requirements. FLAG
Telecom owns and operates the FLAG (Fiberoptic Link Around the Globe)
Europe-Asia cable system, stretching 28,000 km from the UK to Japan, and
provides an innovative range of products and services to the international
carrier community and Internet Service Providers. The company's latest venture,
FLAG Atlantic-1 (FA-1), now under construction, will provide fully protected
services between London, Paris and New York and extend the network to 42,500
route kilometres. The FA-1 cable project is on track and is expected to enter
commercial service during March 2001.
Ed McCormack, COO and CFO, FLAG Telecom, said: "We are very pleased with the
results of this offering. Following the recent IPO of the company and this
additional fundraising we are now set to accelerate the development of
innovative products and services and extend the reach of the FLAG Telecom
network."
The FLAG Europe-Asia cable, with 16 operational landing points in 13 countries,
directly connects landings in Japan (2) and the UK, via the Atlantic Ocean,
Mediterranean Sea, Red Sea, Indian Ocean, the South China Sea, and the Pacific
Ocean. The cable is the longest private cable system ever built and provides
high-capacity digital services to international carriers, resellers, and ISPs.
The FLAG Europe-Asia cable, along what is considered the most difficult route of
any cable system in the world, took 27 months and required approximately 4,000
permits to install. It spans many of the world's fastest growing economies and
offers direct connectivity to over 75 percent of the world's population. Built
at a cost of $1.6bn, the cable is designed to meet the growing demand for
international communications services, providing carriers with a world-class
<PAGE>
broadband superhighway. Currently the company has over 90 telecommunications
operators as customers, including most of the world's top carriers.
FLAG Atlantic-1, the company's latest venture now under construction, is
designed to be the world's first terabit/s transoceanic dual cable system
offering fully protected services between Paris, London and New York. The system
will be a triple-ring, dual cable system, connecting the East Coast of the
United States, with nodes in the heart of New York to two landings in Europe -
one in Brittany, France and the other in Cornwall, UK, with city nodes in Paris
and London. Customers will be able to add traffic either at the shore landing
stations or the city nodes. The planned three self-healing rings are designed to
provide secure end to end circuits to most of the major world business centres.
FA-1 will connect to the FLAG Europe-Asia cable system in Cornwall, UK.
FLAG Telecom offers terrestrial connections between FLAG Telecom's landing
stations in the United Kingdom and Spain to the city centres of London and
Madrid, and intra-European connections to major European metropolitan areas.
This capacity is provided through arrangements with key European bandwidth
providers, including iaxis.
The single FLAG network operations centre (FNOC) is located in the central time
zone of the Europe-Asia route, at Fujairah in the United Arab Emirates. The FNOC
manages all maintenance activity, performance monitoring and activates capacity
on demand. With the addition of FLAG Atlantic-1, which will be built and
operated as a 50:50 joint venture with GTS, the network is expected to extend to
over 42,500 route kilometers, enough to encircle the globe.
www.flagtelecom.com
For further information about FLAG Telecom, please contact:
Jane Windsor Larry Bautista
FLAG Telecom FLAG Telecom
Tel: +44 171 317 0811 Tel: +44 171 317 0800
Fax: +44 171 317 0808 Fax: +44 171 317 0808
M: +44 777 55 23 156
[email protected] [email protected]
Statements contained in this Press Release which are not historical facts may be
forward-looking statements, as the term is defined in the Private Securities
Litigation Reform Act of 1995. Such forward-looking statements are subject to
risks and uncertainties which could cause actual results to differ materially
from those currently anticipated due to a number of factors, which include, but
are not limited to: the Company's ability to achieve revenues from products and
services that are in the early stages of development or operation, the Company's
completion of FLAG Atlantic-1 within budget and on time, the Company's ability
to deploy sophisticated technologies on a global basis, the Company's ability to
upgrade and expand its network and respond to customer demands and industry
changes, regulatory enactments and changes, competition and pricing pressure,
rapid technological change, adverse foreign economic or political events and
other factors that are discussed in the Company's Registration Statement on Form
F-1 filed with the Securities and Exchange Commission in regard to its common
shares.
