SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
-----------------------
SCHEDULE 13D
Under the Securities Exchange Act of 1934
Viatel, Inc.
(Name of Issuer)
Common Stock, par value $0.01 per share
(Title of Class of Securities)
925529208
(CUSIP Number)
Thomas O. Hicks
c/o Hicks, Muse, Tate & Furst Incorporated
200 Crescent Court
Suite 1600
Dallas, Texas 75201
(214) 740-7300
(Name, Address and Telephone Number of Person Authorized to Receive Notices and
Communications)
Copies to:
Eric S. Shube
Vinson & Elkins, L.L.P.
1325 Avenue of the Americas
New York, New York 10019
(917) 206-8005
March 9, 2000
<PAGE>
(Date of Event which Requires Filing of this Statement)
If the filing person has previously filed a statement on Schedule 13G to
report the acquisition that is the subject of this Schedule 13D, and is filing
this schedule because of Rule 13d-1(e), 13d-1(f) or 13d-1(g), check the
following box. [ ]
(Continued on following pages)
Page 2
<PAGE>
CUSIP NO. 87959Y 10 3
- --------------------------------------------------------------------------
1 Name of Reporting Person
I.R.S. Identification No. of above person (entities only)
Mr. Thomas O. Hicks
- --------------------------------------------------------------------------
2 Check the appropriate box if a member of a group* (a) [ ]
(b) [ ]
- --------------------------------------------------------------------------
3 SEC use only
- --------------------------------------------------------------------------
4 Source of Funds N/A
- --------------------------------------------------------------------------
5 Check if Disclosure of Legal Proceedings is Required Pursuant to Items
2(d) or 2(e) [ ]
- --------------------------------------------------------------------------------
6 Citizenship or Place of Organization United States
7 Sole Voting Power 0
Number of Shares Beneficially -----------------------------------------------
8 Shared Voting Power* 4,519,599
Owned by Each Reporting -----------------------------------------------
9 Sole Dispositive Power 0
Person With -----------------------------------------------
10 Shared Dispositive Power* 4,519,599
- --------------------------------------------------------------------------------
11 Aggregate Amount Beneficially Owned by each Reporting Person** 4,519,599
- --------------------------------------------------------------------------------
12 Check if the Aggregate Amount in Row (11) Excludes Certain Shares [ ]
- --------------------------------------------------------------------------------
13 Percent of Class Represented by Amount in Row (11)** 8.6%
- --------------------------------------------------------------------------------
14 Type of Reporting Person IN
- --------------------------------------------------------------------------------
* The Reporting Person expressly disclaims (a) the existence of any group
and (b) beneficial ownership with respect to any shares other than
the shares owned of record by such reporting person.
** Assuming (1) conversion of all 7.50% Cumulative Convertible Preferred
Stock beneficially owned by such reporting person, but without giving
effect to the conversion into Common Stock of (a) any 7.50%
Cumulative Convertible Preferred Stock held by others or (b) any
capital stock held by other holders and (2) exercise of all five-year
Common Stock warrants and seven-and-one-half year Common Stock warrants
beneficially owned by such reporting person, but without giving effect
to the exercise of any other warrants.
Page 3
<PAGE>
CUSIP NO. 87959Y 10 3
- --------------------------------------------------------------------------------
1 Name of Reporting Person
I.R.S. Identification No. of above person (entities only)
HMEU Viatel Qualified Fund, LLC
- --------------------------------------------------------------------------------
2 Check the appropriate box if a member of a group* (a) [ ]
(b) [ ]
- --------------------------------------------------------------------------------
3 SEC use only
- --------------------------------------------------------------------------------
4 Source of Funds OO
- --------------------------------------------------------------------------------
5 Check if Disclosure of Legal Proceedings is Required Pursuant to Items
2(d) or 2(e) [ ]
- --------------------------------------------------------------------------------
6 Citizenship or Place of Organization Delaware
- --------------------------------------------------------------------------------
7 Sole Voting Power 0
Number of Shares Beneficially -----------------------------------------------
8 Shared Voting Power* 1,959,756
Owned by Each Reporting -----------------------------------------------
9 Sole Dispositive Power 0
Person With -----------------------------------------------
10 Shared Dispositive Power* 1,959,756
-----------------------------------------------
11 Aggregate Amount Beneficially Owned by each Reporting Person** 1,959,756
- --------------------------------------------------------------------------------
12 Check if the Aggregate Amount in Row (11) Excludes Certain Shares [ ]
- --------------------------------------------------------------------------------
13 Percent of Class Represented by Amount in Row (11)** 3.9%
- --------------------------------------------------------------------------------
14 Type of Reporting Person N/A
- --------------------------------------------------------------------------------
* The Reporting Person expressly disclaims (a) the existence of any group
and (b) beneficial ownership with respect to any shares other than
the shares owned of record by such reporting person.
** Assuming (1) conversion of all 7.50% Cumulative Convertible Preferred
Stock beneficially owned by such reporting person, but without giving
effect to the conversion into Common Stock of (a) any 7.50%
Cumulative Convertible Preferred Stock held by others or (b) any capital
stock held by other holders and (2) exercise of all five-year Common
Stock warrants and seven-and-one-half year Common Stock warrants
beneficially owned by such reporting person, but without giving effect
to the exercise of any other warrants.
Page 4
<PAGE>
CUSIP NO. 87959Y 10 3
- --------------------------------------------------------------------------------
1 Name of Reporting Person
I.R.S. Identification No. of above person (entities only)
Hicks, Muse, Tate & Furst Europe Fund, L.P.
- --------------------------------------------------------------------------------
2 Check the appropriate box if a member of a group* (a) [ ]
(b) [ ]
- --------------------------------------------------------------------------------
3 SEC use only
- --------------------------------------------------------------------------------
4 Source of Funds N/A
- --------------------------------------------------------------------------------
5 Check if Disclosure of Legal Proceedings is Required Pursuant to Items
2(d) or 2(e) [ ]
- --------------------------------------------------------------------------------
6 Citizenship or Place of Organization Delaware
- --------------------------------------------------------------------------------
7 Sole Voting Power 0
Number of Shares Beneficially ----------------------------------------------
8 Shared Voting Power* 1,959,756
Owned by Each Reporting ----------------------------------------------
9 Sole Dispositive Power 0
Person With ----------------------------------------------
10 Shared Dispositive Power* 1,959,756
----------------------------------------------
11 Aggregate Amount Beneficially Owned by each Reporting Person** 1,959,756
- --------------------------------------------------------------------------------
12 Check if the Aggregate Amount in Row (11) Excludes Certain Shares [ ]
- --------------------------------------------------------------------------------
13 Percent of Class Represented by Amount in Row (11)** 3.9%
- --------------------------------------------------------------------------------
14 Type of Reporting Person PN
* The Reporting Person expressly disclaims (a) the existence of any group
and (b) beneficial ownership with respect to any shares other than
the shares owned of record by such reporting person.
** Assuming (1) conversion of all 7.50% Cumulative Convertible Preferred
Stock beneficially owned by such reporting person, but without giving
effect to the conversion into Common Stock of (a) any 7.50%
Cumulative Convertible Preferred Stock held by others or (b) any capital
stock held by other holders and (2) exercise of all five-year Common
Stock warrants and seven-and-one-half year Common Stock warrants
beneficially owned by such reporting person, but without giving effect
to the exercise of any other warrants.
Page 5
<PAGE>
CUSIP NO. 87959Y 10 3
- --------------------------------------------------------------------------------
1 Name of Reporting Person
I.R.S. Identification No. of above person (entities only)
HMEU Viatel Private Fund, LLC
- --------------------------------------------------------------------------------
2 Check the appropriate box if a member of a group* (a) [ ]
(b) [ ]
- --------------------------------------------------------------------------------
3 SEC use only
- --------------------------------------------------------------------------------
4 Source of Funds N/A
- --------------------------------------------------------------------------------
5 Check if Disclosure of Legal Proceedings is Required Pursuant to Items
2(d) or 2(e) [ ]
- --------------------------------------------------------------------------------
6 Citizenship or Place of Organization Delaware
- --------------------------------------------------------------------------------
7 Sole Voting Power 0
Number of Shares Beneficially -----------------------------------------------
8 Shared Voting Power* 11,515
Owned by Each Reporting. -----------------------------------------------
9 Sole Dispositive Power 0
Person With -----------------------------------------------
10 Shared Dispositive Power* 11,515
-----------------------------------------------
11 Aggregate Amount Beneficially Owned by each Reporting Person** 11,515
- --------------------------------------------------------------------------------
12 Check if the Aggregate Amount in Row (11) Excludes Certain Shares [ ]
- --------------------------------------------------------------------------------
13 Percent of Class Represented by Amount in Row (11)** 0.02%
- --------------------------------------------------------------------------------
14 Type of Reporting Person OO
- --------------------------------------------------------------------------------
* The Reporting Person expressly disclaims (a) the existence of any group
and (b) beneficial ownership with respect to any shares other than
the shares owned of record by such reporting person.
** Assuming (1) conversion of all 7.50% Cumulative Convertible Preferred
Stock beneficially owned by such reporting person, but without giving
effect to the conversion into Common Stock of (a) any 7.50%
Cumulative Convertible Preferred Stock held by others or (b) any
capital stock held by other holders and (2) exercise of all five-year
Common Stock warrants and seven-and-one-half year Common Stock warrants
beneficially owned by such reporting person, but without giving effect
to the exercise of any other warrants.
Page 6
<PAGE>
CUSIP NO. 87959Y 10 3
- --------------------------------------------------------------------------------
1 Name of Reporting Person
I.R.S. Identification No. of above person (entities only)
Hicks, Muse, Tate & Furst Europe Private Fund, L.P.
- --------------------------------------------------------------------------------
2 Check the appropriate box if a member of a group* (a) [ ]
(b) [ ]
- --------------------------------------------------------------------------------
3 SEC use only
- --------------------------------------------------------------------------------
4 Source of Funds OO
- --------------------------------------------------------------------------------
5 Check if Disclosure of Legal Proceedings is Required Pursuant to Items
2(d) or 2(e) [ ]
- --------------------------------------------------------------------------------
6 Citizenship or Place of Organization Delaware
- --------------------------------------------------------------------------------
7 Sole Voting Power 0
Number of Shares Beneficially --------------------------------------------
8 Shared Voting Power* 11,515
Owned by Each Reporting --------------------------------------------
9 Sole Dispositive Power 0
Person With --------------------------------------------
10 Shared Dispositive Power* 11,515
--------------------------------------------
11 Aggregate Amount Beneficially Owned by each Reporting Person** 11,515
- --------------------------------------------------------------------------------
12 Check if the Aggregate Amount in Row (11) Excludes Certain Shares [ ]
- --------------------------------------------------------------------------------
13 Percent of Class Represented by Amount in Row (11)** 0.02%
- --------------------------------------------------------------------------------
14 Type of Reporting Person PN
- --------------------------------------------------------------------------------
* The Reporting Person expressly disclaims (a) the existence of any group
and (b) beneficial ownership with respect to any shares other than
the shares owned of record by such reporting person.
** Assuming (1) conversion of all 7.50% Cumulative Convertible Preferred
Stock beneficially owned by such reporting person, but without giving
effect to the conversion into Common Stock of (a) any 7.50%
Cumulative Convertible Preferred Stock held by others or (b) any capital
stock held by other holders and (2) exercise of all five-year Common Stock
warrants and seven-and-one-half year Common Stock warrants beneficially
owned by such reporting person, but without giving effect to the
exercise of any other warrants.
Page 7
<PAGE>
CUSIP NO. 87959Y 10 3
- --------------------------------------------------------------------------------
1 Name of Reporting Person
I.R.S. Identification No. of above person (entities only)
HMEU GP LLC
- --------------------------------------------------------------------------------
2 Check the appropriate box if a member of a group* (a) [ ]
(b) [X]
- --------------------------------------------------------------------------------
3 SEC use only
- --------------------------------------------------------------------------------
4 Source of Funds OO
- --------------------------------------------------------------------------------
5 Check if Disclosure of Legal Proceedings is Required Pursuant to Items
2(d) or 2(e) [ ]
- --------------------------------------------------------------------------------
6 Citizenship or Place of Organization Texas
- --------------------------------------------------------------------------------
7 Sole Voting Power 0
Number of Shares Beneficially ---------------------------------------------
8 Shared Voting Power* 1,971,271
Owned by Each Reporting ---------------------------------------------
9 Sole Dispositive Power 0
Person With ---------------------------------------------
10 Shared Dispositive Power* 1,971,271
---------------------------------------------
11 Aggregate Amount Beneficially Owned by each Reporting Person** 1,971,271
- --------------------------------------------------------------------------------
12 Check if the Aggregate Amount in Row (11) Excludes Certain Shares [ ]
- --------------------------------------------------------------------------------
13 Percent of Class Represented by Amount in Row (11)** 4.0%
- --------------------------------------------------------------------------------
14 Type of Reporting Person OO
- --------------------------------------------------------------------------------
* The Reporting Person expressly disclaims (a) the existence of any group
and (b) beneficial ownership with respect to any shares other than
the shares owned of record by such reporting person.
** Assuming (1) conversion of all 7.50% Cumulative Convertible Preferred
Stock beneficially owned by such reporting person, but without giving
effect to the conversion into Common Stock of (a) any 7.50%
Cumulative Convertible Preferred Stock held by others or (b) any capital
stock held by other holders and (2) exercise of all five-year Common
Stock warrants and seven-and-one-half year Common Stock warrants
beneficially owned by such reporting person, but without giving effect
to the exercise of any other warrants.
Page 8
<PAGE>
CUSIP NO. 87959Y 10 3
- --------------------------------------------------------------------------------
1 Name of Reporting Person
I.R.S. Identification No. of above person (entities only)
HMEU Viatel I-EQ Coinvestors, LLC
- --------------------------------------------------------------------------------
2 Check the appropriate box if a member of a group* (a) [ ]
(b) [X]
- --------------------------------------------------------------------------------
3 SEC use only
- --------------------------------------------------------------------------------
4 Source of Funds OO
- --------------------------------------------------------------------------------
5 Check if Disclosure of Legal Proceedings is Required Pursuant to Items
2(d) or 2(e) [ ]
- --------------------------------------------------------------------------------
6 Citizenship or Place of Organization Delaware
- --------------------------------------------------------------------------------
7 Sole Voting Power 0
Number of Shares Beneficially ----------------------------------------------
8 Shared Voting Power* 36,072
Owned by Each Reporting ----------------------------------------------
9 Sole Dispositive Power 0
Person With -----------------------------------------------
10 Shared Dispositive Power* 36,072
-----------------------------------------------
11 Aggregate Amount Beneficially Owned by each Reporting Person** 36,072
- --------------------------------------------------------------------------------
12 Check if the Aggregate Amount in Row (11) Excludes Certain Shares [ ]
- --------------------------------------------------------------------------------
13 Percent of Class Represented by Amount in Row (11)** 0.1%
- --------------------------------------------------------------------------------
14 Type of Reporting Person OO
- --------------------------------------------------------------------------------
* The Reporting Person expressly disclaims (a) the existence of any group
and (b) beneficial ownership with respect to any shares other than
the shares owned of record by such reporting person.
** Assuming (1) conversion of all 7.50% Cumulative Convertible Preferred
Stock beneficially owned by such reporting person, but without giving
effect to the conversion into Common Stock of (a) any 7.50%
Cumulative Convertible Preferred Stock held by others or (b) any capital
stock held by other holders and (2) exercise of all five-year Common
Stock warrants and seven-and-one-half year Common Stock warrants
beneficially owned by such reporting person, but without giving effect
to the exercise of any other warrants.
Page 9
<PAGE>
CUSIP NO. 87959Y 10 3
- --------------------------------------------------------------------------------
1 Name of Reporting Person
I.R.S. Identification No. of above person (entities only)
HMEU I-EQ Coinvestors, L.P.
- --------------------------------------------------------------------------------
2 Check the appropriate box if a member of a group* (a) [ ]
(b) [X]
- --------------------------------------------------------------------------------
3 SEC use only
- --------------------------------------------------------------------------------
4 Source of Funds OO
- --------------------------------------------------------------------------------
5 Check if Disclosure of Legal Proceedings is Required Pursuant to Items
2(d) or 2(e)
- --------------------------------------------------------------------------------
6 Citizenship or Place of Organization Cayman Islands
7 Sole Voting Power 0
Number of Shares Beneficially ----------------------------------------------
8 Shared Voting Power* 36,072
Owned by Each Reporting ----------------------------------------------
9 Sole Dispositive Power 0
Person With ----------------------------------------------
10 Shared Dispositive Power* 36,072
----------------------------------------------
11 Aggregate Amount Beneficially Owned by each Reporting Person** 36,072
- --------------------------------------------------------------------------------
12 Check if he Aggregate Amount in Row (11) Excludes Certain Shares [ ]
- --------------------------------------------------------------------------------
13 Percent of Class Represented by Amount in Row (11)** 0.1%
- --------------------------------------------------------------------------------
14 Type of Reporting Person PN
- --------------------------------------------------------------------------------
* The Reporting Person expressly disclaims (a) the existence of any group
and (b) beneficial ownership with respect to any shares other than
the shares owned of record by such reporting person.
** Assuming (1) conversion of all 7.50% Cumulative Convertible Preferred
Stock beneficially owned by such reporting person, but without giving
effect to the conversion into Common Stock of (a) any 7.50%
Cumulative Convertible Preferred Stock held by others or (b) any capital
stock held by other holders and (2) exercise of all five-year Common
Stock warrants and seven-and-one-half year Common Stock warrants
beneficially owned by such reporting person, but without giving effect
to the exercise of any other warrants.
Page 10
<PAGE>
CUSIP NO. 87959Y 10 3
- --------------------------------------------------------------------------------
1 Name of Reporting Person
I.R.S. Identification No. of above person (entities only)
HMEU Viatel I-SBS Coinvestors, LLC
- --------------------------------------------------------------------------------
2 Check the appropriate box if a member of a group* (a) [ ]
(b) [X]
- --------------------------------------------------------------------------------
3 SEC use only
- --------------------------------------------------------------------------------
4 Source of Funds OO
- --------------------------------------------------------------------------------
5 Check if Disclosure of Legal Proceedings is Required Pursuant to Items
2(d) or 2(e) [ ]
- --------------------------------------------------------------------------------
6 Citizenship or Place of Organization Delaware
- --------------------------------------------------------------------------------
7 Sole Voting Power 0
Number of Shares Beneficially ---------------------------------------------
8 Shared Voting Power* 47,922
Owned by Each Reporting ---------------------------------------------
9 Sole Dispositive Power 0
Person With ---------------------------------------------
10 Shared Dispositive Power* 47,922
---------------------------------------------
11 Aggregate Amount Beneficially Owned by each Reporting Person** 47,922
- --------------------------------------------------------------------------------
12 Check if the Aggregate Amount in Row (11) Excludes Certain Shares [ ]
- --------------------------------------------------------------------------------
13 Percent of Class Represented by Amount in Row (11)** 0.1%
- --------------------------------------------------------------------------------
14 Type of Reporting Person OO
- --------------------------------------------------------------------------------
* The Reporting Person expressly disclaims (a) the existence of any group
and (b) beneficial ownership with respect to any shares other than
the shares owned of record by such reporting person.
** Assuming (1) conversion of all 7.50% Cumulative Convertible Preferred
Stock beneficially owned by such reporting person, but without giving
effect to the conversion into Common Stock of (a) any 7.50%
Cumulative Convertible Preferred Stock held by others or (b) any capital
stock held by other holders and (2) exercise of all five-year Common
Stock warrants and seven-and-one-half year Common Stock warrants
beneficially owned by such reporting person, but without giving effect
to the exercise of any other warrants.
Page 11
<PAGE>
CUSIP NO. 87959Y 10 3
- --------------------------------------------------------------------------------
1 Name of Reporting Person
I.R.S. Identification No. of above person (entities only)
HMEU I-SBS Coinvestors, L.P.
- --------------------------------------------------------------------------------
2 Check the appropriate box if a member of a group* (a) [ ]
(b) [X]
- --------------------------------------------------------------------------------
3 SEC use only
- --------------------------------------------------------------------------------
4 Source of Funds OO
- --------------------------------------------------------------------------------
5 Check if Disclosure of Legal Proceedings is Required Pursuant to Items
2(d) or 2(e) [ ]
- --------------------------------------------------------------------------------
6 Citizenship or Place of Organization Cayman Islands
- --------------------------------------------------------------------------------
7 Sole Voting Power 0
Number of Shares Beneficially -----------------------------------------------
8 Shared Voting Power* 47,922
Owned by Each Reporting -----------------------------------------------
9 Sole Dispositive Power 0
Person With -----------------------------------------------
10 Shared Dispositive Power* 47,922
-----------------------------------------------
11 Aggregate Amount Beneficially Owned by each Reporting Person** 47,922
- --------------------------------------------------------------------------------
12 Check if the Aggregate Amount in Row (11) Excludes Certain Shares [ ]
- --------------------------------------------------------------------------------
13 Percent of Class Represented by Amount in Row (11)** 0.1%
- --------------------------------------------------------------------------------
14 Type of Reporting Person PN
- --------------------------------------------------------------------------------
* The Reporting Person expressly disclaims (a) the existence of any group
and (b) beneficial ownership with respect to any shares other than
the shares owned of record by such reporting person.
** Assuming (1) conversion of all 7.50% Cumulative Convertible Preferred
Stock beneficially owned by such reporting person, but without giving
effect to the conversion into Common Stock of (a) any 7.50%
Cumulative Convertible Preferred Stock held by others or (b) any
capital stock held by other holders and (2) exercise of all five-year
Common Stock warrants and seven-and-one-half year Common Stock warrants
beneficially owned by such reporting person, but without giving effect
to the exercise of any other warrants.
Page 12
<PAGE>
CUSIP NO. 87959Y 10 3
- --------------------------------------------------------------------------------
1 Name of Reporting Person
I.R.S. Identification No. of above person (entities only)
HMEU Intermediate Partners I-C, L.P.
- --------------------------------------------------------------------------------
2 Check the appropriate box if a member of a group* (a) [ ]
(b) [X]
- --------------------------------------------------------------------------------
3 SEC use only
- --------------------------------------------------------------------------------
4 Source of Funds OO
5 Check if Disclosure of Legal Proceedings is Required Pursuant to Items
2(d) or 2(e) [ ]
6 Citizenship or Place of Organization Cayman Islands
7 Sole Voting Power 0
Number of Shares Beneficially
8 Shared Voting Power* 83,994
Owned by Each Reporting
9 Sole Dispositive Power 0
Person With
10 Shared Dispositive Power* 83,994
11 Aggregate Amount Beneficially Owned by each Reporting Person** 83,994
12 Check if the Aggregate Amount in Row (11) Excludes Certain Shares [ ]
13 Percent of Class Represented by Amount in Row (11)** 0.2%
14 Type of Reporting Person PN
* The Reporting Person expressly disclaims (a) the existence of any group
and (b) beneficial ownership with respect to any shares other than
the shares owned of record by such reporting person.
** Assuming (1) conversion of all 7.50% Cumulative Convertible Preferred
Stock beneficially owned by such reporting person, but without giving
effect to the conversion into Common Stock of (a) any 7.50%
Cumulative Convertible Preferred Stock held by others or (b) any capital
stock held by other holders and (2) exercise of all five-year Common Stock
warrants and seven-and-one-half year Common Stock warrants beneficially
owned by such reporting person, but without giving effect to the
exercise of any other warrants.
Page 13
<PAGE>
CUSIP NO. 87959Y 10 3
1 Name of Reporting Person
I.R.S. Identification No. of above person (entities only)
Viatel PG Europe, LLC
2 Check the appropriate box if a member of a group* (a) [ ]
(b) [X]
3 SEC use only
4 Source of Funds OO
5 Check if Disclosure of Legal Proceedings is Required Pursuant to Items
2(d) or 2(e) [ ]
6 Citizenship or Place of Organization Delaware
7 Sole Voting Power 0
Number of Shares Beneficially
8 Shared Voting Power* 204,533
Owned by Each Reporting
9 Sole Dispositive Power 0
Person With
10 Shared Dispositive Power* 204,533
11 Aggregate Amount Beneficially Owned by each Reporting Person** 204,533
12 Check if the Aggregate Amount in Row (11) Excludes Certain Shares [ ]
13 Percent of Class Represented by Amount in Row (11)** 0.4%
14 Type of Reporting Person OO
* The Reporting Person expressly disclaims (a) the existence of any group
and (b) beneficial ownership with respect to any shares other than
the shares owned of record by such reporting person.
** Assuming (1) conversion of all 7.50% Cumulative Convertible Preferred
Stock beneficially owned by such reporting person, but without giving
effect to the conversion into Common Stock of (a) any 7.50%
Cumulative Convertible Preferred Stock held by others or (b) any capital
stock held by other holders and (2) exercise of all five-year Common
Stock warrants and seven-and-one-half year Common Stock warrants
beneficially owned by such reporting person, but without giving effect
to the exercise of any other warrants.
Page 14
<PAGE>
CUSIP NO. 87959Y 10 3
1 Name of Reporting Person
I.R.S. Identification No. of above person (entities only)
HM PG Europe I, C.V.
2 Check the appropriate box if a member of a group* (a) [ ]
(b) [X]
3 SEC use only
4 Source of Funds OO
5 Check if Disclosure of Legal Proceedings is Required Pursuant to Items
2(d) or 2(e) [ ]
6 Citizenship or Place of Organization Netherlands
7 Sole Voting Power 0
Number of Shares Beneficially
8 Shared Voting Power* 204,533
Owned by Each Reporting
9 Sole Dispositive Power 0
Person With
10 Shared Dispositive Power* 204,533
11 Aggregate Amount Beneficially Owned by each Reporting Person** 204,533
12 Check if the Aggregate Amount in Row (11) Excludes Certain Shares [ ]
13 Percent of Class Represented by Amount in Row (11)** 0.4%
14 Type of Reporting Person PN
* The Reporting Person expressly disclaims (a) the existence of any group
and (b) beneficial ownership with respect to any shares other than
the shares owned of record by such reporting person.
** Assuming (1) conversion of all 7.50% Cumulative Convertible Preferred
Stock beneficially owned by such reporting person, but without giving
effect to the conversion into Common Stock of (a) any 7.50%
Cumulative Convertible Preferred Stock held by others or (b) any
capital stock held by other holders and (2) exercise of all five-year
Common Stock warrants and seven-and-one-half year Common Stock warrants
beneficially owned by such reporting person, but without giving effect
to the exercise of any other warrants.
Page 15
<PAGE>
CUSIP NO. 87959Y 10 3
1 Name of Reporting Person
I.R.S. Identification No. of above person (entities only)
HMEU Fund I-C, Inc.
2 Check the appropriate box if a member of a group* (a) [ ]
(b) [X]
3 SEC use only
4 Source of Funds OO
5 Check if Disclosure of Legal Proceedings is Required Pursuant to Items
2(d) or 2(e) [ ]
6 Citizenship or Place of Organization Cayman Islands
7 Sole Voting Power 0
Number of Shares Beneficially
8 Shared Voting Power* 288,527
Owned by Each Reporting
9 Sole Dispositive Power 0
Person With
10 Shared Dispositive Power* 288,527
11 Aggregate Amount Beneficially Owned by each Reporting Person** 288,527
12 Check if the Aggregate Amount in Row (11) Excludes Certain Shares
13 Percent of Class Represented by Amount in Row (11)** 0.6%
14 Type of Reporting Person CO
* The Reporting Person expressly disclaims (a) the existence of any group
and (b) beneficial ownership with respect to any shares other than
the shares owned of record by such reporting person.
** Assuming (1) conversion of all 7.50% Cumulative Convertible Preferred
Stock beneficially owned by such reporting person, but without giving
effect to the conversion into Common Stock of (a) any 7.50%
Cumulative Convertible Preferred Stock held by others or (b) any capital
stock held by other holders and (2) exercise of all five-year Common
Stock warrants and seven-and-one-halfyear Common Stock warrants
beneficially owned by such reporting person, but without giving effect
to the exercise of any other warrants.
Page 16
<PAGE>
CUSIP NO. 87959Y 10 3
1 Name of Reporting Person
I.R.S. Identification No. of above person (entities only)
HMTF Bridge Viatel, LLC
2 Check the appropriate box if a member of a group* (a) [ ]
(b) [X]
3 SEC use only
4 Source of Funds OO
5 Check if Disclosure of Legal Proceedings is Required Pursuant to Items
2(d) or 2(e) [ ]
6 Citizenship or Place of Organization Delaware
7 Sole Voting Power 0
Number of Shares Beneficially
8 Shared Voting Power* 2,259,801
Owned by Each Reporting
9 Sole Dispositive Power 0
Person With
10 Shared Dispositive Power* 2,259,801
11 Aggregate Amount Beneficially Owned by each Reporting Person** 2,259,801
12 Check if the Aggregate Amount in Row (11) Excludes Certain Shares
13 Percent of Class Represented by Amount in Row (11)** 4.5%
14 Type of Reporting Person OO
* The Reporting Person expressly disclaims (a) the existence of any group
and (b) beneficial ownership with respect to any shares other than
the shares owned of record by such reporting person.
** Assuming (1) conversion of all 7.50% Cumulative Convertible Preferred
Stock beneficially owned by such reporting person, but without giving
effect to the conversion into Common Stock of (a) any 7.50%
Cumulative Convertible Preferred Stock held by others or (b) any capital
stock held by other holders and (2) exercise of all five-year Common
Stock warrants and seven-and-one-half year Common Stock warrants
beneficially owned by such reporting person, but without giving effect
to the exercise of any other warrants.
Page 17
<PAGE>
CUSIP NO. 87959Y 10 3
1 Name of Reporting Person
I.R.S. Identification No. of above person (entities only)
HMTF Bridge Partners, L.P.
2 Check the appropriate box if a member of a group* (a) [ ]
(b) [X]
3 SEC use only
4 Source of Funds OO
5 Check if Disclosure of Legal Proceedings is Required Pursuant to Items
2(d) or 2(e) [ ]
6 Citizenship or Place of Organization Delaware
7 Sole Voting Power 0
Number of Shares Beneficially
8 Shared Voting Power* 2,259,801
Owned by Each Reporting
9 Sole Dispositive Power 0
Person With
10 Shared Dispositive Power* 2,259,801
11 Aggregate Amount Beneficially Owned by each Reporting Person** 2,259,801
12 Check if the Aggregate Amount in Row (11) Excludes Certain Shares [ ]
13 Percent of Class Represented by Amount in Row (11)** 4.5%
14 Type of Reporting Person PN
* The Reporting Person expressly disclaims (a) the existence of any group
and (b) beneficial ownership with respect to any shares other than
the shares owned of record by such reporting person.
** Assuming (1) conversion of all 7.50% Cumulative Convertible Preferred
Stock beneficially owned by such reporting person, but without giving
effect to the conversion into Common Stock of (a) any 7.50%
Cumulative Convertible Preferred Stock held by others or (b) any capital
stock held by other holders and (2) exercise of all five-year Common
Stock warrants and seven-and-one-half year Common Stock warrants
beneficially owned by such reporting person, but without giving effect
to the exercise of any other warrants.
Page 18
<PAGE>
CUSIP NO. 87959Y 10 3
1 Name of Reporting Person
I.R.S. Identification No. of above person (entities only)
HMTF Bridge Partners, LLC
2 Check the appropriate box if a member of a group* (a) [ ]
(b) [X]
3 SEC use only
4 Source of Funds OO
5 Check if Disclosure of Legal Proceedings is Required Pursuant to Items
2(d) or 2(e) [ ]
6 Citizenship or Place of Organization Texas
7 Sole Voting Power 0
Number of Shares Beneficially
8 Shared Voting Power* 2,259,801
Owned by Each Reporting
9 Sole Dispositive Power 0
Person With
10 Shared Dispositive Power* 2,259,801
11 Aggregate Amount Beneficially Owned by each Reporting Person** 2,259,801
12 Check if the Aggregate Amount in Row (11) Excludes Certain Shares [ ]
13 Percent of Class Represented by Amount in Row (11)** 4.5%
14 Type of Reporting Person OO
* The Reporting Person expressly disclaims (a) the existence of any group
and (b) beneficial ownership with respect to any shares other than
the shares owned of record by such reporting person.
** Assuming (1) conversion of all 7.50% Cumulative Convertible Preferred
Stock beneficially owned by such reporting person, but without giving
effect to the conversion into Common Stock of (a) any 7.50%
Cumulative Convertible Preferred Stock held by others or (b) any capital
stock held by other holders and (2) exercise of all five-year Common
Stock warrants and seven-and-one-half year Common Stock warrants
beneficially owned by such reporting person, but without giving
effect to the exercise of any other warrants.
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ITEM 1. SECURITY AND ISSUER.
The class of equity securities to which this Schedule 13D (this
"Statement") relates is the Common Stock, par value $0.01 per share (the "Common
Stock"), of Viatel, Inc., a Delaware corporation (the "Issuer"). The address of
the Issuer's principal executive offices is 685 Third Avenue, New York, New York
10017.
ITEM 2. IDENTITY AND BACKGROUND.
(a) Name of Person(s) Filing this Statement (the "Reporting Persons"):
Mr. Thomas O. Hicks
HMEU Viatel Qualified Fund, LLC, a Delaware limited liability
company ("Qualified LLC")
Hicks, Muse, Tate & Furst Europe Fund, L.P., a Delaware limited
partnership ("Europe L.P.")
HMEU Viatel Private Fund, LLC, a Delaware limited liability
company ("Private LLC")
Hicks, Muse, Tate & Furst Europe Private Fund, L.P.,
a Delaware limited partnership ("Private L.P.")
HMEU GP LLC, a Texas limited liability company ("HMEU GP")
HMEU Viatel I-EQ Coinvestors, LLC, a Delaware limited liability
company ("I-EQ LLC")
HMEU I-EQ Coinvestors, L.P., a Cayman Islands limited partnership
("I-EQ L.P.")
HMEU Viatel I-SBS Coinvestors, LLC, a Delaware limited liability
company ("I-SBS LLC")
HMEU I-SBS Coinvestors, L.P., a Cayman Islands limited
partnership ("I-SBS L.P.")
HMEU Intermediate Partners I-C, L.P., a Cayman Islands
limited partnership ("Intermediate Partners")
HM Viatel PG Europe, LLC, a Delaware limited liability
company ("PG LLC")
HM PG Europe I, C.V., a Netherlands limited partnership
("PG C.V.")
HMEU Fund I-C, Inc., a Cayman Islands corporation
("Fund I-C, Inc.")
HMTF Bridge Viatel, LLC, a Delaware limited liability company
("Bridge LLC")
HMTF Bridge Partners, L.P., a Delaware limited partnership
("Bridge Partners L.P.")
HMTF Bridge Partners, LLC, a Texas limited liability company
("Bridge Partners LLC")
(b) - (c)
Mr. Thomas O. Hicks
Mr. Thomas O. Hicks is chief executive officer of Hicks, Muse, Tate &
Furst Incorporated ("Hicks, Muse"), a private investment firm primarily engaged
in leveraged acquisitions, recapitalizations and other investment activities.
Mr. Hicks is also the sole member and sole manager of HMEU GP, which is the sole
general partner of Europe L.P. and Private L.P. Europe L.P. is the sole member
of Qualified LLC, and Private L.P. is the sole member of Private LLC. Mr. Hicks
is also the sole member of Fund I-C, Inc. Fund I-C, Inc. is the sole general
partner of Intermediate Partners, which is the sole general partner of I-EQ L.P.
and I-SBS L.P. I-EQ L.P. is the sole member of I-EQ LLC, and I-SBS L.P. is the
sole member of I-SBS LLC. Fund I-C, Inc. is also the sole general partner of PG
C.V., which is the sole member of PG LLC. Mr. Hicks is also the sole member of
Bridge Partners LLC, which is the sole general partner of Bridge Partners L.P.,
which is the sole member of Bridge LLC. The business address of Mr. Hicks is
200 Crescent Court, Suite 1600, Dallas, Texas 75201-6950.
Qualified LLC
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Qualified LLC is a Delaware limited liability company formed to invest
in the 7.50% Cumulative Convertible Preferred Stock, Series B-1 of the Issuer
(the "Preferred Stock"), the five-year warrants (the "A-1 Warrants") and the
seven-and-one-half year warrants (the "B-1Warrants") to purchase Common Stock
(the A-1 Warrants and B-1Warrants together, the "Warrants"). The business
address of Qualified LLC, which also serves as its principal office, is 200
Crescent Court, Suite 1600, Dallas, Texas 75201-6950. Pursuant to Instruction C
to Schedule 13D of the Securities Exchange Act of 1934, as amended (the
"Exchange Act"), information with respect to Europe L.P., the sole member of
Qualified LLC, is set forth below.
Europe L.P.
Europe L.P. is a Delaware limited partnership, the principal business
of which is to invest directly or indirectly in various companies. The business
address of Europe L.P., which also serves as its principal office, is 200
Crescent Court, Suite 1600, Dallas, Texas 75201-6950. Pursuant to Instruction C
to Schedule 13D of the Exchange Act, information with respect to HMEU GP, the
sole general partner of Europe L.P., is set forth below.
Private LLC
Private LLC is a Delaware limited liability company formed to invest
in the Preferred Stock and the Warrants. The business address of Private LLC,
which also serves as its principal office, is 200 Crescent Court, Suite 1600,
Dallas, Texas 75201-6950. Pursuant to Instruction C to Schedule 13D of the
Exchange Act, information with respect to Private L.P., the sole member of
Private LLC, is set forth below.
Private L.P.
Private L.P. is a Delaware limited partnership, the principal business
of which is to invest directly or indirectly in various companies. The business
address of Private L.P., which also serves as its principal office, is 200
Crescent Court, Suite 1600, Dallas, Texas 75201-6950. Pursuant to Instruction C
to Schedule 13D of the Exchange Act, information with respect to HMEU GP, the
sole general partner of Private L.P., is set forth below.
HMEU GP
HMEU GP is a Texas limited liability company, the principal business
of which is serving as the sole general partner of various limited partnerships
whose principal business is to serve as partners in various investment
partnerships. The principal business address of HMEU GP, which also serves as
its principal office, is 200 Crescent Court, Suite 1600, Dallas, Texas
75201-6950. Pursuant to Instruction C to Schedule 13D of the Exchange Act,
information with respect to Mr. Thomas O. Hicks, the sole member of HMEU GP, is
set forth above.
I-EQ LLC
I-EQ LLC is a Delaware limited liability company formed to invest in
the Preferred Stock and the Warrants. The business address of I-EQ LLC, which
also serves as its principal office, is 200 Crescent Court, Suite 1600, Dallas,
Texas 75201-6950. Pursuant to Instruction C to Schedule 13D of the Exchange
Act, information with respect to I-EQ L.P., the sole member of I-EQ LLC, is set
forth below.
I-EQ L.P.
I-EQ L.P. is a Cayman Islands limited partnership, the principal
business of which is to invest directly or indirectly in various companies. The
business address of I-EQ L.P., which also serves as its principal office, is 200
Crescent Court, Suite 1600, Dallas, Texas 75201-6950. Pursuant to Instruction C
to Schedule 13D of the Exchange Act, information with respect to Intermediate
Partners, the sole general partner of I-EQ L.P., is set forth below.
I-SBS LLC
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I-SBS LLC is a Delaware limited liability company formed to invest in
the Preferred Stock and the Warrants. The business address of I-SBS LLC, which
also serves as its principal office, is 200 Crescent Court, Suite 1600, Dallas,
Texas 75201-6950. Pursuant to Instruction C to Schedule 13D of the Exchange
Act, information with respect to I-SBS L.P., the sole member of I-SBS LLC, is
set forth below.
I-SBS L.P.
I-SBS L.P. is a Cayman Islands limited partnership, the principal
business of which is to invest directly or indirectly in various companies. The
business address of I-SBS L.P., which also serves as its principal office, is
200 Crescent Court, Suite 1600, Dallas, Texas 75201-6950. Pursuant to
Instruction C to Schedule 13D of the Exchange Act, information with respect to
Intermediate Partners, the sole general partner of I-SBS L.P., is set forth
below.
Intermediate Partners
Intermediate Partners is a Cayman Islands limited partnership, the
principal business of which is serving as the sole general partner of various
limited partnerships whose principal business is to serve as partners in various
investment partnerships. The principal business address of Intermediate
Partners, which also serves as its principal office, is 200 Crescent Court,
Suite 1600, Dallas, Texas 75201-6950. Pursuant to Instruction C to Schedule 13D
of the Exchange Act, information with respect to Fund I-C, Inc., the sole
general partner of Intermediate Partners, is set forth below.
PG LLC
PG LLC is a Delaware limited liability company formed to invest in the
Preferred Stock and the Warrants. The business address of PG LLC, which also
serves as its principal office, is 200 Crescent Court, Suite 1600, Dallas, Texas
75201-6950. Pursuant to Instruction C to Schedule 13D of the Exchange Act,
information with respect to PG C.V., the sole member of PG LLC, is set forth
below.
PG C.V.
PG C.V. is a Netherlands limited partnership, the principal business
of which is to invest directly or indirectly in various companies. The business
address of PG C.V., which also serves as its principal office, is 200 Crescent
Court, Suite 1600, Dallas, Texas 75201-6950. Pursuant to Instruction C to
Schedule 13D of the Exchange Act, information with respect to Fund I-C, Inc.,
the sole general partner of PG C.V., is set forth below.
Fund I-C, Inc.
Fund I-C, Inc. is a Cayman Islands corporation, the principal business
of which is serving as the sole general partner in various limited partnerships
whose principal business is to serve as partners in various investment
partnerships. The business address of Fund I-C, Inc., which also serves as its
principal office, is 200 Crescent Court, Suite 1600, Dallas, Texas 75201-6950.
Pursuant to Instruction C to Schedule 13D of the Exchange Act, information with
respect to Mr. Thomas O. Hicks, the sole member of Fund I-C, Inc., is set forth
above.
The executive officers of Fund I-C, Inc. are Thomas O. Hicks, John R.
Muse, Charles W. Tate, Jack D. Furst, Michael J. Levitt, Lawrence D. Stuart,
David B. Deniger, Dan H. Blanks, David W. Knickel, Cesar A. Baez, Peter Brodsky,
Eric C. Neuman, Andrew S. Rosen, Michael D. Salim, Darron K. Ash, William G.
Neisel, John Ralston, Marian L. Brancaccio and Huntlaw Corporate Services Ltd.
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<PAGE>
Each executive officer's business address is 200 Crescent Court, Suite 1600,
Dallas, Texas 75201-6950. Mr. Hicks is the sole member of Fund I-C, Inc.,
director of Fund I-C, Inc. and Chairman of the Board, Chief Executive Officer
and Partner. Mr. Muse is Partner and Chief Operating Officer. Mr. Tate is
Partner and President. Each of Mr. Furst, Mr. Levitt, Mr. Stuart, Mr. Deniger
and Mr. Blanks is a Partner. Mr. Knickel is Vice President, Treasurer and
Secretary. Each of Mr. Baez, Mr. Brodsky, Mr. Neuman, and Mr. Rosen is a
Principal. Mr. Salim is Principal and General Counsel. Mr. Ash is Chief
Financial Officer. Mr. Neisel is Fund Controller. Mr. Ralston is Corporate
Controller. Ms. Brancaccio is Associate Counsel and Assistant Secretary.
Huntlaw Corporate Services Ltd. is Assistant Secretary. Each of the
above-mentioned persons is employed by affiliates of Hicks, Muse, a private
investment firm primarily engaged in leveraged acquisitions, recapitalizations
and other investment activities. The address of Hicks, Muse is 200 Crescent
Court, Suite 1600, Dallas, Texas 75201-6950.
Bridge LLC
Bridge LLC is a Delaware limited liability company formed to invest in
the Preferred Stock and the Warrants. The business address of Bridge LLC, which
also serves as its principal office, is 200 Crescent Court, Suite 1600, Dallas,
Texas 75201-6950. Pursuant to Instruction C to Schedule 13D of the Exchange
Act, information with respect to Bridge Partners L.P., the sole member of Bridge
LLC, is set forth below.
Bridge Partners L.P.
Bridge Partners L.P. is a Delaware limited partnership, the principal
business of which to invest directly or indirectly in various companies. The
business address of Bridge Partners L.P., which also serves as its principal
office, is 200 Crescent Court, Suite 1600, Dallas, Texas 75201-6950. Pursuant
to Instruction C to Schedule 13D of the Exchange Act, information with respect
to Bridge Partners LLC, the general partner of Bridge Partners L.P., is set
forth below.
Bridge Partners LLC
Bridge Partners LLC is Texas limited liability company, the principal
business of which is serving as the sole general partner of various limited
partnerships whose principal business is to serve as partners in various
investment partnerships. The principal business address of Bridge Partners LLC,
which also serves as its principal office, is 200 Crescent Court, Suite 1600,
Dallas, Texas 75201-6950. Pursuant to Instruction C to Schedule 13D of the
Exchange Act, information with respect to Mr. Thomas O. Hicks, the sole member
of Bridge Partners LLC, is set forth above.
(d) None of the entities or persons identified in this Item 2 has,
during the last five years, been convicted in a criminal proceeding (excluding
traffic violations or similar misdemeanors).
(e) None of the entities or persons identified in this Item 2 has,
during the last five years, been a party to a civil proceeding of a judicial or
administrative body of competent jurisdiction and as a result of such proceeding
was or is subject to a judgment, decree or final order enjoining future
violations of, or prohibiting or mandating activities subject to, federal or
state securities laws or finding any violations with respect to such laws.
(f) All of the persons identified in this Item 2 are United States
citizens.
ITEM 3. SOURCE AND AMOUNT OF FUNDS OR OTHER CONSIDERATION.
As more fully described in Item 6 below, on March 9, 2000, Qualified LLC,
Private LLC, I-EQ LLC, I-SBS LLC, PG LLC and Bridge LLC each purchased from the
Issuer the number of shares of Preferred Stock and the number of Warrants set
forth opposite their respective names below at the purchase price set forth
opposite their respective names below.
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<TABLE>
<CAPTION>
NUMBER OF NUMBER OF A-1 NUMBER OF B-1
SHARES WARRANTS WARRANTS PURCHASE
NAME OF ENTITY PURCHASED PURCHASED PURCHASED PRICE
- -------------- --------- ------------- ------------- -----------
<S> <C> <C> <C> <C>
Qualified LLC 70,462 163,281 163,281 $70,462,000
Private LLC 414 960 960 $ 414,000
I-EQ LLC 1,297 3,005 3,005 $ 1,297,000
I-SBS LLC 1,723 3,993 3,993 $ 1,723,000
PG LLC 7,354 17,040 17,040 $ 7,354,000
Bridge LLC 81,250 188,279 188,279 $81,250,000
</TABLE>
Qualified LLC obtained funds for the purchase price of its shares of
Preferred Stock and its Warrants from capital contributions provided by Europe
L.P.; Europe L.P. obtained such funds from capital contributions provided by its
limited partners and HMEU GP; and HMEU GP obtained such funds from capital
contributions provided by Mr. Thomas O. Hicks, who obtained such funds from
personal funds.
Private LLC obtained funds for the purchase price of its shares of
Preferred Stock and its Warrants from capital contributions provided by Private
L.P.; Private L.P. obtained such funds from capital contributions provided by
its limited partners and HMEU GP; and HMEU GP obtained such funds from capital
contributions provided by Mr. Thomas O. Hicks, who obtained such funds from
personal funds.
I-EQ LLC obtained funds for the purchase price of its shares of Preferred
Stock and its Warrants from capital contributions provided by I-EQ L.P.; I-EQ
L.P. obtained such funds from capital contributions provided by its limited
partners and Intermediate Partners; and Intermediate Partners obtained such
funds from capital contributions provided by its limited partners and Fund I-C,
Inc. Fund I-C, Inc. obtained such funds from capital contributions provided by
Mr. Thomas O. Hicks, who obtained such funds from personal funds.
I-SBS LLC obtained funds for the purchase price of its shares of Preferred
Stock and its Warrants from capital contributions provided by I-SBS L.P.; I-SBS
L.P. obtained such funds from capital contributions provided by its limited
partners and Intermediate Partners; and Intermediate Partners obtained such
funds from capital contributions provided by its limited partners and Fund I-C,
Inc. Fund I-C, Inc. obtained such funds from capital contributions provided by
Mr. Thomas O. Hicks, who obtained such funds from personal funds.
PG LLC obtained funds for the purchase price of its shares of Preferred
Stock and its Warrants from capital contributions provided by PG C.V.; PG C.V.
obtained such funds from capital contributions provided by its limited partners
and Fund I-C, Inc. Fund I-C, Inc. obtained such funds from capital
contributions provided by Mr. Thomas O. Hicks, who obtained such funds from
personal funds.
Bridge LLC obtained funds for the purchase price of its shares of Preferred
Stock and its Warrants from capital contributions provided by Bridge Partners
L.P.; Bridge Partners L.P. obtained $2,447,422 of such funds from capital
contributions provided by its general partner, Bridge Partners LLC, and its
limited partners, and it obtained the remainder of the funds, $80,477,636,
from borrowing under a credit agreement dated December 28, 1999, among HMTF
Bridge Partners, L.P. and HM/Europe Coinvestors, C.V., as Initial Borrowers,
and any Future Borrowers from time to time parties thereto, the Lenders from
time to time parties thereto,the Issuing Bank, the Chase Manhattan Bank, as
Administrative Agent, and Bank of America, N.A., as Syndication Agent (the
"Credit Agreement"). Such funds include amounts allocated to fees and
expenses. Bridge Partners L.P. intends to repay the borrowings either
with funds drawn under a new credit facility or with funds contributed
by affiliates of Hicks, Muse. The terms of the line of credit
facility are set forth in the Credit Agreement, a copy of which is filed as
Exhibit 10.4, and is incorporated by reference. Bridge Partners LLC obtained
the funds it contributed to Bridge Partners L.P. from capital contributions
provided by Mr. Thomas O. Hicks, who obtained such funds from personal funds.
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ITEM 4. PURPOSE OF THE TRANSACTION.
The Reporting Persons consummated the transactions described herein in
order to acquire an interest in the Issuer for investment purposes. The
Reporting Persons intend to review continuously their position in the Issuer.
Depending upon future evaluations of the business prospects of the Issuer and
upon other developments, including, but not limited to, general economic and
business conditions and stock market conditions, the Reporting Persons may
retain or from time to time increase their holdings or dispose of all or a
portion of their holdings, subject to any applicable legal and contractual
restrictions on their ability to do so.
In addition, the matters set forth in Item 6 below are incorporated in this
Item 4 by reference as if fully set forth herein.
Except as set forth in this Item 4 (including the matters described in Item
6 below which are incorporated in this Item 4 by reference), the Reporting
Persons have no present plans or proposals that relate to or that would result
in any of the actions specified in clauses (a) through (j) of Item 4 of Schedule
13D of the Exchange Act.
ITEM 5. INTEREST IN SECURITIES OF THE ISSUER.
(a) (1) Qualified LLC is the record and beneficial owner of 70,462
shares of Preferred Stock, 163,281 A-1 Warrants and 163,281 B-1 Warrants.
Assuming conversion of all such shares of Preferred Stock and assuming exercise
of all such Warrants, Qualified LLC is the beneficial owner of 1,959,756 shares
of Common Stock, which, based on calculations made in accordance with Rule 13d-3
of the Exchange Act and, as of January 31, 2000, there being 47,814,701 shares
of Common Stock outstanding, represents approximately 3.9% of the outstanding
shares of Common Stock.
(2) Assuming conversion of all 70,462 shares of Preferred Stock
and exercise of all 326,562 Warrants owned of record by Qualified LLC, Europe
L.P., in its capacity as sole member of Qualified LLC, may, pursuant to Rule
13d-3 of the Exchange Act, be deemed to be the beneficial owner of 1,959,756
shares of Common Stock, which, based on calculations made in accordance with
Rule 13d-3 of the Exchange Act and, as of January 31, 2000, there being
47,814,701 shares of Common Stock outstanding, represents approximately 3.9% of
the outstanding shares of Common Stock.
(3) Private LLC is the record and beneficial owner of 414 shares
of Preferred Stock, 960 A-1 Warrants and 960 B-1 Warrants. Assuming conversion
of all such shares of Preferred Stock and assuming exercise of all such
Warrants, Private LLC is the beneficial owner of 11,515 shares of Common Stock,
which, based on calculations made in accordance with Rule 13d-3 of the Exchange
Act and, as of January 31, 2000, there being 47,814,701 shares of Common Stock
outstanding, represents approximately 0.02% of the outstanding shares of Common
Stock.
(4) Assuming conversion of all 414 shares of Preferred Stock and
exercise of all 1,920 Warrants owned of record by Private LLC, Private L.P., in
its capacity as sole member of Private LLC, may, pursuant to Rule 13d-3 of the
Exchange Act, be deemed to be the beneficial owner of 11,515 shares of Common
Stock, which, based on calculations made in accordance with Rule 13d-3 of the
Exchange Act and, as of January 31, 2000, there being 47,814,701shares of Common
Stock outstanding, represents approximately 0.02% of the outstanding shares of
Common Stock.
(5) Assuming conversion of all 70,876 shares of Preferred Stock
and exercise of all 328,482 Warrants owned of record by Qualified LLC and
Private LLC, HMEU GP, in its capacity as the sole general partner of each of
Europe L.P. and Private L.P., may, pursuant to Rule 13d-3 of the Exchange Act,
be deemed to be the beneficial owner of 1,971,271 shares of Common Stock, which,
based on calculations made in accordance with Rule 13d-3 of the Exchange Act
and, as of January 31, 2000, there being 47,814,701 shares of Common Stock
outstanding, represents approximately 4.0% of the outstanding shares of Common
Stock.
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(6) I-EQ LLC is the record and beneficial owner of 1,297 shares of
Preferred Stock, 3,005 A-1 Warrants and 3,005 B-1Warrants. Assuming conversion
of all such shares of Preferred Stock and assuming exercise of all such
Warrants, I-EQ LLC is the beneficial owner of 36,072 shares of Common Stock,
which, based on calculations made in accordance with Rule 13d-3 of the Exchange
Act and, as of January 31, 2000, there being 47,814,701 shares of Common Stock
outstanding, represents approximately 0.1% of the outstanding shares of Common
Stock.
(7) Assuming conversion of all 1,297 shares of Preferred Stock and
exercise of all 6,010 Warrants owned of record by I-EQ LLC, I-EQ L.P., in its
capacity as sole member of I-EQ LLC, may, pursuant to Rule 13d-3 of the Exchange
Act, be deemed to be the beneficial owner of 36,072 shares of Common Stock,
which, based on calculations made in accordance with Rule 13d-3 of the Exchange
Act and, as of January 31, 2000, there being 47,814,701 shares of Common Stock
outstanding, represents approximately 0.1% of the outstanding shares of Common
Stock.
(8) I-SBS LLC is the record and beneficial owner of 1,723 shares
of Preferred Stock, 3,993 A-1 Warrants and 3,993 B-1Warrants. Assuming
conversion of all such shares of Preferred Stock and assuming exercise of all
such Warrants, I-SBS LLC is the beneficial owner of 47,922 shares of Common
Stock, which, based on calculations made in accordance with Rule 13d-3 of the
Exchange Act and, as of January 31, 2000, there being 47,814,701 shares of
Common Stock outstanding, represents approximately 0.1% of the outstanding
shares of Common Stock.
(9) Assuming conversion of all 1,723 shares of Preferred Stock and
exercise of all 7,986 Warrants owned of record by I-SBS LLC, I-SBS L.P., in its
capacity as sole member of I-SBS LLC, may, pursuant to Rule 13d-3 of the
Exchange Act, be deemed to be the beneficial owner of 47,922 shares of Common
Stock, which, based on calculations made in accordance with Rule 13d-3 of the
Exchange Act and, as of January 31, 2000, there being 47,814,701 shares of
Common Stock outstanding, represents approximately 0.1% of the outstanding
shares of Common Stock.
(10) Assuming conversion of all 3,020 shares of Preferred Stock
and exercise of all 13,996 Warrants owned of record by I-EQ LLC and I-SBS LLC,
Intermediate Partners, in its capacity as sole general partner of both I-EQ L.P.
and I-SBS L.P., may, pursuant to Rule 13d-3 of the Exchange Act, be deemed to be
the beneficial owner of 83,994 shares of Common Stock, which, based on
calculations made in accordance with Rule 13d-3 of the Exchange Act and, as of
January 31, 2000, there being 47,814,701 shares of Common Stock outstanding,
represents approximately 0.2% of the outstanding shares of Common Stock.
(11) PG LLC is the record and beneficial owner of 7,354 shares of
Preferred Stock, 17,040 A-1 Warrants and 17,040 B-1Warrants. Assuming
conversion of all such shares of Preferred Stock and assuming exercise of all
such Warrants, PG LLC is the beneficial owner of 204,533 shares of Common Stock,
which, based on calculations made in accordance with Rule 13d-3 of the Exchange
Act and, as of January 31, 2000, there being 47,814,701 shares of Common Stock
outstanding, represents approximately 0.4% of the outstanding shares of Common
Stock.
(12) Assuming conversion of all 7,354 shares of Preferred Stock
and exercise of all 34,080 Warrants owned of record by PG LLC, PG C.V., in its
capacity as sole member of PG LLC, may, pursuant to Rule 13d-3 of the Exchange
Act, be deemed to be the beneficial owner of 204,533 shares of Common Stock,
which, based on calculations made in accordance with Rule 13d-3 of the Exchange
Act and, as of January 31, 2000, there being 47,814,701 shares of Common Stock
outstanding, represents approximately 0.4% of the outstanding shares of Common
Stock.
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(13) Assuming conversion of all 10,374 shares of Preferred
Stock and exercise of all 48,076 Warrants owned of record by I-EQ LLC, I-SBS LLC
and PG LLC, Fund I-C, Inc., in its capacity as sole general partner of each of
PG C.V. and Intermediate Partners, may, pursuant to Rule 13d-3 of the Exchange
Act, be deemed to be the beneficial owner of 288,527 shares of Common Stock,
which, based on calculations made in accordance with Rule 13d-3 of the Exchange
Act and, as of January 31, 2000, there being 47,814,701 shares of Common Stock
outstanding, represents approximately 0.6% of the outstanding shares of Common
Stock.
(14) Bridge LLC is the record and beneficial owner of 81,250
shares of Preferred Stock, 188,279 A-1 Warrants and 188,279 B-1Warrants.
Assuming conversion of all such shares of Preferred Stock and assuming exercise
of all such Warrants, Bridge LLC is the beneficial owner of 2,259,801 shares of
Common Stock, which, based on calculations made in accordance with Rule 13d-3 of
the Exchange Act and, as of January 31, 2000, there being 47,814,701 shares of
Common Stock outstanding, represents approximately 4.5% of the outstanding
shares of Common Stock.
(15) Assuming conversion of all 81,250 shares of Preferred Stock
and exercise of all 376,558 Warrants owned of record by Bridge LLC, Bridge
Partners L.P., in its capacity as sole member of Bridge LLC, may, pursuant to
Rule 13d-3 of the Exchange Act, be deemed to be the beneficial owner of
2,259,801 shares of Common Stock, which, based on calculations made in
accordance with Rule 13d-3 of the Exchange Act and, as of January 31, 2000,
there being 47,814,701 shares of Common Stock outstanding, represents
approximately 4.5% of the outstanding shares of Common Stock.
(16) Assuming conversion of all 81,250 shares of Preferred
Stock and exercise of all 376,558 Warrants owned of record by Bridge LLC, Bridge
Partners LLC, in its capacity as general partner of Bridge Partners L.P., may,
pursuant to Rule 13d-3 of the Exchange Act, be deemed to be the beneficial owner
of 2,259,801 shares of Common Stock, which, based on calculations made in
accordance with Rule 13d-3 of the Exchange Act and, as of January 31, 2000,
there being 47,814,701 shares of Common Stock outstanding, represents
approximately 4.5% of the outstanding shares of Common Stock.
(17) Assuming conversion of all 162,500 shares of Preferred Stock
and exercise of all 753,116 Warrants owned of record by Qualified LLC, Private
LLC, I-EQ LLC, I-SBS LLC, PG LLC and Bridge LLC, Mr. Thomas O. Hicks, in his
capacity as sole member of HMEU GP, Fund I-C, Inc. and Bridge Partners LLC, may,
pursuant to Rule 13d-3 of the Exchange Act, be deemed to be the beneficial owner
of 4,519,599 shares of Common Stock, which based on calculations made in
accordance with Rule 13d-3 of the Exchange Act and, as of January 31, 2000,
there being 47,814,701 shares of Common Stock outstanding, represents
approximately 8.6% of the outstanding shares of Common Stock.
The Reporting Persons expressly disclaim (a) the existence of any group and
(b) beneficial ownership with respect to any shares other than the shares owned
of record by such Reporting Person.
(b) The information set forth in Items 7 through 11 of the cover pages
hereto is incorporated herein by reference.
(c) Except as set forth herein, none of the persons named in response
to paragraph (a) has effected any transactions in shares of Common Stock during
the past 60 days.
(d) The right to receive dividends on, and proceeds from the sale of,
the shares of Common Stock which may be beneficially owned by the persons
described in (a) and (b) above is governed by the limited liability company
agreements and limited partnership agreements of each such entity, and such
dividends or proceeds may be distributed with respect to numerous member
interests and general and limited partnership interests.
ITEM 6. CONTRACTS, ARRANGEMENTS, UNDERSTANDINGS OR RELATIONSHIPS WITH RESPECT
TO SECURITIES OF THE ISSUER.
Page 27
<PAGE>
The matters set forth in Item 2 are incorporated in this Item 6 by
reference as if fully set forth herein.
Securities Purchase Agreement
Pursuant to the Securities Purchase Agreement (the "Securities Purchase
Agreement"), dated as of February 1, 2000 between the Issuer, HMTF Europe
Acquisition Corp. ("HMTF") and each of the other Purchasers (as defined in the
Securities Purchase Agreement) listed on Schedule I thereto, the Issuer agreed
to sell to HMTF, and HMTF agreed to purchase from the Issuer, 162,500 shares of
Preferred Stock, 376,558 A-1 Warrants and 376,558 B-1 Warrants for a purchase
price of $162,500,000.
Prior to the issuance of the shares of Preferred Stock and the Warrants at
the Closing (as defined below), pursuant to an Assignment of Rights Under
Securities Purchase Agreement dated February 3, 2000 (the "Assignment
Agreement"), HMTF assigned all of its rights, titles, interests and obligations
in, to and under the Securities Purchase Agreement to Qualified LLC, Private
LLC, I-EQ LLC, I-SBS LLC, PG LLC and Bridge LLC (the "Assignees").
On March 9, 2000, at the closing held pursuant to the Securities Purchase
Agreement (the "Closing"), the Issuer sold to each of the persons listed below
(the "HMTF Holders") the number of shares of Preferred Stock and the number of
Warrants set forth opposite each person's name below in exchange for the
purchase price set forth opposite such person's name below.
<TABLE>
<CAPTION>
NUMBER OF NUMBER OF A-1 NUMBER OF B-1
SHARES WARRANTS WARRANTS PURCHASE
NAME OF ENTITY PURCHASED PURCHASED PURCHASED PRICE
- -------------- --------- ------------- ------------- -----------
<S> <C> <C> <C> <C>
Qualified LLC 70,462 163,281 163,281 $70,462,000
Private LLC 414 960 960 $ 414,000
I-EQ LLC 1,297 3,005 3,005 $ 1,297,000
I-SBS LLC 1,723 3,993 3,993 $ 1,723,000
PG LLC 7,354 17,040 17,040 $ 7,354,000
Bridge LLC 81,250 188,279 188,279 $81,250,000
</TABLE>
The foregoing description of the Securities Purchase Agreement is not, and
does not purport to be, complete and is qualified in its entirety by reference
to the Securities Purchase Agreement, a copy of which is filed herewith as
Exhibit 10.1 and is incorporated herein by reference.
Registration Rights
At Closing, the Issuer and the holders of Preferred Stock entered into a
Registration Rights Agreement (the "Registration Rights Agreement"), pursuant to
which the Issuer has agreed to effect two "demand" registrations at the request
of the holders of a majority of the Registrable Securities held by the HMTF
Holders and any direct or indirect transferee of any Registrable Securities held
Page 28
<PAGE>
by the HMTF Holders, provided that each such demand registration must be in
respect of Registrable Securities (as defined below) with a fair market value of
at least $50,000,000 and provided that certain other restrictions are met. In
addition, the Purchasers have certain piggyback registration rights in
connection with registrations of the Issuer's securities under the Securities
Act of 1933 (the "Securities Act").
"Registrable Securities" means (a) the Preferred Stock purchased pursuant
to the Securities Purchase Agreement, plus any additional shares of Preferred
Stock issued in respect thereof in connection with any stock split, stock
dividend or similar event with respect to the Preferred Stock, (b) the Common
Stock issued upon conversion of such Preferred Stock and upon exercise of the
Warrants, plus any additional shares of Common Stock issued in respect thereof
in connection with any stock split, stock dividend or similar event with respect
to the Common Stock and (c) any securities that the Issuer or any successor
entity into which such Common Stock or such Preferred Stock may be converted or
changed.
The foregoing description of the Registration Rights Agreement is not, and
does not purport to be, complete and is qualified in its entirety by reference
to the Registration Rights Agreement, a copy of which is filed herewith as
Exhibit 10.2 and is incorporated herein by reference.
Certificate of Designation
As contemplated by the Securities Purchase Agreement, the Board of
Directors of the Issuer approved and adopted the Certificate of Designations,
Preferences and Rights of 7.50% Cumulative Convertible Preferred Stock Series
B-1 Due 2015 (the "Certificate of Designation") to create the series of
Preferred Stock. Under the Certificate of Designation, the shares of Preferred
Stock will, with respect to dividend rights and rights on liquidation,
winding-up and dissolution, rank (i) senior to all shares of Common Stock, the
Series A Junior Participating Preferred Stock of the Issuer and to each other
class of capital stock or preferred stock of the Issuer, the terms of which do
not expressly provide that it ranks senior to or on a parity with the shares of
the Preferred Stock as to dividend rights and rights on liquidation, winding-up
and dissolution of the Issuer; (ii) on a parity with additional shares of
Preferred Stock issued by the Issuer and each other class of capital stock or
series of preferred stock of the Issuer issued by the Issuer, the terms of which
expressly provide that such class or series will rank on a parity with the
shares of the Preferred Stock as to dividend rights and rights on liquidation,
winding-up and dissolution, if the Issuer, in issuing the shares, complies with
applicable provisions in the Certificate of Designation; and (iii) junior to
each class of capital stock or series of preferred stock of the Issuer issued by
the Issuer, the terms of which expressly provide that such class or series will
rank senior to the shares of Preferred Stock as to dividend rights and rights
upon liquidation, winding-up and dissolution, if the Issuer, in issuing the
shares, complies with applicable provisions in the Certificate of Designation.
Page 29
<PAGE>
The holders of the shares of Preferred Stock will be entitled to receive
with respect to each share of Preferred Stock, out of funds legally available
for the payment of dividends, dividends at a rate per annum of 7.50% of the
then-effective Liquidation Preference (as defined below). Such dividends shall
be cumulative from the date of issuance of the Preferred Stock and shall be
payable quarterly in arrears. On each Dividend Payment Date, commencing May 31,
2000, to and including the May 31, 2005 Dividend Payment Date, accrued dividends
on a share of the Preferred Stock for the preceding Dividend Period shall be
added cumulatively to and thereafter remain a part of the Liquidation Preference
of such share. Thereafter, accrued dividends shall be payable quarterly on each
Dividend Payment Date, commencing on August 31, 2005, to the holders of record
of Preferred Stock as of the close of business on the applicable Dividend Record
Date. Accrued dividends that are not paid in full in cash on any such Dividend
Payment Date (whether or not declared and whether or not there are sufficient
funds legally available for the payment thereof) shall be added cumulatively to
the Liquidation Preference on the applicable Dividend Payment Date and
thereafter remain a part thereof.
The holders of shares of Preferred Stock will have the right, generally, at
any time, to convert any or all their shares of Preferred Stock into a number of
fully paid and nonassessable shares of Common Stock equal to the then effective
Liquidation Preference thereof plus accrued and unpaid dividends to the date of
conversion divided by the Conversion Price in effect at the time of conversion.
The shares of Preferred Stock may be redeemed at any time commencing on or
after March 9, 2005 (or earlier, if, under the Certificate of Designation,
certain conditions relating to a Change of Control (as defined in the
Certificate of Designation) shall have occurred), in whole or from time to time
in part, at the election of the Issuer, at a redemption price payable in cash
equal to 100% of the then effective Liquidation Preference (after giving effect
to the Special Payment (as defined below), if applicable) plus accrued and
unpaid dividends from the last dividend payment date to the date fixed for
redemption. Shares of Preferred Stock (if not earlier redeemed or converted)
shall be mandatorily redeemed by the Issuer on February 28, 2015, at a
redemption price per share in cash equal to the then effective Liquidation
Preference, plus accrued and unpaid dividends thereon from the last dividend
payment date to the date of mandatory redemption.
Upon occurrence of a "Change of Control" (as defined in the Certificate of
Designation), the holders of Preferred Stock shall be entitled to receive, if
the change of control occurs prior to March 9, 2005, the Special Payment and
shall have the right to either (a) continue to hold their shares of Preferred
Stock (or the shares of preferred stock issued in respect thereof pursuant to
consolidation, merger, conveyance or transfer as provided in the Certificate of
Designation (the "Hold Option")), (b) convert their shares of Preferred Stock
(including shares received as a Special Payment) or (c) elect to have their
shares of Preferred Stock remarketed as described below (the "Remarketing
Option").
If the change of control occurs prior to March 9, 2005, the holders of the
Preferred Stock shall receive the Special Payment, pursuant to which the
Liquidation Preference of each share of Preferred Stock shall be deemed to have
been increased by an amount (the "Special Payment") equal to a formula set forth
in the Certificate of Designation. The holders of the Preferred Stock shall
receive the Special Payment whether they elect the Hold Option, the Remarketing
Option or the option to convert their shares of Preferred Stock.
If the Remarketing Option is selected with respect to a share of Preferred
Stock, such holder shall be deemed to have elected to waive such holder's right
to convert such share for a specified period of time and the Issuer shall
thereafter have the option either to (a) have such share redeemed in accordance
with the provisions for optional redemption contained in the Certificate of
Designation, or (b) remarket such share for the account of such holder and, if
the net proceeds to such holder of such remarketing are less than an amount in
cash equal to 100% of the Liquidation Preference (after giving effect to the
Special Payment (if applicable)) of such share plus accrued and unpaid dividends
thereon from the last dividend payment date to the date payment is received by
such holder in respect of such share, the Issuer shall issue to and sell for the
account of such holder a sufficient number of shares of Common Stock to make up
such shortfall. If the Issuer does not, within 180 days after the date of the
Issuer's giving written notice of its election of (a) or (b) above, settle the
claim with the holder pursuant to (a) or (b) above, then the holder shall have
the option, for a period of 10 business days, of electing the Hold Option or
electing to convert such holder's shares of Preferred Stock.
The holders of the shares of Preferred Stock will be entitled to vote on
all matters that the holders of the Issuer's Common Stock are entitled to vote
upon. In exercising these voting rights, each share of Preferred Stock shall be
entitled to vote on an as-converted basis with the holders of the Issuer's
Common Stock. The approval of the holders of at least a majority of the
then-outstanding shares of Preferred Stock and the Company's 7.50% Cumulative
Convertible Preferred Stock, Series B-2, voting as one class, will be required
for the Issuer to take certain actions. In addition, for so long as members of
the HMTF Group own any combination of the shares of Preferred Stock issued to
the members of the HMTF Group as of the Closing and shares of Common Stock
issued upon conversion of such Preferred Stock (the "HMTF Shares"), which, taken
together, would represent (if all such shares of Preferred Stock were converted)
an amount of Common Stock issuable upon conversion of 50% or more of such
Preferred Stock, the holders of the HMTF Shares, voting as a class, may elect
Page 30
<PAGE>
one director to serve on the board of directors of the Issuer. Pursuant to this
right, the HMTF Holders have elected John R. Muse for election to the board of
directors of the Issuer. The Securities Purchase Agreement contains a parallel
provision for the election of a director that is inoperative for so long as the
above described provision is in effect.
"Liquidation Preference" means an amount equal to $1,000 per share of
Preferred Stock plus an amount equal to the Share Option Adjustment Amount (as
defined below) per share of the Preferred Stock, subject to change in accordance
with the provisions of the Certificate of Designation.
"Share Option Adjustment Amount" means an amount equal to $72.00.
The foregoing description is not, and does not purport to be, complete and
is qualified in its entirety by reference to the Certificate of Designation, a
copy of which is filed as Exhibit 10.3 and is incorporated by reference.
Common Stock Warrant Certificates
As contemplated by the Securities Purchase Agreement, the Board of
Directors of the Issuer approved and adopted the Common Stock Warrant
Certificates for the A-1 Warrants (the A-1 Warrant Certificate") and the B-1
Warrants (the "B-1 Warrant Certificate"). The A-1 Warrants entitle the HMTF
Holders or their permitted assigns to purchase from the Issuer fully paid and
nonassessable shares of Common Stock at an exercise price of $75.00 per share,
as adjusted from time to time pursuant to the terms of the A-1 Warrant
Certificate. The A-1 Warrants are void after March 9, 2005. The B-1 Warrants
entitle the HMTF Holders or their permitted assigns to purchase from the Issuer
fully paid and nonassessable shares of Common Stock at an exercise price of
$100.00 per share, as adjusted from time to time pursuant to the terms of the
B-1 Warrant Certificate. The B-1 Warrants are void after September 9, 2007.
The foregoing description of the A-1 Warrant Certificate and the B-1
Warrant Certificate is not, and does not purport to be, complete and is
qualified in its entirety by reference to the Form of Common Stock Warrant No.
A-1 and the Form of Common Stock Warrant No. B-1, copies of which are filed
herewith as Exhibit 10.4 and Exhibit 10.5, respectively, and are incorporated
herein by reference.
ITEM 7. MATERIAL TO BE FILED AS EXHIBITS.
Exhibit 10.1: Securities Purchase Agreement, dated as of February 1, 2000,
between the Issuer, HMTF and each of the other Purchasers
(as defined in the Securities Purchase Agreement) listed
on Schedule I thereto, relating to the purchase and sale of
7.50% Cumulative Convertible Preferred Stock, five-year
warrants and seven-and-one-half year warrants of Viatel, Inc.
Exhibit 10.2: Registration Rights Agreement, dated as of March 9, 2000,
between the Issuer and each of the Initial Holders
(as defined in the Registration Rights Agreement).
Exhibit 10.3: Certificate of Designations, Preferences and Rights of 7.50%
Cumulative Convertible Preferred Stock Series B-1 Due 2015.
Exhibit 10.4: Form of Common Stock Warrant No. A-1, dated as of March 9,
2000.
Exhibit 10.5: Form of Common Stock Warrant No. B-1, dated as of March 9,
2000.
Exhibit 10.6: Credit Agreement, dated December 28, 1999, by and among HMTF
Bridge Partners, L.P., and HM/Europe Coinvestors, C.V. as
Initial Borrowers, the Lenders named therein, the Issuing
Bank, The Chase Manhattan Bank, as Administrative Agent, and
Bank of America, N.A., as Syndication Agent.
Exhibit 99.1: Joint Filing Agreement among the parties regarding filing of
Schedule 13D.
Page 31
<PAGE>
SIGNATURE
After reasonable inquiry and to the best of my knowledge and belief, the
undersigned certifies that the information set forth in this statement is true,
complete and correct.
March 20, 2000 *
------------------------------------------
Name: Thomas O. Hicks
* By: /s/ David W. Knickel
Name: David W. Knickel
Attorney-in-Fact
S -1
<PAGE>
SIGNATURE
After reasonable inquiry and to the best of my knowledge and belief, the
undersigned certifies that the information set forth in this statement is true,
complete and correct.
March 20, 2000 HMEU VIATEL QUALIFIED FUND, LLC
By: /s/ David W. Knickel
Name: David W. Knickel
Title: Vice President
S -2
<PAGE>
SIGNATURE
After reasonable inquiry and to the best of my knowledge and belief, the
undersigned certifies that the information set forth in this statement is true,
complete and correct.
March 20, 2000 HICKS, MUSE, TATE & FURST EUROPE FUND,
L.P.
By: HMEU GP LLC, its General Partner
By: /s/ David W. Knickel
Name: David W. Knickel
Title: Vice President
S -3
<PAGE>
SIGNATURE
After reasonable inquiry and to the best of my knowledge and belief, the
undersigned certifies that the information set forth in this statement is true,
complete and correct.
March 20, 2000 HMEU VIATEL PRIVATE FUND, LLC
By: /s/ David W. Knickel
Name: David W. Knickel
Title: Vice President
S -4
<PAGE>
SIGNATURE
After reasonable inquiry and to the best of my knowledge and belief, the
undersigned certifies that the information set forth in this statement is true,
complete and correct.
March 20, 2000 HICKS, MUSE, TATE & FURST EUROPE PRIVATE
FUND, L.P.
By: HMEU GP LLC, its General Partner
By: /s/ David W. Knickel
Name: David W. Knickel
Title: Vice President
S -5
<PAGE>
SIGNATURE
After reasonable inquiry and to the best of my knowledge and belief, the
undersigned certifies that the information set forth in this statement is true,
complete and correct.
March 20, 2000 HMEU GP LLC
By: /s/ David W. Knickel
Name: David W. Knickel
Title: Vice President
S -6
<PAGE>
SIGNATURE
After reasonable inquiry and to the best of my knowledge and belief, the
undersigned certifies that the information set forth in this statement is true,
complete and correct.
March 20, 2000 HMEU VIATEL I-EQ COINVESTORS, LLC
By: /s/ David W. Knickel
Name: David W. Knickel
Title: Vice President
S -7
<PAGE>
SIGNATURE
After reasonable inquiry and to the best of my knowledge and belief, the
undersigned certifies that the information set forth in this statement is true,
complete and correct.
March 20, 2000 HMEU I-EQ COINVESTORS, L.P.
By: HMEU Intermediate Partners I-C, L.P., its
General Partner
By: HMEU Fund I-C, Inc., its General Partner
By: /s/ David W. Knickel
Name: David W. Knickel
Title: Vice President
S -8
<PAGE>
SIGNATURE
After reasonable inquiry and to the best of my knowledge and belief, the
undersigned certifies that the information set forth in this statement is true,
complete and correct.
March 20, 2000 HMEU VIATEL I-SBS COINVESTORS, LLC
By: /s/ David W. Knickel
Name: David W. Knickel
Title: Vice President
S -9
<PAGE>
SIGNATURE
After reasonable inquiry and to the best of my knowledge and belief, the
undersigned certifies that the information set forth in this statement is true,
complete and correct.
March 20, 2000 HMEU I-SBS COINVESTORS, L.P.
By: HMEU Intermediate Partners I-C, L.P., its
General Partner
By: HMEU Fund I-C, Inc., its General Partner
By: /s/ David W. Knickel
Name: David W. Knickel
Title: Vice President
S -10
<PAGE>
SIGNATURE
After reasonable inquiry and to the best of my knowledge and belief, the
undersigned certifies that the information set forth in this statement is true,
complete and correct.
March 20, 2000 HMEU INTERMEDIATE PARTNERS I-C, L.P.
By: HMEU Fund I-C, Inc., its General Partner
By: /s/ David W. Knickel
Name: David W. Knickel
Title: Vice President
S -11
<PAGE>
SIGNATURE
After reasonable inquiry and to the best of my knowledge and belief, the
undersigned certifies that the information set forth in this statement is true,
complete and correct.
March 20, 2000 HM VIATEL PG EUROPE, LLC
By: /s/ David W. Knickel
Name: David W. Knickel
Title: Vice President
S -12
<PAGE>
SIGNATURE
After reasonable inquiry and to the best of my knowledge and belief, the
undersigned certifies that the information set forth in this statement is true,
complete and correct.
March 20, 2000 HM PG EUROPE I, C.V.
By: HMEU Fund I-C, Inc., its General Partner
By: /s/ David W. Knickel
Name: David W. Knickel
Title: Vice President
S -13
<PAGE>
SIGNATURE
After reasonable inquiry and to the best of my knowledge and belief, the
undersigned certifies that the information set forth in this statement is true,
complete and correct.
March 20, 2000 HMEU FUND I-C, INC.
By: /s/ David W. Knickel
Name: David W. Knickel
Title: Vice President
S -14
<PAGE>
SIGNATURE
After reasonable inquiry and to the best of my knowledge and belief, the
undersigned certifies that the information set forth in this statement is true,
complete and correct.
March 20, 2000 HMTF BRIDGE VIATEL, LLC
By: /s/ David W. Knickel
Name: David W. Knickel
Title: Vice President
S -15
<PAGE>
SIGNATURE
After reasonable inquiry and to the best of my knowledge and belief, the
undersigned certifies that the information set forth in this statement is true,
complete and correct.
March 20, 2000 HMTF BRIDGE PARTNERS, L.P.
By: HMTF Bridge Partners, LLC, its General
Partner
By: /s/ David W. Knickel
Name: David W. Knickel
Title: Vice President
S -16
<PAGE>
SIGNATURE
After reasonable inquiry and to the best of my knowledge and belief, the
undersigned certifies that the information set forth in this statement is true,
complete and correct.
March 20, 2000 HMTF BRIDGE PARTNERS, LLC
By: /s/ David W. Knickel
Name: David W. Knickel
Title: Vice President
S -17
<PAGE>
E-1
EXHIBIT INDEX
Exhibit 10.1: Securities Purchase Agreement, dated as of February 1, 2000,
between the Issuer, HMTF and each of the other Purchasers
(as defined in the Securities Purchase Agreement) listed
on Schedule I thereto, relating to the purchase and sale of
7.50% Cumulative Convertible Preferred Stock, five-year
warrants and seven-and-one-half year warrants of Viatel,
Inc.**
Exhibit 10.2: Registration Rights Agreement, dated as of March 9, 2000*
between the Issuer and each of the Initial Holders
(as defined in the Registration Rights Agreement).
Exhibit 10.3: Certificate of Designations, Preferences and Rights of 7.50%
Cumulative Convertible Preferred Stock Series B-1 Due 2015.*
Exhibit 10.4: Form of Common Stock Warrant No. A-1, dated as of March 9,
2000.*
Exhibit 10.5: Form of Common Stock Warrant No. B-1, dated as of March 9,
2000.*
Exhibit 10.6: Credit Agreement, dated December 28, 1999, by and among HMTF
Bridge Partners, L.P., and HM/Europe Coinvestors, C.V., as
Initial Borrowers, the Lenders named therein, the Issuing
Bank, the Chase Manhattan Bank, as Administrative Agent,
and Bank of America, N.A., as Syndication Agent.
Exhibit 99.1: Joint Filing Agreement among the parties regarding filing of
Schedule 13D.*
March 20__
* Filed herewith
** Incorporated by reference to Viatel, Inc. Form 8-K Filed on February
16, 2000 (File No. 000-21261)
S -18
<PAGE>
JOINT FILING STATEMENT
Each of the undersigned agrees that (i) the statement on Schedule 13D
relating to the Common Stock, par value $.01 per share, of Viatel, Inc. has been
adopted and filed on behalf of each of them, (ii) all future amendments to such
statement on Schedule 13D will, unless written notice to the contrary is
delivered as described below, be jointly filed on behalf of each of them, and
(iii) the provisions of Rule 13d-1(k)(1) under the Securities Exchange Act of
1934 apply to each of them. This agreement may be terminated with respect to
the obligations to jointly file future amendments to such statement on Schedule
13D as to any of the undersigned upon such person giving written notice thereof
to each of the other persons signatory hereto, at the principal office thereof.
March 20, 2000 *
-
Name: Thomas O. Hicks
* By: /s/ David W. Knickel
Name: David W. Knickel
Attorney-in-Fact
HMEU VIATEL QUALIFIED FUND, LLC
By: /s/ David W. Knickel
Name: David W. Knickel
Title: Vice President
HICKS, MUSE, TATE & FURST EUROPE FUND, L.P.
By: HMEU GP LLC, its General Partner
By: /s/ David W. Knickel
Name: David W. Knickel
Title: Vice President
HMEU VIATEL PRIVATE FUND, LLC
By: /s/ David W. Knickel
Name: David W. Knickel
Title: Vice President
S -19
<PAGE>
HICKS, MUSE, TATE & FURST EUROPE PRIVATE FUND, L.P.
By: HMEU GP LLC, its General Partner
By: /s/ David W. Knickel
Name: David W. Knickel
Title: Vice President
HMEU GP LLC
By: /s/ David W. Knickel
Name: David W. Knickel
Title: Vice President
HMEU VIATEL I-EQ COINVESTORS, LLC
By: /s/ David W. Knickel
Name: David W. Knickel
Title: Vice President
HMEU I-EQ COINVESTORS, L.P.
By: HMEU Intermediate Partners, I-C, L.P., its General Partner
By: HMEU Fund I-C, Inc., its General Partner
By: /s/ David W. Knickel
Name: David W. Knickel
Title: Vice President
HMEU VIATEL I-SBS COINVESTORS, LLC
By: /s/ David W. Knickel
Name: David W. Knickel
Title: Vice President
S -20
<PAGE>
HMEU I-SBS COINVESTORS, L.P.
By: HMEU Intermediate Partners I-C, L.P., its General Partner
By: HMEU Fund I-C, Inc., its General Partner
By: /s/ David W. Knickel
Name: David W. Knickel
Title: Vice President
HMEU INTERMEDIATE PARTNERS I-C, L.P.
By: HMEU Fund I-C, Inc., its General Partner
By: /s/ David W. Knickel
Name: David W. Knickel
Title: Vice President
HM VIATEL PG EUROPE, LLC
By: /s/ David W. Knickel
Name: David W. Knickel
Title: Vice President
HM PG EUROPE I, C.V.
By: HMEU Fund I-C, Inc., its General Partner
By: /s/ David W. Knickel
Name: David W. Knickel
Title: Vice President
HMEU FUND I-C, INC.
By: /s/ David W. Knickel
Name: David W. Knickel
Title: Vice President
S -21
<PAGE>
HMTF BRIDGE VIATEL, LLC
By: /s/ David W. Knickel
Name: David W. Knickel
Title: Vice President
HMTF BRIDGE PARTNERS, L.P.
By: HMTF Bridge Partners, LLC, its General Partner
By: /s/ David W. Knickel
Name: David W. Knickel
Title: Vice President
HMTF BRIDGE PARTNERS, LLC
By: /s/ David W. Knickel
Name: David W. Knickel
Title: Vice President
S -22
<PAGE>
REGISTRATION RIGHTS AGREEMENT
This Registration Rights Agreement (the "Agreement"), is made as of March
9, 2000 by and among Viatel, Inc. a Delaware corporation (the "Company"), and
the security holders listed on Schedule I to this Agreement.
WHEREAS, the Company and the Initial Holders (as herein defined) (or certain
Affiliates of the Initial Holders) entered into a Securities Purchase Agreement
dated February 1, 2000 (the "Securities Purchase Agreement");
WHEREAS, it is a condition precedent to the closing of the transactions
contemplated in the Securities Purchase Agreement that the parties hereto
execute and deliver this Agreement;
NOW THEREFORE, in consideration of the premises, mutual promises and covenants
contained in this Agreement and intending to be legally bound, the parties
hereto hereby agree as follows:
Article I
Definitions
Section 1.01. Definitions. Terms defined in the Securities Purchase
Agreement are used herein as therein defined. In addition, the following terms,
as used herein, have the following meanings:
"Chase Holders" means the Initial Chase Holders and any direct or indirect
transferee of any Registrable Securities held by the Initial Chase Holders.
"Commission" means the Securities and Exchange Commission.
"Demand Registration" means a registration under the Securities Act requested in
accordance with Section 2.01.
"HMTF Holders" means the Initial HMTF Holders and any direct or indirect
transferee of any Registrable Securities initially held by any of the Initial
HMTF Holders.
"Holders" means the collective reference to the HMTF Holders and the Chase
Holders.
"Initial Chase Holders" means Chase Equity Associates, LLC, a limited liability
company organized under the laws of the State of Delaware, or any of its
Affiliates.
"Initial HMTF Holders" means HMTF Bridge Viatel, LLC, HMEU Viatel I-EQ
Coinvestors, LLC, HMEU Viatel I-SBS Coinvestors, LLC, HM Viatel PG Europe, LLC,
HMEU Viatel Qualified Fund, LLC, and HMEU Viatel Private Fund, LLC.
"Initial Holders" means the Initial HMTF Holders and the Initial Chase Holders.
"Piggyback Registration" has the meaning set forth in Section 2.02.
"Registrable Common Stock" means the shares of Common Stock issued upon
conversion of the Registrable Series B-1 Preferred Stock or the Registrable
Series C Preferred Stock or upon exercise of the Warrants, plus any additional
shares of Common Stock issued in respect thereof in connection with any stock
split, stock dividend or similar event with respect to the Common Stock.
"Registrable Securities" means (a) the Registrable Series B Preferred Stock, (b)
the Registrable Series C Preferred Stock, (c) the Registrable Common Stock and
(d) any securities of the Company or any successor entity into which Registrable
Common Stock, Registrable Series B Preferred Stock or Registrable Series C
Preferred Stock may hereafter be converted or changed. As to any particular
Registrable Securities, such securities shall cease to be Registrable Securities
when (i) a registration statement with respect to the sale of such securities
shall have become effective under the Securities Act and such securities shall
have been disposed of under such registration statement, (ii) such securities
shall have been transferred pursuant to Rule 144, (iii) such securities shall
have been otherwise transferred or disposed of, and new certificates therefor
not bearing a legend restricting further transfer shall have been delivered by
the Company, and subsequent transfer or disposition of them shall not require
their registration or qualification under the Securities Act or any similar
state law then in force, or (iv) such securities shall have ceased to be
outstanding.
"Registrable Series B Preferred Stock" means the collective reference to the
Registrable Series B-1 Preferred Stock and Registrable Series B-2 Preferred
Stock.
"Registrable Series B-1 Preferred Stock" means the Series B-1 Preferred Stock
issued pursuant to the Securities Purchase Agreement, plus any additional shares
of Series B-1 Preferred Stock, if any, issued in respect thereof in connection
with any stock split, stock dividend or similar event with respect to the Series
B-1 Preferred Stock or the conversion of any shares of Series B-2 Preferred
Stock.
"Registrable Series B-2 Preferred Stock" means the Series B-2 Preferred Stock
issued pursuant to the Securities Purchase Agreement, plus any additional shares
of Series B-2 Preferred Stock, if any, issued in respect thereof in connection
with any stock split, stock dividend or similar event with respect to the Series
B-2 Preferred Stock or the conversion of any shares of Series B-1 Preferred
Stock.
"Registrable Series C Preferred Stock" means the shares of Series C Preferred
Stock, if any, issued upon conversion of the Registrable Series B-2 Preferred
Stock or exercise of the Warrants, plus any additional shares of Series C
Preferred Stock, if any, issued in respect thereof in connection with any stock
split, stock dividend or similar event with respect to the Series C Preferred
Stock or the conversion of any shares of Series B Preferred Stock or Common
Stock.
"Registration Expenses" has the meaning set forth in Section 3.02.
"Requesting Holders" means the Holders requesting a Demand Registration, and
shall include parties deemed "Requesting Holders" pursuant to Section
2.01(a)(iv) or Section 2.01(a)(v), as applicable.
"Rule 144" means Rule 144 (or any successor rule of similar effect) promulgated
under the Securities Act.
"Rule 415" means Rule 415 (or any successor rule of similar effect) promulgated
under the Securities Act.
"Selling Holder" means any Holder who is selling Registrable Securities pursuant
to a public offering registered hereunder.
"Series B Preferred Stock" means the Series B-1 Preferred Stock and the Series
B-2 Preferred Stock, par value $0.01 per share.
"Series B-1 Preferred Stock" means the Company's 7.50% Cumulative Convertible
Preferred Stock, Series B-1, par value $0.01 per share.
"Series B-2 Preferred Stock" means the Company's 7.50% Cumulative Convertible
Preferred Stock, Series B-2, par value $0.01 per share.
"Series C Preferred Stock" means the Company's Series C Preferred Stock, par
value $0.01 per share.
"Shelf Registration" has the meaning set forth in Section 2.03(a).
"Underwriter" means a securities dealer who purchases any Registrable Securities
as principal and not as part of such dealer's market-making activities.
"Warrants" means the A-1 Warrants, the A-2 Warrants, the B-1 Warrants and the
B-2 Warrants (each as defined in the Securities Purchase Agreement) to purchase
Common Stock.
Section 2.02. Internal References. Unless the context indicates
otherwise, references to Articles, Sections and paragraphs shall refer to the
corresponding articles, sections and paragraphs in this Agreement, and
references to the parties shall mean the parties to the Securities Purchase
Agreement.
Article III
Registration Rights
Section 3.01. Demand Registration. (a)(i) Holders of a majority of the
Registrable Securities held by the HMTF Holders may make up to two written
requests for a Demand Registration of all or any part of the Registrable
Securities held by such HMTF Holders; provided, that (A) each such Demand
Registration by the HMTF Holders must be in respect of Registrable Securities
with a fair market value of at least $50,000,000, and (B) the HMTF Holders shall
not be entitled to a Demand Registration if, during the 120 days preceding such
request, either the HMTF Holders had requested a Demand Registration (unless
such Demand Registration was preempted pursuant to Section 2.01(e)), or the HMTF
Holders were given the opportunity to participate in a Piggyback Registration in
accordance with Section 2.02 and either (1) failed to notify the Company of a
desire to participate in such Piggyback Registration or (2) notified the Company
of a desire to participate in such Piggyback Registration and were able to sell
in such Piggyback Registration at least 80% of the Registrable Securities
requested by the HMTF Holders to be included in such Piggyback Registration.
(ii) Holders of a majority of the Registrable Securities held by the Chase
Holders may make up to two written requests for a Demand Registration of all or
any part of the Registrable Securities held by such Chase Holders; provided,
that (A) each such Demand Registration by the Chase Holders must be in respect
of Registrable Securities with a fair market value of at least $50,000,000, and
(B) the Chase Holders shall not be entitled to a Demand Registration if, during
the 120 days preceding such request, either the Chase Holders had requested a
Demand Registration (unless such Demand Registration was preempted pursuant to
Section 2.01(e)), or the Chase Holders were given the opportunity to participate
in a Piggyback Registration in accordance with Section 2.02 and either (1)
failed to notify the Company of a desire to participate in such Piggyback
Registration or (2) notified the Company of a desire to participate in such
Piggyback Registration and were able to sell in such Piggyback Registration at
least 80% of the Registrable Securities requested by the Chase Holders to be
included in such Piggyback Registration.
(iii) Any request for a Demand Registration will specify the aggregate number of
shares of Registrable Securities proposed to be sold by the Requesting Holders
and will also specify the intended method of disposition thereof. A
registration will not count as a Demand Registration until it has become
effective. Should a Demand Registration not become effective due to the failure
of a Requesting Holder to perform its obligations under this Agreement or the
inability of the Requesting Holders to reach agreement with the Underwriters for
the proposed sale on price or other customary terms for such transaction, or in
the event the Requesting Holders withdraw or do not pursue the request for the
Demand Registration (in each of the foregoing cases, provided that at such time
the Company is in compliance in all material respects with its obligations under
this Agreement), then, subject to Section 2.01(b), such Demand Registration
shall be deemed to have been effected (provided, that (i) if, the Demand
Registration does not become effective because a material adverse change has
occurred, or is reasonably likely to occur, in the condition (financial or
otherwise), business, assets or results of operations of the Company and its
subsidiaries taken as a whole subsequent to the date of the written request made
by the Requesting Holders, (ii) if the Company withdraws the Demand Registration
for any reason, or (iii) if, after the Demand Registration has become effective,
an offering of Registrable Securities pursuant to a registration is interfered
with by any stop order, injunction, or other order or requirement of the
Commission or other governmental agency or court, then the Demand Registration
shall not be deemed to have been effected and will not count as a Demand
Registration).
(iv) Upon receipt of any request for a Demand Registration by holders of a
majority of the Registrable Securities held by the HMTF Holders, the Company
shall promptly (but in any event within ten (10) days) give written notice of
such proposed Demand Registration to all other HMTF Holders, and all such HMTF
Holders shall have the right, exercisable by written notice to the Company
within fifteen (15) days of their receipt of the Company's notice, to elect to
include in such Demand Registration such portion of their Registrable Securities
as they may request. All such HMTF Holders requesting to have their Registrable
Securities included in a Demand Registration in accordance with the preceding
sentence shall be deemed to be "Requesting Holders" for purposes of this Section
2.01.
(v) Upon receipt of any request for a Demand Registration by holders of a
majority of the Registrable Securities held by the Chase Holders, the Company
shall promptly (but in any event within ten (10) days) give written notice of
such proposed Demand Registration to all other Chase Holders and all such
Holders shall have the right, exercisable by written notice to the Company
within fifteen (15) days of their receipt of the Company's notice, to elect to
include in such Demand Registration such portion of their Registrable Securities
as they may request. All such Holders requesting to have their Registrable
Securities included in a Demand Registration in accordance with the preceding
sentence shall be deemed to be "Requesting Holders" for purposes of this Section
2.01.
(b) In the event that the Requesting Holders withdraw or do not pursue a
request for a Demand Registration and, pursuant to Section 2.01(a) hereof, such
Demand Registration is deemed to have been effected, the HMTF Holders or the
Chase Holders, as the case may be, may reacquire such Demand Registration (such
that the withdrawal or failure to pursue a request will not count as a Demand
Registration hereunder) if the Selling Holders reimburse the Company for any and
all Registration Expenses incurred by the Company in connection with such
request for a Demand Registration.
(c) If the Requesting Holders so elect, the offering of such Registrable
Securities pursuant to such Demand Registration shall be in the form of a "firm
commitment" underwritten offering. A majority in interest of the Requesting
Holders shall have the right to select the managing Underwriters and any
additional investment bankers and managers to be used in connection with any
offering under this Section 2.01, subject to the Company's approval, which
approval shall not be unreasonably withheld.
(d) The Requesting Holders will inform the Company of the time and manner of
any disposition of Registrable Common Stock, and agree to reasonably cooperate
with the Company in effecting the disposition of the Registrable Common Stock in
a manner that does not unreasonably disrupt the public trading market for the
Common Stock; provided, however, that the Holders' only right to a shelf
registration statement shall be pursuant to Section 2.03.
(e) The Company will have the right to preempt any Demand Registration with a
primary registration by delivering written notice (within seven business days
after the Company has received a request for such Demand Registration) of such
intention to the Selling Holder indicating that the Company has identified a
specific business need and use for the proceeds of the sale of such securities
and the Company shall use commercially reasonable efforts to effect a primary
registration within 60 days of such notice. In the ensuing primary
registration, the Holders will have such piggyback registration rights as are
set forth in Section 2.02 hereof. Upon the Company's preemption of a requested
Demand Registration, such requested registration will not count as the Holders'
Demand Registration. The Company may exercise the right to preempt a Demand
Registration only twice in any 360-day period; provided, that during any 360-day
period the Company shall use its reasonable best efforts to permit a period of
at least 120 consecutive days during which the Selling Holders may effect a
Demand Registration.
(f) No securities to be sold for the account of any Person (including the
Company) other than a Requesting Holder shall be included in a Demand
Registration unless the managing Underwriter or Underwriters shall advise the
Company and the Requesting Holders in writing that the inclusion of such
securities will not materially and adversely affect the price of the offering (a
"Material Adverse Effect"). Furthermore, in the event the managing Underwriter
or Underwriters shall advise the Company or the Requesting Holders that even
after exclusion of all securities of other Persons (including the Company)
pursuant to the immediately preceding sentence, the amount of Registrable
Securities proposed to be included in such Demand Registration by Requesting
Holders is sufficiently large to cause a Material Adverse Effect, the
Registrable Securities of the Requesting Holders to be included in such Demand
Registration shall equal the number of shares which the Company and the
Requesting Holders are so advised can be sold in such offering without a
Material Adverse Effect and such shares shall be allocated pro rata among the
Requesting Holders on the basis of the number of Registrable Securities
requested to be included in such registration by each such Requesting Holder
(assuming that all convertible securities shall have been converted directly or
indirectly into Common Stock and such registration statement relates solely to
the Common Stock); provided, however, that if any Registrable Securities
requested to be registered pursuant to a Demand Registration under Section 2.01
are excluded from registration hereunder, then the Holder(s) having shares
excluded ("Excluded Holders") shall have the right to withdraw all, or any part,
of their shares from such requested registration. If any Requesting Holder
shall have withdrawn all of its shares from such requested registration, such
requested registration shall not count as a Demand Registration.
Section 3.02. Piggyback Registration. (a) If the Company proposes to file
a registration statement under the Securities Act with respect to an offering of
any securities for its own account or for the account of another Person (other
than a registration statement on Form S-4 or S-8, or, except as provided for in
Section 2.03, pursuant to Rule 415 (or any substitute form or rule,
respectively, that may be adopted by the Commission)), the Company shall give
written notice of such proposed filing to the Holders at the address set forth
in the share register of the Company as soon as reasonably practicable (but in
no event less than fifteen days before the anticipated filing date), undertaking
to provide each Holder the opportunity to register on the same terms and
conditions such number of Registrable Securities as such Holder may request (a
"Piggyback Registration"). Each Holder will have seven business days after
receipt of any such notice to notify the Company as to whether it wishes to
participate in a Piggyback Registration (which notice shall not be deemed to be
a request for a Demand Registration); provided, that should a Holder fail to
provide timely notice to the Company, such Holder will forfeit any rights to
participate in the Piggyback Registration with respect to such proposed offering
other than as described in Section 2.01(a)(iv) or Section 2.01(a)(v), as
applicable. In the event that the registration statement is filed on behalf of
a Person other than the Company, the Company will use its best efforts to have
the Registrable Securities that the Holders wish to sell included in the
registration statement. If the Company or the Person for whose account such
offering is being made shall determine in its sole discretion not to register or
to delay the proposed offering, the Company may, at its election, provide
written notice of such determination to the Holders and (i) in the case of a
determination not to effect the proposed offering, shall thereupon be relieved
of the obligation to register such Registrable Securities in connection
therewith, and (ii) in the case of a determination to delay a proposed offering,
shall thereupon be permitted to delay registering such Registrable Securities
for the same period as the delay in respect of the proposed offering. As
between the Company and the Selling Holders, the Company shall be entitled to
select the Underwriters in connection with any Piggyback Registration.
(b) If the Registrable Securities requested to be included in the
Piggyback Registration by any Holder differ from the type of securities proposed
to be registered by the Company and the managing Underwriter advises the Company
that due to such differences the inclusion of such Registrable Securities would
cause a Material Adverse Effect, then (i) the number of such Holders'
Registrable Securities to be included in the Piggyback Registration shall be
reduced to an amount which, in the opinion of the managing Underwriter, would
eliminate such Material Adverse Effect or (ii) if no such reduction would, in
the opinion of the managing Underwriter, eliminate such Material Adverse Effect,
then the Company shall have the right to exclude all such Registrable Securities
from such Piggyback Registration, provided, that no other securities of such
type are included and offered for the account of any other Person in such
Piggyback Registration. Any partial reduction in number of Registrable
Securities of any Holder to be included in the Piggyback Registration pursuant
to clause (i) of the immediately preceding sentence shall be effected pro rata
based on the ratio (and calculated on an as converted basis) which such Holder's
requested shares bears to the total number of shares requested to be included in
such Piggyback Registration by all Persons other than the Company who have the
contractual right to request that their shares be included in such registration
statement and who have requested that their shares be included (assuming that
all convertible securities shall have been converted directly or indirectly into
Common Stock and such registration statement relates solely to the Common
Stock). If the Registrable Securities requested to be included in the Piggyback
Registration are of the same type as the securities being registered (which, for
this purpose, the Series C Preferred Stock shall be treated the same as Common
Stock) by the Company and the managing Underwriter advises the Company that the
inclusion of such Registrable Securities would cause a Material Adverse Effect,
the Company will be obligated to include in such registration, as to each
Holder, only a portion of the shares such Holder has requested be registered
equal to the ratio (and calculated on an as converted basis) which such Holder's
requested shares bears to the total number of shares requested to be included in
such registration statement by all Persons (other than the Person or Persons
initiating such registration request) who have the contractual right to request
that their shares be included in such registration statement and who have
requested their shares be included (assuming that all convertible securities
shall have been converted directly or indirectly into Common Stock and such
registration statement relates solely to the Common Stock). If the Company
initiated the registration, then the Company may include all of its securities
in such registration statement before any such Holder's requested shares are
included. If another security holder initiated the registration, then the
Company may not include any of its securities in such registration statement
unless all Registrable Securities requested to be included in the registration
statement by all Holders are included in such registration statement. If as a
result of the provisions of this Section 2.02(b) any Holder shall not be
entitled to include all Registrable Securities in a registration that such
Holder has requested to be so included, such Holder may withdraw such Holder's
request to include Registrable Securities in such registration statement prior
to its effectiveness.
Section 3.03. Shelf Registration. Holders of a majority of the
Registrable Securities may at any time make a written request that the Company
effect a shelf registration of a portion of the Registrable Securities held by
such Holders (the "Shelf Registration") pursuant to Rule 415. Upon receipt of a
request for the Shelf Registration, the Company shall promptly (but in any event
within ten (10) days) give written notice of the proposed Shelf Registration to
all other Holders, and each such other Holder shall have the right to include
for offer and sale in the Shelf Registration: (i) prior to the first anniversary
of the Closing Date (the "First Anniversary"), no more than 25% of the
Registrable Securities held by such Holder immediately after the Closing
(assuming the conversion of all Series B Preferred Stock after giving effect to
the accretion of dividends thereon and all Series C Preferred Stock and the
exercise of all Warrants) (directly or indirectly in accordance with their
terms), (ii) from and after the First Anniversary and prior to the second
anniversary of the Closing Date (the "Second Anniversary"), no more than 50% of
the Registrable Securities held by such Holder immediately after the Closing
(assuming the conversion of all Series B Preferred Stock after giving effect to
the accretion of dividends thereon and all Series C Preferred Stock and the
exercise of all Warrants) (directly or indirectly in accordance with their
terms), (iii) from and after the Second Anniversary and prior to the third
anniversary of the Closing Date (the "Third Anniversary"), no more than 75% of
the Registrable Securities held by such Holder immediately after the Closing
(assuming the conversion of all Series B Preferred Stock after giving effect to
the accretion of dividends thereon and all Series C Preferred Stock) (directly
or indirectly in accordance with their terms), and (iv) from and after the Third
Anniversary, all Registrable Securities held by such Holder immediately after
the Closing (assuming the conversion of all Series B Preferred Stock after
giving effect to the accretion of dividends thereon and all Series C Preferred
Stock and the exercise of all Warrants) (directly or indirectly in accordance
with their terms). Any reference to the number of shares held by any Holder
shall be determined so as to adjust for any stock splits, dividends or similar
transactions.
Article IV
Registration Procedures
Section 4.01. Filings; Information. In connection with the registration
of Registrable Securities pursuant to Section 2.01, Section 2.02 and Section
2.03 hereof, the Company will use its reasonable best efforts to effect the
registration of such Registrable Securities as promptly as is reasonably
practicable, and in connection with any such request:
(a) The Company will expeditiously prepare and file with the Commission a
registration statement on any form for which the Company then qualifies and
which counsel for the Company shall deem appropriate and available for the sale
of the Registrable Securities to be registered thereunder in accordance with the
intended method of distribution thereof, and use its reasonable best efforts to
cause such filed registration statement to become and remain effective (i) with
respect to any Demand Registration or Piggyback Registration, for such period,
not to exceed 60 days, as may be reasonably necessary to effect the sale of such
securities, (ii) with respect to the Shelf Registration, until the sale of all
Registrable Securities thereunder; provided, that if the Company shall furnish
to the Selling Holder a certificate signed by the Company's Chairman, Chief
Executive Officer, President or any Executive or Senior Vice-President stating
that the Company's Board of Directors has determined in good faith that it would
be detrimental or otherwise disadvantageous to the Company or its stockholders
for such a registration statement to be filed as expeditiously as possible
because the sale of Registrable Securities covered by such Registration
Statement or the disclosure of information in any related prospectus or
prospectus supplement would materially interfere with any acquisition, financing
or other material event or transaction which is then intended or the public
disclosure of which at the time would be materially prejudicial to the Company,
the Company may postpone the filing or effectiveness of a registration statement
for a period of not more than 120 days; provided, that during any 365-day period
the Company shall use its reasonable best efforts to permit a period of at least
120 consecutive days during which the Company will make a registration statement
available under this Agreement; and provided, further, that if (i) the effective
date of any registration statement filed pursuant to a Demand Registration would
otherwise be at least 45 calendar days, but fewer than 90 calendar days, after
the end of the Company's fiscal year, and (ii) the Securities Act requires the
Company to include audited financials as of the end of such fiscal year, the
Company may delay the effectiveness of such registration statement for such
period as is reasonably necessary to include therein its audited financial
statements for such fiscal year.
(b) Anything in this Agreement to the contrary notwithstanding, it is
understood and agreed that the Company shall not be required to keep any shelf
registration effective or useable for offers and sales of the Registrable
Securities, file a post effective amendment to a shelf registration statement or
prospectus supplement or to supplement or amend any registration statement, if
the Company is then involved in discussions concerning, or otherwise engaged in,
any material financing or investment, acquisition or divestiture transaction or
other material business purpose if the Company determines in good faith that the
making of such a filing, supplement or amendment at such time would interfere
with such transaction or purpose. The Company shall promptly give the Holders
of Registrable Securities written notice of such postponement containing a
general statement of the reasons for such postponement and an approximation of
the anticipated delay, which delay shall last no longer than 90 days, no more
than once during any 365-day period. Upon receipt by a Holder of Registrable
Securities of notice of an event of the kind described in this Section 3.01(b),
such Holder shall forthwith discontinue such Holder's disposition of Registrable
Securities until such Holder's receipt of notice from the Company that such
disposition may continue and of any supplemented or amended prospectus indicated
in such notice. The Company shall use its reasonable best efforts to permit
sales of Registrable Securities on such shelf registration statement for at
least 120 days during any 365-day period.
(c) The Company will, if requested, prior to filing such registration statement
or any amendment or supplement thereto, furnish to the Selling Holders, and each
applicable managing Underwriter, if any, copies thereof, and thereafter furnish
to the Selling Holders and each such Underwriter, if any, such number of copies
of such registration statement, amendment and supplement thereto (in each case
including all exhibits thereto and documents incorporated by reference therein)
and the prospectus included in such registration statement (including each
preliminary prospectus) as the Selling Holders or each such Underwriter may
reasonably request in order to facilitate the sale of the Registrable Securities
by the Selling Holders.
(d) After the filing of the registration statement, the Company will promptly
notify the Selling Holders of any stop order issued or, to the Company's
knowledge, threatened to be issued by the Commission and take all reasonable
actions required to prevent the entry of such stop order or to remove it if
entered.
(e) The Company will use its commercially reasonable efforts to qualify the
Registrable Securities for offer and sale under such other securities or blue
sky laws of such jurisdictions in the United States as the Selling Holders
reasonably request; keep each such registration or qualification (or exemption
therefrom) effective during the period in which such registration statement is
required to be kept effective; and do any and all other acts and things which
may be reasonably necessary or advisable to enable each Selling Holder to
consummate the disposition of the Registrable Securities owned by such Selling
Holder in such jurisdictions; provided, that the Company will not be required to
(i) qualify generally to do business in any jurisdiction where it would not
otherwise be required to qualify but for this paragraph 3.01(e), (ii) subject
itself to taxation in any such jurisdiction or (iii) consent to general service
of process in any such jurisdiction.
(f) The Company will as promptly as is practicable notify the Selling Holders,
at any time when a prospectus relating to the sale of the Registrable Securities
is required by law to be delivered in connection with sales by an Underwriter or
dealer, of the occurrence of any event requiring the preparation of a supplement
or amendment to such prospectus so that, as thereafter delivered to the
purchasers of such Registrable Securities, such prospectus will not contain an
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 the light
of the circumstances under which they were made, not misleading and promptly
make available to the Selling Holders and to the Underwriters any such
supplement or amendment. Upon receipt of any notice of the occurrence of any
event of the kind described in the preceding sentence, Selling Holders will
forthwith discontinue the offer and sale of Registrable Securities pursuant to
the registration statement covering such Registrable Securities until receipt by
the Selling Holders and the Underwriters of the copies of such supplemented or
amended prospectus and, if so directed by the Company, the Selling Holders will
deliver to the Company all copies, other than permanent file copies then in the
possession of Selling Holders, of the most recent prospectus covering such
Registrable Securities at the time of receipt of such notice. In the event the
Company shall give such notice, the Company shall extend the period during which
such registration statement shall be maintained effective as provided in Section
3.01(a) hereof by the number of days during the period from and including the
date of the giving of such notice to the date when the Company shall make
available to the Selling Holders such supplemented or amended prospectus.
(g) The Company will enter into customary agreements (including an underwriting
agreement in customary form) and take such other actions as are required in
order to expedite or facilitate the sale of such Registrable Securities.
(h) At the request of any managing Underwriter in connection with an
underwritten offering the Company will furnish (i) an opinion of counsel,
addressed to the Underwriters, covering such customary matters as the managing
Underwriter may reasonably request and (ii) a comfort letter or comfort letters
from the Company's independent public accountants covering such customary
matters as the managing Underwriter may reasonably request.
(i) If requested by the managing Underwriter or any Selling Holder, the Company
shall promptly incorporate in a prospectus supplement or post effective
amendment such information as the managing Underwriter or any Selling Holder
reasonably requests to be included therein, including without limitation, with
respect to the Registrable Securities being sold by such Selling Holder, the
purchase price being paid therefor by the Underwriters and with respect to any
other terms of the underwritten offering of the Registrable Securities to be
sold in such offering, and promptly make all required filings of such prospectus
supplement or post effective amendment.
(j) The Company shall promptly make available for inspection by any Selling
Holder or Underwriter participating in any disposition pursuant to any
registration statement, and any attorney, accountant or other agent or
representative retained by any such Selling Holder or Underwriter (collectively,
the "Inspectors"), all financial and other records, pertinent corporate
documents and properties of the Company (collectively, the "Records"), as shall
be reasonably necessary to enable them to exercise their due diligence
responsibility, and cause the Company's officers, directors and employees to
supply all information requested by any such Inspector in connection with such
registration statement; provided, however, that unless the disclosure of such
Records is necessary to avoid or correct a misstatement or omission in the
registration statement or the release of such Records is ordered pursuant to a
subpoena or other order from a court of competent jurisdiction, the Company
shall not be required to provide any information under this subparagraph (j) if
(A) the Company believes, after consultation with counsel for the Company, that
to do so would cause the Company to forfeit an attorney-client privilege that
was applicable to such information or (B) if either (1) the Company has
requested and been granted from the Commission confidential treatment of such
information contained in any filing with the Commission or documents provided
supplementally or otherwise or (2) the Company reasonably determines in good
faith that such Records are confidential and so notifies the Inspectors in
writing unless prior to furnishing any such information with respect to (A) or
(B) such Holder of Registrable Securities requesting such information agrees to
enter into a confidentiality agreement in customary form and subject to
customary exceptions; provided, further, however, that each Holder of
Registrable Securities agrees that it will, upon learning that disclosure of
such Records is sought in a court of competent jurisdiction, give notice to the
Company and allow the Company, at its expense, to undertake appropriate action
and to prevent disclosure of the Records deemed confidential.
(k) The Company shall cause the Registrable Securities included in any
registration statement to be (A) listed on each securities exchange, if any, on
which similar securities issued by the Company are then listed, or (B)
authorized to be quoted and/or listed (to the extent applicable) on the Nasdaq
National Market if the Registrable Securities so qualify.
(l) The Company shall provide a CUSIP number for the Registrable Securities
included in any registration statement not later than the effective date of such
registration statement.
(m) The Company shall cooperate with each Selling Holder and each Underwriter
participating in the disposition of such Registrable Securities and their
respective counsel in connection with any filings required to be made with the
National Association of Securities Dealers, Inc.
(n) The Company shall during the period when the prospectus is required to be
delivered under the Securities Act, promptly file all documents required to be
filed with the Commission pursuant to Sections 13(a), 13(c), 14 or 15(d) of the
Exchange Act.
(o) The Company will make generally available to its security holders, as soon
as reasonably practicable, an earnings statement covering a period of 12 months,
beginning within three months after the effective date of the registration
statement, which earnings statement shall satisfy the provisions of Section
11(a) of the Securities Act and the rules and regulations of the Commission
thereunder.
The Company may require Selling Holders promptly to furnish in writing to
the Company such information regarding such Selling Holders, the plan of
distribution of the Registrable Securities and other information as the Company
may from time to time reasonably request or as may be legally required in
connection with such registration.
Section 4.02. Registration Expenses. In connection with any Registration
effected hereunder, the Company shall pay the following expenses incurred in
connection with such registration (the "Registration Expenses"): (i)
registration and filing fees with the Commission and the National Association of
Securities Dealers, Inc., (ii) fees and expenses of compliance with securities
or blue sky laws (including reasonable fees and disbursements of counsel in
connection with blue sky qualifications of the Registrable Securities), (iii)
printing expenses, (iv) fees and expenses incurred in connection with the
listing or quotation of the Registrable Securities, (v) fees and expenses of
counsel to the Company and the reasonable fees and expenses of independent
certified public accountants for the Company (including fees and expenses
associated with the special audits or the delivery of comfort letters), (vi) the
reasonable fees and expenses of any additional experts retained by the Company
in connection with such registration, (vii) all roadshow costs and expenses not
paid by the Underwriters and (viii) the reasonable fees and expenses of one
counsel to Selling Holders.
Article V
Indemnification and Contribution
Section 5.01. Indemnification by the Company. The Company agrees to
indemnify and hold harmless each Selling Holder and its Affiliates and their
respective officers, directors, partners, stockholders, members, employees,
agents and representatives and each Person (if any) which controls a Selling
Holder within the meaning of either Section 15 of the Securities Act or Section
20 of the Exchange Act, from and against any and all losses, claims, damages,
liabilities, costs and expenses (including reasonable attorneys' fees) caused
by, arising out of, resulting from or related to any untrue statement or alleged
untrue statement of a material fact contained or incorporated by reference in
any registration statement or prospectus relating to the Registrable Securities
(as amended or supplemented if the Company shall have furnished any amendments
or supplements thereto) or any preliminary prospectus, or caused by any omission
or alleged omission to state therein a material fact required to be stated
therein or necessary to make the statements therein not misleading, except
insofar as such losses, claims, damages or liabilities are caused by or based
upon any information furnished in writing to the Company by or on behalf of such
Selling Holder expressly for use therein or by the Selling Holder's failure to
deliver a copy of the registration statement or prospectus or any amendments or
supplements thereto after the Company has furnished the Selling Holder with
copies of the same; provided, however, that the Company shall have no obligation
to indemnify under this sentence to the extent any such losses, claims, damages
or liabilities have been finally and non-appealably determined by a court to
have resulted from such Selling Holder's willful misconduct or gross negligence.
The Company also agrees to indemnify any Underwriters of the Registrable
Securities, their officers and directors and each person who controls such
Underwriters on substantially the same basis as that of the indemnification of
the Selling Holders provided in this Section 4.01, except insofar as such
losses, claims, damages or liabilities are caused by or based upon any
information furnished in writing to the Company by or on behalf of such
Underwriter expressly for use therein or by the Underwriter's failure to deliver
a copy of the registration statement or prospectus or any amendments or
supplements thereto after the Company has furnished the Underwriter with copies
of the same; provided, however, that the Company shall have no obligation to
indemnify under this sentence to the extent any such losses, claims, damages or
liabilities have been finally and non-appealably determined by a court to have
resulted from any such Underwriter's willful misconduct or gross negligence.
Section 5.02. Indemnification by Selling Holders. Each Selling Holder
agrees to indemnify and hold harmless the Company, its officers and directors,
and each Person, if any, which controls the Company within the meaning of either
Section 15 of the Securities Act or Section 20 of the Exchange Act to the same
extent as the foregoing indemnity from the Company to each Selling Holder, but
only with reference to information furnished in writing by or on behalf of such
Selling Holder expressly for use in any registration statement or prospectus
relating to the Registrable Securities, or any amendment or supplement thereto,
or any preliminary prospectus. Each Selling Holder also agrees to indemnify and
hold harmless any Underwriters of the Registrable Securities, their officers and
directors and each person who controls such Underwriters on substantially the
same basis as that of the indemnification of the Company provided in this
Section 4.02, but only with reference to information furnished in writing by or
on behalf of such Selling Holder expressly for use in any registration statement
or prospectus relating to the Registrable Securities, or any amendment or
supplement thereto, or any preliminary prospectus. Each such Selling Holder's
liability under this Section 4.02 shall be limited to an amount equal to the net
proceeds (after deducting the underwriting discount and expenses) received by
such Selling Holder from the sale of such Registrable Securities by such Selling
Holder. The obligation of such Selling Holder to indemnify shall be several and
not joint.
Section 5.03. Conduct of Indemnification Proceedings. In case any proceeding
(including any governmental investigation) shall be instituted involving any
Person in respect of which indemnity may be sought pursuant to Section 4.01 or
Section 4.02, such Person (the "Indemnified Party") shall promptly notify the
Person against whom such indemnity may be sought (the "Indemnifying Party") in
writing and the Indemnifying Party, upon the request of the Indemnified Party,
shall retain counsel reasonably satisfactory to such Indemnified Party to
represent such Indemnified Party and any others the Indemnifying Party may
designate in such proceeding and shall pay the reasonable fees and disbursements
of such counsel related to such proceeding. In any such proceeding, any
Indemnified Party 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 Party
unless (i) the Indemnifying Party and the Indemnified Party shall have mutually
agreed to the retention of such counsel or (ii) the named parties to any such
proceeding (including any impleaded parties) include both the Indemnified Party
and the Indemnifying Party and, in the written opinion of counsel for the
Indemnified Party, 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 Party shall not, in connection with any
proceeding or related proceedings in the same jurisdiction, be liable for the
fees and expenses of more than one separate firm of attorneys (in addition to
any local counsel) at any time for all such Indemnified Parties, and that all
such fees and expenses shall be reimbursed as they are incurred. In the case of
any such separate firm for the Indemnified Parties, such firm shall be
designated in writing by the Indemnified Parties. The Indemnifying Party shall
not be liable for any settlement of any proceeding effected without its written
consent, but if settled with such consent (not to be unreasonably withheld), or
if there be a final judgment for the plaintiff, the Indemnifying Party shall
indemnify and hold harmless such Indemnified Parties from and against any loss
or liability (to the extent stated above) by reason of such settlement or
judgment.
Section 5.04. Contribution. If the indemnification provided for in this
Article IV is unavailable to an Indemnified Party in respect of any losses,
claims, damages or liabilities in respect of which indemnity is to be provided
hereunder, then each such Indemnifying Party, in lieu of indemnifying such
Indemnified Party, shall to the fullest extent permitted by law contribute to
the amount paid or payable by such Indemnified Party as a result of such losses,
claims, damages or liabilities in such proportion as is appropriate to reflect
the relative fault of such party in connection with the statements or omissions
that resulted in such losses, claims, damages or liabilities, as well as any
other relevant equitable considerations. The relative fault of the Company, a
Selling Holder and the Underwriters 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 such party and the parties' relative intent, knowledge,
access to information and opportunity to correct or prevent such statement or
omission.
The Company and each Selling Holder agrees that it would not be just and
equitable if contribution pursuant to this Section 4.04 were determined by pro
rata allocation (even if the Underwriters 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 Party as a result of the losses,
claims, damages or liabilities referred to in the immediately preceding
paragraph shall be deemed to include, subject to the limitations set forth
above, any legal or other expenses reasonably incurred by such Indemnified Party
in connection with investigating or defending any such action or claim.
Notwithstanding the provisions of this Article IV, no Underwriter shall be
required to contribute any amount in excess of the amount by which the total
price at which the securities underwritten by it and distributed to the public
were offered to the public exceeds the amount of any damages which such
Underwriter has otherwise been required to pay by reason of such untrue or
alleged untrue statement or omission or alleged omission, and each Selling
Holder shall not be required to contribute any amount in excess of the amount by
which the net proceeds of the offering (before deducting expenses) received by
such Selling Holder exceeds the amount of any damages which such Selling Holder
has otherwise been required to pay by reason of such untrue or alleged untrue
statement or omission or alleged omission. No person guilty of fraudulent
misrepresentation (within the meaning of Section 11(f) of the Securities Act)
shall be entitled to contribution from any Person who was not guilty of such
fraudulent misrepresentation.
Article VI
Miscellaneous
Section 6.01. Participation in Underwritten Registrations. No Person may
participate in any underwritten registered offering contemplated hereunder
unless such Person (a) agrees to sell its securities on the basis provided in
any underwriting arrangements approved by the Persons entitled hereunder to
approve such arrangements, (b) completes and executes all questionnaires, powers
of attorney, custody arrangements, indemnities, underwriting agreements and
other documents reasonably required under the terms of such underwriting
arrangements and this Agreement and (c) furnishes in writing to the Company such
information regarding such Person, the plan of distribution of the Registrable
Securities and other information as the Company may from time to time request or
as may be legally required in connection with such registration; provided,
however, that no such Person shall be required to make any representations or
warranties in connection with any such registration other than representations
and warranties as to (i) such Person's ownership of his or its Registrable
Securities to be sold or transferred free and clear of all liens, claims and
encumbrances, (ii) such Person's power and authority to effect such transfer and
(iii) such matters pertaining to compliance with securities laws as may be
reasonably requested; provided further, however, that the obligation of such
Person to indemnify pursuant to any such underwriting agreements shall be
several, not joint and several, among such Persons selling Registrable
Securities, and the liability of each such Person will be in proportion to, and
provided further that such liability will be limited to, the net amount received
by such Person from the sale of such Person's Registrable Securities pursuant to
such registration.
Section 6.02. Rule 144. The Company covenants that it will file any reports
required to be filed by it under the Securities Act and the Exchange Act and
that it will take such further action as the Holders may reasonably request to
the extent required from time to time to enable the Holders to sell Registrable
Securities without registration under the Securities Act within the limitation
of the exemptions provided by Rule 144 under the Securities Act, as such Rule
may be amended from time to time, or any similar rule or regulation hereafter
adopted by the Commission. Upon the request of any Holder, the Company will
deliver to such Holder a written statement as to whether it has complied with
such reporting requirements.
Section 6.03. Holdback Agreements. Each Holder agrees, in the event of an
underwritten offering by the Company (whether for the account of the Company or
otherwise) not to offer, sell, contract to sell or otherwise dispose of any
Registrable Securities, or any securities convertible into or exchangeable or
exercisable for such securities, including any sale pursuant to Rule 144 under
the Securities Act (except as part of such underwritten offering), during the 14
days prior to, and during the 90-day period (or such lesser period as the lead
or managing underwriters may require) beginning on, the effective date of the
registration statement for such underwritten offering (or, in the case of an
offering pursuant to an effective shelf registration statement pursuant to Rule
415, the pricing date for such underwritten offering).
Section 6.04. Termination. The registration rights granted under this
Agreement will terminate on March 9, 2015, or such earlier time as there shall
no longer be any Registrable Securities; provided, however, that if all shares
of Series B Preferred Stock outstanding on such date shall not have been
redeemed in full in accordance with Section 10 of the Certificate of
Designations, this Agreement shall remain in full force and effect with respect
to the Registrable Securities until such time as the shares of Series B
Preferred Stock have been so redeemed in full.
Section 6.05. Amendments, Waivers, Etc. This Agreement may not be amended,
waived or otherwise modified or terminated except by an instrument in writing
signed by the Company and (i) Holders of at least 50% of the Registrable
Securities (calculated on an as-converted basis) then held by all HMTF Holders,
if the amendment is to be effective against the HMTF Holders, (ii) Holders of at
least 50% of the Registrable Securities (calculated on an as-converted basis)
then held by all Chase Holders, if the amendment is to be effective against the
Chase Holders.
Section 6.06. Counterparts. This Agreement may be executed in one or more
counterparts, all of which shall be considered one and the same agreement. Each
party need not sign the same counterpart.
Section 6.07. Entire Agreement. This Agreement constitutes the entire
agreement and supersedes all prior agreements and understandings, both written
and oral, among the parties with respect to the subject matter hereof.
Section 6.08. Governing Law. This Agreement shall be governed by, and
construed in accordance with, the laws of the State of New York regardless of
the laws that might otherwise govern under applicable principles of conflicts of
law thereof.
Section 6.09. Assignment of Registration Rights. Each Holder of the
Registrable Securities may assign all or any part of its rights under this
Agreement to any person to whom such Holder sells, transfers or assigns such
Registrable Securities. In the event that the Holder shall assign its rights
pursuant to this Agreement in connection with the transfer of less than all its
Registrable Securities, the Holder shall also retain his rights with respect to
its remaining Registrable Securities.
<PAGE>
IN WITNESS WHEREOF, the Company and each Initial Holder has caused this
Agreement to be signed on its behalf by its officer thereunto duly authorized as
of the date first written above.
VIATEL, INC.,
By:
Name:
Title:
HMTF BRIDGE VIATEL, LLC
HMEU VIATEL I-EQ COINVESTORS, LLC
HMEU VIATEL I-SBS COINVESTORS, LLC
HM VIATEL PG EUROPE, LLC
HMEU VIATEL QUALIFIED FUND, LLC
HMEU VIATEL PRIVATE FUND, LLC
By: /s/ David W. Knickel
Name: David W. Knickel
Title: Vice President
CHASE EQUITY ASSOCIATES, LLC
By: Chase Capital Partners
as Manager
By:
Name:
Title:
<PAGE>
SCHEDULE I
PURCHASERS NUMBER OF SHARES PURCHASE PRICE OF
THE SHARES
CHASE EQUITY ASSOCIATES, LLC 162,500 $1,000
TOTAL 162,500 $162,500,000
HMTF BRIDGE VIATEL, LLC 81,250 $1,000
HMEU VIATEL I-EQ
COINVESTORS, LLC 1,297 $1,000
HMEU VIATEL I-SBS COINVESTORS, LLC 1,723 $1,000
HM VIATEL PG EUROPE 7,354 $1,000
HMEU VIATEL QUALIFIED FUND, LLC 70,462 $1,000
HMEU VIATEL PRIVATE FUND, LLC 414 $1,000
TOTAL 162,500 $162,500,000
TABBED SCHEME USED
VIATEL, INC.
CERTIFICATE OF DESIGNATIONS, PREFERENCES AND
RIGHTS OF 7.50% CUMULATIVE
CONVERTIBLE PREFERRED STOCK SERIES B-1 DUE 2015
<PAGE>
NY01/MEEHT/490948.11 33
NY01/MEEHT/490948.11
CERTIFICATE OF DESIGNATIONS
Viatel, Inc., a company organized and existing under the General
Corporation Law of the State of Delaware (the "Company"), certifies that
pursuant to the authority contained in its Certificate of Incorporation (the
"Certificate of Incorporation") and its By-laws (the "By-laws"), and in
accordance with Section 151 of the General Corporation Law of the State of
Delaware, the board of directors of the Company (the "Board of Directors") at a
meeting duly called and held on January 31st, 2000, duly approved and adopted
the following resolution, which resolution remains in full force and effect on
the date hereof:
RESOLVED, that pursuant to the authority vested in the Board of Directors
by the Certificate of Incorporation and By-laws, the Board of Directors does
hereby create, authorize and provide for the issue of a series of Preferred
Stock having the following designation, voting powers, preferences and relative,
participating, optional and other special rights:
Certain capitalized terms used herein are defined in Section 16.
1. Number and Designation. The Company shall have a series of Preferred
Stock, which shall be designated as its 7.50% Series B-1 Cumulative Convertible
Preferred Stock due 2015 (the "Series B-1 Preferred Stock"), par value $0.01 per
share, with 325,000 shares initially authorized. Unless otherwise specified,
references herein to any "Section" refer to the Section number specified in this
Certificate of Designation.
2. Issuance. The Company may issue up to 325,000 shares of Series B-1
Preferred Stock in accordance with the Purchase Agreement; provided that, the
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aggregate of the then Outstanding shares of Series B-1 Preferred Stock and
Series B-2 Preferred Stock shall not exceed such 325,000 shares.
3. Registered Form; Liquidation Preference; Registrar. Certificates for
shares of Series B Preferred Stock shall be issuable only in registered form and
only with an initial Liquidation Preference of $1,072 per share. The Company
shall serve as initial Registrar and Transfer Agent (the "Registrar") for the
Series B Preferred Stock.
4. Registration; Transfer. Shares of the Series B Preferred Stock have
not been registered under the Securities Act of 1933, as amended (the
"Securities Act") and may not be resold, pledged or otherwise transferred prior
to the date when they may be resold pursuant to Rule 144 under the Securities
Act other than (i) to the Company, (ii) pursuant to an exemption from
registration under the Securities Act or (iii) pursuant to an effective
registration statement under the Securities Act, in each case in accordance with
any applicable securities laws of any state of the United States. Until such
time as it is no longer required pursuant to the Securities Act, certificates
evidencing the Series B Preferred Stock shall contain a legend (the "Restrictive
Legend") evidencing the foregoing restrictions in substantially the form
attached hereto as Exhibit A.
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5. Paying Agent and Conversion Agent. a) The Company shall maintain (i)
an office or agency where shares of Series B Preferred Stock may be presented
for payment (the "Paying Agent"), (ii) an office or agency where shares of
Series B Preferred Stock may be presented for conversion (the "Conversion
Agent"), and (iii) a Registrar, which shall be an office or an agency where
shares of Series B Preferred Stock may be presented for transfer. The Company
may appoint the Registrar, the Paying Agent and the Conversion Agent and may
appoint one or more additional paying agents and one or more additional
conversion agents in such other locations as it shall determine. The term
"Paying Agent" includes any additional paying agent, and the term "Conversion
Agent" includes any additional conversion agent. The Company may change any
Paying Agent or Conversion Agent without prior notice to any holder. The Company
shall notify the Registrar of the name and address of any Paying Agent or
Conversion Agent appointed by the Company. If the Company fails to appoint or
maintain another entity as Paying Agent or Conversion Agent, the Registrar shall
act as such. Notwithstanding the foregoing, the Company or any of its Affiliates
may act as Paying Agent, Registrar, coregistrar or Conversion Agent.
(b) Neither the Company nor the Registrar shall be required (i) to issue,
countersign or register the transfer of or exchange any share of Series B
Preferred Stock during a period beginning at the opening of business 15 days
before any Redemption Date (as defined under Section 10(d)) and ending at the
close of business on such Redemption Date or (ii) to register the transfer of or
exchange any share of Series B Preferred Stock so selected for redemption. This
Section 5(b) shall not apply to any conversion of Series B Preferred Stock in
accordance with Section 12.
(c) If shares of Series B Preferred Stock are issued upon the transfer,
exchange or replacement of shares of Series B Preferred Stock bearing the
Restrictive Legend, or if a request is made to remove such Restrictive Legend on
shares of Series B Preferred Stock, the shares of Series B Preferred Stock so
issued shall bear the Restrictive Legend, or the Restrictive Legend shall not be
removed, as the case may be, unless the holders of such shares shall request
such legend be removed, and outside counsel for such holders reasonably
determines that the transfer of such shares is no longer restricted by the
Securities Act and outside counsel for the Company reasonably concurs in such
determination.
(d) Each holder of a share of Series B Preferred Stock agrees to
indemnify the Company and the Registrar against any liability that may result
from the transfer, exchange or assignment by such holder of such holder's share
of Series B Preferred Stock in violation of any provision of this Certificate of
Designation and/or applicable Federal or state securities law; provided,
--------
however, that such indemnity shall not apply to acts of willful misconduct or
gross negligence on the part of the Company or the Registrar, as the case may
be.
(e) Payments due on the shares of Series B Preferred Stock shall be
payable at the office or agency of the Company maintained for such purpose in
The City of New York and at any other office or agency maintained by the Company
for such purpose. If any such payment is in cash, it shall be payable by wire
transfer (provided that appropriate wire instructions have been received by the
Registrar at least 15 days prior to the applicable date of payment) to a United
States dollar account maintained by the holder with, a bank located in New York
City; provided that at the option of the Company payment of dividends in cash
--------
may be made by check mailed to the address of the person entitled thereto as
such address shall appear in the Series B Preferred Share Register.
6. Dividend Rights.
(a) The Company shall pay, and the holders of the shares of Series B
Preferred Stock shall be entitled to receive, cumulative dividends from the date
of initial issuance of such shares of Series B Preferred Stock at a rate of
7.50% per annum on the amount of the then-effective Liquidation Preference of
the shares of Series B Preferred Stock. Dividends will be computed on the basis
of a 360-day year of twelve 30-day months and will be payable in accordance with
Section 11 hereof. Dividends will be payable quarterly in arrears on May 31,
August 31, November 30 and February 28 of each year (each a "Dividend Payment
Date"), commencing (subject to the next sentence) on May 31, 2000, for so long
as any shares of Series B Preferred Stock are outstanding; provided, however,
that if such date is not a Business Day, then the Dividend Payment Date shall be
the next Business Day. The Company may elect not to declare dividend payments on
any Dividend Payment Date and shall not declare dividend payments prior to May
31, 2005; provided, however, that dividends on shares of the Series B Preferred
Stock will accrue (including, without limitation, for the period from the
issuance of the Series B Preferred Stock through May 31, 2005, notwithstanding
the prohibitions set forth above) whether or not the Company has earnings or
profits, whether or not there are funds legally available for the payment of
such dividends and whether or not dividends are declared. Dividends, whether
declared or undeclared, will accumulate to the extent they are not paid on the
Dividend Payment Date for the period to which they relate. The Company will take
all actions required or permitted under the General Corporation Law of the State
of Delaware to permit the payment or accrual of dividends on the shares of
Series B Preferred Stock. On each Dividend Payment Date, commencing May 31,
2000, to and including the May 31, 2005 Dividend Payment Date, accrued dividends
on a share of the Series B Preferred Stock for the preceding dividend period
shall be added cumulatively to and thereafter remain a part of the Liquidation
Preference of such share. Thereafter, accrued dividends shall be payable
quarterly on each Dividend Payment Date, commencing on August 31, 2005, to the
holders of record of the Series B Preferred Stock as of the close of business on
the applicable Dividend Record Date. Accrued dividends that are not paid in
full in cash on any such Dividend Payment Date (whether or not declared and
whether or not there are sufficient funds legally available for the payment
thereof) shall be added cumulatively to the Liquidation Preference on the
applicable Dividend Payment Date and thereafter remain a part thereof. Accrued
dividends added to the Liquidation Preference of a share of Series B Preferred
Stock in accordance with the foregoing provisions of this Section 6(a) are
sometimes referred to in this Certificate as "Accumulated Dividends". For
purposes of determining the amount of dividends "accrued" (i) as of the first
Dividend Payment Date and as of any date that is not a Dividend Payment Date,
such amount shall be calculated on the basis of the rate per annum specified
above in this paragraph for the actual number of days elapsed from and including
the Closing Date (in case of the first Dividend Payment Date and any date prior
to the first Dividend Payment Date ) or the last preceding Dividend Payment Date
(in case of any other date) to the date as of which such determination is to be
made, based on a 360-day year, and (ii) as of any Dividend Payment Date after
the first Dividend Payment Date, such amount shall be calculated on the basis of
such rate per annum based on a 360-day year of twelve 30-day months. Whenever
the Company shall declare or pay any dividend on any Series B Preferred Stock,
the holders of the Series B Preferred Stock shall be entitled to receive such
dividends on a per share basis.
(b) In addition to all dividends payable pursuant to Section 6(a),
whenever the Company shall declare or pay any dividend on its Common Stock, the
holders of the Series B Preferred Stock shall be entitled to receive such
dividends on a ratable as-converted basis (calculated as if all shares of Series
B Preferred Stock had been converted directly or indirectly into Common Stock
and/or Series C Preferred Stock). Dividends payable pursuant to this Section
6(b) shall not reduce any dividends payable pursuant to Section 6(a).
7. Payment of Dividends; Mechanics of Payment; Dividend Rights Preserved.
a) Subject to Sections 6 and 11, dividends on any share of Series B Preferred
Stock that are payable, and are punctually paid or duly provided for, on any
Dividend Payment Date shall be paid in arrears to the person in whose name such
share of Series B Preferred Stock (or one or more predecessor shares of Series B
Preferred Stock) is registered at the close of business on the next preceding
May 15, August 15, November 15 and February 15 (each a "Dividend Record Date").
(b) Unless full cumulative dividends on all outstanding shares of Series
B Preferred Stock for all past dividend periods shall have been declared and
paid, or declared and a sufficient sum for the payment thereof set apart, then:
(i) no dividend (other than (A) with respect to Junior Shares, a dividend
payable solely in any Junior Shares, or (B) with respect to Parity Shares, a
dividend payable solely in Junior Shares or Parity Shares, or (C) with respect
to Parity Shares, a partial dividend paid pro rata on such Parity Shares and the
shares of Series B Preferred Stock) shall be declared or paid upon, or any sum
set apart for the payment of dividends upon, any Junior Shares or Parity Shares,
respectively;
(ii) no other distribution shall be declared or made upon, or any sum set
apart for the payment of any distribution upon, any Junior Shares or Parity
Shares;
(iii) no Junior Shares or Parity Shares or any warrants, rights, calls or
options (other than any cashless exercises of options or buybacks of options or
restricted stock from present or former employees, directors or consultants)
exercisable for or convertible into any Parity Share or Junior Share shall be
purchased, redeemed or otherwise acquired (other than in exchange for other
Junior Shares or Parity Shares, respectively and other than conversion of (A)
Series B-1 Preferred Stock into Series B-2 Preferred Stock, and vice versa, (B)
Series B-2 Preferred Stock into Series C Preferred Stock, and (C) Series C
Preferred Stock into Common Stock and vice versa) by the Company or any of its
subsidiaries; and
(iv) no monies shall be paid into or set apart or made available for a
sinking or other like fund for the purchase, redemption or other acquisition of
any Junior Shares or Parity Shares or any warrants, rights, calls or options
exercisable for or convertible into any Parity Shares or Junior Shares by the
Company or any of its subsidiaries (other than any cashless exercises of options
or option buybacks).
Except as provided in Sections 6, 12 or 13 hereof, holders of Series B
Preferred Stock will not be entitled to any dividends, whether payable in cash,
property or stock, in excess of the full cumulative dividends as herein
described.
(c) The Company will notify the Registrar and make a public announcement
no later than the close of business on the tenth Business Day prior to the
Record Date for each dividend as to whether it will pay such dividend.
(d) Any dividends (other than Accumulated Dividends) on any share of
Series B Preferred Stock may be paid, subject to Section 11, by the Company in
any lawful manner (which shall include the establishment of a record date not
more than 45 days prior to the payment thereof) not inconsistent with the
requirements of any national stock exchange or Commission recognized trading
market on which the shares of Series B Preferred Stock may be listed or admitted
to trading, and upon such notice (which shall precede the record date by at
least ten Business Days) as may be required by such exchange or trading market,
if, after notice given by the Company to the Registrar of the proposed payment
pursuant to this clause (d), such manner of payment shall be deemed practicable
by the Registrar.
(e) Subject to the foregoing provisions of this Section 7, each share of
Series B Preferred Stock delivered under this Certificate of Designation upon
registration of transfer of or in exchange for or in lieu of any other share of
Series B Preferred Stock shall carry the rights to dividends accumulated and
unpaid, and to accrue, that were carried by such other shares of Series B
Preferred Stock.
(f) The holder of record of a share of Series B Preferred Stock at the
close of business on a Dividend Record Date with respect to the payment of
dividends on the shares of Series B Preferred Stock will be entitled to receive
such dividends with respect to such share of Series B Preferred Stock on the
corresponding Dividend Payment Date, notwithstanding the conversion of such
share after such Dividend Record Date and prior to such Dividend Payment Date.
8. Voting Rights. a) The holders of record of shares of Series B
Preferred Stock shall not be entitled to any voting rights except as hereinafter
provided in this Section 8 or as otherwise provided by law.
(b) The holders of record of shares of Series B-1 Preferred Stock shall
be entitled to vote on all matters that the holders of the Company's Common
Stock are entitled to vote upon.
(c) In addition to the voting rights set forth above, the approval of the
holders of at least a majority of the then Outstanding shares of Series B
Preferred Stock voting or consenting, as the case may be, as one class, will be
required for the Company to:
(i) amend the Certificate of Incorporation, this Certificate of
Designation or the By-Laws so as to (A) affect adversely the rights, preferences
(including, without limitation, liquidation preferences, conversion price,
dividend rate and Optional Redemption provisions), privileges or voting rights
of holders of the shares of Series B Preferred Stock, or (B) increase or
decrease the number of authorized shares of Series B Preferred Stock;
(ii) in a single transaction or series of related transactions,
consolidate or merge with or into, or sell, assign, transfer, lease, convey or
otherwise dispose of all or substantially all of its assets to, any Person or
adopt a plan of liquidation, except as expressly provided in Section 14 hereof;
(iii) enter into, or permit any of its subsidiaries to enter into, any
agreement that would impose material restrictions on the Company's ability to
honor the exercise of any rights of the holders of the Series B Preferred Stock;
(iv) authorize or create, modify the terms of or increase or decrease the
authorized amount of any Senior Shares or Parity Shares;
(v) issue any shares of Series B Preferred Stock other than (a) pursuant
to the terms of the Purchase Agreement as in effect on the Closing Date, or (b)
shares of the Series B-1 Preferred Stock upon the conversion of shares of the
Series B-2 Preferred Stock and vice versa; or
(vi) after March 9, 2005 (the "Fifth Anniversary Date"), commence or
effect any tender or exchange offer made by the Company or any Subsidiary for
all or any portion of the Common Stock.
In addition to the voting rights set forth above, the approval of the holders of
at least a majority of the then Outstanding shares of Series B-1 Preferred
Stock, other than the Relinquishing Holders, voting or consenting, as the case
may be, as one class, will be required for the Company to, on or prior to the
Fifth Anniversary Date, commence or effect any tender or exchange offer made by
the Company or any Subsidiary for all or any portion of the Common Stock. No
amendment shall be made to this Certificate of Designations without making the
same amendment to the corresponding provision (if any) to the Series B-2
Certificate of Designations (and vice versa).
(d) For so long as members of the HMTF Group own any combination of the
shares of Series B Preferred Stock issued to members of the HMTF Group on the
Closing Date under the Purchase Agreement (the "HMTF Issued Series B Preferred
Shares") and shares of Common Stock issued upon conversion of HMTF Issued Series
B Preferred Shares that, taken together, would represent (if all HMTF Issued
Series B Preferred Shares were converted) an amount of Common Stock issuable
upon conversion of 50% or more of the HMTF Issued Series B Preferred Shares, the
HMTF Holders, voting as a single class, shall be entitled to elect one director
to serve on the Board of Directors at any annual meeting of stockholders or
special meeting held in place thereof, or at a special meeting of the HMTF
Holders called as hereinafter provided. If directors of the Company are
generally entitled to three year terms and a director has been elected by the
HMTF Holders pursuant to this paragraph, no subsequent election need be held
pursuant to this paragraph prior to the expiration of such three year term
unless a vacancy shall exist in the office of a director elected by the HMTF
Holders. At any time after voting power to elect such director shall have become
vested and be continuing in the HMTF Holders pursuant to this paragraph, or if a
vacancy shall exist in the office of a director elected by the HMTF Holders at a
time when the HMTF Holders are entitled to elect a director pursuant to this
paragraph, a proper officer of the Company may, and upon the written request of
the holders of record of at least twenty-five percent (25%) of the HMTF Issued
Series B Preferred Shares then Outstanding held by the HMTF Holders addressed to
the Secretary of the Company shall, call a special meeting of the HMTF Holders
for the purpose of electing the director that such holders are entitled to
elect. If such meeting shall not be called by a proper officer of the Company
within twenty (20) days after personal service of said written request upon the
Secretary of the Company, or within twenty (20) days after mailing the same
within the United States by certified mail, addressed to the Secretary of the
Company at its principal executive offices, then the holders of at least
twenty-five percent (25%) of the HMTF Issued Series B Preferred Shares then
Outstanding held by the HMTF Holders may designate in writing one of their
number to call such meeting at the expense of the Company, and such meeting may
be called by the person so designated upon the notice required for the annual
meeting of stockholders of the Company and shall be held at the place for
holding the annual meetings of stockholders. As used herein, (i) "HMTF Group"
means Hicks, Muse, Tate & Furst Incorporated, a Texas corporation, and its
Affiliates and their respective officers, directors, partners, members,
stockholders and employees (and members of their respective families and trusts
for the primary benefit of such family members) and HMTF Bridge Viatel, LLC,
HMEU Viatel I-EQ Coinvestors, LLC, HMEU Viatel I-SBS Coinvestors, LLC, HM Viatel
PG Europe, LLC, HMEU Viatel Qualified Fund, LLC, HMEU Viatel Private Fund, LLC,
and their respective Affiliates and (ii) "HMTF Holders" means members of the
HMTF Group that are the holders of all or a portion of the HMTF Issued Series B
Preferred Shares or the Common Stock into which such HMTF Issued Series B
Preferred Shares are converted. Any action permitted or required to be taken by
the HMTF Holders pursuant to this Section 8(d) may be taken (1) at any annual or
special meeting of stockholders or at a special meeting of the HMTF Holders, or
(2) without a meeting, without prior notice, and without a vote if a consent or
consents in writing, setting forth the action so taken, shall be signed by the
HMTF Holders having not less than the minimum number of votes that would be
necessary to authorize or take such action at a meeting at which all shares held
by the HMTF Holders entitled to vote thereon were present and voted and shall be
delivered to the Company by delivery to its address listed in Section 8.2 of the
Purchase Agreement.
(e) In exercising the voting rights set forth in Section 8(b), each share
of Series B Preferred Stock shall be entitled to vote on an as-converted basis
with the holders of the Company's Common Stock. In exercising the voting rights
set forth in Section 8 (d), each HMTF Issued Series B Preferred Share shall be
entitled to vote on an as-converted basis with the other HMTF Issued Series B
Preferred Shares and shares of Common Stock held by the HMTF Holders and into
which HMTF Issued Series B Preferred Shares have been converted, voting as a
single class. In exercising the other voting rights set forth in this Section 8
each share of Series B Preferred Stock entitled to vote shall have one vote per
share, except that when any other series of preferred stock shall have the right
to vote with the Series B Preferred Stock as a single class on any matter not
specified in this Section 8, then the Series B Preferred Stock and such other
series of preferred stock shall have with respect to such matters one vote per
$1,000 of the aggregate liquidation preference of all shares of Series B
Preferred Stock and all shares of such other series of preferred stock. Except
as otherwise required by applicable law or as set forth herein, the shares of
Series B Preferred Stock shall not have any relative, participating, optional or
other special voting rights and powers and the consent of the holders thereof
shall not be required for the taking of any corporate action.
(f) Chase Capital Partners and its Affiliates that are holders of all or
a portion of the Series B-2 Preferred Stock issued to any such entities on the
Closing Date shall have the right to designate an observer who shall have the
right to attend meetings of the Company's Board of Directors and such observer
shall be entitled to receive notice of each such meeting at the same time as
such directors. In addition, to the extent that the Company's Board of
Directors is to take action by unanimous written consent, the observer shall be
entitled to receive a copy of any such written consent when it is forwarded to
the directors for their execution. For purposes of this Section 8(f), Series
B-2 Preferred Stock issued on the Closing Date shall be deemed to include Series
B-1 Preferred Stock or Series C Preferred Stock issued on any date after the
Closing Date upon conversion of such Series B-2 Preferred Stock, as well as
Common Stock issued on any date after the Closing Date upon conversion of such
Series B-1 Preferred Stock or Series C Preferred Stock.
9. Ranking. a) The shares of Series B Preferred Stock will, with
respect to dividend rights and rights on liquidation, winding-up and
dissolution, rank (i) senior to all shares of Common Stock (whether issued in
one or more classes), the Series A Junior Participating Preferred Stock of the
Company and to each other class of capital stock or series of Preferred Stock of
the Company, the terms of which do not expressly provide that it ranks senior to
or on a parity with the shares of Series B Preferred Stock as to dividend rights
and rights on liquidation, winding-up and dissolution of the Company
(collectively referred to, together with all shares of Common Stock (whether
issued in one or more classes) of the Company, as "Junior Shares"); (ii) on a
parity with additional shares of Series B Preferred Stock issued by the Company
and each other class of capital stock or series of Preferred Stock of the
Company issued by the Company in compliance with Section 8 hereof, the terms of
which expressly provide that such class or series will rank on a parity with the
shares of Series B Preferred Stock as to dividend rights and rights on
liquidation, winding-up and dissolution of the Company (collectively referred to
as "Parity Shares"); and (iii) junior to each class of capital stock or series
of Preferred Stock of the Company issued by the Company in compliance with
Section 8 hereof, the terms of which expressly provide that such class or series
will rank senior to the shares of Series B Preferred Stock as to dividend rights
and rights upon liquidation, winding-up and dissolution of the Company
(collectively referred to as "Senior Shares").
(b) No dividend whatsoever shall be declared or paid upon, or any sum set
apart for the payment of dividends upon, any outstanding shares of Series B
Preferred Stock with respect to any dividend period unless all dividends for all
preceding dividend periods have been declared and paid, or declared and a
sufficient sum set apart for the payment of such dividends, upon all outstanding
Senior Shares.
(c) In the event of any liquidation, dissolution or winding-up of the
Company, whether voluntary or involuntary, the holders of the shares of Series B
Preferred Stock then Outstanding shall be entitled to receive, prior and in
preference to any distribution of any of the assets of the Company to the
holders of shares of Common Stock or Junior Shares by reason of their ownership
thereof, an amount equal to the greater of (i) the then effective Liquidation
Preference of their shares of Series B Preferred Stock, plus an amount equal to
all dividends accrued and unpaid thereon from the last Dividend Payment Date to
the date fixed for liquidation, dissolution or winding-up or (ii) the amount
such holders would receive if such holders converted, directly or indirectly in
accordance with their terms, their shares of Series B Preferred Stock into
Common Stock and/or Series C Preferred Stock immediately prior to such
liquidation, dissolution or winding up.
(d) If upon the occurrence of such event the assets of the Company shall
be insufficient to permit the payment to such holders of the full preferential
amount and all liquidating payments on all Parity Shares, the entire assets of
the Company legally available for distribution shall be distributed among the
holders of the shares of Series B Preferred Stock and the holders of all Parity
Shares ratably in accordance with the respective amounts that would be payable
on such shares of Series B Preferred Stock and any such Parity Shares if all
amounts payable thereon were paid in full. After payment of the full
preferential amount (and, if applicable, an amount equal to a pro rata dividend
to the holders of Outstanding shares of Series B Preferred Stock), such holders
shall not be entitled to any further participation in any distribution of assets
of the Company.
10. Redemption. The shares of Series B Preferred Stock may be
redeemed by the Company at any time commencing on or after the Fifth Anniversary
Date (or earlier, in accordance with the provisions of Section 13(d) if a Change
of Control Date shall have occurred, but only as to shares of Series B Preferred
Stock with respect to which the Remarketing Option has been elected), in whole
or from time to time in part, at the election of the Company (an "Optional
Redemption"), at a redemption price (the "Redemption Price") payable in cash
equal to 100% of the then effective Liquidation Preference (after giving effect
to the Special Payment, if applicable), plus accrued and unpaid dividends
thereon from the last Dividend Payment Date to the date of redemption (the
"Optional Redemption Date").
(b) Shares of Series B Preferred Stock (if not earlier redeemed or
converted) shall be mandatorily redeemed by the Company on February 28, 2015
(the "Mandatory Redemption Date"; provided, however, that if such date is not a
Business Day, then the Mandatory Redemption Date shall be the next Business
Day), at a Redemption Price per share in cash equal to the then effective
Liquidation Preference (after giving effect to the Special Payment, if
applicable), plus accrued and unpaid dividends thereon from the last Dividend
Payment Date to the Mandatory Redemption Date.
(c) In the event of a redemption or repurchase of fewer than all the
shares of Series B Preferred Stock, the shares of Series B Preferred Stock will
be chosen for redemption by the Registrar from the Outstanding shares of Series
B Preferred Stock not previously called for redemption, pro rata based on the
number of shares of Series B Preferred Stock held by each holder; provided, that
the Company may redeem (an "Odd-lot Redemption") all shares held by holders of
fewer than 100 shares of Series B Preferred Stock (or by holders that would hold
fewer than 100 shares of Series B Preferred Stock following such redemption)
prior to its redemption of other shares of Series B Preferred Stock; provided,
further, that the Company may not redeem a portion of any share without
redeeming the entire share. If fewer than all the shares of Series B Preferred
Stock represented by any share certificate are so to be redeemed, (i) the
Company shall issue a new certificate for the shares not redeemed and (ii) if
any shares represented thereby are converted before termination of the
conversion right with respect to such shares, such converted shares shall be
deemed (so far as may be) to be the shares represented by such share certificate
that was selected for redemption. Shares of Series B Preferred Stock that have
been converted during a selection of shares of Series B Preferred Stock to be
redeemed shall be treated by the Registrar as outstanding for the purpose of
such selection but not for the purpose of the payment of the Redemption Price.
(d) In the event the Company elects to effect an Optional Redemption, the
Company shall (i) make a public announcement of the redemption and (ii) give a
redemption notice (the "Redemption Notice") to the holders not fewer than 30
days nor more than 60 days before the redemption date (the "Redemption Date").
Whenever a Redemption Notice is required to be delivered to the holders, such
notice shall provide the information set forth below and be given by first class
mail, postage prepaid to each holder of shares of Series B Preferred Stock to be
redeemed, at such holder's address appearing in the Series B Preferred Share
Register. All Redemption Notices shall identify the shares of Series B Preferred
Stock to be redeemed (including CUSIP number) and shall state:
(i) the Redemption Date;
(ii) the applicable Redemption Price;
(iii) if fewer than all the outstanding shares of Series B Preferred
Stock are to be redeemed, the identification (and, in the case of partial
redemption, the certificate number, the total number of shares represented
thereby and the number of such shares being redeemed on the Redemption Date) of
the particular shares of Series B Preferred Stock to be redeemed;
(iv) that on the Redemption Date, the Redemption Price, together with all
accrued and unpaid dividends from the last Dividend Payment Date to the
Redemption Date, will become due and payable upon each such share of Series B
Preferred Stock to be redeemed and that dividends thereon will cease to accrue
on and after said date;
(v) the conversion price, the date on which the right to convert shares
of Series B Preferred Stock to be redeemed will terminate and the place or
places where such shares of Series B Preferred Stock may be surrendered for
conversion; and
(vi) the place or places where such shares of Series B Preferred Stock
are to be surrendered for payment of the Redemption Price and the other amounts
which are then payable.
The Redemption Notice shall be given by the Company or, at the Company's
request, by the Registrar in the name and at the expense of the Company;
provided that if the Company so requests, it shall provide the Registrar
-
adequate time, as reasonably determined by the Registrar, to deliver such
notices in a timely fashion.
(e) Prior to any Redemption Date, the Company shall deposit with the
Registrar or with a Paying Agent (or, if the Company is acting as its own Paying
Agent, segregate and hold in trust) an amount of consideration sufficient to pay
the Redemption Price of all the shares of Series B Preferred Stock that are to
be redeemed on that date plus all accrued and unpaid dividends thereon from the
last Dividend Payment Date to the Redemption Date. If any share of Series B
Preferred Stock called for redemption is converted, any consideration deposited
with the Registrar or with any Paying Agent or so segregated and held in trust
for the redemption of such share of Series B Preferred Stock shall be paid or
delivered to the Company upon Company Order or, if then held by the Company,
shall be discharged from such trust.
(f) Notice of redemption having been given as aforesaid, the shares of
Series B Preferred Stock so to be redeemed shall, on the Redemption Date, become
due and payable at the Redemption Price therein specified plus all accrued and
unpaid dividends thereon from the last Dividend Payment Date to the Redemption
Date, and from and after such date (unless the Company shall default in the
payment of the Redemption Price and accrued but unpaid dividends) dividends on
such shares of Series B Preferred Stock shall cease to accrue and such shares
shall cease to be convertible into shares of Common Stock. Upon surrender of any
such shares of Series B Preferred Stock for redemption in accordance with said
notice, such shares of Series B Preferred Stock shall be redeemed by the Company
at the applicable Redemption Price, together with all accrued and unpaid
dividends thereon from the last Dividend Payment Date to the Redemption Date. If
any share of Series B Preferred Stock called for redemption shall not be so paid
upon surrender thereof for redemption, the Redemption Price thereof, and all
accrued and unpaid dividends thereon from the last Dividend Payment Date to the
Redemption Date, shall, until paid, bear interest from the Redemption Date at
the dividend rate payable on the shares of Series B Preferred Stock and such
shares shall remain convertible.
(g) Any certificate that represents more than one share of Series B
Preferred Stock and is to be redeemed only in part shall be surrendered at any
office or agency of the Company designated for that purpose (with, if the
Company or the Registrar so requires, due endorsement by, or a written
instrument of transfer in form satisfactory to the Company and the Registrar
duly executed by, the holder thereof or his attorney duly authorized in
writing), and the Company shall execute, and the Registrar shall countersign and
deliver to the holder of such share of Series B Preferred Stock without service
charge, a new Series B Preferred Stock certificate or certificates, representing
any number of shares of Series B Preferred Stock as requested by such holder, in
aggregate amount equal to and in exchange for the number of shares not redeemed
and represented by the Series B Preferred Stock certificate so surrendered.
(h) If a share of Series B Preferred Stock is redeemed subsequent to a
Dividend Record Date with respect to any Dividend Payment Date and on or prior
to such Dividend Payment Date, then any accrued dividends payable on such
Dividend Payment Date will be paid to the person in whose name such share of
Series B Preferred Stock is registered at the close of business on such Dividend
Record Date.
11. Method of Payments. The Company may make any dividend payments in
cash with respect to any period after the Fifth Anniversary Date. Any dividends
not paid in cash on a current basis on the applicable Dividend Payment Date with
respect to all periods after the Fifth Anniversary Date, and all dividends with
respect to the periods prior to the Fifth Anniversary Date, shall not be paid in
cash but rather shall constitute Accumulated Dividends. Notwithstanding the
foregoing, the Company may make any dividend payments required to be paid
pursuant to Section 6(b) in cash. No payment may be made in respect of
Accumulated Dividends as dividends. Rather, Accumulated Dividends shall be
added to the Liquidation Preference. Dividends may not be paid by delivery of
shares of Series B Preferred Stock.
12. Conversion. a) Subject to and upon compliance with the provisions
of this Certificate of Designation, at the option of the holder thereof, any
share of Series B-1 Preferred Stock may be converted at any time into a number
of fully paid and nonassessable shares of Common Stock (calculated as to each
conversion to the nearest 1/100 of a share) equal to (i) the then effective
Liquidation Preference thereof plus accrued and unpaid dividends to the date of
conversion divided by (ii) the Conversion Price in effect at the time of
conversion. Such conversion right shall expire at the close of business on the
Business Day next preceding the Mandatory Redemption Date unless the Company
defaults on the payment due on redemption. In case a share of Series B-1
Preferred Stock is called for redemption, such conversion right in respect of
the share so called shall expire at the close of business on the Business Day
next preceding the Redemption Date, unless the Company defaults in making the
payment due upon redemption.
The "Conversion Price" shall be initially $46.25. The "Conversion Price"
shall be adjusted in certain instances as provided in Section 12(d) and Section
12(e) hereof.
(b) In order to exercise the conversion privilege, the holder of any
share of Series B-1 Preferred Stock to be converted shall surrender the
certificate for such share, duly endorsed or assigned to the Company or in
blank, at any office or agency of the Company maintained for that purpose,
accompanied by written notice to the Company at such office or agency that the
holder elects to convert such share or, if fewer than all the shares of Series
B-1 Preferred Stock represented by a single share certificate are to be
converted, the number of shares represented thereby to be converted.
Shares of Series B-1 Preferred Stock shall be deemed to have been converted
immediately prior to the close of business on the day of surrender of such
shares for conversion in accordance with the foregoing provisions, and at such
time the rights of the holders of such shares as holders shall cease, and the
person or persons entitled to receive the shares of Common Stock issuable upon
conversion shall be treated for all purposes as the record holder or holders of
such shares of Common Stock at such time. As promptly as practicable on or after
the conversion date, the Company shall issue and shall deliver at such office or
agency a certificate or certificates for the number of full shares of Common
Stock issuable upon conversion, together with payment in lieu of any fraction of
a share, as provided in Section 12(c).
In the case of any conversion of fewer than all the shares of Series B-1
Preferred Stock evidenced by a certificate, upon such conversion the Company
shall execute and the Registrar shall countersign and deliver to the holder
thereof, at the expense of the Company, a new certificate or certificates
representing the number of unconverted shares of Series B-1 Preferred Stock.
(c) No fractional shares of Common Stock shall be issued upon the
conversion of a share of Series B-1 Preferred Stock. If more than one share of
Series B-1 Preferred Stock shall be surrendered for conversion at one time by
the same holder, the number of full shares of Common Stock which shall be
issuable upon conversion thereof shall be computed on the basis of the aggregate
number of shares of Series B-1 Preferred Stock so surrendered. Instead of any
fractional shares of Common Stock which would otherwise be issuable upon
conversion of any share of Series B-1 Preferred Stock, the Company shall pay a
cash adjustment in respect of such fraction in an amount equal to the same
fraction of the closing price (as defined in Section 12(d)(vi)) per share of
Common Stock at the close of business on the Business Day prior to the day of
conversion.
(d) For purposes of this Section 12(d), all references to Common Stock shall
be deemed to include the shares of Common Stock into which the Series C
Preferred Stock is convertible. The Conversion Price shall be adjusted from
time to time by the Company as follows:
(i) If the Company shall hereafter pay a dividend or make a
distribution to all holders of the outstanding shares of Common Stock in shares
of Common Stock, the Conversion Price in effect at the opening of business on
the date following the date fixed for the determination of shareholders entitled
to receive such dividend or other distribution shall be reduced by multiplying
such Conversion Price by a fraction of which the numerator shall be the number
of shares of Common Stock outstanding at the close of business on the Common
Stock Record Date (as defined in Section 12(d)(vi)) fixed for such determination
and the denominator shall be the sum of such number of shares and the total
number of shares constituting such dividend or other distribution, such
reduction to become effective immediately after the opening of business on the
day following the Common Stock Record Date. If any dividend or distribution of
the type described in this Section 12(d)(i) is declared but not so paid or made,
the Conversion Price shall again be adjusted to the Conversion Price which would
then be in effect if such dividend or distribution had not been declared.
(ii) a) In case the Company shall issue or sell any Common Stock (other
than Common Stock issued (A) pursuant to the Company's existing or future stock
option plans or pursuant to any other existing or future Common Stock-related
director or employee compensation plan of the Company approved by the Board of
Directors, (B) pursuant to the Company's existing or future stock purchase plans
approved by the Board of Directors which permit Company employees to purchase
Common Stock at a purchase price that is not more than a 15% discount to the
Current Market Price, (C) as consideration for the acquisition of a business or
of assets, (D) in a firm commitment underwritten public offering when either (i)
the underwriting discount is 5% or less, or (ii) the offering price per share is
greater than the Conversion Price, (E) to the Company's joint venture partners
in exchange for interests in the relevant joint venture, (F) upon exercise or
conversion of any security the issuance of which caused an adjustment hereunder
or the issuance of which did not require adjustment hereunder or (G) upon
exercise or conversion of any of the Series B-1 Preferred Stock, the Series B-2
Preferred Stock, the Series C Preferred Stock or the Warrants (as defined in the
Purchase Agreement) in accordance with their respective terms) without
consideration or for a consideration per share less than the Current Market
Price on the date of such issuance, or shall issue securities convertible into
Common Stock having a conversion price per share less than the Current Market
Price at the date of issuance of such convertible security, the Conversion Price
to be in effect after such issuance or sale shall be determined by multiplying
the Conversion Price in effect immediately prior to such issuance or sale by a
fraction, (1) the numerator of which shall be the sum of (x) the number of
shares of Common Stock outstanding immediately prior to such issuance or sale
and (y) the number of shares of Common Stock which the aggregate consideration
receivable by the Company for the total number of additional shares of Common
Stock so issued or sold (or, in the case of convertible securities, issuable on
conversion) would purchase at the Current Market Price in effect immediately
prior to such issuance or sale and (2) the denominator of which shall be the sum
of the number of shares of Common Stock outstanding immediately prior to such
issuance or sale and the number of additional shares of Common Stock to be
issued or sold (or, in the case of convertible securities, issued on
conversion). In case any portion of the consideration to be received by the
Company shall be in a form other than cash, the fair market value of such
noncash consideration shall be utilized in the foregoing computation. Such fair
market value shall be determined in good faith by the Board of Directors.
(b) If the Company shall offer or issue options, rights or warrants to all
holders of its outstanding shares of Common Stock entitling them to subscribe
for or purchase shares of Common Stock at a price per share less than the
Current Market Price (as defined in Section 12(d)(vi)) on the Common Stock
Record Date fixed for the determination of shareholders entitled to receive such
rights or warrants, the Conversion Price shall be adjusted so that the same
shall equal the price determined by multiplying the Conversion Price in effect
at the opening of business on the date after such Common Stock Record Date by a
fraction of which the numerator shall be the number of shares of Common Stock
outstanding at the close of business on the Common Stock Record Date plus the
number of shares of Common Stock which the aggregate offering price of the total
number of shares of Common Stock subject to such options, rights or warrants
would purchase at such Current Market Price and of which the denominator shall
be the number of shares of Common Stock outstanding at the close of business on
the Common Stock Record Date plus the total number of additional shares of
Common Stock subject to such options, rights or warrants for subscription or
purchase. Such adjustment shall become effective immediately after the opening
of business on the day following the Common Stock Record Date fixed for
determination of shareholders entitled to purchase or receive such options,
rights or warrants. To the extent that shares of Common Stock are not delivered
pursuant to such options, rights or warrants, upon the expiration or termination
of such options, rights or warrants the Conversion Price shall again be adjusted
to be the Conversion Price which would then be in effect had the adjustments
made upon the issuance of such options, rights or warrants been made on the
basis of delivery of only the number of shares of Common Stock actually
delivered. If such options, rights or warrants are not so issued, the Conversion
Price shall again be adjusted to be the Conversion Price which would then be in
effect if such date fixed for the determination of shareholders entitled to
receive such options, rights or warrants had not been fixed. In determining
whether any options, rights or warrants entitle the holders to subscribe for or
purchase shares of Common Stock at less than such Current Market Price, and in
determining the aggregate offering price of such shares of Common Stock, there
shall be taken into account (x) any consideration received for such options,
rights or warrants, with the value of such consideration and the amount of such
exercise or subscription price, if other than cash, to be determined by the
Board of Directors and (y) the amount of any exercise price or subscription
price required to be paid upon exercise of such options, warrants or rights.
(iii) If the outstanding shares of Common Stock shall be subdivided
into a greater number of shares of Common Stock, the Conversion Price in effect
at the opening of business on the day following the day upon which such
subdivision becomes effective shall be proportionately reduced, and, conversely,
if the outstanding shares of Common Stock shall be combined into a smaller
number of shares of Common Stock, the Conversion Price in effect at the opening
of business on the day following the day upon which such combination becomes
effective shall be proportionately increased, such reduction or increase, as the
case may be, to become effective immediately after the opening of business on
the day following the day upon which such subdivision or combination becomes
effective.
(iv) If the Company shall, by dividend or otherwise, distribute to all
holders of its shares of Common Stock any class of capital stock of the Company
(other than any dividends or distributions to which Section 12(d)(i) applies) or
evidences of its indebtedness, cash or other assets (including securities, but
excluding any rights or warrants of a type referred to in Section 12(d)(ii)(b)
and dividends and distributions paid exclusively in cash and excluding any
capital stock, evidences of indebtedness, cash or assets distributed upon a
merger or consolidation to which Section 12(e) applies) (the foregoing
hereinafter in this Section 12(d)(iv) called the "Distributed Securities"),
then, in each such case, the Conversion Price shall be reduced so that the same
shall be equal to the price determined by multiplying the Conversion Price in
effect immediately prior to the close of business on the Common Stock Record
Date (as defined in Section 12(d)(vi)) with respect to such distribution by a
fraction of which the numerator shall be the Current Market Price (determined as
provided in Section 12(d)(vi)) on such date less the fair market value (as
determined by the Board of Directors, whose good faith determination shall be
conclusive and described in a resolution of the Board of Directors) on such date
of the portion of the Distributed Securities so distributed applicable to one
share of Common Stock and the denominator shall be such Current Market Price,
such reduction to become effective immediately prior to the opening of business
on the day following the Common Stock Record Date; provided, however, that, in
the event the then fair market value (as so determined) of the portion of the
Distributed Securities so distributed applicable to one share of Common Stock is
equal to or greater than the Current Market Price on the Common Stock Record
Date, in lieu of the foregoing adjustment, adequate provision shall be made so
that each holder of shares of Series B Preferred Stock shall have the right to
receive upon conversion of a share of Series B Preferred Stock (or any portion
thereof) the amount of Distributed Securities such holder would have received
had such holder converted such share of Series B Preferred Stock (or portion
thereof) directly or indirectly into Common Stock immediately prior to such
Common Stock Record Date. If such dividend or distribution is not so paid or
made, the Conversion Price shall again be adjusted to be the Conversion Price
which would then be in effect if such dividend or distribution had not been
declared. If the Board of Directors determines the fair market value of any
distribution for purposes of this Section 12(d)(iv) by reference to the actual
or when issued trading market for any securities constituting all or part of
such distribution, it must in doing so consider the prices in such market over
the same period used in computing the Current Market Price pursuant to Section
12(d)(vi) to the extent possible.
Options, rights or warrants distributed by the Company to all holders of
shares of Common Stock entitling the holders thereof to subscribe for or
purchase shares of the Company's capital stock (either initially or under
certain circumstances), which options, rights or warrants, until the occurrence
of a specified event or events ("Dilution Trigger Event"): (A) are deemed to be
transferred with such shares of Common Stock; (B) are not exercisable; and (C)
are also issued in respect of future issuances of shares of Common Stock, shall
be deemed not to have been distributed for purposes of this Section 12(d)(iv)
(and no adjustment to the Conversion Price under this Section 12(d)(iv) shall be
required) until the occurrence of the earliest Dilution Trigger Event, whereupon
such options, rights and warrants shall be deemed to have been distributed and
an appropriate adjustment to the Conversion Price under this Section 12(d)(iv)
shall be made. If any such options, rights or warrants, including any such
existing options, rights or warrants distributed prior to the first issuance of
shares of Series B-1 Preferred Stock, are subject to subsequent events, upon the
occurrence of each of which such options, rights or warrants shall become
exercisable to purchase different securities, evidences of indebtedness or other
assets, then the occurrence of each such event shall be deemed to be such date
of issuance and record date with respect to new options, rights or warrants (and
a termination or expiration of the existing options, rights or warrants, without
exercise by the holder thereof). In addition, in the event of any distribution
(or deemed distribution) of options, rights or warrants, or any Dilution Trigger
Event with respect thereto, that was counted for purposes of calculating a
distribution amount for which an adjustment to the Conversion Price under this
Section 12(d) was made, (1) in the case of any such options, rights or warrants
which shall all have been redeemed or repurchased without exercise by any
holders thereof, the Conversion Price shall be readjusted upon such final
redemption or repurchase to give effect to such distribution or Dilution Trigger
Event, as the case may be, as though it were a cash distribution, equal to the
per share redemption or repurchase price received by a holder or holders of
shares of Common Stock with respect to such options, rights or warrants
(assuming such holder had retained such options, rights or warrants), made to
all holders of shares of Common Stock as of the date of such redemption or
repurchase, and (2) in the case of such options, rights or warrants which shall
have expired or been terminated without exercise by any holders thereof, the
Conversion Price (as adjusted pursuant to this paragraph) shall be readjusted to
be the Conversion Price which would have been in effect if such options, rights
or warrants had not been issued.
Notwithstanding any other provision of this Section 12(d)(iv) to the contrary,
options, rights, warrants, evidences of indebtedness, other securities, cash or
other assets (including, without limitation, any rights distributed pursuant to
any shareholder rights plan) shall be deemed not to have been distributed for
purposes of this Section 12(d)(iv) if the Company makes proper provision so that
each holder of shares of Series B-1 Preferred Stock who converts a share of
Series B-1 Preferred Stock (or any portion thereof) after the date fixed for
determination of shareholders entitled to receive any such distribution shall be
entitled to receive upon such conversion, in addition to the shares of Common
Stock issuable upon such conversion, the amount and kind of such distributions
that such holder would have been entitled to receive if such holder had,
immediately prior to such determination date, converted such share of Series B-1
Preferred Stock into Common Stock.
For purposes of this Section 12(d)(iv) and Sections 12(d)(i) and (ii), any
dividend or distribution to which this Section 12(d)(iv) is applicable that also
includes shares of Common Stock, or options, rights or warrants to subscribe for
or purchase shares of Common Stock to which Section 12(d)(ii) applies (or both),
shall be deemed instead to be (A) a dividend or distribution of the evidences of
indebtedness, assets, shares of capital stock, rights or warrants other than
such shares of Common Stock or options, rights or warrants to which Section
12(d)(ii) applies (and any Conversion Price reduction required by this Section
12(d)(iv) with respect to such dividend or distribution shall then be made)
immediately followed by (B) a dividend or distribution of such shares of Common
Stock or such options, rights or warrants (and any further Conversion Price
reduction required by Sections 12(d)(i) or 12(d)(ii) with respect to such
dividend or distribution shall then be made), except that (1) the Common Stock
Record Date of such dividend or distribution shall be substituted as "the date
fixed for the determination of stockholders entitled to receive such dividend or
other distribution", "the Common Stock Record Date fixed for such determination"
and "the Common Stock Record Date" within the meaning of Section 12(d)(i) and as
"the date fixed for the determination of shareholders entitled to receive such
rights or warrants", "the Common Stock Record Date fixed for the determination
of the share holders entitled to receive such rights or warrants" and "such
Common Stock Record Date" for purposes of Section 12(d)(ii), and (2) any shares
of Common Stock included in such dividend or distribution shall not be deemed
"outstanding at the close of business on the date fixed for such determination"
for the purposes of Section 12(d)(i).
(v) If a tender offer made by the Company or any of its subsidiaries
for all or any portion of the Common Stock expires and such tender offer (as
amended upon the expiration thereof) requires the payment to shareholders (based
on the acceptance (up to any maximum specified in the terms of the tender offer)
of Purchased Shares) of an aggregate consideration having a fair market value
(as determined by the Board of Directors, whose good faith determination shall
be conclusive and described in a resolution of the Board of Directors) that,
combined together with the aggregate of the cash plus the fair market value (as
determined by the Board of Directors, whose good faith determination shall be
conclusive and described in a resolution of the Board of Directors), as of the
expiration of such tender offer, of consideration payable in respect of any
other tender offers, by the Company or any of its subsidiaries for all or any
portion of the shares of Common Stock expiring within the 12 months preceding
the expiration of such tender offer and in respect of which no adjustment
pursuant to this Section 12(d)(v) has been made, exceeds 5% of the net income of
the Company reported for the 12 month period ending with the fiscal quarter next
preceding such payment (determined as of the last time (the "Expiration Time")
tenders could have been made pursuant to such tender offer (as it may be
amended)), then, and in each such case, immediately prior to the opening of
business on the day after the date of the Expiration Time, the Conversion Price
shall be adjusted so that the same shall equal the price determined by
multiplying the Conversion Price in effect immediately prior to the close of
business on the date of the Expiration Time by a fraction of which the numerator
shall be the number of shares of Common Stock outstanding (including any
tendered shares) at the Expiration Time multiplied by the Current Market Price
of the shares of Common Stock on the trading day next succeeding the Expiration
Time and the denominator shall be the sum of (x) the fair market value
(determined as aforesaid) of the aggregate consideration payable to shareholders
based on the acceptance (up to any maximum specified in the terms of the tender
offer) of all shares validly tendered and not withdrawn as of the Expiration
Time (the shares deemed so accepted, up to any such maximum, being referred to
as the "Purchased Shares") and (y) the product of the number of shares of Common
Stock outstanding (less any Purchased Shares) at the Expiration Time and the
Current Market Price of the shares of Common Stock on the trading day next
succeeding the Expiration Time, such reduction (if any) to become effective
immediately prior to the opening of business on the day following the Expiration
Time. If the Company is obligated to purchase shares pursuant to any such tender
offer, but the Company is permanently prevented by applicable law from effecting
any such purchases or all such purchases are rescinded, the Conversion Price
shall again be adjusted to be the Conversion Price which would then be in effect
if such tender offer had not been made. If the application of this Section
12(d)(v) to any tender offer would result in an increase in the Conversion
Price, no adjustment shall be made for such tender offer under this Section
12(d)(v).
(vi) For purposes of this Section 12(d), the following terms shall have the
meaning indicated:
"closing price" with respect to any securities on any day means the closing
sale price as of 4:00 p.m. Eastern Time on such day or any earlier final closing
on such day or, if no such sale takes place on such day, the average of the
reported high and low bid prices on such day, in each case on the Nasdaq
National Market, or the New York Stock Exchange, as applicable, or, if such
security is not listed or admitted to trading on such national market or
exchange, on the national stock exchange or Commission recognized trading market
in the United States on which such security is quoted or listed or admitted to
trading, or, if not quoted or listed or admitted to trading on any national
stock exchange or Commission recognized trading market in the United States, the
average of the high and low bid prices of such security on the over-the-counter
market on the day in question as reported by the National Quotation Bureau
Incorporated or a similar generally accepted reporting service in the United
States, or, if not so available, in such manner as furnished by any New York
Stock Exchange member firm selected from time to time by the Board of Directors
for that purpose, or a price determined in good faith by the Board of Directors,
whose determination shall be conclusive and described in a resolution of the
Board of Directors.
"Common Stock Record Date" means, with respect to any dividend, distribution or
other transaction or event in which the holders of Common Stock have the right
to receive any cash, securities or other property or in which the Common Stock
(or other applicable security) is exchanged for or converted into any
combination of cash, securities or other property, the date fixed for
determination of shareholders entitled to receive such cash, securities or other
property (whether such date is fixed by the Board of Directors or by statute,
contract or otherwise).
"Current Market Price" means the average of the daily closing prices per share
of Common Stock for the 10 consecutive trading days immediately prior to the
date in question; provided, however, that (A) if the "ex" date (as hereinafter
defined) for any event (other than the issuance or distribution requiring such
computation) that requires an adjustment to the Conversion Price pursuant to
Section 12(d)(i), (ii), (iii), (iv), and (v) occurs during such 10 consecutive
trading days, the closing price for each trading day prior to the "ex" date for
such other event shall be adjusted by multiplying such closing price by the same
fraction by which the Conversion Price is so required to be adjusted as a result
of such other event, (B) if the "ex" date for any event (other than the issuance
or distribution requiring such computation) that requires an adjustment to the
Conversion Price pursuant to Section 12(d)(i), (ii), (iii), (iv), or (v) occurs
on or after the "ex" date for the issuance or distribution requiring such
computation and prior to the day in question, the closing price for each trading
day on and after the "ex" date for such other event shall be adjusted by
multiplying such closing price by the reciprocal of the fraction by which the
Conversion Price is so required to be adjusted as a result of such other event
and (C) if the "ex" date for the issuance or distribution requiring such
computation is prior to the day in question, after taking into account any
adjustment required pursuant to clause (A) or (B) of this proviso, the closing
price for each trading day on or after such "ex" date shall be adjusted by
adding thereto the amount of any cash and the fair market value (as determined
by the Board of Directors in a manner consistent with any good faith
determination of such value for purposes of Section 12(d)(iv) or (v), whose good
faith determination shall be conclusive and described in a resolution of the
Board of Directors) of the evidences of indebtedness, shares of capital stock or
assets being distributed applicable to one share of Common Stock as of the close
of business on the day before such "ex" date. For purposes of any computation
under Section 12(d)(v), the Current Market Price on any date shall be deemed to
be the average of the daily closing prices per share of Common Stock for such
day and the next two succeeding trading days; provided, however, that, if the
"ex" date for any event (other than the tender offer requiring such computation)
that requires an adjustment to the Conversion Price pursuant to Section
12(d)(i), (ii), (iii), (iv), or (v) occurs on or after the Expiration Time for
the tender or exchange offer requiring such computation and prior to the day in
question, the closing price for each trading day on and after the "ex" date for
such other event shall be adjusted by multiplying such closing price by the
reciprocal of the fraction by which the Conversion Price is so required to be
adjusted as a result of such other event. For purposes of this paragraph, the
term "ex" date (1) when used with respect to any issuance or distribution, means
the first date on which the shares of Common Stock trade regular way on the
relevant exchange or in the relevant market from which the closing price was
obtained without the right to receive such issuance or distribution, (2) when
used with respect to any subdivision or combination of shares of Common Stock,
means the first date on which the shares of Common Stock trade regular way on
such exchange or in such market after the time at which such subdivision or
combination becomes effective and (3) when used with respect to any tender or
exchange offer means the first date on which the shares of Common Stock trade
regular way on such exchange or in such market after the Expiration Time of such
offer. Notwithstanding the foregoing, whenever successive adjustments to the
Conversion Price are called for pursuant to this Section 12(d), such adjustments
shall be made to the Current Market Price as may be necessary or appropriate to
effectuate the intent of this Section 12(d) and to avoid unjust or inequitable
results, as determined in good faith by the Board of Directors.
"fair market value" means the amount which a willing buyer would pay a willing
seller in an arm's-length transaction.
(vii) No adjustment in the Conversion Price shall be required unless
such adjustment would require an increase or decrease of at least 1% in such
price; provided, however, that any adjustments which by reason of this Section
12(d)(vii) are not required to be made shall be carried forward and taken into
account in any subsequent adjustment. All calculations under this Section 12
shall be made by the Company and shall be made to the nearest cent. No
adjustment need be made for a change in the par value or no par value of the
Common Stock.
(viii) Whenever the Conversion Price is adjusted as herein provided, the
Company shall promptly file with the Registrar an Officers' Certificate setting
forth the Conversion Price after such adjustment and setting forth a brief
statement of the facts requiring such adjustment. Promptly after delivery of
such certificate, the Company shall prepare a notice of such adjustment of the
Conversion Price setting forth the adjusted Conversion Price and the date on
which each adjustment becomes effective and shall mail such notice of such
adjustment of the Conversion Price to each holder of shares of Series B-1
Preferred Stock at such holder's last address appearing on the register of
holders maintained for that purpose within 20 days of the effective date of such
adjustment. Failure to deliver such notice shall not affect the legality or
validity of any such adjustment.
(ix) In any case in which this Section 12(d) provides that an adjustment
shall become effective immediately after a Common Stock Record Date for an
event, the Company may defer until the occurrence of such event issuing to the
holder of any share of Series B-1 Preferred Stock converted after such Common
Stock Record Date and before the occurrence of such event the additional shares
of Common Stock issuable upon such conversion by reason of the adjustment
required by such event over and above the shares of Common Stock issuable upon
such conversion before giving effect to such adjustment.
(x) For purposes of this Section 12(d), the number of shares of Common Stock
at any time outstanding shall not include shares held in the treasury of the
Company. The Company shall not pay any dividend or make any distribution on
shares of Common Stock held in the treasury of the Company.
(e) Subject to Section 13 hereof, in case of any consolidation of the
Company with, or merger of the Company into, any other Person, or in case of any
merger of another Person into the Company (other than a merger that does not
result in any reclassification, conversion, exchange or cancellation of
outstanding shares of Common Stock of the Company), or in case of any sale,
conveyance or transfer of all or substantially all the assets of the Company,
the holder of each share of Series B-1 Preferred Stock shall have the right
thereafter, during the period such share of Series B-1 Preferred Stock shall be
convertible as specified in Section 12(a), to convert such share of Series B-1
Preferred Stock into the kind and amount of securities, cash and other property
receivable upon such consolidation, merger, conveyance or transfer by a holder
of the number of shares of shares of Common Stock of the Company into which such
share of Series B-1 Preferred Stock might have been converted immediately prior
to such consolidation, merger, conveyance or transfer, assuming such holder of
shares of Common Stock of the Company failed to exercise his rights of election,
if any, as to the kind or amount of securities, cash and other property
receivable upon such consolidation, merger, conveyance or transfer (provided
that, if the kind or amount of securities, cash and other property receivable
upon such consolidation, merger, conveyance or transfer is not the same for each
share of Common Stock of the Company in respect of which such rights of election
shall not have been exercised ("nonelecting share"), then for the purpose of
this Section 12 the kind and amount of securities, cash and other property
receivable upon such consolidation, merger, conveyance or transfer by each
nonelecting share shall be deemed to be the kind and amount so receivable per
share by a plurality of the nonelecting shares). Such securities shall provide
for adjustments which, for events subsequent to the effective date of the
triggering event, shall be as nearly equivalent as may be practicable to the
adjustments provided for in this Section 12. The above provisions of this
Section 12 shall similarly apply to successive consolidations, mergers,
conveyances or transfers.
(f) In case:
(i) the Company shall declare a dividend (or any other distribution) on
its Common Stock and/or Series C Preferred Stock payable otherwise than in cash
out of its earned surplus; or
(ii) the Company shall authorize the granting to all holders of its shares
of Common Stock and/or Series C Preferred Stock of rights or warrants to
subscribe for or purchase any shares of capital stock of any class or of any
other rights; or
(iii) of any reclassification of the Common Stock and/or Series C Preferred
Stock (other than a subdivision or combination of the Company's outstanding
shares of Common Stock and/or Series C Preferred Stock), or of any consolidation
or merger to which the Company is a party and for which approval of any
shareholders of the Company is required, or the sale, conveyance or transfer of
all or substantially all the assets of the Company; or
(iv) of the voluntary or involuntary dissolution, liquidation or winding-up
of the Company;
then the Company shall cause to be filed with the Registrar and at each office
or agency maintained for the purpose of conversion of shares of Series B-1
Preferred Stock, and shall cause to be mailed to all holders at their last
addresses as they shall appear in the shares of Series B-1 Preferred Stock
Register, at least 20 Business Days (or 10 Business Days in any case specified
in clause (i) or (ii) above) prior to the applicable date hereinafter specified,
a notice stating (x) the date on which a record is to be taken for the purpose
of such dividend, distribution, rights or warrants, or, if a record is not to be
taken, the date as of which the holders of shares of Common Stock and/or Series
C Preferred Stock of record to be entitled to such dividend, distribution,
rights or warrants are to be determined or (y) the date on which such
reclassification, consolidation, merger, sale, transfer, dissolution,
liquidation or winding-up is expected to become effective, and the date as of
which it is expected that holders of shares of Common Stock and/or Series C
Preferred Stock of record shall be entitled to exchange their shares of Common
Stock and/or Series C Preferred Stock for securities, cash or other property
deliverable upon such reclassification, consolidation, merger, sale, transfer,
dissolution, liquidation or winding-up. Failure to give the notice required by
this Section 12(f) or any defect therein shall not affect the legality or
validity of any dividend, distribution, right, warrant, reclassification,
consolidation, merger, sale, transfer, dissolution, liquidation or winding-up,
or the vote upon any such action.
(g) The Company shall at all times reserve and keep available, free
from preemptive rights, out of its authorized but unissued shares of Common
Stock, for the purpose of effecting the conversion of shares of Series B-1
Preferred Stock, the full number of shares of Common Stock then issuable upon
the conversion of all outstanding shares of Series B-1 Preferred Stock.
(h) The Company will pay any and all taxes that may be payable in respect of
the issue or delivery of shares of Common Stock on conversion of shares of
Series B-1 Preferred Stock pursuant hereto. The Company shall not, however, be
required to pay any tax which may be payable in respect of any transfer involved
in the issue and delivery of shares of Common Stock in a name other than that of
the holder of the share of Series B-1 Preferred Stock or shares of Series B-1
Preferred Stock to be converted, and no such issue or delivery shall be made
unless and until the Person requesting such issue has paid to the Company the
amount of any such tax, or has established to the satisfaction of the Company
that such tax has been paid or is not payable.
(i) Conversion to Other Series B Preferred Stock.
(i) Conversion of Series B-1 Preferred Stock. Subject to and upon
compliance with the provisions of this Section 12(i)(i), any Regulated
Stockholder (defined below) shall be entitled to convert, at any time and from
time to time, any or all of the shares of Series B-1 Preferred Stock held by
such Regulated Stockholder into the same number of shares of Series B-2
Preferred Stock.
(ii) Conversion of Series B-2 Preferred Stock. Subject to and upon
compliance with the provisions of this Section 12(i)(ii), each record holder of
Series B-2 Preferred Stock shall be entitled at any time and from time to time
in such holder's sole discretion and at such holder's option, to convert any or
all of the shares of such holder's Series B-2 Preferred Stock into the same
number of shares of Series B-1 Preferred Stock (and, if such holder so elects,
simultaneously upon issuance of such shares of Series B-1 Preferred Stock to
convert any or all of such shares of Series B-1 Preferred Stock to shares of
Common Stock, and in accordance with this Certificate of Designations, as if
such holder of Series B-2 Preferred Stock were a holder of Series B-1 Preferred
Stock when making such election); provided, however, that Series B-2 Preferred
Stock held by a particular Regulated Stockholder may not be converted into
Series B-1 Preferred Stock to the extent that immediately prior thereto, or as a
result of such conversion, the number of shares of Series B-1 Preferred Stock
held by such Regulated Stockholder would exceed the number of shares of Series
B-1 Preferred Stock which such Regulated Stockholder reasonably determines it
and its Affiliates may own, control or have the power to vote under any law,
regulation, rule or other requirement of any governmental authority at the time
applicable to such Regulated Stockholder or its Affiliates. Each Regulated
Stockholder may provide for further restrictions upon the conversion of any
shares of Series B-2 Preferred Stock by providing the Company with signed,
written instructions specifying such additional restrictions and legending such
shares as to the existence of such restrictions.
(iii) Conversion Procedure. Each conversion of shares of Series B Preferred
Stock into shares of another class of Series B Preferred Stock shall be effected
by the surrender of the certificate or certificates representing the shares to
be converted (the "Converting Shares") at the principal office of the Company
(or such other office or agency of the Company as the Company may designate by
written notice to the holders of Series B Preferred Stock) at any time during
its usual business hours, together with written notice by the holder of such
Converting Shares, stating that such holder desires to convert the Converting
Shares, or a stated number of the shares represented by such certificate or
certificates, into an equal number of shares of the class into which such shares
may be converted (the "Converted Shares"). Such notice shall also state the
name or names (with addresses) and denominations in which the certificate or
certificates for Converted Shares are to be issued and shall include
instructions for the delivery thereof. The Company shall promptly notify each
Regulated Stockholder of its receipt of such notice. Promptly after such
surrender and the receipt of such written notice, the Company will issue and
deliver in accordance with the surrendering holder's instructions the
certificate or certificates evidencing the Converted Shares issuable upon such
conversion, and the Company will deliver to the converting holder a certificate
(which shall contain such legends as were set forth on the surrendered
certificate or certificates) representing any shares which were represented by
the certificate or certificates that were delivered to the Company in connection
with such conversion, but which were not converted. Such conversion, to the
extent permitted by law, shall be deemed to have been effected as of the close
of business on the date on which such certificate or certificates shall have
been surrendered and such notice shall have been received by the Company, and at
such time the rights of the holder of the Converting Shares as such holder shall
cease and the person or persons in whose name or names the certificate or
certificates for the Converted Shares are to be issued upon such conversion
shall be deemed to have become the holder or holders of record of the Converted
Shares. Upon issuance of shares in accordance with this Section 12(i)(iii),
such Converted Shares shall be deemed to be duly authorized, validly issued,
fully paid and non-assessable. The Company shall take all such actions as may
be necessary to assure that all such shares of Series B Preferred Stock may be
so issued without violation of any applicable law or governmental regulation or
any requirements of any domestic securities exchange upon which shares of Series
B Preferred Stock may be listed (except for official notice of issuance which
will be immediately transmitted by the Company upon issuance). The Company
shall not close its books against the transfer of shares of Series B Preferred
Stock in any manner which would interfere with the timely conversion of any
shares of Series B Preferred Stock.
A written request for conversion from any Regulated Stockholder to the Company
stating such Regulated Stockholder's reasonable belief that a conversion is
permissible under all applicable laws, rules and regulations shall be conclusive
and shall obligate the Company to effect such conversion in a timely manner.
(iv) Notice of Conversion to Other Regulated Stockholders. The Company
shall not convert or directly or indirectly redeem, purchase or otherwise
acquire any shares of Series B Preferred Stock or any other class of capital
stock of the Company or take any other action affecting the voting rights of
such shares, if such action will increase the percentage of any class of
outstanding voting securities owned or controlled by any Regulated Stockholder
(other than any such stockholder which requested that the Company take such
action, or which otherwise waives in writing its rights under this Section
12(i)(iv)), unless the Company simultaneously with taking such action gives
written notice that it is taking such action to each Regulated Stockholder.
(j) Miscellaneous.
(i) Stock Splits; Adjustments. If the Company shall in any manner
subdivide (by stock split, stock dividend or otherwise) or combine (by reverse
stock split or otherwise) the outstanding shares of the Series B-1 Preferred
Stock or the Series B-2 Preferred Stock then the outstanding shares of each
other series of Series B Preferred Stock shall be subdivided or combined, as the
case may be, to the same extent, share and share alike, and effective provision
shall be made for the protection of the conversion rights hereunder.
(ii) Preemptive Right with respect to Certain Issuances. In case the
Company shall issue or sell any Common Stock or convertible Junior Shares (other
than Common Stock issued (A) pursuant to the Company's existing or future stock
option plans or pursuant to any other existing or future Common Stock-related
director or employee compensation plan of the Company approved by the Board of
Directors, (B) other than pursuant to the Company's existing or future stock
purchase plans approved by the Board of Directors which permit the Company's
employees to purchase Common Stock at not more than a 15% discount to the
Current Market Price, (C) as consideration for the acquisition of a business or
of assets, (D) in a firm commitment underwritten public offering when either (i)
the underwriting discount is 5% or less, or (ii) the offering price per share
is greater than the Conversion Price, (E) to the Company's unaffiliated joint
venture partners in exchange for interests in the relevant joint venture, (F)
upon exercise or conversion of any security, the issuance of which caused an
adjustment hereunder or the issuance of which did not require adjustment
hereunder or (G) upon exercise or conversion of any of the Series B-1 Preferred
Stock, the Series B-2 Preferred Stock, the Series C Preferred Stock or the
Warrants (as defined in the Purchase Agreement) in accordance with their
respective terms) for a consideration per share less than the Conversion Price
then in effect but equal to or greater than the Current Market Price at the date
of issuance of such Common Stock or convertible Junior Shares, the holders of
the Series B Preferred Stock shall be entitled if they so elect to purchase such
number of the shares of the Common Stock or convertible Junior Shares (or, in
the case of a Regulated Holder, upon such Regulated Holder's request, nonvoting
securities (x) identical in all respects, other than voting, to any such voting
securities and (y) convertible into voting securities in a manner consistent
with the convertibility of Series B-2 Preferred Stock into voting securities of
the Company), being issued as will permit such holders to maintain their
proportional ownership interest in the Company after giving effect to such
issuance.
The Company shall give twenty days prior written notice to the holders of
the Series B Preferred Stock of its intention to issue or sell any Common Stock
or Junior Shares that would give rise to preemptive rights pursuant to this
Section 12(j)(ii). Within ten days after receipt of such notice, the holders of
the Series B Preferred Stock shall notify the Company whether or not they intend
(without commitment) to purchase such shares.
(iii) No Charge. The issuance of certificates for shares of any class
of Series B Preferred Stock (upon conversion of shares of any other series of
Series B Preferred Stock or otherwise) shall be made without charge to the
holders of such shares for any issuance tax in respect thereof or other cost
incurred by the Company in connection with such conversion and/or the issuance
of shares of Series B Preferred Stock; provided, however, that the Company shall
not be required to pay any tax which may be payable in respect of any transfer
involved in the issuance and delivery of any certificate in a name other than
that of the holder of the Series B Preferred Stock converted.
13. Change of Control. (a) If a Change of Control shall have occurred
(the time and date of such occurrence being a "Change of Control Date"), the
Company shall cause to be filed with the Registrar and at each office or agency
maintained for the purpose of conversion of shares of Series B Preferred Stock,
and shall cause to be mailed to all holders at their last addresses as they
shall appear in the Series B Preferred Stock Register, in any case within 10
days after the Change of Control Date, a notice stating (1) the Change of
Control Date, (2) the fact that (if the Change of Control Date is prior to the
Fifth Anniversary Date) the holders shall receive the Special Payment (as
defined below) as a result of such Change of Control, (3) the fact that holders
shall have the right to either (a) continue to hold their shares of Series B
Preferred Stock (or the shares of preferred stock issued in respect thereof
pursuant to Section 14) (the "Hold Option") or (b) in the case of shares of
Series B-1 Preferred Stock, convert such shares (after taking into account the
Special Payment) in accordance with Section 12 or (c) elect the Remarketing
Option (as defined below), (4) the relevant circumstances and facts regarding
such Change of Control and (5) the instructions that such holder must follow in
order to exercise the rights identified above. As of the Change of Control Date
(if the Change of Control Date occurs prior to the Fifth Anniversary Date), the
holders of the Series B Preferred Stock shall receive the Special Payment,
pursuant to which the Liquidation Preference of each share of Series B Preferred
Stock shall be deemed to have been increased by an amount (the "Special
Payment") equal to the product of (x) the Share Factor with respect to such
share of Series B Preferred Stock and (y) the Aggregate Special Payment Amount.
Such Special Payment shall accrue as of the Change of Control Date (if the
Change of Control Date is prior to the Fifth Anniversary Date) whether or not
the Company has earnings or profits, whether or not there are funds legally
available for the payment of such dividend and whether or not such dividend is
declared and shall be in all respects identical to any other dividend declared
or accrued on the Series B Preferred Stock (except as set forth above) and all
provisions of this Certificate of Designation applicable to dividends shall
apply to such Special Payment (except as set forth above). The Special Payment
shall be added to the Liquidation Preference as of the Change of Control Date
whether the holders of the Series B Preferred Stock elect the Hold Option or the
Remarketing Option or whether they elect to convert their shares in accordance
with Section 12.
(b) Within 30 days after delivery by the Company of the notice
described in Section 13(a), each holder of shares of Series B Preferred Stock
(or the shares of preferred stock issued in respect thereof pursuant to Section
14) who wishes to exercise the Hold Option or the Remarketing Option must submit
written notice (a "COC Response Notice") to the Company setting forth the option
such holder wishes to elect (and if no option is selected within such 30 day
period such holder shall be deemed to have selected the Hold Option).
(c) If the Hold Option is selected with respect to a share of Series B
Preferred Stock, or if no notice from a holder is received by the date referred
to in the preceding paragraph, such share of Series B Preferred Stock (or the
shares of preferred stock issued in respect thereof pursuant to Section 14)
shall remain outstanding in accordance with its current terms (including,
without limitation, the right to convert pursuant to Section 12) after giving
effect to the Special Payment (if applicable).
(d) If the Remarketing Option is selected with respect to a share of Series
B Preferred Stock, the holder of such share shall be deemed to have elected to
waive such holder's right during the Remarketing Period to convert such share
pursuant to Section 12 during the Remarketing Period and the Company shall
thereafter have the option (the "Remarketing Option") to either (a) have such
share redeemed in accordance with the optional redemption procedures set forth
in Section 10 (except that such procedures shall apply only to the holders so
electing the Remarketing Option) or (b) remarket such share for the account of
such holder and, if the net proceeds to such holder of such remarketing are less
than an amount in cash equal to 100% of the Liquidation Preference (after giving
effect to the Special Payment (if applicable)) of such share plus accrued and
unpaid dividends thereon from the last Dividend Payment Date to the date payment
in full is received by such holder in respect of such share (the "Remarketing
Price"), the Company shall issue to and sell for the account of such holder a
sufficient number of shares of Common Stock to make up such shortfall; i.e.,
such that the holder receives a net amount in cash in respect of such share of
Series B Preferred Stock as to which the Remarketing Option has been selected
which, when taken together with the net proceeds received by such holder in such
remarketing is equal to the Remarketing Price. Written notice of the election
by the Company to either redeem or remarket such share shall be provided to such
holder within 75 days after receipt of a COC Response Notice specifying the
Remarketing Option.
(e) In order to accomplish the remarketing, the Company shall take all
actions that may be necessary, including without limitation, preparing and
filing a registration statement under the Securities Act, and shall pay all
expenses (including without limitation, underwriting discounts) associated with
the remarketing and issuance and shall provide customary indemnification for the
benefit of the holder against securities law liabilities in connection
therewith. If the Remarketing Option has been selected and the Company has not
elected to redeem such share, payment of the full Remarketing Price in respect
of the remarketed share shall be made at a single settlement against surrender
of the share. Such settlement shall take place as soon as reasonably
practicable. If such settlement does not take place within 180 days after the
date of the Company's written notice pursuant to paragraph (d) above (the
"Remarketing Period"), the Company shall give written notice to the holders that
have elected the Remarketing Option that such 180-day period has elapsed and
that each such holder shall have the option, for a period of 10 Business Days
following the giving of such notice, of electing to terminate the remarketing
process with respect to such holder's shares and to elect (i) to convert such
holder's shares in accordance with Section 12 or (ii) the Hold Option. The
foregoing shall not affect the holder's right to receive and retain the Special
Payment (if the Change of Control Date is prior to the Fifth Anniversary Date)
as of the Change of Control Date).
(f) The Company shall have the right to institute reasonable procedures in
order to implement this Section 13 and, to the extent reasonably practicable,
will make proper provision prior to the Change of Control Date to ensure that
the holders of shares of Series B Preferred Stock will be entitled to receive
the benefits intended to be afforded by this Section 13. Nothing in this
Section 13 shall affect the rights of the holders of Series B Preferred Stock
set forth in Section 14 hereof.
14. Consolidation, Merger, Conveyance or Transfer. Without the vote or
consent of the holders of a majority of the then Outstanding shares of Series B
Preferred Stock, the Company may not consolidate or merge with or into, or sell,
assign, transfer, lease, convey or otherwise dispose of all or substantially all
of its assets to, any Person unless (i) if the Company is the surviving or
continuing Person, the Series B Preferred Stock shall remain outstanding without
any amendment that would adversely affect the preferences, rights or powers of
the Series B Preferred Stock, (ii) if the Company is not the surviving or
continuing Person, (a) the entity formed by such consolidation or merger or to
which such sale, assignment, transfer, lease, conveyance or other disposition
shall have been made (in any such case, the "resulting entity") is a corporation
organized and existing under the laws of Bermuda, the United States or any State
thereof or the District of Columbia; and (b) the shares of Series B Preferred
Stock are converted into or exchanged for and become shares of such resulting
entity, having in respect of such resulting entity the same (or more favorable)
powers, preferences and relative, participating, optional or other special
rights that the shares of Series B Preferred Stock had immediately prior to such
transaction; and (iii) the Company shall have delivered to the Registrar an
Officers' Certificate and an opinion of counsel, reasonably satisfactory in form
and content, each stating that such consolidation, merger, conveyance or
transfer complies with this Section 14 and that all conditions precedent herein
provided for relating to such transaction have been complied with.
15. SEC Reports; Reports by Company. So long as any shares of Series B
Preferred Stock are outstanding, the Company shall file with the SEC and, within
15 days after it files them with the SEC, with the Registrar and, if requested,
furnish to each holder of shares of Series B Preferred Stock all annual and
quarterly reports and the information, documents, and other reports that the
Company is required to file with the SEC pursuant to Section 13(a) or 15(d) of
the Exchange Act ("SEC Reports"). In the event the Company is not required or
shall cease to be required to file SEC Reports, pursuant to the Exchange Act,
the Company will nevertheless file such reports with the SEC (unless the SEC
will not accept such a filing). Whether or not required by the Exchange Act to
file SEC Reports with the SEC, so long as any shares of Series B Preferred Stock
are Outstanding, the Company will furnish or cause to be furnished copies of the
SEC Reports to the holders of shares of Series B Preferred Stock at the time the
Company is required to make such information available to the Registrar and to
prospective investors who request it in writing.
16. Definitions. For purposes of this Certificate of Designation, the
following terms shall have the meaning set forth below (capitalized terms used
but not defined herein shall have the meanings ascribed to them in the Series
B-2 Certificate of Designations):
"Accumulated Dividends" has the meaning set forth in Section 6.
"Affiliate" means, with respect to any Person, any other Person directly or
indirectly controlling, controlled by, or under direct or indirect common
control with, such Person. For the purposes of this definition and the
definition of "HMTF Group", "control" when used with respect to any Person means
the power to direct the management and policies of such Person, directly or
indirectly, whether through the ownership of voting securities, by contract or
otherwise; and the terms "controlling" and "controlled" have meanings
correlative to the foregoing. Without limiting the foregoing, each of Chase
Capital Partners, The Chase Manhattan Corporation, each of their respective
affiliates (the "Chase Entities") and any other person, fund or entity for whom
any of the Chase Entities acts as a fiduciary or provides discretionary
management with respect to any investments or any such direct or indirect
interests therein shall be deemed to be affiliates of each other.
"Aggregate Change of Control Date Accreted Value" means the product obtained by
multiplying (x) the Change of Control Date Accreted Value by (y) the number of
shares of Series B Preferred Stock Outstanding immediately prior to the Change
of Control Date.
"Aggregate Five Year Accreted Value" means the product obtained by multiplying
(x) the Five Year Accreted Value by (y) the number of shares of Series B
Preferred Stock Outstanding immediately prior to the Change of Control Date.
"Aggregate Special Payment Amount" means the difference between (x) the
Aggregate Five Year Accreted Value and (y) the Aggregate Change of Control Date
Accreted Value.
"Board of Directors" has the meaning set forth in the Recitals.
"Business Day" means each Monday, Tuesday, Wednesday, Thursday and Friday which
is not a day on which banking institutions in The City of New York are
authorized or obligated by law or executive order to be closed.
"By-laws" has the meaning set forth in the Recitals.
"COC Response Notice" has the meaning set forth in Section 13(b).
"Capital Stock" means, with respect to any person, any and all shares,
interests, participations, rights in, or other equivalents (however designated
and whether voting and/or non-voting) of such person's capital stock, whether
outstanding on the Closing Date or issued after the Closing Date, and any and
all rights (other than any evidence of indebtedness), warrants or options
exchangeable for or convertible into such capital stock.
"Certificate of Incorporation" has the meaning set forth in the recitals.
"Change of Control" means the occurrence of any of the following events: (a)
any "person" or "group" (as such terms are used in Sections 13(d) and 14(d) of
the Exchange Act) is or becomes the "beneficial owner" (as defined in Rule 13d-3
and 13d-5 under the Exchange Act, except that a person shall be deemed to have
"beneficial ownership" of all securities that such person has the right to
acquire, whether such right is exercisable immediately or only after the passage
of time), directly or indirectly, of more than 50% of the total Voting Capital
Stock of the Company; or (b) the Company consolidates with, or merges with or
into, another person or sells, assigns, conveys, transfers, leases or otherwise
disposes of all or substantially all of its assets to any person, or any person
consolidates with, or merges with or into the Company, in any such event
pursuant to a transaction in which either (A) the outstanding Voting Capital
Stock of the Company is converted into or exchanged for cash, securities or
other property, other than any such transaction where immediately after such
transaction no "person" or "group" (as such terms are used in Sections 13(d) and
14(d) of the Exchange Act) (other than any such group if each member of such
group, together with its Affiliates, owns less than 50% of the total Voting
Capital Stock of the Company) is the "beneficial owner" (as defined in Rules
13d-3 and 13d-5 under the Exchange Act, except that a person shall be deemed to
have "beneficial ownership" of all securities that such person has the right to
acquire, whether such right is exercisable immediately or only after the passage
of time), directly or indirectly, of more than 50% of the total Voting Capital
Stock of the surviving or transferee company or its parent company or (B) the
holders of the outstanding Voting Capital Stock of the Company immediately prior
to such transaction hold less than 50% of the outstanding Voting Capital Stock
of the surviving or transferee company or its parent company immediately after
the transaction or (C) during any consecutive two-year period, individuals who
at the beginning of such period constituted the Board of Directors (together
with any new directors whose election by the Board of Directors or whose
nomination for election by the stockholders of the Company was approved by a
vote of a majority of the directors then still in office who were either
directors at the beginning of such period or whose election or nomination for
election was previously so approved) cease for any reason to constitute a
majority of the Board of Directors then in office.
"Change of Control Date" has the meaning set forth in Section 13(a).
"Change of Control Date Accreted Value" means with respect to each $1,072 of
original Liquidation Preference, the value that $1,072 would accrete to between
the Closing Date and the Change of Control Date, compounded quarterly at an
annual rate of 7.50%.
"Closing Date" means any Closing Date under the Purchase Agreement.
"closing price" has the meaning set forth in Section 12(d)(vi).
"Common Stock Record Date" has the meaning set forth in Section 12(d)(vi).
"Common Stock" means the common stock of the Company, par value $0.01 per share.
"Company" has the meaning set forth in the Recitals.
"Company Order" means a written request or order signed in the name of the
Company by its Chairman of the Board, its Chief Executive Officer, its President
or any Executive or Senior Vice President and by its Chief Financial Officer,
Treasurer, an Assistant Treasurer, its Secretary or an Assistant Secretary.
"Conversion Agent" has the meaning set forth in Section 5(a).
"Conversion Price" has the meaning set forth in Section 12.
"Current Market Price" has the meaning set forth in Section 12(d)(vi).
"Dilution Trigger Event" has the meaning set forth in Section 12(d)(iv).
"Distributed Securities" has the meaning set forth in Section 12(d)(iv).
"Dividend Payment Date" has the meaning set forth in Section 6.
"Dividend Record Date" has the meaning set forth in Section 7(a).
"Exchange Act" means the Securities Exchange Act of 1934, as amended.
"Expiration Time" has the meaning set forth in Section 12(d)(v).
"fair market value" has the meaning set forth in Section 12(d)(vi).
"Fifth Anniversary Date" has the meaning set forth in Section 8(c)(vi).
"Five Year Accreted Value" means with respect to each $1,072 of original
Liquidation Preference, $1,554.34 (subject to appropriate adjustment with
respect to stock splits, stock dividends and similar events affecting the Series
B Preferred Stock).
"HMTF Group" has the meaning set forth in Section 8(d).
"HMTF Holders" has the meaning set forth in Section 8(d).
"Hold Option" has the meaning set forth in Section 13(a).
"Junior Shares" has the meaning set forth in Section 9(a).
"Liquidation Preference" means an amount equal to $1,000 per share plus an
amount equal to the Share Option Adjustment Amount per share of Series B
Preferred Stock, subject to change in accordance with Section 6, Section 7,
Section 11 and Section 13 hereof, including, without limitation, by the addition
of Accumulated Dividends and, if applicable and without duplication, the
Special Payment.
"Mandatory Redemption Date" has the meaning set forth in Section 10(b);
provided, however, that if such date shall not be a Business Day, then such date
-------
shall be the next Business Day.
"nonelecting share" has the meaning set forth in Section 12(e).
"Odd-lot Redemption" has the meaning set forth in Section 10(c).
"Officers' Certificate" means a certificate of the Company signed in the name of
the Company by its Chairman of the Board, its Chief Executive Officer, its
President or an Executive or Senior Vice President and by its Chief Financial
Officer, Treasurer, an Assistant Treasurer, its Secretary or an Assistant
Secretary.
"Optional Redemption" has the meaning set forth in Section 10(a).
"Optional Redemption Date" has the meaning set forth in Section 10(a).
"Outstanding" means (i) when used with respect to shares of Series B Preferred
Stock, as of the date of determination, all shares of Series B Preferred Stock
theretofore authenticated and delivered under this Certificate of Designation,
except (a) shares of Series B Preferred Stock theretofore converted into shares
of Common Stock and/or Series C Preferred Stock in accordance with Section 12
and shares of Series B Preferred Stock theretofore canceled by the Registrar or
delivered to the Registrar for cancellation; (b) shares of Series B Preferred
Stock for whose payment or redemption money in the necessary amount has been
theretofore deposited with the Registrar 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 shares of
Series B Preferred Stock; provided that, if such shares of Series B Preferred
Stock are to be redeemed, notice of such redemption has been duly given pursuant
to this Certificate of Designation or provision therefor satisfactory to the
Registrar has been made; and (c) shares of Series B Preferred Stock in exchange
for or in lieu of which other shares of Series B Preferred Stock have been
authenticated and delivered pursuant to this Certificate of Designation;
provided, however, that, in determining whether the holders of the shares of
Series B Preferred Stock have given any request, demand, authorization,
direction, notice, consent or waiver or taken any other action hereunder, shares
of Series B Preferred Stock owned by the Company or any Subsidiary of the
Company shall be disregarded and deemed not to be Outstanding, except that, in
determining whether the Registrar shall be protected in relying upon any such
request, demand, authorization, direction, notice, consent, waiver or other
action, only shares of Series B Preferred Stock which the Registrar has actual
knowledge of being so owned shall be so disregarded. Shares of Series B
Preferred Stock so owned which have been pledged in good faith may be regarded
as Outstanding if the pledgee establishes to the satisfaction of the Registrar
the pledgee's right so to act with respect to such shares of Series B Preferred
Stock and that the pledgee is not the Company or any other obligor upon the
shares of Series B Preferred Stock or any Affiliate of the Company or of such
other obligor and (ii) when used with respect to shares of Series B-2 Preferred
Stock, the same definition of "Outstanding" shall apply thereto with references
to Series B-2 being substituted for references to Series B-1 therein.
"Parity Shares" has the meaning set forth in Section 9(a).
"Paying Agent" has the meaning set forth in Section 5(a).
"Person" means an individual, partnership, corporation, limited liability
company, business trust, joint stock company, trust, unincorporated association,
joint venture, governmental authority or other entity of whatever nature.
"Preferred Stock" means, with respect to any person, any and all shares,
interests, participations or other equivalents (however designated, whether
voting or non-voting) of such person's preferred or preference stock, whether
now outstanding or issued after the date hereof, including all series and
classes of such preferred or preference stock.
"Purchase Agreement" means the Securities Purchase Agreement, dated as of
February 1, 2000, among the Company and the Purchasers named therein, as it may
be amended from time to time.
"Purchased Shares" has the meaning set forth in Section 12(d)(v).
"Redemption Date" has the meaning set forth in Section 10(d).
"Redemption Notice" has the meaning set forth in Section 10(d).
"Redemption Price" has the meaning set forth in Section 10(a).
"Registrar" has the meaning set forth in Section 3.
"Registration Rights Agreement" means the Registration Rights Agreement, dated
as of March 9, 2000, among the Company and the Purchasers.
"Regulated Stockholder" shall mean Chase Equity Associates, LLC or any other
stockholder that (i) is subject to the provisions of Regulation Y or has an
Affiliate subject to provisions of Regulation Y, (ii) holds shares of Common
Stock or Preferred Stock of the Company and (iii) has provided written notice to
the Company of its status as a "Regulated Stockholder" hereunder.
"Regulation Y" shall mean Regulation Y of the Board of Governors of the Federal
Reserve System, 12 C.F.R. Part 225 (or any successor to such Regulation).
"Relinquishing Holder" means Chase Capital Partners and its Affiliates and their
respective transferees and any other holder of a share of Series B-1 Preferred
Stock that delivers a written notice to the Company to the effect that such
holder elects not to be entitled to vote with respect to any matter referred to
in Section 8(d).
"Remarketing Option" has the meaning set forth in Section 13(d).
"Restrictive Legend" has the meaning set forth in Section 4.
"resulting entity" has the meaning set forth in Section 14.
"SEC" means the Securities and Exchange Commission, as from time to time
constituted, created under the Securities Exchange Act of 1934, or, if at any
time after the adoption of this Certificate of Designation such commission is
not existing and performing the duties now assigned to it, then the body
performing such duties at such time.
"SEC Reports" has the meaning set forth in Section 15.
"Securities Act" has the meaning set forth in Section 4.
"Senior Shares" has the meaning set forth in Section 9(a).
"Series B Preferred Stock" means the Series B-1 Preferred Stock and the Series
B-2 Preferred Stock.
"Series B-1 Preferred Stock" has the meaning set forth in Section 1.
"Series B-2 Certificate of Designations" means the Certificate of Designations,
Preferences and Rights of the Company's 7.50% Cumulative Convertible Preferred
Stock, Series B-2, due 2015.
"Series B-2 Preferred Stock" means the Company's 7.50% Cumulative Convertible
Preferred Stock, Series B-2, due 2015, par value $0.01 per share, to be issued
pursuant to the Series B-2 Certificate of Designations.
"Series C Certificate of Designations" means the Certificate of Designations,
Preferences and Rights of the Series C Preferred Stock.
"Series C Preferred Stock" means the Company's Convertible Preferred Stock,
Series C, par value $0.01 per share, to be issued pursuant to the Series C
Certificate of Designations.
"Share Factor" means with respect to each share of Series B Preferred Stock, a
fraction, the numerator of which is the Liquidation Preference of such share as
of the Change of Control Date, without giving effect to the Special Payment, and
the denominator of which is the aggregate Liquidation Preference of all
outstanding shares of Series B Preferred Stock as of the Change of Control Date,
without giving effect to the Special Payment.
"Share Option Adjustment Amount" means an amount equal to $72.00.
"Special Payment" has the meaning set forth in Section 13.
"Voting Capital Stock" means with respect to any Person, securities of any class
or classes of Capital Stock in such Person ordinarily entitling the holders
thereof (whether at all times or at the times that such class of Capital Stock
has voting power by reason of the happening of any contingency) to vote in the
election of members of the board of directors or comparable governing body of
such Person.
<PAGE>
Series B-1 Certificate of Designation
Signature Page
NY01/MEEHT/490948.11
IN WITNESS WHEREOF, the Company has caused this Certificate of Designation
to be duly executed by the undersigned officer of the Company, this 9th day of
March, 2000.
VIATEL, INC.,
By:
Name:
Title:
<PAGE>
EXHIBIT A
"THE SHARES REPRESENTED BY THIS CERTIFICATE HAVE NOT BEEN REGISTERED UNDER THE
SECURITIES ACT OF 1933, AS AMENDED (THE "SECURITIES ACT") OR THE SECURITIES LAWS
OF ANY STATE OF THE UNITED STATES. SUCH SHARES MAY NOT BE OFFERED, SOLD,
TRANSFERRED, PLEDGED, HYPOTHECATED OR OTHERWISE DISPOSED OF IN THE ABSENCE OF
SUCH REGISTRATION OTHER THAN PURSUANT TO AN EXEMPTION FROM SUCH REGISTRATION
REQUIREMENTS."
THE SECURITIES REPRESENTED BY THIS CERTIFICATE HAVE NOT BEEN REGISTERED UNDER
THE SECURITIES ACT OF 1933, AS AMENDED (THE "SECURITIES ACT") OR THE SECURITIES
LAWS OF ANY STATE OF THE UNITED STATES. SUCH SECURITIES MAY NOT BE OFFERED,
SOLD, TRANSFERRED, PLEDGED, HYPOTHECATED OR OTHERWISE DISPOSED OF IN THE ABSENCE
OF SUCH REGISTRATION OTHER THAN PURSUANT TO AN EXEMPTION FROM SUCH REGISTRATION
REQUIREMENTS.
HMTF BRIDGE VIATEL, LLC
COMMON STOCK WARRANT
Void after March 9, 2005
Warrant No. A-1-1
This certifies that, for value received, HMTF BRIDGE VIATEL, LLC or its
permitted assigns is entitled, subject to the terms and conditions set forth
herein (including the exercise conditions of Section 2), to purchase from
Viatel, Inc. (the "Company"), a Delaware corporation, up to 188,279 fully paid
and nonassessable shares (the "Shares") of Common Stock (as defined herein) at
the exercise price of $75.00 per share (the "Exercise Price"). The Exercise
Price and number of Shares is subject to adjustment as provided in this Warrant.
The term "Warrant" as used herein shall include this Warrant and any warrants
delivered in substitution or exchange therefor as provided herein.
1. Definitions. As used in this Warrant, the following terms, unless
the context otherwise requires, have the following meanings:
(a) "Common Stock" means shares of the Company's common stock, par
value $0.01 per share.
(b) "Company" includes any Person that shall succeed to or assume the
obligations of the Company under this Warrant.
(c) "Person" means any individual, partnership, corporation, limited
liability company, joint venture, association, joint-stock company, trust,
unincorporated organization, government or agency or political subdivision
thereof, or other entity.
(d) "Public Offering" shall mean a public offering by the Company of
its Common Stock registered under the Securities Act of 1933, as amended.
(e) "Warrantholder", "Holder of Warrant", "Holder", or similar terms
refers to the holder of this Warrant.
2. Exercise Provisions.
(a) Exercisability. The Holder of this Warrant may exercise it in
whole or in part, by surrender of this Warrant, accompanied by a duly executed
Subscription Form (attached hereto as Annex A), to the Company at its principal
office (or to the office of the Warrant Agent as contemplated in Section 6(b),
if applicable), accompanied by payment, in lawful money of the United States, of
the amount obtained by multiplying the Exercise Price (as adjusted fyment set
forth herein.rom time to time pursuant to the terms of this Warrant) by the
number of shares of Common Stock designated in such completed Subscription Form.
This Warrant shall be deemed to have been exercised immediately prior to the
close of business on the day of surrender of such Warrant, and the person or
persons entitled to receive shares of Common Stock issuable upon exercise of
this Warrant shall be treated for all purposes as the record holder or holders
of such shares of Common Stock at such time.
(b) Payment of Exercise Price. Payment may be made by check payable to
the Company. The holders of this Warrant may, in lieu of any exercise payment
as set forth above, pay the Exercise Price by (i) delivering shares of Common
Stock having a fair market value (as defined below in this Section 2) equal to
the aggregate Exercise Price or (ii) any combination of the methods of pa
(c) Net Issue Exercise. Notwithstanding any provisions herein to the
contrary, if the fair market value (as defined below in this Section 2) of one
share of Common Stock is greater than the Exercise Price (on the date of
exercise of this Warrant), in lieu of exercising this Warrant in exchange for
cash, the Holder hereof may elect to exercise all or a portion of this Warrant
by canceling all or a portion of this Warrant and receiving in exchange therefor
shares of Common Stock (as determined below) equal to the value of this Warrant,
or the portion thereof being canceled, by surrender of this Warrant at the
principal office of the Company (or the office of the Warrant Agent contemplated
by Section 6(b), if applicable) together with a duly executed Subscription Form,
in which event the Company shall issue to such Holder a number of shares of
Common Stock computed using the following formula:
X=Y(A-B)
A
Where X= the number of shares of Common Stock to be issued to the
Holder
Y= the number of shares of Common Stock purchasable under
the Warrant or, if only a portion of the Warrant is
being exercised, under the portion of the Warrant being
exercised (on the date of such exercise)
A= the fair market value of one share of the Common
Stock (on the date of such exercise)
B= the Exercise Price (as adjusted on the date of such
exercise)
For purposes of the above calculation and Section 2(b) only, "fair market value"
of one share of Common Stock shall be determined by the Company's Board of
Directors in good faith; provided, however, where a public market exists for the
Common Stock at the time of such exercise, the "fair market value" per share
shall be the average for the five trading days prior to the date of such
exercise of the average of the closing bid and asked prices of the Common Stock
quoted in the Over-The-Counter Market Summary or the last reported sale price of
the Common Stock quoted on the Nasdaq National Market System or the principal
exchange on which the Common Stock is then listed, whichever is applicable, as
published in The Wall Street Journal.
(d) Restrictions on Exercise. This Warrant is exercisable at any
time and from time to time from the date hereof, provided this Warrant has not
terminated pursuant to Section 10.
3. Delivery of Stock Certificates. As soon as possible after full or
partial exercise of this Warrant and in any event within ten days after such
exercise, the Company, at its expense, will cause to be issued in the name of
and delivered to the Holder of this Warrant, a certificate or certificates for
the number of fully paid and nonassessable shares of Common Stock to which that
Holder shall be entitled upon such exercise, together with any other securities
and property to which that Holder is entitled upon such exercise under the terms
of this Warrant. In the event that this Warrant is exercised in part, the
Company at its expense also will execute and deliver a new Warrant of like tenor
exercisable for the number of Shares for which this Warrant may then be
exercised. No fractional shares or scrip representing fractional shares will be
issued upon exercise of this Warrant. If upon any exercise of this Warrant a
fraction of a Share results, the Company will pay the cash value of that
fractional Share, calculated on the basis of the fair market value (as shall be
determined by the Company's Board of Directions in good faith) as of the date of
exercise.
4. Adjustment Provisions.
For purposes of this Section 4, all references to Common Stock shall be
deemed to include the shares of Common Stock into which the Series C Preferred
Stock of the Company is convertible. The Exercise Price shall be adjusted from
time to time by the Company as follows:
(a) If the Company shall hereafter pay a dividend or make a
distribution to all holders of the outstanding shares of Common Stock in shares
of Common Stock, the Exercise Price in effect at the opening of business on the
date following the date fixed for the determination of shareholders entitled to
receive such dividend or other distribution shall be reduced by multiplying such
Exercise Price by a fraction the numerator of which shall be the number of
shares of Common Stock outstanding at the close of business on the Common Stock
Record Date (as defined in Section 4(h)(ii)) fixed for such determination and
the denominator of which shall be the sum of (x) such number of shares and (y)
the total number of shares constituting such dividend or other distribution,
such reduction to become effective immediately after the opening of business on
the day following the Common Stock Record Date. If any dividend or distribution
of the type described in this Section 4(a) is declared but not so paid or made,
the Exercise Price shall again be adjusted to the Exercise Price which would
then be in effect if such dividend or distribution had not been declared.
(b) In case the Company shall issue or sell any Common Stock (other
than Common Stock issued (i) pursuant to the Company's existing or future stock
option plans or pursuant to any other existing or future Common Stock-related
director or employee compensation plan of the Company approved by the Board of
Directors, (ii) pursuant to the Company's existing or future stock purchase
plans that permit Company employees to purchase Common Stock at a purchase price
that is not more than a 15% discount to the Current Market Price, (iii) as
consideration for the acquisition of a business or of assets, (iv) in a firm
commitment underwritten public offering when either (A) the underwriting
discount is 5% or less, or (B) the offering price per share is greater than the
Exercise Price, (v) to the Company's joint venture partners in exchange for
interests in the relevant joint venture, (vi) upon exercise or conversion of any
security the issuance of which caused an adjustment hereunder or the issuance of
which did not require adjustment hereunder or (vii) upon exercise or conversion
of any of the Series B-1 Preferred Stock, the Series B-2 Preferred Stock, the
Series C Preferred Stock or the Warrants, in each case as defined in the
Securities Purchase Agreement, dated as of February 1, 2000, among the Company
and the Purchasers named therein), without consideration or for a consideration
per share less than the Current Market Price (as defined in Section 4(h)(iii))
on the date of such issuance, or shall issue securities convertible into Common
Stock having a conversion price per share less than the Current Market Price at
the date of issuance of such convertible security, the Exercise Price to be in
effect after such issuance or sale shall be determined by multiplying the
Exercise Price in effect immediately prior to such issuance or sale by a
fraction, the numerator of which shall be the sum of (x) the number of shares of
Common Stock outstanding immediately prior to such issuance or sale and (y) the
number of shares of Common Stock which the aggregate consideration receivable by
the Company for the total number of additional shares of Common Stock so issued
or sold (or, in the case of convertible securities, issuable on conversion)
would purchase at the Current Market Price in effect immediately prior to such
issuance or sale and the denominator of which shall be the sum of the number of
shares of Common Stock outstanding immediately prior to such issuance or sale
and the number of additional shares of Common Stock to be issued or sold (or, in
the case of convertible securities, issuable on conversion). In case any
portion of the consideration to be received by the Company shall be in a form
other than cash, the "fair market value" of such noncash consideration shall be
utilized in the foregoing computation. Such fair market value shall be
determined in good faith by the Board of Directors.
(c) If the Company shall offer or issue options, rights or warrants to
all holders of its outstanding shares of Common Stock entitling them to
subscribe for or purchase shares of Common Stock at a price per share less than
the Current Market Price on the Common Stock Record Date fixed for the
determination of shareholders entitled to receive such options, rights or
warrants, the Exercise Price shall be adjusted so that the same shall equal the
price determined by multiplying the Exercise Price in effect at the opening of
business on the date after such Common Stock Record Date by a fraction the
numerator of which shall be the sum of (x) the number of shares of Common Stock
outstanding at the close of business on the Common Stock Record Date and (y) the
number of shares of Common Stock which the aggregate offering price of the total
number of shares of Common Stock subject to such options, rights or warrants
would purchase at such Current Market Price and the denominator of which shall
be the sum of (x) the number of shares of Common Stock outstanding at the close
of business on the Common Stock Record Date and (y) the total number of
additional shares of Common Stock subject to such options, rights or warrants
for subscription or purchase. Such adjustment shall become effective immediately
after the opening of business on the day following the Common Stock Record Date
fixed for determination of shareholders entitled to purchase or receive such
options, rights or warrants. To the extent that shares of Common Stock are not
delivered pursuant to such options, rights or warrants, upon the expiration or
termination of such options, rights or warrants the Exercise Price (as adjusted
pursuant to this Section 4(c)) shall again be adjusted to be the Exercise Price
which would then be in effect had the adjustments made upon the issuance of such
options, rights or warrants been made on the basis of delivery of only the
number of shares of Common Stock actually delivered. If such options, rights or
warrants are not so issued, the Exercise Price (as adjusted pursuant to this
Section 4(c)) shall again be adjusted to be the Exercise Price which would then
be in effect if such date fixed for the determination of shareholders entitled
to receive such options, rights or warrants had not been fixed. In determining
whether any options, rights or warrants entitle the holders to subscribe for or
purchase shares of Common Stock at less than such Current Market Price, and in
determining the aggregate offering price of such shares of Common Stock, there
shall be taken into account (1) any consideration received for such options,
rights or warrants, with the value of such consideration and the amount of such
exercise or subscription price, if other than cash, to be determined in good
faith by the Board of Directors and (2) the amount of any exercise price or
subscription price required to be paid upon exercise of such options, warrants
or rights.
(d) If the outstanding shares of Common Stock shall be subdivided into
a greater number of shares of Common Stock, the Exercise Price in effect at the
opening of business on the day following the day upon which such subdivision
becomes effective shall be proportionately reduced, and, conversely, if the
outstanding shares of Common Stock shall be combined into a smaller number of
shares of Common Stock, the Exercise Price in effect at the opening of business
on the day following the day upon which such combination becomes effective shall
be proportionately increased; such reduction or increase, as the case may be, to
become effective immediately after the opening of business on the day following
the day upon which such subdivision or combination becomes effective.
(e) (i) If the Company shall, by dividend or otherwise, distribute to
all holders of its shares of Common Stock any class of capital stock of the
Company (other than any dividends or distributions to which Section 4(a)
applies) or evidences of its indebtedness, cash or other assets (including
securities, but excluding any options, rights, or warrants of a type referred to
in Section 4(c), and dividends and distributions paid exclusively in cash and
excluding any capital stock, evidences of indebtedness, cash or assets
distributed upon a merger or consolidation to which Section 4(m) applies) (the
foregoing hereinafter in this Section 4(e) called the "Distributed Securities"),
then, in each such case, the Exercise Price shall be reduced so that the same
shall be equal to the price determined by multiplying the Exercise Price in
effect immediately prior to the close of business on the Common Stock Record
Date with respect to such distribution by a fraction the numerator of which
shall be the difference between (x) the Current Market Price on such date over
(y) the fair market value (as determined by the Board of Directors, whose good
faith determination shall be conclusive and described in a resolution of the
Board of Directors) on such date of the portion of the Distributed Securities
applicable to one share of Common Stock and the denominator of which shall be
such Current Market Price, such reduction to become effective immediately prior
to the opening of business on the day following the Common Stock Record Date;
provided, however, that, in the event the then fair market value (as so
determined) of the portion of the Distributed Securities applicable to one share
of Common Stock is equal to or greater than the Current Market Price on the
Common Stock Record Date, in lieu of the foregoing adjustment, adequate
provision shall be made so that each Holder shall have the right to receive,
upon exercise of such Warrant (or any portion thereof), the amount of
Distributed Securities such Holder would have received had such Holder exercised
such Warrant (or portion thereof) immediately prior to such Common Stock Record
Date. If such dividend or distribution is not so paid or made, the Exercise
Price (as adjusted pursuant to this Section 4(e)(i)) shall again be adjusted to
be the Exercise Price which would then be in effect if such dividend or
distribution had not been declared. If the Board of Directors determines the
fair market value of any distribution for purposes of this Section 4(e) by
reference to the actual or when issued trading market for any securities
constituting all or part of such distribution, the Board of Directors must, in
doing so, consider the price of the Common Stock in such market over the same
period used in computing the Current Market Price pursuant to Section 4(h)(iii),
to the extent possible.
(ii) Options, rights or warrants distributed by the Company to all
holders of shares of Common Stock entitling the holders thereof to subscribe for
or purchase shares of the Company's capital stock (either initially or under
certain circumstances), which options, rights or warrants, until the occurrence
of a specified event or events ("Dilution Trigger Event"): (A) are deemed to be
transferred with such shares of Common Stock; (B) are not exercisable; and (C)
are also issued in respect of future issuances of shares of Common Stock, shall
be deemed not to have been distributed for purposes of this Section 4(e) (and no
adjustment to the Exercise Price under this Section 4(e) shall be required)
until the occurrence of the earliest Dilution Trigger Event, whereupon such
options, rights and warrants shall be deemed to have been distributed and an
appropriate adjustment to the Exercise Price under this Section 4(e) shall be
made. If any such options, rights or warrants, including any such existing
options, rights or warrants distributed prior to the first issuance of the
Warrants, are subject to subsequent events, upon the occurrence of which such
options, rights or warrants shall become exercisable to purchase different
securities, evidences of indebtedness or other assets, then the occurrence of
each such event shall be deemed to be such date of issuance and record date with
respect to new options, rights or warrants (and a termination or expiration of
the existing options, rights or warrants, without exercise by the holder
thereof). In addition, in the event of any distribution (or deemed
distribution) of options, rights or warrants, or any Dilution Trigger Event with
respect thereto, that was counted for purposes of calculating a distribution
amount for which an adjustment to the Exercise Price under this Section 4(e) was
made, (1) in the case of any such options, rights or warrants all of which shall
have been redeemed or repurchased without exercise by any holders thereof, the
Exercise Price (as adjusted pursuant to this Section 4(e)) shall be readjusted
upon such final redemption or repurchase to give effect to such distribution or
Dilution Trigger Event, as the case may be, as though it were a cash
distribution equal to the per share redemption or repurchase price received by a
holder or holders of shares of Common Stock with respect to such options, rights
or warrants (assuming such holder had retained such options, rights or
warrants), made to all holders of shares of Common Stock as of the date of such
redemption or repurchase, and (2) in the case of such options, rights or
warrants which shall have expired or been terminated without exercise by any
holders thereof, the Exercise Price (as adjusted pursuant to this Section 4(e))
shall be readjusted to be the Exercise Price which would then be in effect if
such options, rights or warrants had not been issued.
(iii) Notwithstanding any other provision of this Section 4(e) to the
contrary, options, rights, warrants, evidences of indebtedness, other
securities, cash or other assets (including, without limitation, any rights
distributed pursuant to any shareholder rights plan) shall be deemed not to have
been distributed for purposes of this Section 4(e) if the Company makes proper
provision so that each Holder who exercises such Holder's Warrants (or any
portion thereof) after the date fixed for determination of shareholders entitled
to receive any such options, rights, warrants, evidences of indebtedness, other
securities, cash or other assets (including, without limitation, any rights
distributed pursuant to any shareholder rights plan) shall be entitled to
receive upon such exercise, in addition to the shares of Common Stock issuable
upon such exercise, the amount and kind of any such options, rights, warrants,
evidences of indebtedness, other securities, cash or other assets (including,
without limitation, any rights distributed pursuant to any shareholder rights
plan) that such Holder would have been entitled to receive if such Holder had,
immediately prior to such determination date, exercised such Warrants.
(iv) For purposes of Section 4(e) and Sections 4(a) and 4(c), any dividend
or distribution to which this Section 4(e) is applicable that also includes
shares of Common Stock, or options, rights or warrants to subscribe for or
purchase shares of Common Stock to which 4(c) applies (or both), shall be deemed
instead to be (A) a dividend or distribution of the evidences of indebtedness,
assets, shares of capital stock, rights or warrants other than such shares of
Common Stock or options, rights or warrants to subscribe for or purchase shares
of Common Stock, to which Section 4(c) applies (and any Exercise Price reduction
required by this Section 4(e) with respect to such dividend or distribution
shall then be made), immediately followed by (B) a dividend or distribution of
such shares of Common Stock or such options, rights or warrants to subscribe for
or purchase shares of Common Stock, (and any further Exercise Price reduction
required by Sections 4(a) or 4(c) with respect to such dividend or distribution
shall then be made), except that (1) the Common Stock Record Date of such
dividend or distribution shall be substituted as "the date fixed for the
determination of stockholders entitled to receive such dividend or other
distribution", "the Common Stock Record Date fixed for such determination" and
"the Common Stock Record Date" within the meaning of Section 4(a) and as "the
Common Stock Record Date fixed for the determination of the share holders
entitled to receive such options, rights or warrants" and "such Common Stock
Record Date" for purposes of Section 4(c), and (2) any shares of Common Stock
included in such dividend or distribution shall not be deemed "outstanding at
the close of business on the date fixed for such determination" for the purposes
of Section 4(a).
(f) If the Company shall, by dividend or otherwise, distribute to all
holders of its shares of Common Stock cash (excluding any cash that is
distributed upon a merger or consolidation to which Section 4(m) applies or as
part of a distribution referred to in Sections 4(e)(i)-4(e)(iv)) in an aggregate
amount that, combined together with (i) the aggregate amount of any other such
distributions to all holders of its shares of Common Stock made exclusively in
cash within the 12 months preceding the date of payment of such distribution,
and in respect of which no adjustment pursuant to this Section 4(f) has been
made, and (ii) the aggregate of any cash, plus the fair market value (as
determined by the Board of Directors, whose good faith determination shall be
conclusive and described in a resolution of the Board of Directors) of
consideration payable in respect of any tender offer by the Company for all or
any portion of the shares of Common Stock concluded within the 12 months
preceding the date of payment of such distribution, and in respect of which no
adjustment pursuant to Section 4(g) has been made, exceeds 5% of the net income
of the Company reported for the 12 month period ending with the fiscal quarter
immediately preceding such payment (the "12 Month Net Income"), then, and in
each such case, immediately after the close of business on such date, the
Exercise Price shall be reduced so that the same shall equal the price
determined by multiplying the Exercise Price in effect immediately prior to the
close of business on such Common Stock Record Date by a fraction the numerator
of which shall be equal to the Current Market Price on the Common Stock Record
Date less an amount equal to the quotient of (x) the excess of such combined
amount over such 5% of the 12 Month Net Income and (y) the number of shares of
Common Stock outstanding on the Common Stock Record Date and the denominator of
which shall be equal to the Current Market Price on such Common Stock Record
Date; provided, however, that, if the portion of the cash so distributed
applicable to one share of Common Stock is equal to or greater than the Current
Market Price of the Common Stock on the Common Stock Record Date, in lieu of the
foregoing adjustment, adequate provision shall be made so that each Holder shall
have the right to receive upon exercise of such Warrant (or any portion thereof)
the amount of cash such Holder would have received had such Holder exercised
such Warrant (or portion thereof) immediately prior to such Common Stock Record
Date. If such dividend or distribution is not so paid or made, the Exercise
Price (as adjusted pursuant to this Section 4(f)) shall again be adjusted to be
the Exercise Price which would then be in effect if such dividend or
distribution had not been declared.
(g) If a tender offer made by the Company or any of its subsidiaries
for all or any portion of the Common Stock expires and such tender offer (as
amended upon the expiration thereof) requires the payment to shareholders (based
on the acceptance (up to any maximum specified in the terms of the tender offer)
of Purchased Shares) of an aggregate consideration having a fair market value
(as determined by the Board of Directors, whose good faith determination shall
be conclusive and described in a resolution of the Board of Directors) that,
combined together with (A) the aggregate of the cash plus the fair market value
(as determined by the Board of Directors, whose good faith determination shall
be conclusive and described in a resolution of the Board of Directors), as of
the expiration of such tender offer, of consideration payable in respect of any
other tender offers, by the Company or any of its subsidiaries for all or any
portion of the shares of Common Stock expiring within the 12 months preceding
the expiration of such tender offer and in respect of which no adjustment
pursuant to this Section 4(g) has been made and (B) the aggregate amount of any
distributions to all holders of the Common Stock made exclusively in cash within
12 months preceding the expiration of such tender offer and in respect of which
no adjustment pursuant to Section 4(f) has been made, exceeds 5% of the 12 Month
Net Income (determined as of the last time (the "Expiration Time") tenders could
have been made pursuant to such tender offer (as it may be amended)) then, and
in each such case, immediately prior to the opening of business on the day after
the date of the Expiration Time, the Exercise Price shall be adjusted so that
the same shall equal the price determined by multiplying the Exercise Price in
effect immediately prior to the close of business on the date of the Expiration
Time by a fraction the numerator of which shall be the product of the number of
shares of Common Stock outstanding (including any tendered shares) at the
Expiration Time multiplied by the Current Market Price of the Common Stock on
the trading day next succeeding the Expiration Time and the denominator of which
shall be the sum of (x) the fair market value (determined as aforesaid) of the
aggregate consideration payable to shareholders based on the acceptance (up to
any maximum specified in the terms of the tender offer) of all shares validly
tendered and not withdrawn as of the Expiration Time (the shares deemed so
accepted, up to any such maximum, being referred to as the "Purchased Shares")
and (y) the product of the number of shares of Common Stock outstanding (less
any Purchased Shares) at the Expiration Time and the Current Market Price of the
shares of Common Stock on the trading day next succeeding the Expiration Time,
such reduction (if any) to become effective immediately prior to the opening of
business on the day following the Expiration Time. If the Company is obligated
to purchase shares pursuant to any such tender offer, but the Company is
permanently prevented by applicable law from effecting any such purchases or all
such purchases are rescinded, the Exercise Price (as adjusted pursuant to this
Section 4(g)) shall again be adjusted to be the Exercise Price which would then
be in effect if such tender offer had not been made. If the application of this
Section 4(g) to any tender offer would result in an increase in the Exercise
Price, no adjustment shall be made for such tender offer under this Section
4(g).
(h) For purposes of Section 4, the following terms shall have the
meaning indicated:
(i) "closing price" with respect to any securities on any day means the
closing sale price as of 4:00 p.m. Eastern Time on such day or any earlier final
closing on such day or, if no such sale takes place on such day, the average of
the reported high and low bid prices on such day, in each case on the Nasdaq
National Market, or the New York Stock Exchange, as applicable, or, if such
security is not listed or admitted to trading on such national market or
exchange, on the national stock exchange or nationally recognized trading market
in the United States on which such security is quoted or listed or admitted to
trading, or, if not quoted or listed or admitted to trading on any national
stock exchange or nationally recognized trading market in the United States, the
average of the high and low bid prices of such security on the over-the-counter
market on the day in question as reported by the National Quotation Bureau,
Incorporated or a similar generally accepted reporting service in the United
States, or, if not so available, in such manner as furnished by any New York
Stock Exchange member firm selected from time to time by the Board of Directors
for that purpose, or a price determined in good faith by the Board of Directors,
whose determination shall be conclusive and described in a resolution of the
Board of Directors.
(ii) "Common Stock Record Date" means, with respect to any dividend,
distribution or other transaction or event in which the holders of Common Stock
have the right to receive any cash, securities or other property or pursuant to
which the Common Stock (or other applicable security) is exchanged for or
converted into any combination of cash, securities or other property, the date
fixed for determination of shareholders entitled to receive such cash,
securities or other property (whether such date is fixed by the Board of
Directors or by statute, contract or otherwise).
(iii) "Current Market Price" means the average of the daily closing prices
per share of Common Stock for the ten consecutive trading days immediately prior
to the date in question; provided, however, that (A) if the "ex" date (as
hereinafter defined) for any event (other than the issuance or distribution
requiring such computation) that requires an adjustment to the Exercise Price
pursuant to Section 4(a), 4(b), 4(c), 4(d), 4(e), 4(f) or 4(g) occurs during
such ten consecutive trading days, the closing price for each trading day prior
to the "ex" date for such other event shall be adjusted by multiplying such
closing price by the same fraction by which the Exercise Price is so required to
be adjusted as a result of such other event, (B) if the "ex" date for any event
(other than the issuance or distribution requiring such computation) that
requires an adjustment to the Exercise Price pursuant to Section 4(a), 4(b),
4(c), 4(d), 4(e), 4(f) or 4(g) occurs on or after the "ex" date for the issuance
or distribution requiring such computation and prior to the day in question, the
closing price for each trading day on and after the "ex" date for such other
event shall be adjusted by multiplying such closing price by the reciprocal of
the fraction by which the Exercise Price is so required to be adjusted as a
result of such other event and (C) if the "ex" date for the issuance or
distribution requiring such computation is prior to the day in question, after
taking into account any adjustment required pursuant to clause (A) or (B) of
this proviso, the closing price for each trading day on or after such "ex" date
shall be adjusted by adding thereto the amount of any cash and the fair market
value (as determined by the Board of Directors in a manner consistent with any
good faith determination of such value for purposes of Section 4(e) or 4(f),
whose good faith determination shall be conclusive and described in a resolution
of the Board of Directors) of the evidences of indebtedness, shares of capital
stock or assets being distributed applicable to one share of Common Stock as of
the close of business on the day before such "ex" date. For purposes of any
computation under Section 4(f), the Current Market Price on any date shall be
deemed to be the average of the daily closing prices per share of Common Stock
for such day and the next two succeeding trading days; provided, however, that,
if the "ex" date for any event (other than the tender offer requiring such
computation) that requires an adjustment to the Exercise Price pursuant to
Section 4(a), 4(b), 4(c), 4(d), 4(e), or 4(g) occurs on or after the Expiration
Time for the tender or exchange offer requiring such computation and prior to
the day in question, the closing price for each trading day on and after the
"ex" date for such other event shall be adjusted by multiplying such closing
price by the reciprocal of the fraction by which the Exercise Price is so
required to be adjusted as a result of such other event. For purposes of this
paragraph, the term "ex" date (1) when used with respect to any issuance or
distribution, means the first date on which the shares of Common Stock trade
regular way on the relevant exchange or in the relevant market from which the
closing price was obtained without the right to receive such issuance or
distribution, (2) when used with respect to any subdivision or combination of
shares of Common Stock, means the first date on which the shares of Common Stock
trade regular way on such exchange or in such market after the time at which
such subdivision or combination becomes effective and (3) when used with respect
to any tender or exchange offer means the first date on which the shares of
Common Stock trade regular way on such exchange or in such market after the
Expiration Time of such offer. Notwithstanding the foregoing, whenever
successive adjustments to the Exercise Price are called for pursuant to this
Section 4, such adjustments shall be made to the Current Market Price as may be
necessary or appropriate to effectuate the intent of this Section 4 and to avoid
unjust or inequitable results, as determined in good faith by the Board of
Directors.
(iv) "fair market value" means the amount which a willing buyer would pay
a willing seller in an arm's-length transaction.
(i) No adjustment in the Exercise Price shall be required unless such
adjustment would require an increase or decrease of at least 1% in such price;
provided, however, that any adjustments which by reason of this Section 4(i) are
not required to be made shall be carried forward and taken into account in any
subsequent adjustment. All calculations under this Section 4 shall be made by
the Company and shall be made to the nearest cent. No adjustment need be made
for a change in the par value or no par value of the Common Stock.
(j) Whenever the Exercise Price is adjusted as herein provided, the Company
shall promptly file with the Warrant Agent an Officers' Certificate setting
forth the Exercise Price after such adjustment, the number of shares of Common
Stock for which this Warrant will be exercisable after such adjustment pursuant
to Section 4(n) and a brief statement of the facts requiring such adjustment.
Promptly after delivery of such certificate, the Company shall prepare a notice
of such adjustment of the Exercise Price setting forth the adjusted Exercise
Price and the date on which each adjustment becomes effective and shall mail
such notice of such adjustment of the Exercise Price to each Holder at such
Holder's last address appearing on the register of Holders maintained for that
purpose within 20 days of the effective date of such adjustment. Failure to
deliver such notice shall not affect the legality or validity of any such
adjustment.
(k) In any case in which this Section 4 provides that an adjustment shall
become effective immediately after a Common Stock Record Date for an event, the
Company may defer, until the occurrence of such event, issuing to the Holder of
any Warrant exercised after such Common Stock Record Date and before the
occurrence of such event, the additional shares of Common Stock issuable upon
such exercise by reason of the adjustment required by such event over and above
the shares of Common Stock issuable upon such exercise before giving effect to
such adjustment.
(l) For purposes of this Section 4, the number of shares of Common Stock at
any time outstanding shall not include shares of Common Stock held in the
treasury of the Company. The Company shall not pay any dividend or make any
distribution on shares of Common Stock held in the treasury of the Company.
(m) In case of any consolidation of the Company with, or merger of the
Company into, any other Person, or in case of any merger of another Person into
the Company (other than a merger that does not result in any reclassification,
conversion, exchange or cancellation of outstanding shares of Common Stock), or
in case of any sale, conveyance or transfer of all or substantially all the
assets of the Company, the Holders shall have the right thereafter, during the
period such Warrant shall be exercisable as specified in Section 2(d), to
exercise such Warrants into the kind and amount of securities, cash and other
property receivable upon such consolidation, merger, conveyance or transfer by a
holder of the number of shares of Common Stock for which the Warrants might have
been exercised immediately prior to such consolidation, merger, conveyance or
transfer, assuming such holder of shares of Common Stock failed to exercise his
rights of election, if any, as to the kind or amount of securities, cash and
other property receivable upon such consolidation, merger, conveyance or
transfer (provided that, if the kind or amount of securities, cash and other
property receivable upon such consolidation, merger, conveyance or transfer is
not the same for each share of Common Stock in respect of which such rights of
election shall not have been exercised ("nonelecting share"), then for the
purpose of this Section 4(m) the kind and amount of securities, cash and other
property receivable upon such consolidation, merger, conveyance or transfer by
each nonelecting share shall be deemed to be the kind and amount so receivable
per share by a plurality of the nonelecting shares). Such securities shall
provide for adjustments which, for events subsequent to the effective date of
the triggering event, shall be as nearly equivalent as may be practicable to the
adjustments provided for in this Section 4(m). The above provisions of this
Section 4(m) shall similarly apply to successive consolidations, mergers,
conveyances or transfers.
(n) Upon each adjustment of the Exercise Price as a result of the operation
of this Section 4, this Warrant shall thereafter evidence the right to purchase,
at the adjusted Exercise Price, that number of shares of Common Stock obtained
by multiplying the number of Shares covered by this Warrant immediately prior to
this adjustment by the Exercise Price in effect immediately prior to such
adjustment and dividing the product so obtained by the Exercise Price in effect
immediately after such adjustment of the Exercise Price.
5. Notice of Certain Events. If at any time prior to the termination or
full exercise of this Warrant:
(a) the Company shall declare any dividend payable in stock of any
class upon its Common Stock and/or Series C Preferred Stock, make any
distribution to the holders of its Common Stock and/or Series C Preferred Stock
or offer for subscription pro rata to holders of Common Stock and/or Series C
Preferred Stock any additional shares of stock of any class or other rights;
(b) there shall be any reclassification of the Common Stock and/or
Series C Preferred Stock of the Company;
(c) there shall be any consolidation or merger of the Company with or
into, or sale of all or substantially all of its assets to, another Person;
(d) there shall be a voluntary or involuntary dissolution, liquidation
or winding up of the Company; or
(e) there shall be a Public Offering;
then, in any one or more of such cases, the Company shall give the Holder at
least 10 days' prior written notice of the date on which the books of the
Company shall close or a record shall be taken for such dividend, distribution
or subscription rights or for determining rights to vote in respect to any such
reclassification, consolidation, merger, sale, dissolution, liquidation or
winding up or of the date of a filing of a registration statement under the
Securities Act for a Public Offering. Such notice in accordance with the
foregoing clause shall also specify, in the case of any such dividend,
distribution or subscription rights, the date on which the Holders shall be
entitled thereto, and such notice in accordance with the foregoing clause shall
also specify the date on which the Holders shall be entitled to exchange their
Common Stock for securities or other property deliverable upon such
reclassification, consolidation, merger, sale, dissolution, liquidation or
winding up, as the case may be. Each such written notice shall be given by
first-class mail, postage prepared, addressed to the Holder at the address of
such holder as shown on the books of the Company.
6. Transfer of Warrants.
(a) Warrant Register. The Company shall maintain a register (the
"Warrant Register") containing the names, addresses and facsimile numbers of the
Holder(s). Any Holder of this Warrant or any portion thereof may change its
address as shown on the Warrant Register by written notice to the Company
requesting such a change. Until this Warrant is transferred on the Warrant
Register, the Company may treat the Holder as shown on the Warrant Register as
the absolute owner of this Warrant for all purposes, notwithstanding any notice
to the contrary.
(b) Warrant Agent. The Company may, by written notice to the Holder,
appoint an agent for the purpose of maintaining the Warrant Register referred to
in Section 6(a) above, issuing any other securities then issuable upon the
exercise of this Warrant, exchanging this Warrant, replacing this Warrant or any
or all of the foregoing. Thereafter, any such registration, issuance or
replacement, as the case may be, shall be made at the office of such agent.
(c) Transferability and Negotiability of Warrant. Title to this
Warrant may be transferred by endorsement (by a Holder executing the Assignment
Form attached hereto as Annex B) and delivery in the same manner as negotiable
instruments transferable by endorsement and delivery.
(d) Exchange of Warrant Upon a Transfer. On surrender of this Warrant
for exchange, properly endorsed on the Assignment Form and subject to the
provisions of this Warrant with respect to compliance with the Securities Act,
the Company at its expense shall issue to or on the order of the Holder a new
Warrant or Warrants of like tenor, in the name of the Holder or as such Holder
(on payment by such Holder of any applicable transfer taxes) may direct,
exercisable for the number of Shares issuable upon the exercise hereof.
7. Registration Rights. If the Holder of this Warrant is a party to,
or an assignee of rights under, that certain Registration Rights Agreement,
dated March 9, 2000 (the "Registration Rights Agreement"), such Holder shall be
entitled to include any shares of Common Stock or other securities received upon
exercise of the Warrant with such Holder's Registrable Securities (as such term
is defined in the Registration Rights Agreement), on the terms and conditions as
set forth in the Registration Rights Agreement. The Holder of this Warrant
shall be entitled to condition any exercise of this Warrant upon the
consummation of any transaction including any merger, public or private
offering, sale of assets or similar transaction.
8. Amendment and Waivers. No amendment, modification or termination of
this Warrant shall be binding unless executed in writing by the Company and the
Warrantholder intending to be bound thereby.
9. Waivers and Extensions. Any provision of this Warrant may be
amended, waived or modified only if such amendment, waiver or modification is in
writing, is signed by the party intending to be bound, and specifically refers
to this Warrant. Waivers may be made in advance or after the right waived has
arisen or the breach or default waived has occurred. Any waiver may be
conditional. No waiver of any breach of any agreement or provision herein
contained shall be deemed a waiver of any preceding or succeeding breach thereof
nor of any other agreement or provision herein contained. No waiver or
extension of time for performance of any obligations or acts shall be deemed a
waiver or extension of the time for performance of any other obligations or
acts.
10. Termination. The right to exercise this Warrant shall
expire and shall be void at 5:00 p.m. New York City time
on March 9, 2005.
11. Reservation of Stock. The Company covenants that it will at all
times reserve and keep available, solely for issuance upon exercise of this
Warrant, all shares of Common Stock or other securities from time to time
issuable upon exercise of this Warrant and, subject to any existing contractual
limitations, from time to time, will take all steps necessary to amend its
Certificate of Incorporation to provide sufficient reserves of shares of Common
Stock or other securities issuable upon exercise of this Warrant. The Company
further covenants that all shares that may be issued upon the exercise of rights
represented by this Warrant and payment of the Exercise Price, as set forth
herein, will be fully paid and non-assessable and free from all taxes, liens and
charges in respect of the issue thereof. The Company also agrees that its
issuance of this Warrant shall constitute full authority to its officers who are
charged with the duty of executing stock certificates to execute and issue the
necessary certificates for shares of Common Stock upon exercise of this Warrant.
12. Replacement. On receipt of evidence reasonably satisfactory to the
Company of the loss, theft, destruction, or mutilation of this Warrant and, in
the case of loss, theft, or destruction, on delivery of any indemnity agreement
or bond reasonably satisfactory in form and amount to the Company or, in the
case of mutilation, on surrender and cancellation of this Warrant, the Company
at its expense will execute and deliver, in lieu of this Warrant, a new Warrant
of like tenor.
13. No Rights as Stockholder. Except as provided in Section 2(a), no
Holder of this Warrant, as such, shall be entitled to vote or receive dividends
or be considered a stockholder of the Company for any purpose, nor shall
anything in this Warrant be construed to confer on any Holder of this Warrant as
such, any rights of a stockholder of the Company or any right to vote, give or
withhold consent to any corporate action, to receive notice of meeting of
stockholders, to receive dividends or subscription rights or otherwise.
14. Miscellaneous Provisions.
(a) Governing Law. This Warrant shall be governed by, interpreted
under, and construed in accordance with the laws of the State of New York,
regardless of the laws that might otherwise govern under applicable principles
of conflicts of laws thereof.
(b) Notices. All notices, demands, requests, consents, approvals or
other communications (collectively, "Notices") required or permitted to be given
hereunder or which are given with respect to this Warrant shall be in writing
and shall be personally served, delivered by reputable air courier service with
charges prepaid, or transmitted by hand delivery, telegram, telex or facsimile,
to such address as such Holder hereof shall have specified most recently by
written notice. Notice shall be deemed given on the date of service or
transmission if personally served or transmitted by telegram, telex or
facsimile. Notice otherwise sent as provided herein shall be deemed given on
the next business day following delivery of such notice to a reputable air
courier service.
(c) Binding Effect. The provisions of this Warrant shall be binding
upon the Company and its successors and assigns.
(d) Remedies. In the event of a breach of this Warrant, the Holder
hereof shall be entitled to injunctive relief and specific performance of its
rights under this Warrant, in addition to all of its rights granted by law,
including, without limitation, recovery of damages. The Company agrees that
monetary damages would not be adequate compensation for any loss incurred by
reason of a breach of this Warrant by the Company and hereby waives any defense
in any action for injunctive relief or specific performance that a remedy at law
would be adequate.
(e) Headings. Titles and headings of sections of this Warrant are for
convenience only and shall not affect the construction of any provision of this
Warrant.
Dated: March 9, 2000
VIATEL, INC.
By:
Name:
Title:
<PAGE>
9
ANNEX A
SUBSCRIPTION FORM
(To be signed only upon exercise of Warrant)
To: VIATEL, INC.
Attention: Secretary
(1) The undersigned, the holder of the attached Warrant, hereby
irrevocably elects to [exercise the purchase right represented by that Warrant
for, and to purchase under that Warrant, ___________
Insert here the number of shares called for on the face of the Warrant (or, in
the case of partial exercise, the portion as to which the Warrant is being
exercised), without making any adjustment for additional shares of Common Stock
or any other securities or property which, under the adjustment provisions of
the Warrant, may be deliverable upon exercise. shares of Common Stock of VIATEL,
INC. and herewith tenders any necessary payment of the Exercise Price in such
number of shares in full]. [to exercise [all][a portion] of the purchase right
represented by that Warrant by canceling the Warrant with respect to ___________
shares of Common Stock of VIATEL, INC. in exchange for a number of shares of
Common Stock equal to the value [as determined pursuant to the Warrant] as the
[portion of the] Warrant [being canceled].
(2) In exercising the Warrant, the undersigned hereby confirms and
acknowledges that the shares of Common Stock or other securities to be issued
upon exercise thereof are being acquired solely for the account of the
undersigned and not as a nominee for any other party, and that the undersigned
will not sell, offer for sale, pledge, hypothecate or otherwise dispose of any
shares of Common Stock, except under circumstances that will not result in a
violation of the Securities Act of 1933, as amended, or any applicable state
securities laws.
(3) Please issue a certificate(s) representing said shares of Common
Stock in the name of the undersigned or in the name of the transferee specified
below.
(4) Please issue a new Warrant for the unexercised portion in the name
of the undersigned or in the name of the permitted transferee specified below.
(5) Please deliver any certificate(s) or Warrant to the following
address.
Name: March 20___________
Address: March 20___________
Attention: March 20___________
Dated:
March 20___________
ByMarch 20___________
Name:
<PAGE>
ANNEX B
ASSIGNMENT FORM
FOR VALUE RECEIVED the undersigned registered owner of this Warrant hereby
sells, assigns and transfers unto the assignee named below all of the rights of
the undersigned under this Warrant, with respect to the number of shares of
Common Stock set forth below:
No. of Shares of
Name and Address of Assignee Common Stock
and does hereby irrevocably constitute and appoint March 20_______
attorney-in-fact to register such transfer onto the books of Viatel, Inc.
maintained for the purpose, with full power of substitution in the premises.
Date: Print Name:
Signature:
Witness:
NOTICE: The signature on this assignment must correspond with the name as
written upon the face of the within Warrant in every particular, without
alteration or enlargement or any change whatsoever.
THE SECURITIES REPRESENTED BY THIS CERTIFICATE HAVE NOT BEEN REGISTERED UNDER
THE SECURITIES ACT OF 1933, AS AMENDED (THE "SECURITIES ACT") OR THE SECURITIES
LAWS OF ANY STATE OF THE UNITED STATES. SUCH SECURITIES MAY NOT BE OFFERED,
SOLD, TRANSFERRED, PLEDGED, HYPOTHECATED OR OTHERWISE DISPOSED OF IN THE ABSENCE
OF SUCH REGISTRATION OTHER THAN PURSUANT TO AN EXEMPTION FROM SUCH REGISTRATION
REQUIREMENTS.
HMTF BRIDGE VIATEL, LLC
COMMON STOCK WARRANT
Void after September 9, 2007
Warrant No. B-1-1
This certifies that, for value received HMTF BRIDGE VIATEL, LLC or its permitted
assigns is entitled, subject to the terms and conditions set forth herein
(including the exercise conditions of Section 2), to purchase from Viatel, Inc.
(the "Company"), a Delaware corporation, up to 188,279 fully paid and
nonassessable shares (the "Shares") of Common Stock (as defined herein) at the
exercise price of $100.00 per share (the "Exercise Price"). The Exercise Price
and number of Shares is subject to adjustment as provided in this Warrant. The
term "Warrant" as used herein shall include this Warrant and any warrants
delivered in substitution or exchange therefor as provided herein.
1. Definitions. As used in this Warrant, the following terms, unless
the context otherwise requires, have the following meanings:
(a) "Common Stock" means shares of the Company's common stock, par
value $0.01 per share.
(b) "Company" includes any Person that shall succeed to or assume the
obligations of the Company under this Warrant.
(c) "Person" means any individual, partnership, corporation, limited
liability company, joint venture, association, joint-stock company, trust,
unincorporated organization, government or agency or political subdivision
thereof, or other entity.
(d) "Public Offering" shall mean a public offering by the Company of
its Common Stock registered under the Securities Act of 1933, as amended.
(e) "Warrantholder", "Holder of Warrant", "Holder", or similar terms
refers to the holder of this Warrant.
2. Exercise Provisions.
(a) Exercisability. The Holder of this Warrant may exercise it in
whole or in part, by surrender of this Warrant, accompanied by a duly executed
Subscription Form (attached hereto as Annex A), to the Company at its principal
office (or to the office of the Warrant Agent as contemplated in Section 6(b),
if applicable), accompanied by payment, in lawful money of the United States, of
the amount obtained by multiplying the Exercise Price (as adjusted from time to
time pursuant to the terms of this Warrant) by the number of shares of Common
Stock designated in such completed Subscription Form. This Warrant shall be
deemed to have been exercised immediately prior to the close of business on the
day of surrender of such Warrant, and the person or persons entitled to receive
shares of Common Stock issuable upon exercise of this Warrant shall be treated
for all purposes as the record holder or holders of such shares of Common Stock
at such time.
(b) Payment of Exercise Price. Payment may be made by check payable to
the Company. The holders of this Warrant may, in lieu of any exercise payment
as set forth above, pay the Exercise Price by (i) delivering shares of Common
Stock having a fair market value (as defined below in this Section 2) equal to
the aggregate Exercise Price or (ii) any combination of the methods of payment
set forth herein.
(c) Net Issue Exercise. Notwithstanding any provisions herein to the
contrary, if the fair market value (as defined below in this Section 2) of one
share of Common Stock is greater than the Exercise Price (on the date of
exercise of this Warrant), in lieu of exercising this Warrant in exchange for
cash, the Holder hereof may elect to exercise all or a portion of this Warrant
by canceling all or a portion of this Warrant and receiving in exchange therefor
shares of Common Stock (as determined below) equal to the value of this Warrant,
or the portion thereof being canceled, by surrender of this Warrant at the
principal office of the Company (or the office of the Warrant Agent contemplated
by Section 6(b), if applicable) together with a duly executed Subscription Form,
in which event the Company shall issue to such Holder a number of shares of
Common Stock computed using the following formula:
X=Y(A-B)
-----
A
Where X= The number of shares of Common Stock to be issued to the
Holder
Y= The number of shares of Common Stock purchasable under
the Warrant or, if only a portion of the Warrant is
being exercised, under the portion of the Warrant
being exercised (on the date of such exercise)
A= the fair market value of one share of the Common
Stock (on the date of such exercise)
B= The Exercise Price (as adjusted on the date
of such exercise)
For purposes of the above calculation and Section 2(b) only, "fair market value"
of one share of Common Stock shall be determined by the Company's Board of
Directors in good faith; provided, however, where a public market exists for the
Common Stock at the time of such exercise, the "fair market value" per share
shall be the average for the five trading days prior to the date of such
exercise of the average of the closing bid and asked prices of the Common Stock
quoted in the Over-The-Counter Market Summary or the last reported sale price of
the Common Stock quoted on the Nasdaq National Market System or the principal
exchange on which the Common Stock is then listed, whichever is applicable, as
published in The Wall Street Journal.
(d) Restrictions on Exercise. This Warrant is exercisable at any
time and from time to time from the date hereof, provided this Warrant has not
terminated pursuant to Section 10.
3. Delivery of Stock Certificates. As soon as possible after full or
partial exercise of this Warrant and in any event within ten days after such
exercise, the Company, at its expense, will cause to be issued in the name of
and delivered to the Holder of this Warrant, a certificate or certificates for
the number of fully paid and nonassessable shares of Common Stock to which that
Holder shall be entitled upon such exercise, together with any other securities
and property to which that Holder is entitled upon such exercise under the terms
of this Warrant. In the event that this Warrant is exercised in part, the
Company at its expense also will execute and deliver a new Warrant of like tenor
exercisable for the number of Shares for which this Warrant may then be
exercised. No fractional shares or scrip representing fractional shares will be
issued upon exercise of this Warrant. If upon any exercise of this Warrant a
fraction of a Share results, the Company will pay the cash value of that
fractional Share, calculated on the basis of the fair market value (as shall be
determined by the Company's Board of Directors in good faith) as of the date of
exercise.
4. Adjustment Provisions.
For purposes of this Section 4, all references to Common Stock shall be
deemed to include the shares of Common Stock into which the Series C Preferred
Stock of the Company is convertible. The Exercise Price shall be adjusted from
time to time by the Company as follows:
(a) If the Company shall hereafter pay a dividend or make a
distribution to all holders of the outstanding shares of Common Stock in shares
of Common Stock, the Exercise Price in effect at the opening of business on the
date following the date fixed for the determination of shareholders entitled to
receive such dividend or other distribution shall be reduced by multiplying such
Exercise Price by a fraction the numerator of which shall be the number of
shares of Common Stock outstanding at the close of business on the Common Stock
Record Date (as defined in Section 4(h)(ii)) fixed for such determination and
the denominator of which shall be the sum of (x) such number of shares and (y)
the total number of shares constituting such dividend or other distribution,
such reduction to become effective immediately after the opening of business on
the day following the Common Stock Record Date. If any dividend or distribution
of the type described in this Section 4(a) is declared but not so paid or made,
the Exercise Price shall again be adjusted to the Exercise Price which would
then be in effect if such dividend or distribution had not been declared.
(b) In case the Company shall issue or sell any Common Stock (other
than Common Stock issued (i) pursuant to the Company's existing or future stock
option plans or pursuant to any other existing or future Common Stock-related
director or employee compensation plan of the Company approved by the Board of
Directors, (ii) pursuant to the Company's existing or future stock purchase
plans that permit Company employees to purchase Common Stock at a purchase price
that is not more than a 15% discount to the Current Market Price, (iii) as
consideration for the acquisition of a business or of assets, (iv) in a firm
commitment underwritten public offering when either (A) the underwriting
discount is 5% or less, or (B) the offering price per share is greater than the
Exercise Price, (v) to the Company's joint venture partners in exchange for
interests in the relevant joint venture, (vi) upon exercise or conversion of any
security the issuance of which caused an adjustment hereunder or the issuance of
which did not require adjustment hereunder or (vii) upon exercise or conversion
of any of the Series B-1 Preferred Stock, the Series B-2 Preferred Stock, the
Series C Preferred Stock or the Warrants, in each case as defined in the
Securities Purchase Agreement, dated as of February 1, 2000, among the Company
and the Purchasers named therein), without consideration or for a consideration
per share less than the Current Market Price (as defined in Section 4(h)(iii))
on the date of such issuance, or shall issue securities convertible into Common
Stock having a conversion price per share less than the Current Market Price at
the date of issuance of such convertible security, the Exercise Price to be in
effect after such issuance or sale shall be determined by multiplying the
Exercise Price in effect immediately prior to such issuance or sale by a
fraction, the numerator of which shall be the sum of (x) the number of shares of
Common Stock outstanding immediately prior to such issuance or sale and (y) the
number of shares of Common Stock which the aggregate consideration receivable by
the Company for the total number of additional shares of Common Stock so issued
or sold (or, in the case of convertible securities, issuable on conversion)
would purchase at the Current Market Price in effect immediately prior to such
issuance or sale and the denominator of which shall be the sum of the number of
shares of Common Stock outstanding immediately prior to such issuance or sale
and the number of additional shares of Common Stock to be issued or sold (or, in
the case of convertible securities, issuable on conversion). In case any
portion of the consideration to be received by the Company shall be in a form
other than cash, the "fair market value" of such noncash consideration shall be
utilized in the foregoing computation. Such fair market value shall be
determined in good faith by the Board of Directors.
(c) If the Company shall offer or issue options, rights or warrants to
all holders of its outstanding shares of Common Stock entitling them to
subscribe for or purchase shares of Common Stock at a price per share less than
the Current Market Price on the Common Stock Record Date fixed for the
determination of shareholders entitled to receive such options, rights or
warrants, the Exercise Price shall be adjusted so that the same shall equal the
price determined by multiplying the Exercise Price in effect at the opening of
business on the date after such Common Stock Record Date by a fraction the
numerator of which shall be the sum of (x) the number of shares of Common Stock
outstanding at the close of business on the Common Stock Record Date and (y) the
number of shares of Common Stock which the aggregate offering price of the total
number of shares of Common Stock subject to such options, rights or warrants
would purchase at such Current Market Price and the denominator of which shall
be the sum of (x) the number of shares of Common Stock outstanding at the close
of business on the Common Stock Record Date and (y) the total number of
additional shares of Common Stock subject to such options, rights or warrants
for subscription or purchase. Such adjustment shall become effective immediately
after the opening of business on the day following the Common Stock Record Date
fixed for determination of shareholders entitled to purchase or receive such
options, rights or warrants. To the extent that shares of Common Stock are not
delivered pursuant to such options, rights or warrants, upon the expiration or
termination of such options, rights or warrants the Exercise Price (as adjusted
pursuant to this Section 4(c)) shall again be adjusted to be the Exercise Price
which would then be in effect had the adjustments made upon the issuance of such
options, rights or warrants been made on the basis of delivery of only the
number of shares of Common Stock actually delivered. If such options, rights or
warrants are not so issued, the Exercise Price (as adjusted pursuant to this
Section 4(c)) shall again be adjusted to be the Exercise Price which would then
be in effect if such date fixed for the determination of shareholders entitled
to receive such options, rights or warrants had not been fixed. In determining
whether any options, rights or warrants entitle the holders to subscribe for or
purchase shares of Common Stock at less than such Current Market Price, and in
determining the aggregate offering price of such shares of Common Stock, there
shall be taken into account (1) any consideration received for such options,
rights or warrants, with the value of such consideration and the amount of such
exercise or subscription price, if other than cash, to be determined in good
faith by the Board of Directors and (2) the amount of any exercise price or
subscription price required to be paid upon exercise of such options, warrants
or rights.
(d) If the outstanding shares of Common Stock shall be subdivided into
a greater number of shares of Common Stock, the Exercise Price in effect at the
opening of business on the day following the day upon which such subdivision
becomes effective shall be proportionately reduced, and, conversely, if the
outstanding shares of Common Stock shall be combined into a smaller number of
shares of Common Stock, the Exercise Price in effect at the opening of business
on the day following the day upon which such combination becomes effective shall
be proportionately increased; such reduction or increase, as the case may be, to
become effective immediately after the opening of business on the day following
the day upon which such subdivision or combination becomes effective.
(e) (i) If the Company shall, by dividend or otherwise, distribute to
all holders of its shares of Common Stock any class of capital stock of the
Company (other than any dividends or distributions to which Section 4(a)
applies) or evidences of its indebtedness, cash or other assets (including
securities, but excluding any options, rights, or warrants of a type referred to
in Section 4(c), and dividends and distributions paid exclusively in cash and
excluding any capital stock, evidences of indebtedness, cash or assets
distributed upon a merger or consolidation to which Section 4(m) applies) (the
foregoing hereinafter in this Section 4(e) called the "Distributed Securities"),
then, in each such case, the Exercise Price shall be reduced so that the same
shall be equal to the price determined by multiplying the Exercise Price in
effect immediately prior to the close of business on the Common Stock Record
Date with respect to such distribution by a fraction the numerator of which
shall be the difference between (x) the Current Market Price on such date over
(y) the fair market value (as determined by the Board of Directors, whose good
faith determination shall be conclusive and described in a resolution of the
Board of Directors) on such date of the portion of the Distributed Securities
applicable to one share of Common Stock and the denominator of which shall be
such Current Market Price, such reduction to become effective immediately prior
to the opening of business on the day following the Common Stock Record Date;
provided, however, that, in the event the then fair market value (as so
determined) of the portion of the Distributed Securities applicable to one share
of Common Stock is equal to or greater than the Current Market Price on the
Common Stock Record Date, in lieu of the foregoing adjustment, adequate
provision shall be made so that each Holder shall have the right to receive,
upon exercise of such Warrant (or any portion thereof), the amount of
Distributed Securities such Holder would have received had such Holder exercised
such Warrant (or portion thereof) immediately prior to such Common Stock Record
Date. If such dividend or distribution is not so paid or made, the Exercise
Price (as adjusted pursuant to this Section 4(e)(i)) shall again be adjusted to
be the Exercise Price which would then be in effect if such dividend or
distribution had not been declared. If the Board of Directors determines the
fair market value of any distribution for purposes of this Section 4(e) by
reference to the actual or when issued trading market for any securities
constituting all or part of such distribution, the Board of Directors must, in
doing so, consider the price of the Common Stock in such market over the same
period used in computing the Current Market Price pursuant to Section 4(h)(iii),
to the extent possible.
(ii) Options, rights or warrants distributed by the Company to all
holders of shares of Common Stock entitling the holders thereof to subscribe for
or purchase shares of the Company's capital stock (either initially or under
certain circumstances), which options, rights or warrants, until the occurrence
of a specified event or events ("Dilution Trigger Event"): (A) are deemed to be
transferred with such shares of Common Stock; (B) are not exercisable; and (C)
are also issued in respect of future issuances of shares of Common Stock, shall
be deemed not to have been distributed for purposes of this Section 4(e) (and no
adjustment to the Exercise Price under this Section 4(e) shall be required)
until the occurrence of the earliest Dilution Trigger Event, whereupon such
options, rights and warrants shall be deemed to have been distributed and an
appropriate adjustment to the Exercise Price under this Section 4(e) shall be
made. If any such options, rights or warrants, including any such existing
options, rights or warrants distributed prior to the first issuance of the
Warrants, are subject to subsequent events, upon the occurrence of which such
options, rights or warrants shall become exercisable to purchase different
securities, evidences of indebtedness or other assets, then the occurrence of
each such event shall be deemed to be such date of issuance and record date with
respect to new options, rights or warrants (and a termination or expiration of
the existing options, rights or warrants, without exercise by the holder
thereof). In addition, in the event of any distribution (or deemed
distribution) of options, rights or warrants, or any Dilution Trigger Event with
respect thereto, that was counted for purposes of calculating a distribution
amount for which an adjustment to the Exercise Price under this Section 4(e) was
made, (1) in the case of any such options, rights or warrants all of which shall
have been redeemed or repurchased without exercise by any holders thereof, the
Exercise Price (as adjusted pursuant to this Section 4(e)) shall be readjusted
upon such final redemption or repurchase to give effect to such distribution or
Dilution Trigger Event, as the case may be, as though it were a cash
distribution equal to the per share redemption or repurchase price received by a
holder or holders of shares of Common Stock with respect to such options, rights
or warrants (assuming such holder had retained such options, rights or
warrants), made to all holders of shares of Common Stock as of the date of such
redemption or repurchase, and (2) in the case of such options, rights or
warrants which shall have expired or been terminated without exercise by any
holders thereof, the Exercise Price (as adjusted pursuant to this Section 4(e))
shall be readjusted to be the Exercise Price which would then be in effect if
such options, rights or warrants had not been issued.
(iii) Notwithstanding any other provision of this Section 4(e) to the
contrary, options, rights, warrants, evidences of indebtedness, other
securities, cash or other assets (including, without limitation, any rights
distributed pursuant to any shareholder rights plan) shall be deemed not to have
been distributed for purposes of this Section 4(e) if the Company makes proper
provision so that each Holder who exercises such Holder's Warrants (or any
portion thereof) after the date fixed for determination of shareholders entitled
to receive any such options, rights, warrants, evidences of indebtedness, other
securities, cash or other assets (including, without limitation, any rights
distributed pursuant to any shareholder rights plan) shall be entitled to
receive upon such exercise, in addition to the shares of Common Stock issuable
upon such exercise, the amount and kind of any such options, rights, warrants,
evidences of indebtedness, other securities, cash or other assets (including,
without limitation, any rights distributed pursuant to any shareholder rights
plan) that such Holder would have been entitled to receive if such Holder had,
immediately prior to such determination date, exercised such Warrants.
(iv) For purposes of Section 4(e) and Sections 4(a) and 4(c), any dividend
or distribution to which this Section 4(e) is applicable that also includes
shares of Common Stock, or options, rights or warrants to subscribe for or
purchase shares of Common Stock to which 4(c) applies (or both), shall be deemed
instead to be (A) a dividend or distribution of the evidences of indebtedness,
assets, shares of capital stock, rights or warrants other than such shares of
Common Stock or options, rights or warrants to subscribe for or purchase shares
of Common Stock, to which Section 4(c) applies (and any Exercise Price reduction
required by this Section 4(e) with respect to such dividend or distribution
shall then be made), immediately followed by (B) a dividend or distribution of
such shares of Common Stock or such options, rights or warrants to subscribe for
or purchase shares of Common Stock, (and any further Exercise Price reduction
required by Sections 4(a) or 4(c) with respect to such dividend or distribution
shall then be made), except that (1) the Common Stock Record Date of such
dividend or distribution shall be substituted as "the date fixed for the
determination of stockholders entitled to receive such dividend or other
distribution", "the Common Stock Record Date fixed for such determination" and
"the Common Stock Record Date" within the meaning of Section 4(a) and as "the
Common Stock Record Date fixed for the determination of the share holders
entitled to receive such options, rights or warrants" and "such Common Stock
Record Date" for purposes of Section 4(c), and (2) any shares of Common Stock
included in such dividend or distribution shall not be deemed "outstanding at
the close of business on the date fixed for such determination" for the purposes
of Section 4(a).
(f) If the Company shall, by dividend or otherwise, distribute to all
holders of its shares of Common Stock cash (excluding any cash that is
distributed upon a merger or consolidation to which Section 4(m) applies or as
part of a distribution referred to in Sections 4(e)(i)-4(e)(iv)) in an aggregate
amount that, combined together with (i) the aggregate amount of any other such
distributions to all holders of its shares of Common Stock made exclusively in
cash within the 12 months preceding the date of payment of such distribution,
and in respect of which no adjustment pursuant to this Section 4(f) has been
made, and (ii) the aggregate of any cash, plus the fair market value (as
determined by the Board of Directors, whose good faith determination shall be
conclusive and described in a resolution of the Board of Directors) of
consideration payable in respect of any tender offer by the Company for all or
any portion of the shares of Common Stock concluded within the 12 months
preceding the date of payment of such distribution, and in respect of which no
adjustment pursuant to Section 4(g) has been made, exceeds 5% of the net income
of the Company reported for the 12 month period ending with the fiscal quarter
immediately preceding such payment (the "12 Month Net Income"), then, and in
each such case, immediately after the close of business on such date, the
Exercise Price shall be reduced so that the same shall equal the price
determined by multiplying the Exercise Price in effect immediately prior to the
close of business on such Common Stock Record Date by a fraction the numerator
of which shall be equal to the Current Market Price on the Common Stock Record
Date less an amount equal to the quotient of (x) the excess of such combined
amount over such 5% of the 12 Month Net Income and (y) the number of shares of
Common Stock outstanding on the Common Stock Record Date and the denominator of
which shall be equal to the Current Market Price on such Common Stock Record
Date; provided, however, that, if the portion of the cash so distributed
applicable to one share of Common Stock is equal to or greater than the Current
Market Price of the Common Stock on the Common Stock Record Date, in lieu of the
foregoing adjustment, adequate provision shall be made so that each Holder shall
have the right to receive upon exercise of such Warrant (or any portion thereof)
the amount of cash such Holder would have received had such Holder exercised
such Warrant (or portion thereof) immediately prior to such Common Stock Record
Date. If such dividend or distribution is not so paid or made, the Exercise
Price (as adjusted pursuant to this Section 4(f)) shall again be adjusted to be
the Exercise Price which would then be in effect if such dividend or
distribution had not been declared.
(g) If a tender offer made by the Company or any of its subsidiaries
for all or any portion of the Common Stock expires and such tender offer (as
amended upon the expiration thereof) requires the payment to shareholders (based
on the acceptance (up to any maximum specified in the terms of the tender offer)
of Purchased Shares) of an aggregate consideration having a fair market value
(as determined by the Board of Directors, whose good faith determination shall
be conclusive and described in a resolution of the Board of Directors) that,
combined together with (A) the aggregate of the cash plus the fair market value
(as determined by the Board of Directors, whose good faith determination shall
be conclusive and described in a resolution of the Board of Directors), as of
the expiration of such tender offer, of consideration payable in respect of any
other tender offers, by the Company or any of its subsidiaries for all or any
portion of the shares of Common Stock expiring within the 12 months preceding
the expiration of such tender offer and in respect of which no adjustment
pursuant to this Section 4(g) has been made and (B) the aggregate amount of any
distributions to all holders of the Common Stock made exclusively in cash within
12 months preceding the expiration of such tender offer and in respect of which
no adjustment pursuant to Section 4(f) has been made, exceeds 5% of the 12 Month
Net Income (determined as of the last time (the "Expiration Time") tenders could
have been made pursuant to such tender offer (as it may be amended)), then, and
in each such case, immediately prior to the opening of business on the day after
the date of the Expiration Time, the Exercise Price shall be adjusted so that
the same shall equal the price determined by multiplying the Exercise Price in
effect immediately prior to the close of business on the date of the Expiration
Time by a fraction the numerator of which shall be the product of the number of
shares of Common Stock outstanding (including any tendered shares) at the
Expiration Time multiplied by the Current Market Price of the Common Stock on
the trading day next succeeding the Expiration Time and the denominator of which
shall be the sum of (x) the fair market value (determined as aforesaid) of the
aggregate consideration payable to shareholders based on the acceptance (up to
any maximum specified in the terms of the tender offer) of all shares validly
tendered and not withdrawn as of the Expiration Time (the shares deemed so
accepted, up to any such maximum, being referred to as the "Purchased Shares")
and (y) the product of the number of shares of Common Stock outstanding (less
any Purchased Shares) at the Expiration Time and the Current Market Price of the
shares of Common Stock on the trading day next succeeding the Expiration Time,
such reduction (if any) to become effective immediately prior to the opening of
business on the day following the Expiration Time. If the Company is obligated
to purchase shares pursuant to any such tender offer, but the Company is
permanently prevented by applicable law from effecting any such purchases or all
such purchases are rescinded, the Exercise Price (as adjusted pursuant to this
Section 4(g)) shall again be adjusted to be the Exercise Price which would then
be in effect if such tender offer had not been made. If the application of this
Section 4(g) to any tender offer would result in an increase in the Exercise
Price, no adjustment shall be made for such tender offer under this Section
4(g).
(h) For purposes of Section 4, the following terms shall have the
meaning indicated:
(i) "closing price" with respect to any securities on any day means the
closing sale price as of 4:00 p.m. Eastern Time on such day or any earlier final
closing on such day or, if no such sale takes place on such day, the average of
the reported high and low bid prices on such day, in each case on the Nasdaq
National Market, or the New York Stock Exchange, as applicable, or, if such
security is not listed or admitted to trading on such national market or
exchange, on the national stock exchange or nationally recognized trading market
in the United States on which such security is quoted or listed or admitted to
trading, or, if not quoted or listed or admitted to trading on any national
stock exchange or nationally recognized trading market in the United States, the
average of the high and low bid prices of such security on the over-the-counter
market on the day in question as reported by the National Quotation Bureau,
Incorporated or a similar generally accepted reporting service in the United
States, or, if not so available, in such manner as furnished by any New York
Stock Exchange member firm selected from time to time by the Board of Directors
for that purpose, or a price determined in good faith by the Board of Directors,
whose determination shall be conclusive and described in a resolution of the
Board of Directors.
(ii) "Common Stock Record Date" means, with respect to any dividend,
distribution or other transaction or event in which the holders of Common Stock
have the right to receive any cash, securities or other property or pursuant to
which the Common Stock (or other applicable security) is exchanged for or
converted into any combination of cash, securities or other property, the date
fixed for determination of shareholders entitled to receive such cash,
securities or other property (whether such date is fixed by the Board of
Directors or by statute, contract or otherwise).
(iii) "Current Market Price" means the average of the daily closing prices
per share of Common Stock for the ten consecutive trading days immediately prior
to the date in question; provided, however, that (A) if the "ex" date (as
hereinafter defined) for any event (other than the issuance or distribution
requiring such computation) that requires an adjustment to the Exercise Price
pursuant to Section 4(a), 4(b), 4(c), 4(d), 4(e), 4(f) or 4(g) occurs during
such ten consecutive trading days, the closing price for each trading day prior
to the "ex" date for such other event shall be adjusted by multiplying such
closing price by the same fraction by which the Exercise Price is so required to
be adjusted as a result of such other event, (B) if the "ex" date for any event
(other than the issuance or distribution requiring such computation) that
requires an adjustment to the Exercise Price pursuant to Section 4(a), 4(b),
4(c), 4(d), 4(e), 4(f) or 4(g) occurs on or after the "ex" date for the issuance
or distribution requiring such computation and prior to the day in question, the
closing price for each trading day on and after the "ex" date for such other
event shall be adjusted by multiplying such closing price by the reciprocal of
the fraction by which the Exercise Price is so required to be adjusted as a
result of such other event and (C) if the "ex" date for the issuance or
distribution requiring such computation is prior to the day in question, after
taking into account any adjustment required pursuant to clause (A) or (B) of
this proviso, the closing price for each trading day on or after such "ex" date
shall be adjusted by adding thereto the amount of any cash and the fair market
value (as determined by the Board of Directors in a manner consistent with any
good faith determination of such value for purposes of Section 4(e) or 4(f),
whose good faith determination shall be conclusive and described in a resolution
of the Board of Directors) of the evidences of indebtedness, shares of capital
stock or assets being distributed applicable to one share of Common Stock as of
the close of business on the day before such "ex" date. For purposes of any
computation under Section 4(f), the Current Market Price on any date shall be
deemed to be the average of the daily closing prices per share of Common Stock
for such day and the next two succeeding trading days; provided, however, that,
if the "ex" date for any event (other than the tender offer requiring such
computation) that requires an adjustment to the Exercise Price pursuant to
Section 4(a), 4(b), 4(c), 4(d), 4(e), or 4(g) occurs on or after the Expiration
Time for the tender or exchange offer requiring such computation and prior to
the day in question, the closing price for each trading day on and after the
"ex" date for such other event shall be adjusted by multiplying such closing
price by the reciprocal of the fraction by which the Exercise Price is so
required to be adjusted as a result of such other event. For purposes of this
paragraph, the term "ex" date (1) when used with respect to any issuance or
distribution, means the first date on which the shares of Common Stock trade
regular way on the relevant exchange or in the relevant market from which the
closing price was obtained without the right to receive such issuance or
distribution, (2) when used with respect to any subdivision or combination of
shares of Common Stock, means the first date on which the shares of Common Stock
trade regular way on such exchange or in such market after the time at which
such subdivision or combination becomes effective and (3) when used with respect
to any tender or exchange offer means the first date on which the shares of
Common Stock trade regular way on such exchange or in such market after the
Expiration Time of such offer. Notwithstanding the foregoing, whenever
successive adjustments to the Exercise Price are called for pursuant to this
Section 4, such adjustments shall be made to the Current Market Price as may be
necessary or appropriate to effectuate the intent of this Section 4 and to avoid
unjust or inequitable results, as determined in good faith by the Board of
Directors.
(iv) "fair market value" means the amount which a willing buyer would pay
a willing seller in an arm's-length transaction.
(i) No adjustment in the Exercise Price shall be required unless such
adjustment would require an increase or decrease of at least 1% in such price;
provided, however, that any adjustments which by reason of this Section 4(i) are
not required to be made shall be carried forward and taken into account in any
subsequent adjustment. All calculations under this Section 4 shall be made by
the Company and shall be made to the nearest cent. No adjustment need be made
for a change in the par value or no par value of the Common Stock.
(j) Whenever the Exercise Price is adjusted as herein provided, the Company
shall promptly file with the Warrant Agent an Officers' Certificate setting
forth the Exercise Price after such adjustment, the number of shares of Common
Stock for which this Warrant will be exercisable after such adjustment pursuant
to Section 4(n) and a brief statement of the facts requiring such adjustment.
Promptly after delivery of such certificate, the Company shall prepare a notice
of such adjustment of the Exercise Price setting forth the adjusted Exercise
Price and the date on which each adjustment becomes effective and shall mail
such notice of such adjustment of the Exercise Price to each Holder at such
Holder's last address appearing on the register of Holders maintained for that
purpose within 20 days of the effective date of such adjustment. Failure to
deliver such notice shall not affect the legality or validity of any such
adjustment.
(k) In any case in which this Section 4 provides that an adjustment shall
become effective immediately after a Common Stock Record Date for an event, the
Company may defer, until the occurrence of such event, issuing to the Holder of
any Warrant exercised after such Common Stock Record Date and before the
occurrence of such event, the additional shares of Common Stock issuable upon
such exercise by reason of the adjustment required by such event over and above
the shares of Common Stock issuable upon such exercise before giving effect to
such adjustment.
(l) For purposes of this Section 4, the number of shares of Common Stock at
any time outstanding shall not include shares of Common Stock held in the
treasury of the Company. The Company shall not pay any dividend or make any
distribution on shares of Common Stock held in the treasury of the Company.
(m) In case of any consolidation of the Company with, or merger of the
Company into, any other Person, or in case of any merger of another Person into
the Company (other than a merger that does not result in any reclassification,
conversion, exchange or cancellation of outstanding shares of Common Stock), or
in case of any sale, conveyance or transfer of all or substantially all the
assets of the Company, the Holders shall have the right thereafter, during the
period such Warrant shall be exercisable as specified in Section 2(d), to
exercise such Warrants into the kind and amount of securities, cash and other
property receivable upon such consolidation, merger, conveyance or transfer by a
holder of the number of shares of Common Stock for which the Warrants might have
been exercised immediately prior to such consolidation, merger, conveyance or
transfer, assuming such holder of shares of Common Stock failed to exercise his
rights of election, if any, as to the kind or amount of securities, cash and
other property receivable upon such consolidation, merger, conveyance or
transfer (provided that, if the kind or amount of securities, cash and other
--------
property receivable upon such consolidation, merger, conveyance or transfer is
not the same for each share of Common Stock in respect of which such rights of
election shall not have been exercised ("nonelecting share"), then for the
purpose of this Section 4(m) the kind and amount of securities, cash and other
property receivable upon such consolidation, merger, conveyance or transfer by
each nonelecting share shall be deemed to be the kind and amount so receivable
per share by a plurality of the nonelecting shares). Such securities shall
provide for adjustments which, for events subsequent to the effective date of
the triggering event, shall be as nearly equivalent as may be practicable to the
adjustments provided for in this Section 4(m). The above provisions of this
Section 4(m) shall similarly apply to successive consolidations, mergers,
conveyances or transfers.
(n) Upon each adjustment of the Exercise Price as a result of the operation
of this Section 4, this Warrant shall thereafter evidence the right to purchase,
at the adjusted Exercise Price, that number of shares of Common Stock obtained
by multiplying the number of Shares covered by this Warrant immediately prior to
this adjustment by the Exercise Price in effect immediately prior to such
adjustment and dividing the product so obtained by the Exercise Price in effect
immediately after such adjustment of the Exercise Price.
5. Notice of Certain Events. If at any time prior to the termination or
full exercise of this Warrant:
(a) the Company shall declare any dividend payable in stock of any
class upon its Common Stock and/or Series C Preferred Stock, make any
distribution to the holders of its Common Stock and/or Series C Preferred Stock
or offer for subscription pro rata to holders of Common Stock and/or Series C
Preferred Stock any additional shares of stock of any class or other rights;
(b) there shall be any reclassification of the Common Stock and/or
Series C Preferred Stock of the Company;
(c) there shall be any consolidation or merger of the Company with or
into, or sale of all or substantially all of its assets to, another Person;
(d) there shall be a voluntary or involuntary dissolution, liquidation
or winding up of the Company; or
(e) there shall be a Public Offering;
then, in any one or more of such cases, the Company shall give the Holder at
least 10 days' prior written notice of the date on which the books of the
Company shall close or a record shall be taken for such dividend, distribution
or subscription rights or for determining rights to vote in respect to any such
reclassification, consolidation, merger, sale, dissolution, liquidation or
winding up or of the date of a filing of a registration statement under the
Securities Act for a Public Offering. Such notice in accordance with the
foregoing clause shall also specify, in the case of any such dividend,
distribution or subscription rights, the date on which the Holders shall be
entitled thereto, and such notice in accordance with the foregoing clause shall
also specify the date on which the Holders shall be entitled to exchange their
Common Stock for securities or other property deliverable upon such
reclassification, consolidation, merger, sale, dissolution, liquidation or
winding up, as the case may be. Each such written notice shall be given by
first-class mail, postage prepared, addressed to the Holder at the address of
such holder as shown on the books of the Company.
6. Transfer of Warrants.
(a) Warrant Register. The Company shall maintain a register (the
"Warrant Register") containing the names, addresses and facsimile numbers of the
Holder(s). Any Holder of this Warrant or any portion thereof may change its
address as shown on the Warrant Register by written notice to the Company
requesting such a change. Until this Warrant is transferred on the Warrant
Register, the Company may treat the Holder as shown on the Warrant Register as
the absolute owner of this Warrant for all purposes, notwithstanding any notice
to the contrary.
(b) Warrant Agent. The Company may, by written notice to the Holder,
appoint an agent for the purpose of maintaining the Warrant Register referred to
in Section 6(a) above, issuing any other securities then issuable upon the
exercise of this Warrant, exchanging this Warrant, replacing this Warrant or any
or all of the foregoing. Thereafter, any such registration, issuance or
replacement, as the case may be, shall be made at the office of such agent.
(c) Transferability and Negotiability of Warrant. Title to this
Warrant may be transferred by endorsement (by a Holder executing the Assignment
Form attached hereto as Annex B) and delivery in the same manner as negotiable
instruments transferable by endorsement and delivery.
(d) Exchange of Warrant Upon a Transfer. On surrender of this Warrant
for exchange, properly endorsed on the Assignment Form and subject to the
provisions of this Warrant with respect to compliance with the Securities Act,
the Company at its expense shall issue to or on the order of the Holder a new
Warrant or Warrants of like tenor, in the name of the Holder or as such Holder
(on payment by such Holder of any applicable transfer taxes) may direct,
exercisable for the number of Shares issuable upon the exercise hereof.
7. Registration Rights. If the Holder of this Warrant is a party to,
or an assignee of rights under, that certain Registration Rights Agreement,
dated March 9, 2000 (the "Registration Rights Agreement"), such Holder shall be
entitled to include any shares of Common Stock or other securities received upon
exercise of the Warrant with such Holder's Registrable Securities (as such term
is defined in the Registration Rights Agreement), on the terms and conditions as
set forth in the Registration Rights Agreement. The Holder of this Warrant
shall be entitled to condition any exercise of this Warrant upon the
consummation of any transaction including any merger, public or private
offering, sale of assets or similar transaction.
8. Amendment and Waivers. No amendment, modification or termination of
this Warrant shall be binding unless executed in writing by the Company and the
Warrantholder intending to be bound thereby.
9. Waivers and Extensions. Any provision of this Warrant may be
amended, waived or modified only if such amendment, waiver or modification is in
writing, is signed by the party intending to be bound, and specifically refers
to this Warrant. Waivers may be made in advance or after the right waived has
arisen or the breach or default waived has occurred. Any waiver may be
conditional. No waiver of any breach of any agreement or provision herein
contained shall be deemed a waiver of any preceding or succeeding breach thereof
nor of any other agreement or provision herein contained. No waiver or
extension of time for performance of any obligations or acts shall be deemed a
waiver or extension of the time for performance of any other obligations or
acts.
10. Termination. The right to exercise this Warrant shall expire and shall
be void at 5:00 p.m. New York City time on September 9, 2007.
11. Reservation of Stock. The Company covenants that it will at all
times reserve and keep available, solely for issuance upon exercise of this
Warrant, all shares of Common Stock or other securities from time to time
issuable upon exercise of this Warrant and, subject to any existing contractual
limitations, from time to time, will take all steps necessary to amend its
Certificate of Incorporation to provide sufficient reserves of shares of Common
Stock or other securities issuable upon exercise of this Warrant. The Company
further covenants that all shares that may be issued upon the exercise of rights
represented by this Warrant and payment of the Exercise Price, as set forth
herein, will be fully paid and non-assessable and free from all taxes, liens and
charges in respect of the issue thereof. The Company also agrees that its
issuance of this Warrant shall constitute full authority to its officers who are
charged with the duty of executing stock certificates to execute and issue the
necessary certificates for shares of Common Stock upon exercise of this Warrant.
12. Replacement. On receipt of evidence reasonably satisfactory to the
Company of the loss, theft, destruction, or mutilation of this Warrant and, in
the case of loss, theft, or destruction, on delivery of any indemnity agreement
or bond reasonably satisfactory in form and amount to the Company or, in the
case of mutilation, on surrender and cancellation of this Warrant, the Company
at its expense will execute and deliver, in lieu of this Warrant, a new Warrant
of like tenor.
13. No Rights as Stockholder. Except as provided in Section 2(a), no
Holder of this Warrant, as such, shall be entitled to vote or receive dividends
or be considered a stockholder of the Company for any purpose, nor shall
anything in this Warrant be construed to confer on any Holder of this Warrant as
such, any rights of a stockholder of the Company or any right to vote, give or
withhold consent to any corporate action, to receive notice of meeting of
stockholders, to receive dividends or subscription rights or otherwise.
14. Miscellaneous Provisions.
(a) Governing Law. This Warrant shall be governed by, interpreted
under, and construed in accordance with the laws of the State of New York,
regardless of the laws that might otherwise govern under applicable principles
of conflicts of laws thereof.
(b) Notices. All notices, demands, requests, consents, approvals or
other communications (collectively, "Notices") required or permitted to be given
hereunder or which are given with respect to this Warrant shall be in writing
and shall be personally served, delivered by reputable air courier service with
charges prepaid, or transmitted by hand delivery, telegram, telex or facsimile,
to such address as such Holder hereof shall have specified most recently by
written notice. Notice shall be deemed given on the date of service or
transmission if personally served or transmitted by telegram, telex or
facsimile. Notice otherwise sent as provided herein shall be deemed given on
the next business day following delivery of such notice to a reputable air
courier service.
(c) Binding Effect. The provisions of this Warrant shall be binding
upon the Company and its successors and assigns.
(d) Remedies. In the event of a breach of this Warrant, the Holder
hereof shall be entitled to injunctive relief and specific performance of its
rights under this Warrant, in addition to all of its rights granted by law,
including, without limitation, recovery of damages. The Company agrees that
monetary damages would not be adequate compensation for any loss incurred by
reason of a breach of this Warrant by the Company and hereby waives any defense
in any action for injunctive relief or specific performance that a remedy at law
would be adequate.
(e) Headings. Titles and headings of sections of this Warrant are for
convenience only and shall not affect the construction of any provision of this
Warrant.
Dated: March 9, 2000
VIATEL, INC.
By:
Name:
Title:
<PAGE>
NY01/DATZW/503855.2 17
NY01/DATZW/503855.2
ANNEX A
SUBSCRIPTION FORM
(To be signed only upon exercise of Warrant)
To: VIATEL, INC.
Attention: Secretary
(1) The undersigned, the holder of the attached Warrant, hereby
irrevocably elects to [exercise the purchase right represented by that Warrant
for, and to purchase under that Warrant, ___________ shares of Common Stock of
VIATEL, INC. and herewith tenders any necessary payment of the Exercise Price in
such number of shares in full]. [to exercise [all][a portion] of the purchase
right represented by that Warrant by canceling the Warrant with respect to
___________ shares of Common Stock of VIATEL, INC. in exchange for a number of
shares of Common Stock equal to the value [as determined pursuant to the
Warrant] as the [portion of the] Warrant [being canceled].
(2) In exercising the Warrant, the undersigned hereby confirms and
acknowledges that the shares of Common Stock or other securities to be issued
upon exercise thereof are being acquired solely for the account of the
undersigned and not as a nominee for any other party, and that the undersigned
will not sell, offer for sale, pledge, hypothecate or otherwise dispose of any
shares of Common Stock, except under circumstances that will not result in a
violation of the Securities Act of 1933, as amended, or any applicable state
securities laws.
(3) Please issue a certificate(s) representing said shares of Common
Stock in the name of the undersigned or in the name of the transferee specified
below.
(4) Please issue a new Warrant for the unexercised portion in the name
of the undersigned or in the name of the permitted transferee specified below.
(5) Please deliver any certificate(s) or Warrant to the following
address.
Name: March 20___________
Address: March 20___________
Attention: March 20___________
Dated:
March 20___________
ByMarch 20___________
Name:
Footnote:
1. Insert here the number of shares called for on the face of the Warrant (or,
in the case of partial exercise, the portion as to which the Warrant is being
exercised), without making any adjustment for additional shares of Common Stock
or any other securities or property which, under the adjustment provisions of
the Warrant, may be deliverable upon exercise.
<PAGE>
ANNEX B
ASSIGNMENT FORM
FOR VALUE RECEIVED the undersigned registered owner of this Warrant hereby
sells, assigns and transfers unto the assignee named below all of the rights of
the undersigned under this Warrant, with respect to the number of shares of
Common Stock set forth below:
No. of Shares of
Name and Address of Assignee Common Stock
and does hereby irrevocably constitute and appoint March 20_______
attorney-in-fact to register such transfer onto the books of Viatel, Inc.
maintained for the purpose, with full power of substitution in the premises.
Date:March 20_______ Print Name:March 20_____
Signature:March 20_______
Witness:March 20_________
NOTICE: The signature on this assignment must correspond with the name as
written upon the face of the within Warrant in every particular, without
alteration or enlargement or any change whatsoever.
Insert here the number of shares called for on the face of the Warrant (or, in
the case of partial exercise, the portion as to which the Warrant is being
exercised), without making any adjustment for additional shares of Common Stock
or any other securities or property which, under the adjustment provisions of
the Warrant, may be deliverable upon exercise.
CREDIT AGREEMENT
dated as of
December 28, 1999
among
HMTF Bridge Partners, L.P.
and
HM/Europe Coinvestors, C.V.,
as Initial Borrowers,
and any Future Borrowers from time to time parties hereto,
The Lenders and the Issuing Bank Parties Hereto,
and
The Chase Manhattan Bank,
as Administrative Agent,
Chase Securities Inc.,
as Co-Lead Arranger and Co-Book Manager,
Bank of America, N.A.,
as Syndication Agent,
and
Banc of America Securities LLC,
as Co-Lead Arranger and Co-Book Manager
U.S. $1,780,000,000 TERM LOAN FACILITY
<PAGE>
CREDIT AGREEMENT, dated as of December 28, 1999, among HMTF Bridge
Partners, L.P., a Delaware limited partnership, and HM/Europe Coinvestors, C.V.,
a limited partnership organized under the laws of the Kingdom of the Netherlands
(collectively, the "Initial Borrowers"), any Future Borrowers from time to time
parties hereto, the Lenders from time to time parties hereto, the Issuing Bank
referred to below, The Chase Manhattan Bank, as Administrative Agent, and Bank
of America, N.A., as Syndication Agent.
The parties hereto agree as follows:
ARTICLE 1
Definitions
SECTION 1.1 Defined Terms. As used in this Agreement, the following
terms have the meanings specified below:
"ABR Loans" means Term Loans the rate of interest applicable to which is
based upon the Alternate Base Rate.
"Additional Lenders" has the meaning set forth in Section 9.13.
"Administrative Agent" means The Chase Manhattan Bank, in its capacity
as administrative agent for the Lenders hereunder.
"Affiliate" means, with respect to a specified Person, another Person that
directly, or indirectly through one or more intermediaries, Controls or is
Controlled by or is under common Control with the Person specified.
"Affiliate Guarantees" means the collective reference to each guarantee
agreement executed and delivered by an Affiliate Guarantor, substantially in the
form of Exhibit F, as the same may be amended, supplemented or otherwise
modified from time to time.
"Affiliate Guarantors" means the collective reference to (a) each Affiliate
of Hicks Muse or Olympus that holds carried interests in any New Portfolio
Company (except to the extent that a carried interest is attributable to an
investment by a Specified Fund in such New Portfolio Company) and (b) HM & Co.
and each other Affiliate of Hicks Muse or Olympus that receives fee income
(whether in the form of management fees, transaction fees, investment banking
fees, advisory fees or otherwise) from or in respect of any New Fund, any New
Portfolio Company or any Investment Party (except to the extent that such fee
income is attributable to an investment by a Specified Fund in such New
Portfolio Company, with any allocation of such fee income attributable to a
Specified Fund and a New Fund being made in a manner equitable to the Lenders
hereunder), in each case whether now existing or subsequently formed.
"Agreement" means this Credit Agreement, as amended, supplemented or
otherwise modified from time to time.
"Alternate Base Rate" means, for any day, a rate per annum equal to the
greatest of (a) the Prime Rate in effect on such day, (b) the Base CD Rate in
effect on such day plus 1% and (c) the Federal Funds Effective Rate in effect on
such day plus 1/2 of 1%. Any change in the Alternate Base Rate due to a change
in the Prime Rate, the Base CD Rate or the Federal Funds Effective Rate shall be
effective from and including the effective date of such change in the Prime
Rate, the Base CD Rate or the Federal Funds Effective Rate, respectively.
"Applicable Margin" means, for any day and for each Type of Term Loan,
based on the then Available Qualified Subscription Amount, the rate per annum
set forth below:
<TABLE>
<CAPTION>
Available Qualified
Level Subscription Amount ABR Loans Eurodollar Loans
- ---------- ------------------------------- ---------- -----------------
<S> <C> <C> <C>
Level I $0 - $625,000,000 1.50% 2.50%
Level II 625,000,001 - $1,250,000,000 1.00% 2.00%
Level III 1,250,000,001 - $1,875,000,000 .50% 1.50%
Level IV Greater than $1,875,000,001 0% 1.00%
</TABLE>
;provided that for the first 45 days following the Closing Date the Applicable
Margin shall be determined by reference to Level I of the above grid and
provided further that Level I of the above grid shall apply at all times while
an Event of Default shall have occurred and be continuing.
"Assessment Rate" means, for any day, the annual assessment rate in effect
on such day that is payable by a member of the Bank Insurance Fund classified as
"well-capitalized" and within supervisory subgroup "B" (or a comparable
successor risk classification) within the meaning of 12 C.F.R. Part 327 (or any
successor provision) to the Federal Deposit Insurance Corporation for insurance
by such Corporation of time deposits made in dollars at the offices of such
member in the United States; provided that if, as a result of any change in any
law, rule or regulation, it is no longer possible to determine the Assessment
Rate as aforesaid, then the Assessment Rate shall be such annual rate as shall
be determined in good faith by the Administrative Agent to be representative of
the cost of such insurance to the Lenders.
"Assignee" has the meaning set forth in Section 9.4(b).
"Assignment and Acceptance" means an assignment and acceptance entered into
by a Lender and an assignee (with the consent of any party whose consent is
required by Section 9.4), and accepted by the Administrative Agent, in the form
of Exhibit A or any other form approved by the Administrative Agent.
"Available Commitment" means, as to any Lender at any time, an amount equal
to the excess, if any, of (a) such Lender's Commitment over (b) such Lender's
Credit Exposure.
"Available Excess Investment Commitment Amount" means, as to any Lender at
any time, an amount equal to the excess, if any, of (a) such Lender's Investment
Commitment Amount over (b) such Lender's Credit Exposure.
"Available Qualified Subscription Amount" means the Qualified Subscription
Amount less the aggregate Qualified Subscription Amounts utilized to make any
and all investments by the New Fund.
"Base CD Rate" means the sum of (a) the Three-Month Secondary CD Rate
multiplied by the Statutory Reserve Rate plus (b) the Assessment Rate.
----
"Board" means the Board of Governors of the Federal Reserve System of the
United States.
"Borrowers" means the Initial Borrowers and any Future Borrower.
"Business Day" means any day that is not a Saturday, Sunday or other day on
which commercial banks in New York City or Dallas, Texas are authorized or
required by law to remain closed; provided that, when used in connection with a
Eurodollar Loan, the term Business Day shall also exclude any day on which banks
are not open for dealings in dollar deposits in the London interbank market.
"Capital Lease Obligations" of any Person means the obligations of such
Person to pay rent or other amounts under any lease of (or other arrangement
conveying the right to use) real or personal property, or a combination thereof,
which obligations are required to be classified and accounted for as capital
leases on a balance sheet of such Person under GAAP, and the amount of such
obligations shall be the capitalized amount thereof determined in accordance
with GAAP.
"Capital Stock" means any and all shares, interests, participations or
other equivalents (however designated) of capital stock of a corporation, any
and all equivalent ownership interests in a Person (other than a corporation),
including any limited liability company interests in a limited liability
company, any limited or general partnership interests in a partnership, and any
and all warrants, rights or options to purchase any of the foregoing.
"Change in Control" means any of the following events: (a) Hicks Muse,
Olympus, or any of their respective principals or Affiliates cease to own of
record and beneficially a majority of the economic interests in any Borrower and
the power, directly or indirectly, to vote or direct the voting of Capital Stock
having a majority of the power to direct the management and policies of any
Borrower, (b) Hicks Muse, Olympus, or their respective principals or Affiliates
cease to Control each Guarantor, (c) Hicks Muse, its principals or Affiliates
cease to own of record and beneficially a majority of the economic interests in
Olympus and the power, directly or indirectly, to vote or direct the voting of
Capital Stock having a majority of the power to direct the management and
policies of Olympus, or (d) Hicks Muse, its principals or Affiliates cease to
Control Olympus.
"Chase" means The Chase Manhattan Bank.
"Closing Date" means December 28, 1999.
"Co-Investor" means a Direct Co-Investor or an Indirect Co-Investor, as the
case may be.
"Co-Investment" means a Direct Co-Investment or an Indirect Co-Investment,
as the case may be.
"Code" means the Internal Revenue Code of 1986, as amended from time to
time.
"Commitment" means, as to any Lender, the commitment of such Lender to make
Term Loans and to participate in Letters of Credit hereunder, in an amount so
that such Lender's Credit Exposure does not exceed such Lender's commitment
hereunder, as such commitment may be (a) reduced from time to time pursuant to
Section 2.5 or 6.1(e), (b) reduced or increased from time to time as the result
of an Assignment and Acceptance or (c) increased pursuant to Section 2.19. The
initial amount of each Lender's Commitment is set forth on Schedule 2.1, or in
the Assignment and Acceptance pursuant to which such Lender shall have assumed
its Commitment, as applicable.
"Control" means the possession of the power, directly or indirectly,
to vote more than 50% of the Capital Stock having ordinary voting power for the
election of directors (or persons performing similar functions) of a
Person."Controlling" and "Controlled" have meanings correlative thereto.
"Credit Exposure" means, with respect to any Lender at any time, the sum of
the outstanding principal amount of such Lender's Term Loans and its LC Exposure
at such time.
"Default" means any event or condition which constitutes an Event of
Default or which upon notice, lapse of time or both would, unless cured or
waived, become an Event of Default.
"Direct Co-Investment" means an investment in any Borrower in connection
with such Borrower's Investment in a New Portfolio Company in an amount not less
than 2.98% of such Borrower's total Investment in such New Portfolio Company.
"Direct Co-Investor" means the principals of Hicks Muse or Olympus, their
families and employees of Hicks Muse and Olympus who make a Direct Co-Investment
in any Borrower with respect to such Borrower's investment in a New Portfolio
Company.
"Directly Owned Investment Party" means any Person in which any Borrower
and, if the Co-Investment is made as an Indirect Co-Investment, any Indirect
Co-Investor, directly makes an Investment, and which Person directly or
indirectly makes the same Investment in the New Portfolio Company.
"Document Party" has the meaning set forth in Section 9.12.
"dollars" or "$" refers to lawful money of the United States.
"EquityCo" means HM/Europe Equity Investors, C.V., a limited partnership
organized under the laws of the Kingdom of the Netherlands.
"Eurodollar Base Rate" means with respect to each day during each Interest
Period pertaining to a Eurodollar Loan, the rate per annum equal to the rate at
which Chase is offered dollar deposits at or about 10:00 A.M., New York, New
York time, two Business Days prior to the beginning of such Interest Period in
the interbank eurodollar market where the eurodollar and foreign currency and
exchange operations in respect of its Eurodollar Loans are then being conducted
for delivery on the first day of such Interest Period for the number of days
comprised therein and in an amount comparable to the amount of its Eurodollar
Loan to be outstanding during such Interest Period.
"Eurodollar Loans" means Term Loans the rate of interest applicable to
which is based upon the Eurodollar Rate.
"Eurodollar Rate" with respect to each day during each Interest Period
pertaining to a Eurodollar Loan, a rate per annum determined for such day
(rounded upward to the nearest 1/100th of 1%) equal to (a) the Eurodollar Base
Rate for such Interest Period multiplied by (b) the Statutory Reserve Rate.
"Eurodollar Tranche" the collective reference to Eurodollar Loans the then
current Interest Periods with respect to all of which begin on the same date and
end on the same later date (whether or not such Eurodollar Loans shall
originally have been made on the same day).
"Event of Default" has the meaning assigned to such term in Article 7.
"Federal Funds Effective Rate" means, for any day, the weighted average
(rounded upwards, if necessary, to the next 1/100 of 1%) of the rates on
overnight Federal funds transactions with members of the Federal Reserve System
arranged by Federal funds brokers, as published on the next succeeding Business
Day by the Federal Reserve Bank of New York, or, if such rate is not so
published for any day that is a Business Day, the average (rounded upwards, if
necessary, to the next 1/100 of 1%) of the quotations for such day for such
transactions received by the Administrative Agent from three Federal funds
brokers of recognized standing selected by it.
"Fees" means the fees payable pursuant to Section 2.10.
"Funding Fee" has the meaning assigned to such term in Section 2.10(a).
"Future Borrower" means any Person that becomes a borrower hereunder
pursuant to any Joinder Agreement.
"GAAP" means generally accepted accounting principles in the United States
from time to time.
"Governmental Authority" means the government of the United States, any
other nation or any political subdivision thereof, whether state or local, and
any agency, authority, instrumentality, regulatory body, court, central bank or
other entity exercising executive, legislative, judicial, taxing, regulatory or
administrative powers or functions of or pertaining to government.
"Guarantee" of or by any Person (the "guarantor") means any obligation,
contingent or otherwise, of the guarantor guaranteeing or having the economic
effect of guaranteeing any Indebtedness or other obligation of any other Person
(the "primary obligor") in any manner, whether directly or indirectly, and
including any obligation of the guarantor, direct or indirect, (a) to purchase
or pay (or advance or supply funds for the purchase or payment of) such
Indebtedness or other obligation or to purchase (or to advance or supply funds
for the purchase of) any security for the payment thereof, (b) to purchase or
lease property, securities or services for the purpose of assuring the owner of
such Indebtedness or other obligation of the payment thereof, (c) to maintain
working capital, equity capital or any other financial statement condition or
liquidity of the primary obligor so as to enable the primary obligor to pay such
Indebtedness or other obligation or (d) as an account party in respect of any
letter of credit or letter of guaranty issued to support such Indebtedness or
obligation; provided that the term Guarantee shall not include endorsements for
collection or deposit in the ordinary course of business.
"Guarantor" shall mean any Affiliate Guarantor or Investment Guarantor.
"Hicks Muse" means HMTF Operating, L.P., a Texas limited partnership
(formerly known as Hicks, Muse, Tate & Furst Incorporated).
"HM & Co." means Hicks, Muse & Co. Partners, L.P., a Texas limited
partnership.
"Increase Effective Date" has the meaning set forth in Section 2.19.
"Increase Response Date" has the meaning set forth in Section 2.19.
"Increase Request" has the meaning set forth in Section 2.19.
"Indebtedness" of any Person means, without duplication, (a) all
obligations of such Person for borrowed money, (b) all obligations of such
Person evidenced by bonds, debentures, notes or similar instruments, (c) all
obligations of such Person under conditional sale or other title retention
agreements relating to property acquired by such Person, (d) all obligations of
such Person in respect of the deferred purchase price of property or services
(excluding current accounts payable incurred in the ordinary course of
business), (e) all Indebtedness of others secured by (or for which the holder of
such Indebtedness has an existing right, contingent or otherwise, to be secured
by) any Lien on property owned or acquired by such Person, whether or not the
Indebtedness secured thereby has been assumed, (f) all Guarantees by such Person
of Indebtedness of others, (g) all Capital Lease Obligations of such Person, (h)
all obligations, contingent or otherwise, of such Person as an account party in
respect of letters of credit and letters of guaranty and (i) all obligations,
contingent or otherwise, of such Person in respect of bankers' acceptances. The
Indebtedness of any Person shall include the Indebtedness of any other entity
(including any partnership in which such Person is a general partner) to the
extent such Person is liable therefor as a result of such Person's ownership
interest in or other relationship with such entity, except to the extent the
terms of such Indebtedness provide that such Person is not liable therefor.
"Indirect Co-Investment" means an investment with any Borrower in
connection with such Borrower's Investment in a New Portfolio Company in an
amount not less than 2.98% of such total Investment in such New Portfolio
Company.
"Indirect Co-Investor" means (a) EquityCo or (b) any other Person formed
for the purpose of making an Indirect Co-Investment with any Borrower in a New
Portfolio Company, in any case, which is owned by the principals of Hicks Muse
or Olympus, or the families and employees of Hicks Muse or Olympus.
"Initial Borrowers" means HMTF Bridge Partners, L.P., a Delaware limited
partnership, and HM/Europe Coinvestors, C.V., a limited partnership organized
under the laws of the Kingdom of the Netherlands.
"Interest Payment Date" means (a) as to any ABR Loan, the date which is the
three month anniversary of the Closing Date and each date which is the three
month anniversary of the prior Interest Payment Date to occur while such ABR
Loan is outstanding, (b) as to any Eurodollar Loan having an Interest Period of
three months or less, the last day of such Interest Period, (c) as to any
Eurodollar Loan having an Interest Period longer than three months, each day
which is three months, or a whole multiple thereof, after the first day of such
Interest Period and the last day of such Interest Period and (d) as to any Term
Loan, the date of any repayment or prepayment made in respect thereof.
"Interest Period" means, as to any Eurodollar Loan, (a) initially, the
period commencing on the borrowing or conversion date, as the case may be, with
respect to such Eurodollar Loan and ending one, two, three, six, or to the
extent available to all Lenders, nine or twelve months thereafter, as selected
by any Borrower in its notice of borrowing or notice of conversion, as the case
may be, given with respect thereto and (b) thereafter, each period commencing on
the last day of the next preceding Interest Period applicable to such Eurodollar
Loan and ending one, two, three, six, or to the extent available to all Lenders,
nine or twelve months thereafter, as selected by any Borrower by irrevocable
notice to the Administrative Agent not less than three Business Days prior to
the last day of the then current Interest Period with respect thereto; provided
that (i) if any Interest Period would end on a day other than a Business Day,
such Interest Period shall be extended to the next succeeding Business Day
unless such next succeeding Business Day would fall in the next calendar month,
in which case such Interest Period shall end on the next preceding Business Day,
(ii) any Interest Period that commences on the last Business Day of a calendar
month (or on a day for which there is no numerically corresponding day in the
last calendar month of such Interest Period) shall end on the last Business Day
of the last calendar month of such Interest Period and (iii) no Borrower may
select an Interest Period that would extend beyond the Maturity Date.
"Investment" means the collective reference to any direct or indirect
investment in a New Portfolio Company by a Borrower. Investments shall not
include debt securities or borrowings of an Investment Party that, in the
judgment of the Borrower, would customarily be issued or borrowed in a bridge
financing to an offering or private placement in anticipation of or to a
registered public offering or in a private placement under Rule 144A of the
Securities Act of 1933, as amended.
"Investment Commitment Amount" means the amount on the date giving rise to
this calculation, as calculated by the Borrowers and the Administrative Agent,
rounded upward to the nearest $500,000.00, that represents (i) the Term Loans,
(ii) the LC Exposure and (iii) all interest and fees previously accrued or which
will be payable pursuant to Sections 2.9, 2.10(a) and 2.10(c) through the
Maturity Date assuming no pre-payments pursuant to Section 2.6 prior to the
Maturity Date (using for future periods not covered by existing Interest
Periods, the Eurodollar Rate available on the date of any determination for a
three (3) month Interest Period and using the current Applicable Margin). The
Investment Commitment Amount of any Lender at any time shall be its Loan
Percentage of the total Investment Commitment Amount.
"Investment Guarantee" means the collective reference to each Investment
Guarantee Agreement executed and delivered by an Investment Guarantor,
substantially in the form of Exhibit G, as the same may be amended, supplemented
or otherwise modified from time to time.
"Investment Guarantor" shall mean any Indirect Co-Investor.
"Investment Party" means any Person in which any Borrower directly or
indirectly makes an Investment, which Person directly or indirectly makes the
same Investment in a New Portfolio Company.
"Investment Term Loan" has the meaning set forth in Section 2.10(a) hereof.
"Investor" means any Person which has executed a Subscription Agreement
(that has become effective pursuant to its terms) and the signature page to the
limited partnership agreement of New Fund and has thereby become obligated to
make capital contributions to New Fund in exchange for limited partnership
interests therein, subject only to such customary conditions as are reasonably
acceptable to the Administrative Agent.
"Issuing Bank" means The Chase Manhattan Bank, in its capacity as the
issuer of Letters of Credit hereunder, and its successors in such capacity as
provided in Section 2.3(i).
"Joinder Agreement" means an agreement substantially in the form of
Exhibit K, as the same may be amended, supplemented or otherwise modified from
time to time.
"LC Disbursement" means a payment made by the Issuing Bank pursuant to a
Letter of Credit.
"LC Exposure" means, at any time, the sum of (a) the aggregate undrawn
amount of any outstanding Letter of Credit at such time plus (b) the aggregate
amount of all LC Disbursements that have not yet been reimbursed by or on behalf
of any Borrower at such time. The LC Exposure of any Lender at any time shall
be its Loan Percentage of the total LC Exposure at such time.
"Lenders" means the Persons listed on Schedule 2.1 and any other Person
that shall have become a party hereto pursuant to an Assignment and Acceptance,
other than any such Person that ceases to be a party hereto pursuant to an
Assignment and Acceptance.
"Letter Agreement" means the Letter Agreement dated as of the date hereof
between Hicks Muse, Olympus and the Administrative Agent on behalf of the
Lenders, substantially in the form of Exhibit J, as the same may be amended,
supplemented or otherwise modified from time to time.
"Letter of Credit" means a letter of credit issued pursuant to Section 2.3,
----------------
a bank guaranty or similar instrument treated as a letter of credit for bank
regulatory purposes, in a form reasonably acceptable to the Administrative Agent
and the Issuing Bank, to support the Borrowers' agreement to make an Investment.
"Lien" means, with respect to any asset, (a) any mortgage, deed of trust,
lien, pledge, hypothecation, encumbrance, charge or security interest in, on or
of such asset, (b) the interest of a vendor or a lessor under any conditional
sale agreement, capital lease or title retention agreement (or any financing
lease having substantially the same economic effect as any of the foregoing)
relating to such asset and (c) in the case of securities, any purchase option,
call or similar right of a third party with respect to such securities.
"Loan Documents" means the collective reference to this Agreement, the
Affiliate Guarantees, the Investment Guarantees, the Pledge Agreement, the
Letter Agreement, the Principal Agreement, the Joinder Agreements and the Notes.
"Loan Parties" means the collective reference to the Initial Borrowers, any
Future Borrowers, the Guarantors, Hicks Muse, Olympus and any other Person party
to a Loan Document.
"Loan Percentage" means, with respect to any Lender, the percentage of the
total Commitments represented by such Lender's Commitment, and, if the
Commitments have terminated, the aggregate outstanding principal amount of the
Term Loans represented by such Lender's Term Loans.
"Material Adverse Effect" means a material adverse effect on (a) the
ability of any Loan Party to perform any of its obligations under any Loan
Document or (b) the rights of or benefits available to the Lenders under any
Loan Document.
"Maturity Date" means the date which is 364 days after the Closing Date.
"New Fund" or "New Funds" means (a) any investment fund or funds formed
after the date hereof and sponsored, advised or managed by Hicks Muse, Olympus
or any of their respective Affiliates and (b) any other Person which may acquire
an Investment in an Investment Party or a New Portfolio Company or any part
thereof.
"New Portfolio Company" means a Person, having as some or all of its
shareholders, partners or members, as the case may be, directly or indirectly,
any of the Borrowers, and, if applicable, one or more Indirect Co-Investors.
"Non-Consenting Lender" has the meaning specified in Section 2.17.
"Non-Excluded Taxes" has the meaning set forth in Section 2.14(a).
"Non-Funding Lender" has the meaning set forth in Section 2.12(c).
"Non-U.S. Lender" has the meaning set forth in Section 2.14(b).
"Note" has the meaning set forth in Section 2.4(e).
"Obligations" means the collective reference to the unpaid principal of and
interest on the Term Loans, the LC Disbursements and all other obligations and
liabilities of the Borrowers to the Administrative Agent and the Lenders
(including, without limitation, interest accruing at the then applicable rate
provided in this Agreement after the maturity of the Term Loans and Letters of
Credit, LC Disbursements and interest accruing at the then applicable rate
provided in this Agreement after the filing of any petition in bankruptcy, or
the commencement of any insolvency, reorganization or like proceeding, relating
to any of the Borrowers whether or not a claim for post-filing or post-petition
interest is allowed in such proceeding), whether direct or indirect, absolute or
contingent, due or to become due, or now existing or hereafter incurred, which
may arise under, out of, or in connection with, this Agreement or any other
document made, delivered or given in connection therewith, in each case whether
on account of principal, interest, reimbursement obligations, fees, indemnities,
costs, expenses or otherwise (including, without limitation, all fees and
disbursements of counsel to the Administrative Agent or to the Lenders that are
required to be paid by the Borrowers pursuant to the terms of this Agreement).
"Olympus" means Olympus Real Estate Corporation, a Delaware corporation.
"Participant" has the meaning set forth in Section 9.4(e).
"Person" means any natural person, corporation, limited liability company,
trust, joint venture, association, company, partnership, Governmental Authority
or other entity of whatever nature.
"Pledge Agreement" means the Pledge Agreement executed and delivered by the
Pledgors, substantially in the form of Exhibit I, as the same may be amended,
---------
supplemented or otherwise modified from time to time.
"Pledged Interests" shall have the meaning set forth in the Pledge
Agreement.
"Pledgors" shall mean (i) on the Closing Date, the Initial Borrowers and
EquityCo, and (ii) thereafter, any Future Borrower and any Indirect Co-Investor.
"Principal Agreement" means the Principal Agreement executed and delivered
by each principal of Hicks Muse and Olympus, substantially in the form of
Exhibit L, as the same may be amended, supplemented or otherwise modified from
time to time.
"Prime Rate" means the rate of interest per annum publicly announced from
time to time by Chase as its prime rate in effect at its principal office in New
York, New York; each change in the Prime Rate shall be effective from and
including the date such change is publicly announced as being effective. The
Prime Rate is a reference rate and does not necessarily represent the lowest or
best rate actually charged to a customer.
"Qualified Investors" means those Investors reasonably acceptable to the
Administrative Agent. Any Investor shall be subject to exclusion for: (i)
default under or breach of (A) its respective Subscription Agreement or (B) the
limited partnership agreement of New Fund; (ii) bankruptcy or other insolvency
event or proceeding with respect to such Investor; (iii) appointment of a
receiver with respect to such Investor; (iv) repudiation by such Investor of its
obligation to make capital contributions to New Fund pursuant to its
Subscription Agreement and the limited partnership agreement of New Fund; and
(v) any material adverse change which affects the ability of such Investor to
fulfill its obligations under the limited partnership agreement of New Fund or
its Subscription Agreement.
"Qualified Subscription Amount" means the aggregate dollar amount of all
subscriptions to New Fund by all Qualified Investors as to which the Borrowers
have delivered to the Administrative Agent a fully executed copy of one or more
Subscription Agreements (including all supporting documentation including, but
not limited to, the executed signature page to the limited partnership agreement
of New Fund).
"Register" has the meaning set forth in Section 9.4(c).
"Related Parties" means, with respect to any specified Person, such
Person's Affiliates and the respective directors, officers, employees, agents,
partners and advisors of such Person and such Person's Affiliates.
"Requested Amount" has the meaning set forth in Section 2.19.
"Required Lenders" at any time, Lenders holding more than 50% of (a) the
Commitments or (b) if the Commitments have been terminated, the sum of (i)
aggregate unpaid principal amount of the Term Loans and (ii) outstanding LC
Exposure.
"Requirement of Law" as to any Person, the Certificate of Incorporation and
By-Laws or other organizational or governing documents of such Person, and any
law, treaty, rule or regulation or determination of an arbitrator or a court or
other Governmental Authority, in each case applicable to or binding upon such
Person or any of its property or to which such Person or any of its property is
subject.
"Responsible Officer" means the Chief Executive Officer, the President, any
Vice President, the Chief Financial Officer, the Treasurer, any Assistant
Treasurer, the Secretary or any Assistant Secretary or any officer having
responsibilities similar to any of the foregoing.
"Restricted Payment" means any dividend or other distribution (whether in
cash, securities or other property) with respect to any shares of any class of
Capital Stock of any Person, or any payment (whether in cash, securities or
other property), including any sinking fund or similar deposit, on account of
the purchase, redemption, retirement, acquisition, cancellation or termination
of any such shares of Capital Stock of such Person or any option, warrant or
other right to acquire any such shares of Capital Stock of such Person.
"Specified Fund" means Hicks, Muse, Tate & Furst Equity Fund II, L.P.,
Hicks, Muse, Tate & Furst Equity Fund III, L.P., Hicks, Muse, Tate & Furst
Equity Fund IV, L.P., Hicks, Muse, Tate & Furst Private Equity Fund IV, L.P.,
Hicks, Muse, Tate & Furst Europe Fund, L.P., Hicks, Muse, Tate & Furst Europe
Private Fund, L.P., Hicks, Muse, Tate & Furst Latin America Fund, L.P. and
Hicks, Muse, Tate & Furst Latin America Private Fund, L.P.
"Statutory Reserve Rate" means a fraction (expressed as a decimal), the
numerator of which is the number one and the denominator of which is the number
one minus the aggregate of the maximum reserve percentages (including any
marginal, special, emergency or supplemental reserves) expressed as a decimal
established by the Board to which the Administrative Agent is subject (a) with
respect to the Base CD Rate, for new negotiable nonpersonal time deposits in
dollars of over $100,000 with maturities approximately equal to three months and
(b) with respect to the Eurodollar Rate, for eurocurrency funding (currently
referred to as "Eurocurrency Liabilities" in Regulation D of the Board). Such
reserve percentages shall include those imposed pursuant to such Regulation D.
Eurodollar Loans shall be deemed to constitute eurocurrency funding and to be
subject to such reserve requirements without benefit of or credit for proration,
exemptions or offsets that may be available from time to time to any Lender
under such Regulation D or any comparable regulation. The Statutory Reserve
Rate shall be adjusted automatically on and as of the effective date of any
change in any reserve percentage.
"Subscription Agreement" shall mean the Subscription Agreement in the form
customarily used by Hicks Muse or Olympus (and then by any New Fund) pursuant to
which a Person agrees to acquire limited partnership interests in New Fund in
accordance with the terms thereof, which such Subscription Agreement obligates
such Person to sign the limited partnership agreement of New Fund.
"Term Loans" has the meaning set forth in Section 2.1.
"Three-Month Secondary CD Rate" means, for any day, the secondary market
rate for three-month certificates of deposit reported as being in effect on such
day (or, if such day is not a Business Day, the next preceding Business Day) by
the Board through the public information telephone line of the Federal Reserve
Bank of New York (which rate will, under the current practices of the Board, be
published in Federal Reserve Statistical Release H.15(519) during the week
following such day) or, if such rate is not so reported on such day or such next
preceding Business Day, the average of the secondary market quotations for
three-month certificates of deposit of major money center banks in New York City
received at approximately 12:00 noon, New York City time, on such day (or, if
such day is not a Business Day, on the next preceding Business Day) by the
Administrative Agent from three negotiable certificate of deposit dealers of
recognized standing selected by it.
"Ticking Fee" has the meaning set forth in Section 2.10(b).
"Transactions" means the execution, delivery and performance by the Loan
Parties of the Loan Documents, the borrowing of Term Loans, the issuance of
Letters of Credit and the use of the proceeds thereof, the grant of the Liens
under the Loan Documents and the making of each Investment.
"Type" as to any Term Loans, its nature as an ABR Loan or a Eurodollar
Loan.
"United States" means the United States of America.
SECTION 1.2 Terms Generally. The definitions of terms herein
shall apply equally to the singular and plural forms of the terms defined.
Whenever the context may require, any pronoun shall include the corresponding
masculine, feminine and neuter forms. The words "include", "includes" and
"including" shall be deemed to be followed by the phrase "without limitation".
The word "will" shall be construed to have the same meaning and effect as the
word "shall". Unless the context requires otherwise (a) any definition of or
reference to any agreement, instrument or other document herein shall be
construed as referring to such agreement, instrument or other document as from
time to time amended, supplemented or otherwise modified (subject to any
restrictions on such amendments, supplements or modifications set forth herein),
(b) any reference herein to any Person shall be construed to include such
Person's successors and assigns, (c) the words "herein", "hereof" and
"hereunder", and words of similar import, shall be construed to refer to this
Agreement in its entirety and not to any particular provision hereof, (d) all
references herein to Articles, Sections, Exhibits and Schedules shall be
construed to refer to Articles and Sections of, and Exhibits and Schedules to,
this Agreement and (e) the words "asset" and "property" shall be construed to
have the same meaning and effect and to refer to any and all tangible and
intangible assets and properties, including cash, securities, accounts and
contract rights.
SECTION 1.3 Accounting Terms; GAAP. Except as otherwise expressly
provided herein, all terms of an accounting or financial nature shall be
construed in accordance with GAAP, as in effect from time to time.
ARTICLE 2
Term Loans
SECTION 2.1 Term Loans. Subject to the terms and conditions
hereof, each Lender severally agrees to make one or more term loans (each, a
"Term Loan") to the Borrowers on the Closing Date and on any Business Day
thereafter prior to the Maturity Date in an aggregate principal amount not to
exceed such Lender's Available Commitment. The initial amount of each Lender's
Commitment is set forth on Schedule 2.1, or in the Assignment and Acceptance
pursuant to which such Lender shall have assumed its Commitment, as applicable.
The Term Loans may from time to time be (a) Eurodollar Loans or (b) ABR Loans,
as determined by the applicable Borrower and notified to the Administrative
Agent in accordance with Sections 2.2 and 2.7. Each Term Loan shall be made as
part of a borrowing consisting of Term Loans made by the Lenders ratably in
accordance with their respective Commitments. Amounts repaid or prepaid on
account of the Term Loans may not be reborrowed. The Term Loans shall be made
only if the total Investment Commitment Amounts shall not exceed the total
Commitments.
SECTION 2.2 Procedure for Term Loan Borrowing. Any Borrower shall
give the Administrative Agent irrevocable notice (including telephonic notice
confirmed in writing) (which notice must be received by the Administrative Agent
(a) in the case of Eurodollar Loans, not later than 11:00 a.m., New York, New
York time, three Business Days prior to the date of the anticipated borrowing
and (b) in the case of ABR Loans, not later than 12:00 noon, New York, New York
time, one Business Day prior to the date of the anticipated borrowing)
requesting that the Lenders make the Term Loans on such borrowing date and
specifying the amount to be borrowed; provided that a notice of an ABR Loan to
finance the reimbursement of an LC Disbursement as required by Section 2.3(e)
shall be deemed given one Business Day prior to the date of such drawing. The
Term Loans made on the Closing Date shall initially be ABR Loans. Upon receipt
of such notice, the Administrative Agent shall promptly notify each Lender
thereof. Not later than 11:00 a.m., New York, New York time, on the relevant
borrowing date, each Lender shall make available to the Administrative Agent at
its office specified in Section 9.1 an amount in immediately available funds
equal to the Term Loan to be made by such Lender. The Administrative Agent
shall credit the account of the applicable Borrower on the books of such office
of the Administrative Agent with the aggregate of the amounts made available to
the Administrative Agent by the Lenders in immediately available funds; provided
that ABR Loans made to fund the reimbursement of an LC Disbursement as provided
in Section 2.3(e) shall be remitted by the Administrative Agent to the Issuing
Bank.
SECTION 2.3 Letters of Credit. (a) General. Subject to the terms
and conditions set forth herein, any Borrower may request the issuance of a
Letter of Credit, for the account of such Borrower on the Closing Date and on
any Business Day thereafter not later than 5 Business Days prior to the Maturity
Date. In the event of any inconsistency between the terms and conditions of
this Agreement and the terms and conditions of any form of letter of credit
application or other agreement submitted by such Borrower to, or entered into by
such Borrower with, the Issuing Bank relating to such Letter of Credit, the
terms and conditions of this Agreement shall control.
(b) Notice of Issuance; Certain Conditions. To request the issuance of
a Letter of Credit, a Borrower shall deliver to the Issuing Bank and the
Administrative Agent (at least three Business Days in advance of the requested
date of issuance, unless otherwise agreed to with the Issuing Bank), a notice
requesting the issuance of such Letter of Credit, the date of issuance, the
amount of such Letter of Credit, the name and address of the beneficiary thereof
and such other information as shall be necessary to prepare such Letter of
Credit, accompanied by a duly completed and executed letter of credit
application in the Issuing Bank's standard form for such Letter of Credit. A
Letter of Credit, shall be issued only if (and upon issuance, the Borrowers
shall be deemed to represent and warrant that), after giving effect to such
issuance, (i) the LC Exposure shall not exceed $250,000,000, (ii) no Letter of
Credit shall have a face amount in excess of $100,000,000, and (iii) the total
Investment Commitment Amounts shall not exceed the total Commitments.
(c) Expiration Date. Each Letter of Credit shall expire not later than
five Business Days prior to the Maturity Date.
(d) Participations. By the issuance of a Letter of Credit and without
any further action on the part of the Issuing Bank or the Lenders, the Issuing
Bank hereby grants to each Lender, and each Lender hereby acquires from the
Issuing Bank, a participation in such Letter of Credit equal to such Lender's
Loan Percentage of the aggregate amount available to be drawn under such Letter
of Credit. In consideration and in furtherance of the foregoing, each Lender
hereby absolutely and unconditionally agrees to pay to the Administrative Agent,
for the account of the Issuing Bank, such Lender's Loan Percentage of each LC
Disbursement made by the Issuing Bank and not reimbursed by the Borrowers on the
date due as provided in Section 2.3(e), or of any reimbursement payment required
to be refunded to the Borrowers for any reason. Each Lender acknowledges and
agrees that its obligation to acquire participations pursuant to this paragraph
in respect of each Letter of Credit is absolute and unconditional and shall not
be affected by any circumstance whatsoever, including the occurrence and
continuance of a Default or reduction or termination of the Commitments, and
that each such payment shall be made without any offset, abatement, withholding
or reduction whatsoever.
(e) Reimbursement. If the Issuing Bank shall make any LC Disbursement
in respect of a Letter of Credit, the Borrowers shall reimburse such LC
Disbursement by paying to the Administrative Agent an amount equal to such LC
Disbursement not later than (a) 12:00 noon, New York, New York time, on the date
that such LC Disbursement is made, if the applicable Borrower shall have
received notice of such LC Disbursement prior to 10:00 a.m., New York, New York
time, one Business Day prior to such date or (b) if such notice has not been
received by the applicable Borrower prior to such time on such date, then not
later than 12:00 noon, New York, New York time, two Business Days immediately
following the day that the Borrowers receive such notice; provided that, if an
Event of Default set forth in Article 7(g) shall not have occurred and be
continuing, the Borrowers shall be deemed to have requested in accordance with
Section 2.2 that such payment be financed with an ABR Loan in an equivalent
amount and, to the extent so financed, the Borrowers' obligation to make such
payment shall be discharged and replaced by the resulting ABR Loan. If the
Borrowers fail to make such payment when due, the Administrative Agent shall
notify each Lender of the applicable LC Disbursement, the payment then due from
the Borrowers in respect thereof and such Lender's Loan Percentage thereof.
Promptly following receipt of such notice, each Lender shall pay to
Administrative Agent its Loan Percentage of the payment then due from the
Borrowers, in the same manner as provided in Section 2.2 with respect to Term
Loans made by such Lender (and Section 2.2 shall apply, mutatis mutandis, to the
payment obligations of the Lenders), and the Administrative Agent shall promptly
pay to the Issuing Bank the amounts so received by it from the Lenders.
Promptly following receipt by the Administrative Agent of any payment from the
Borrowers pursuant to this Section 2.3(e), the Administrative Agent shall
distribute such payment to the Issuing Bank or, to the extent that Lenders have
made payments pursuant to this Section 2.3(e) to reimburse the Issuing Bank,
then to such Lenders and the Issuing Bank as their interest may appear. Any
payment made by a Lender pursuant to this Section 2.3(e) to reimburse the
Issuing Bank for any LC Disbursement (other than the funding of ABR Loans as
contemplated above) shall not constitute a Term Loan and shall not relieve the
Borrowers of their obligation to reimburse such LC Disbursement.
(f) Obligations Absolute. The Borrowers' obligation to reimburse LC
Disbursements as provided in Section 2.3(e) shall be absolute, unconditional and
irrevocable, and shall be performed strictly in accordance with the terms of
this Agreement under any and all circumstances whatsoever and irrespective of:
(i) any lack of validity or enforceability of a Letter of Credit
or this Agreement, or any term or provision therein;
(ii) any amendment or waiver of or any consent to departure from
all or any of the provisions of a Letter of Credit or this Agreement;
(iii) the existence of any claim, setoff, defense or other right
that any Borrower, or any other Person may at any time have against the
beneficiary under a Letter of Credit, the Issuing Bank, the Administrative Agent
or any Lender or any other Person, whether in connection with this Agreement or
any other related or unrelated agreement or transaction;
(iv) any draft or other document presented under a Letter of
Credit proving to be forged, fraudulent or invalid in any respect or any
statement therein being untrue or inaccurate in any respect; and
(v) any other act or omission to act or delay of any kind of the
Issuing Bank, the Lenders, the Administrative Agent or any other Person or any
other event or circumstance whatsoever, whether or not similar to any of the
foregoing, that might but for the provisions of this Section, constitute a legal
or equitable discharge of any Borrower's obligations hereunder.
Neither the Administrative Agent, the Lenders nor the Issuing Bank, nor any of
their Related Parties, shall have any liability or responsibility by reason of
or in connection with the issuance or transfer of a Letter of Credit or any
payment or failure to make any payment thereunder, including any of the
circumstances specified in clauses (i) through (v) above, as well as any error,
omission, interruption, loss or delay in transmission or delivery of any draft,
notice or other communication under or relating to a Letter of Credit (including
any document required to make a drawing thereunder), any error in interpretation
of technical terms or any consequence arising from causes beyond the control of
the Issuing Bank; provided that the foregoing shall not be construed to excuse
the Issuing Bank from liability to the Borrowers to the extent of any direct
damages (as opposed to consequential damages, claims in respect of which are
hereby waived by each of the Borrowers to the extent permitted by applicable
law) suffered by any Borrower that are caused by the Issuing Bank's failure to
exercise the agreed standard of care (as set forth below) in determining whether
drafts and other documents presented under a Letter of Credit comply with the
terms thereof. The parties hereto expressly agree that the Issuing Bank shall
have exercised the agreed standard of care in the absence of gross negligence or
willful misconduct on the part of the Issuing Bank. Without limiting the
generality of the foregoing, it is understood that the Issuing Bank may accept
documents that appear on their face to be in substantial compliance with the
terms of a Letter of Credit, without responsibility for further investigation,
and may make payment upon presentation of documents that appear on their face to
be in substantial compliance with the terms of such Letter of Credit; provided
that the Issuing Bank shall have the right, in its reasonable discretion, to
decline to accept such documents and to make such payment if such documents are
not in strict compliance with the terms of such Letter of Credit.
(g) Disbursement Procedures. The Issuing Bank shall, promptly
following its receipt thereof, examine all documents purporting to represent a
demand for payment under each Letter of Credit. The Issuing Bank shall promptly
notify the Administrative Agent and the applicable Borrower by telephone
(confirmed by telecopy) of such demand for payment and whether the Issuing Bank
has made or will make an LC Disbursement thereunder; provided that any failure
to give or delay in giving such notice shall not relieve the Borrowers of their
obligation to reimburse the Issuing Bank and the Lenders with respect to any
such LC Disbursement.
(h) Interim Interest. If the Issuing Bank shall make any LC
Disbursement, then, unless the Borrowers shall reimburse such LC Disbursement in
full on the date such LC Disbursement is made, the unpaid amount thereof shall
bear interest, for each day from and including the date such LC Disbursement is
made to but excluding the date that the Borrowers reimburses such LC
Disbursement, at the rate per annum then applicable to ABR Loans; provided,
that, if the Borrowers fail to reimburse such LC Disbursement when due pursuant
to Section 2.3(e), then Section 2.9(c) shall apply. Interest accrued pursuant
to this paragraph shall be for the account of the Issuing Bank, except that
interest accrued on and after the date of payment by any Lender pursuant to
Section 2.3(e) to reimburse the Issuing Bank shall be for the account of such
Lender to the extent of such payment.
(i) Replacement of the Issuing Bank. The Issuing Bank may be replaced
at any time by written agreement among the Borrowers, the Administrative Agent,
and the successor Issuing Bank. The Administrative Agent shall notify the
Lenders of any such replacement of the Issuing Bank. At the time any such
replacement shall become effective, the applicable Borrower shall pay all unpaid
fees accrued for the account of the replaced Issuing Bank pursuant to Section
2.10. From and after the effective date of any such replacement, (i) the
successor Issuing Bank shall have all the rights and obligations of the Issuing
Bank under this Agreement with respect to any Letter of Credit to be issued
thereafter and (ii) references herein to the term "Issuing Bank" shall be deemed
to refer to such successor or to any previous Issuing Bank, or to such successor
and all previous Issuing Banks, as the context shall require. After the
replacement of an Issuing Bank hereunder, the replaced Issuing Bank shall remain
a party hereto and shall continue to have all the rights and obligations of an
Issuing Bank under this Agreement with respect to any Letter of Credit issued by
it prior to such replacement.
SECTION 2.4 Repayment of Loans; Evidence of Debt; etc. (a) The
Borrowers hereby unconditionally promise to pay to the Administrative Agent for
the account of each Lender the then unpaid principal amount of the Term Loans of
such Lender on the Maturity Date (or such earlier date on which the Term Loans
shall become due and payable pursuant to Article 7).
(b) Each Lender shall maintain in accordance with its usual practice an
account or accounts evidencing indebtedness of each Borrower to such Lender
resulting from the Term Loans of such Lender from time to time, including the
amounts of principal and interest payable and paid to such Lender from time to
time under this Agreement.
(c) The Administrative Agent shall maintain the Register pursuant to
Section 9.4(c), and a subaccount therein for each Lender, in which shall be
recorded (i) the amount of each Term Loan made hereunder, including each Term
Loan evidenced by a Note, the applicable Borrower and Type thereof and each
Interest Period applicable thereto, (ii) the amount of any principal or interest
due and payable or to become due and payable from the respective Borrowers to
each Lender hereunder and (iii) both the amount of any sum received by the
Administrative Agent hereunder from the various Borrowers and each Lender's
share thereof.
(d) The entries made in the Register and the accounts of each Lender
maintained pursuant to Section 2.4(b) shall, to the extent permitted by
applicable law, be prima facie evidence of the existence and amounts of the
obligations of the Borrowers therein recorded, absent manifest error; provided,
however, that the failure of any Lender or the Administrative Agent to maintain
the Register or any such account, or any error therein, shall not in any manner
affect the obligation of the Borrowers to repay (with applicable interest) the
Term Loans made to the Borrowers by such Lender in accordance with the terms of
this Agreement.
(e) Each Borrower hereby agrees that, upon the request to the
Administrative Agent by any Lender, such Borrower will execute and deliver to
such Lender a promissory note of such Borrower evidencing the Term Loans of such
Lender, substantially in the form of Exhibit H, with appropriate insertions as
to date and principal amount (a "Note").
SECTION 2.5 Termination and Reduction of Commitments. (a)
Unless previously terminated by the Borrowers in accordance with this
Agreement, the Commitments shall terminate on the Maturity Date.
(b) The Borrowers may at any time terminate, or from time to time
reduce, the Commitments; provided that (i) each reduction of the Commitments
shall be in an amount that is an integral multiple of $1,000,000 and not less
than $1,000,000 and (ii) the Borrowers shall not terminate or reduce the
Commitments if, after giving effect to any concurrent prepayment of the Term
Loans in accordance with Section 2.6, the sum of the Credit Exposures would
exceed the total Commitments.
(c) The Borrowers shall notify the Administrative Agent of any election
to terminate or reduce the Commitments under Section 2.5(b) at least three
Business Days prior to the effective date of such termination or reduction,
specifying such election and the effective date thereof. Promptly following
receipt of any notice, the Administrative Agent shall advise the Lenders of the
contents thereof. Each notice delivered by a Borrower pursuant to this Section
2.5(c) shall be irrevocable; provided that a notice of termination of the
Commitments delivered by a Borrower may state that such notice is conditioned
upon the effectiveness of other credit facilities, in which case such notice may
be revoked by such Borrower (by notice to the Administrative Agent on or prior
to the specified effective date) if such condition is not satisfied. Any
termination or reduction of the Commitments shall be permanent. Each reduction
of the Commitments shall be made ratably among the Lenders in accordance with
their respective Commitments.
SECTION 2.6 Prepayments. (a) The Borrowers may at any time and
from time to time prepay the Term Loans, in whole or in part, without premium or
penalty, upon irrevocable notice (including telephonic notice confirmed in
writing) delivered to the Administrative Agent at least three Business Days
prior thereto in the case of Eurodollar Loans and at least one Business Day
prior thereto in the case of ABR Loans, which notice shall specify the date and
amount of prepayment and whether the prepayment is of Eurodollar Loans, ABR
Loans or a combination thereof, and, if of a combination thereof, the amount
allocable to each; provided that, if a Eurodollar Loan is prepaid on any day
other than the last day of the Interest Period applicable thereto, the Borrowers
shall also pay any amounts owing pursuant to Section 2.15. Upon receipt of any
such notice, the Administrative Agent shall promptly notify each Lender thereof.
If any such notice is given, the amount specified in such notice, together with
accrued interest thereon, shall be due and payable on the date specified
therein; provided that, if a notice of prepayment is given in connection with a
conditional notice of termination of the Commitments as contemplated by Section
2.5, then such notice of prepayment may be revoked if such notice is revoked in
accordance with Section 2.5.
(b) If any Capital Stock shall be issued by, or any capital
contribution shall be made to, any Borrower, any Indirect Co-Investor or any
Investment Party (other than with respect to an Investment in a New Portfolio
Company and other than with respect to any Co-Investment) or if any Borrower,
any Indirect Co-Investor or any Investment Party (other than a New Portfolio
Company and other than ratably with respect to any Co-Investment) receives any
Restricted Payment, 100% of the net cash proceeds thereof received by such
Borrower or Indirect Co-Investor shall be applied toward the prepayment in full
of the Term Loans, second, to repay all LC Disbursements and third, to cash
collateralize any outstanding Letter of Credit on terms reasonably satisfactory
to the Administrative Agent. All prepayments made by a Borrower or an Indirect
Co-Investor in accordance with this Section 2.6(b) shall result in a pro rata
reduction of the Commitments.
(c) Upon any sale, assignment, conveyance, transfer or other
disposition (in whole or in part) of any outstanding interest in a Borrower or
in an Indirect Co-Investor (other than any sale, assignment, conveyance,
transfer or other disposition by a Co-Investor to any other Co-Investor) or any
outstanding interest of a Borrower or any Indirect Co-Investor in any Investment
Party or a New Portfolio Company, 100% of the net cash proceeds (taking into
account any necessary escrows) thereof received by such Borrower or such
Indirect Co-Investor (less the ratable interest of any Co-Investors) shall be
applied on the date thereof first toward the prepayment in full of the Term
Loans, together with accrued interest thereon, second, to repay all LC
Disbursements and third, to cash collateralize any outstanding Letter of Credit
on terms reasonably satisfactory to the Administrative Agent; provided, however,
if Borrower or any Investment Party shall sell, transfer or otherwise dispose of
"margin stock" as such term is defined in Regulation U of the Board, the net
proceeds from such sale shall be held by the Borrower or such Investment Party,
as the case may be, in cash or marketable direct obligations issued by, or
unconditionally guaranteed by, the United States Government maturing on or
within one year from the date of such sale until the Maturity Date; provided,
further, that in the event that an interest in a Borrower or an Indirect
Co-Investor, or the interest of a Borrower or Indirect Co-Investor in any
Investment Party or New Portfolio Company which shall not constitute "margin
stock" shall be sold for more than the cost of the Investments held by such
Borrower, Indirect Co-Investor, Investment Party or New Portfolio Company
(including, without limitation, any interest and fees relating thereto), the
amount of net cash proceeds in excess of such cost shall be held in a cash
collateral account in the name and under the sole dominion and control of the
Administrative Agent as security for the Obligations. All prepayments made by a
Borrower in accordance with this Section 2.6(c) shall result in a pro rata
reduction of the Commitments.
d) The application of any prepayment pursuant to paragraphs (b) or (c)
of this Section 2.6 shall be made first to ABR Loans and second to Eurodollar
Loans. Amounts prepaid on account of the Term Loans may not be reborrowed.
(e) Notwithstanding anything to the contrary contained herein, in the
event that a Borrower would incur costs pursuant to Section 2.15 as a result of
any payment due as a result of any prepayment to be made pursuant to this
Section 2.6, such Borrower, at its option, may deposit the amount of such
payment with the Administrative Agent, for the benefit of the Lenders who would
have received such payment, in a cash collateral account until the end of the
applicable Interest Period at which time such payment shall be made. Each
Borrower hereby grants to the Administrative Agent, for the benefit of such
Lenders, a security interest in all amounts in which such Borrower has any
right, title or interest which are from time to time on deposit in such cash
collateral account and expressly waives all rights (which rights the Borrowers
hereby acknowledge and agree are vested exclusively in the Administrative Agent)
to exercise dominion or control over any such amounts.
SECTION 2.7 Conversion and Continuation Options. (a) Any Borrower
may elect from time to time to convert its Eurodollar Loans to ABR Loans by
giving the Administrative Agent at least one Business Day's prior irrevocable
notice of such election, provided that if such conversion of Eurodollar Loans is
made other than on the last day of an Interest Period with respect thereto, then
such Borrower shall pay the Lenders any amounts due pursuant to Section 2.15.
Any Borrower may elect from time to time to convert its ABR Loans to Eurodollar
Loans by giving the Administrative Agent at least three Business Days' prior
irrevocable notice of such election (which notice shall specify the length of
the initial Interest Period therefor), provided that no ABR Loan may be
converted into a Eurodollar Loan when (i) any Event of Default has occurred and
is continuing and (ii) the Administrative Agent or the Required Lenders have
determined in its or their reasonable discretion not to permit such conversions.
Upon receipt of any such notice the Administrative Agent shall promptly notify
each Lender thereof.
(b) Any Eurodollar Loan may be continued as such upon the expiration
of the then current Interest Period with respect thereto by the giving of
irrevocable notice by the applicable Borrower to the Administrative Agent,
in accordance with the applicable provisions of the term "Interest
Period" set forth in Section 1.1, of the length of the next Interest Period
to be applicable to such Loans, provided that no Eurodollar Loan may be
continued as such when any Eventof Default has occurred and is continuing
and the Administrative Agent has or the Required Lenders have determined in
its or their reasonable discretion not to permit such continuations, and
provided, further, that if any Borrower shall fail to give any required notice
as described above in this paragraph or if such continuation is not permitted
pursuant to the preceding proviso such Loans shall be automatically converted
to ABR Loans on the last day of such then expiring Interest Period. Upon
receipt of any such notice the Administrative Agent shall promptly notify
each Lender thereof.
SECTION 2.8 Minimum Amounts and Maximum Number of Tranches.
Notwithstanding anything to the contrary in this Agreement, all borrowings,
conversions, continuations and optional prepayments of Eurodollar Loans
hereunder and all selections of Interest Periods hereunder shall be in minimum
amounts of $5,000,000 and incremental amounts of $500,000 in excess thereof and
shall be made pursuant to such elections so that, after giving effect thereto no
more than ten Eurodollar Tranches shall be outstanding at any one time.
SECTION 2.9 Interest. (a) Each Eurodollar Loan shall bear
interest for each day during each Interest Period with respect thereto at a rate
per annum equal to the Eurodollar Rate determined for such day plus the
Applicable Margin.
(b) Each ABR Loan shall bear interest at a rate per annum equal to the
Alternate Base Rate plus the Applicable Margin.
(c) If all or a portion of (i) any principal of any Term Loan, (ii) any
interest payable thereon or (iii) any Fees or any other amount payable hereunder
(including LC Disbursements) shall not be paid when due (whether at the stated
maturity, by acceleration or otherwise), the principal of the Term Loans and any
such overdue interest, Fees or other amount shall bear interest at a rate per
annum which is (x) in the case of principal, the rate that would otherwise be
applicable thereto pursuant to the foregoing provisions of this Section 2.9 plus
2% or (y) in the case of any such overdue interest, Fees or other amount, the
rate in effect at such time pursuant to paragraph (b) of this Section 2.9 plus
2%, in each case from the date of such non-payment until such overdue principal,
interest, Fees or other amount is paid in full (before as well as after receipt
of a judgment).
(d) Interest shall be payable in arrears on each Interest Payment Date
and the Maturity Date, provided that interest accruing pursuant to paragraph (c)
of this Section 2.9 shall be payable from time to time on demand.
(e) Whenever it is calculated on the basis of the Prime Rate, interest
shall be calculated on the basis of a 365- (or 366-, as the case may be) day
year for the actual days elapsed; and, otherwise, interest shall be calculated
on the basis of a 360-day year for the actual days elapsed. The Administrative
Agent shall as soon as practicable notify the applicable Borrower and the
Lenders of each determination of a Eurodollar Rate. Any change in the interest
rate on a Term Loan resulting from a change in the Alternate Base Rate shall
become effective as of the opening of business on the day on which such change
becomes effective. The Administrative Agent shall as soon as practicable notify
the applicable Borrower and the Lenders of the effective date and the amount of
each such change in interest rate.
(f) Each determination of an interest rate by the Administrative Agent
pursuant to any provision of this Agreement shall be conclusive and binding on
the Borrowers and the Lenders in the absence of manifest error. The
Administrative Agent shall, at the request of any Borrower, deliver to such
Borrower a statement showing the quotations used by the Administrative Agent in
determining any interest rate in respect of its Eurodollar Loan.
SECTION 2.10 Fees. (a) The Borrowers agree to pay to the
Administrative Agent, for the account of each Lender, a funding fee (the
"Funding Fee") equal to (i) 1.0% of each Term Loan made to fund an Investment
(and not for the payment of interest and fees) (each borrowing of such a Term
Loan, an "Investment Term Loan"), payable on the date of the funding of each
such Investment Term Loan, plus (ii) 0.5% of the outstanding amount of each
Investment Term Loan on the seven month anniversary of the funding of such
Investment Term Loan, plus (iii) 0.5% of the outstanding amount of each
Investment Term Loan on the nine month anniversary of the funding of such
Investment Term Loan and (iv) 1.0% of the outstanding amount of each Investment
Term Loan on the eleven month anniversary of the funding of such Investment Term
Loan. Each Funding Fee in respect of an Investment Term Loan shall be payable
on the borrowing date of such Investment Term Loan and on the seven, nine and
eleven month anniversaries of the borrowing date of such Investment Term Loan.
(b) The Borrowers agree to pay to the Administrative Agent, for the
account of each Lender, a ticking fee (the "Ticking Fee") in the amount of 0.5%
per annum on the average daily amount of the Available Excess Investment
Commitment Amount, which shall be paid by the Borrowers to the Administrative
Agent on June 30, 2000 and the Maturity Date (or if this Agreement is terminated
prior to the Maturity Date, the date this Agreement is terminated),
respectively.
(c) Each Borrower shall pay to the Administrative Agent, for the
account of the Issuing Bank and the Lenders, a letter of credit commission with
respect to each Letter of Credit issued for its account, in an amount equal to
the Applicable Margin with respect to Eurodollar Loans on the average daily face
amount of such Letter of Credit, payable quarterly in arrears on each Interest
Payment Date and on the Maturity Date. A portion of such letter of credit
commission equal to 0.125% of the average daily face amount of the Letters of
Credit shall be payable to the Issuing Bank for its own account, and the
remaining portion of such letter of credit commission shall be payable to the
Issuing Bank and the Lenders to be shared ratably among them in accordance with
their respective Loan Percentages.
(d) For purposes of calculating the fees payable by the Borrowers under
this Section 2.10, all prepayments or repayments of the Term Loans shall be
treated as being paid in the order such Term Loans were made from and after the
Closing Date irrespective of the Borrower thereof.
SECTION 2.11 Inability to Determine Interest Rate. If prior to the first
day of any Interest Period (or during any Interest Period):
(a) the Administrative Agent shall have determined (which
determination, in the absence of manifest error, shall be conclusive and binding
upon the Borrowers) that, by reason of circumstances affecting the relevant
market, adequate and reasonable means do not exist for ascertaining the
Eurodollar Rate for such Interest Period, or
(b) the Administrative Agent shall have received notice from the
Required Lenders that the Eurodollar Rate determined or to be determined for
such Interest Period will not adequately and fairly reflect the cost to such
Lenders (as conclusively certified by such Lenders) of making or maintaining
their Term Loans during such Interest Period,
the Administrative Agent shall give telecopy or telephonic notice thereof to
each Borrower and the Lenders as soon as practicable thereafter. If such notice
is given (i) any Eurodollar Loans requested to be made on the first day of such
Interest Period shall be made as ABR Loans, (ii) any Term Loans that were to
have been converted on the first day of such Interest Period to Eurodollar Loans
shall be continued as ABR Loans and (iii) any outstanding Eurodollar Loans shall
be converted to ABR Loans on the last day of the Interest Period applicable
thereto. Until such notice has been withdrawn by the Administrative Agent
(which the Administrative Agent agrees to do when the circumstances that
prompted the delivery of such notice no longer exist), no further Eurodollar
Loans shall be made or continued as such, nor shall any Borrower have the right
to convert ABR Loans to Eurodollar Loans.
SECTION 2.12 Pro Rata Treatment and Payments. (a) Each payment
(including each prepayment) by a Borrower on account of principal of and
interest on, and fees with respect to, the Term Loans and the Letters of Credit
shall be made pro rata according to the respective outstanding principal amounts
of the Term Loans then held by the Lenders or Issuing Bank, as the case may be.
(b) All payments (including prepayments) to be made by a Borrower
hereunder, whether on account of principal, interest or otherwise, shall be made
without setoff or counterclaim and shall be made prior to 12:00 Noon, New York,
New York time, on the due date thereof to the Administrative Agent, for the
account of the Lenders, at the Administrative Agent's office specified in
Section 9.1, in dollars and in immediately available funds. The Administrative
Agent shall distribute such payments to the Lenders promptly upon receipt in
like funds as received. If any payment hereunder becomes due and payable on a
day other than a Business Day, such payment shall be extended to the next
succeeding Business Day (except, in the case of Eurodollar Loans, as otherwise
provided in clause (i) of the definition of "Interest Period"). In the case of
any extension of any payment of principal pursuant to the preceding sentence,
interest thereon shall be payable at the then applicable rate during such
extension.
(c) Notwithstanding that a Lender (a "Non-Funding Lender") has (x)
failed to make a Term Loan required to be made by it hereunder, and the
Administrative Agent has determined that such Lender is not likely to make such
Term Loan or (y) given notice to any Borrower or the Administrative Agent that
it will not make, or that it has disaffirmed or repudiated any obligation to
make, any Term Loans, in each case, by reason of the provisions of the Financial
Institutions Reform, Recovery and Enforcement Act of 1989 or otherwise, any
payment made on account of the principal of the Term Loans outstanding shall be
made pro rata according to the respective outstanding principal amounts of such
Term Loans; and any payment made on account of interest on the Term Loans shall
be made pro rata according to the respective amounts of accrued and unpaid
interest and/or fees due and payable on such Term Loans with respect to which
such payment is being made. The Borrowers agree to give the Administrative
Agent such assistance in making any determination pursuant to this paragraph as
the Administrative Agent may reasonably request. Any such determination by the
Administrative Agent shall be conclusive and binding on the Lenders.
SECTION 2.13 Requirements of Law. (a) If the adoption of or any
change in any Requirement of Law or in the interpretation or application thereof
or compliance by any Lender or the Issuing Bank with any request or directive
(whether or not having the force of law) from any central bank or other
Governmental Authority made subsequent to the date hereof:
(i) shall subject any Lender or the Issuing Bank to any tax of any
kind whatsoever with respect to this Agreement, any Letter of Credit or any
Eurodollar Loan made by it, or change the basis of taxation of payments to such
Lender or Issuing Bank in respect thereof (except Non-Excluded Taxes covered by
Section 2.14, the establishment of a tax based on the net income of such Lender
or Issuing Bank and changes in the rate of tax on the net income of such Lender
or Issuing Bank);
(ii) shall impose, modify or hold applicable any reserve, special
deposit, compulsory loan or similar requirement against assets held by, deposits
or other liabilities in or for the account of, advances, loans or other
extensions of credit by, or any other acquisition of funds by, any office of
such Lender which is not otherwise included in the determination of the
Eurodollar Rate hereunder or on any Issuing Lender with respect to any Letter of
Credit; or
(iii) shall impose on such Lender or Issuing Bank any other
condition;
and the result of any of the foregoing is to increase the cost to such Lender or
Issuing Bank, by an amount which such Lender or Issuing Bank deems to be
material, of making, converting into, continuing or maintaining Eurodollar Loans
or to increase the cost to such Lender or Issuing Bank of participating in,
issuing or maintaining Letters of Credit, or to reduce any amount receivable
hereunder in respect thereof, then, in any such case, the applicable Borrower
shall promptly pay such Lender or the Issuing Bank, as the case may be, upon its
demand, any additional amounts necessary to compensate such Lender or Issuing
Bank for such increased cost or reduced amount receivable. If a Borrower
notifies the Administrative Agent within five Business Days after any Lender
notifies such Borrower of any increased cost pursuant to the foregoing
provisions of this Section 2.13(a), such Borrower may covert all Eurodollar
Loans of such Lender then outstanding into ABR Loans in accordance with Section
2.7 and shall, additionally, reimburse such Lender for any cost in accordance
with Section 2.15.
(b) If any Lender or the Issuing Bank shall have determined that the
adoption of or any change in any Requirement of Law regarding capital adequacy
or in the interpretation or application thereof or compliance by such Lender or
Issuing Bank or any corporation controlling such Lender or Issuing Bank with any
request or directive regarding capital adequacy (whether or not having the force
of law) from any Governmental Authority made subsequent to the date hereof shall
have the effect of reducing the rate of return on such Lender's, such Issuing
Bank's or such corporation's capital as a consequence of its obligations
hereunder to a level below that which such Lender, such Issuing Bank or such
corporation could have achieved but for such adoption, change or compliance
(taking into consideration such Lender's or such corporation's policies with
respect to capital adequacy) by an amount deemed by such Lender or Issuing Bank
to be material, then from time to time, after submission by such Lender or
Issuing Bank to the Borrowers through the Administrative Agent of a written
request therefor, the Borrowers shall pay to such Lender or Issuing Bank such
additional amount or amounts as will compensate such Lender or Issuing Bank for
such reduction.
(c) A certificate as to any additional amounts payable pursuant to
this Section 2.13 showing in reasonable detail the calculation thereof and
certifying that it is generally charging such costs to other similarly
situated borrowers under similar credit facilities submitted by any Lender or
Issuing Bank to the Borrowers through the Administrative Agent shall be
Conclusive in the absence of manifest error, provided that the determination of
such amounts shall be made in good faith in a manner generally consistent with
such Lender's or Issuing Bank's standard practices. The obligations of the
Borrowers pursuant to this Section 2.13 shall survive the termination of this
Agreement and the payment of the Term Loans and all other amounts payable
hereunder for a period of nine months thereafter. If any Lender becomes
entitled to claim any additional amounts pursuant to this Section 2.13, it
shall promptly (and in any event no later than 90 days after such Lender
becomes entitled to make such claim) notify the Borrowers through the
Administrative Agent of the event by reason of which it has become so
entitled.
SECTION 2.14 Taxes. (a) All payments made by the Borrowers under this
Agreement, except as provided in this Section 2.14, shall be made free and clear
of, and without deduction or withholding for or on account of, any present or
future income, stamp or other taxes, levies, imposts, duties, charges, fees,
deductions or withholdings, now or hereafter imposed, levied, collected,
withheld or assessed by any Governmental Authority, excluding net income taxes
and franchise taxes (imposed in lieu of net income taxes) imposed on the
Administrative Agent or any Lender as a result of a present or former connection
between the Administrative Agent or such Lender and the jurisdiction of the
Governmental Authority imposing such tax or any political subdivision or taxing
authority thereof or therein (other than any such connection arising solely from
the Administrative Agent or such Lender having executed, delivered or performed
its obligations or received a payment under, or enforced, this Agreement or any
other Loan Document). If any such non-excluded taxes, levies, imposts, duties,
charges, fees, deductions or withholdings ("Non-Excluded Taxes") are required to
be withheld from any amounts payable to the Administrative Agent or any Lender
hereunder, the amounts so payable to the Administrative Agent or such Lender
shall be increased to the extent necessary to yield to the Administrative Agent
or such Lender (after payment of all Non-Excluded Taxes) interest or any such
other amounts payable hereunder at the rates or in the amounts specified in this
Agreement, provided, however, that the Borrowers shall not be required to
increase any such amounts payable to any Lender with respect to any Non-Excluded
Taxes (i) that are attributable to such Lender's failure to comply with the
requirements of this Section, (ii) that are United States withholding taxes
imposed on amounts payable to such Lender at the time the Lender becomes a party
to this Agreement, or (iii) that are United States withholding taxes imposed as
a result of an event occurring after the date the Lender becomes a Lender other
than a change in law (including any income tax treaty) or regulation or the
introduction of any law or regulation or a change in interpretation or
administration of any law. Whenever any Non-Excluded Taxes are payable by a
Borrower, as promptly as possible thereafter such Borrower paying such
Non-Excluded Taxes shall send to the Administrative Agent for its own account or
for the account of such Lender, as the case may be, a certified copy of an
original official receipt received by such Borrower showing payment thereof. If
the Borrowers fail to pay any Non-Excluded Taxes when due to the appropriate
taxing authority or fails to remit to the Administrative Agent the required
receipts or other required documentary evidence, the Borrowers shall indemnify
the Administrative Agent and the Lenders for any incremental taxes, interest or
penalties that may become payable by the Administrative Agent or any Lender as a
result of any such failure. The agreements in this Section 2.14 shall survive
the termination of this Agreement and the payment of the Loans and all other
amounts payable hereunder for a period of nine months thereafter.
(b) Each Lender (or Transferee) that is not a person described in
Section 7701(a)(30) of the Code (a "Non-U.S. Lender") shall deliver to the
Borrowers and the Administrative Agent (or, in the case of a Participant, to the
Lender from which the related participation shall have been purchased) two
copies of either U.S. Internal Revenue Service Form W-8BEN or Form W-8ECI, or,
in the case of a Non-U.S. Lender claiming exemption from U.S. federal
withholding tax under Section 871(h) or 881(c) of the Code with respect to
payments of "portfolio interest", a Form W-8BEN, or any subsequent versions
thereof or successors thereto and an annual certificate representing, under
penalty of perjury, that such Non-U.S. Lender is not a "bank" for purposes of
Section 881(c) of the Code, is not a 10-percent shareholder (within the meaning
of Section 871(h)(3)(B) of the Code) of any Borrower and is not a controlled
foreign corporation related to the Borrowers (within the meaning of Section
864(d)(4) of the Code), properly completed and duly executed by such Non-U.S.
Lender claiming complete exemption from, or a reduced rate of, U.S. federal
withholding tax on all payments by the Borrowers under this Agreement and the
other Loan Documents. Such forms shall be delivered by each Non-U.S. Lender on
or before the date it becomes a party to this Agreement (or, in the case of any
Participant, on or before the date such Participant purchases the related
participation). In addition, each Non-U.S. Lender shall deliver such forms on
or before the expiration or obsolescence and promptly upon the invalidity of any
form previously delivered by such Non-U.S. Lender and after the occurrence of
any event requiring a change in the most recently provided form and, if
necessary, obtain any extensions of time reasonably requested by any Borrower or
the Administrative Agent for filing and completing such forms. Each Non-U.S.
Lender agrees, to the extent legally entitled to do so, upon reasonable request
by any Borrower, to provide to such Borrower (for the benefit of the Borrowers
and the Administrative Agent) such other forms as may be reasonably required in
order to establish the legal entitlement of such Lender to an exemption from
withholding with respect to payments of interest under this Agreement or the
other Loan Documents, provided that in determining the reasonableness of such a
request, such Lender shall be entitled to consider the cost of complying with
such request (to the extent unreimbursed by the Borrowers) that would be imposed
on such Lender. Each Non-U.S. Lender shall promptly notify the Borrowers at any
time it determines that it is no longer in a position to provide any previously
delivered certificate to any Borrower (or any other form of certification
adopted by the U.S. taxing authorities for such purpose). Notwithstanding any
other provision of this Section 2.14(b), a Non-U.S. Lender shall not be required
to deliver any form pursuant to this Section 2.14(b) that such Non-U.S. Lender
is not legally able to deliver.
(c) If the Administrative Agent or any Lender receives a refund in
respect of Non-Excluded Taxes paid by any Borrower, which in the good faith
judgment of such Lender is allocable to such payment, it shall promptly pay such
refund, together with any other amounts paid by the Borrowers in connection with
such refunded Non-Excluded Taxes, to the Borrowers, net of all out-of-pocket
expenses of such Lender incurred in obtaining such refund, provided, however,
that each Borrower agrees to promptly return such refund to the Administrative
Agent or the applicable Lender, as the case may be, if it receives notice from
the Administrative Agent or applicable Lender that such Administrative Agent or
Lender is required to repay such refund.
SECTION 2.15 Indemnity. Each Borrower agrees to indemnify each Lender
and to hold each Lender harmless from any loss (excluding loss of profit) or
expense which such Lender may sustain or incur as a consequence of (a) default
by any Borrower in making a borrowing of, conversion into or continuation of
Eurodollar Loans after such Borrower has given a notice requesting the same in
accordance with the provisions of this Agreement, (b) default by any Borrower in
making any prepayment after such Borrower has given a notice thereof in
accordance with the provisions of this Agreement or (c) the making of a
prepayment of Eurodollar Loans on a day which is not the last day of an Interest
Period with respect thereto. Such indemnification may include an amount equal
to the excess, if any, of (i) the amount of interest which would have accrued on
the amount so prepaid, or not so borrowed, converted or continued, for the
period from the date of such prepayment or of such failure to borrow, convert or
continue to the last day of such Interest Period (or, in the case of a failure
to borrow, convert or continue, the Interest Period that would have commenced on
the date of such failure) in each case at the applicable rate of interest for
such Loans provided for herein (excluding, however, any margin included therein,
if any) over (ii) the amount of interest (as reasonably determined by such
Lender) which would have accrued to such Lender on such amount by placing such
amount on deposit for a comparable period with leading banks in the interbank
eurodollar market. A certificate as to any amounts payable pursuant to this
Section 2.15, showing in reasonable detail the calculation thereof, submitted to
the Borrowers by any Lender shall be conclusive in the absence of manifest
error. This covenant shall survive the termination of this Agreement and the
payment of the Loans and all other amounts payable hereunder for a period of
nine months thereafter.
SECTION 2.16 Change of Lending Office. Each Lender agrees that if it
makes any demand for payment under Section 2.14(a), or if any adoption or change
of the type described in Section 2.13 shall occur with respect to it, it will
use reasonable efforts (consistent with its internal policy and legal and
regulatory restrictions and so long as such efforts would not be disadvantageous
to it, as determined in its reasonable discretion) to designate a different
lending office if the making of such a designation would reduce or obviate the
need for the Borrowers to make payments under Section 2.14(a), or would
eliminate or reduce the effect of any adoption or change described in Section
2.13.
SECTION 2.17 Replacement of Lenders. If, at any time (a) the Borrowers
become obligated to pay additional amounts described in Sections 2.13 or 2.14 as
a result of any conditions described in such Sections, (b) any Lender becomes
insolvent and its assets become subject to a receiver, liquidator, trustee,
custodian or other Person having similar powers, (c) any Lender becomes a
"Nonconsenting Lender" (as defined below in this Section 2.17) or (d) any Lender
becomes a Non-Funding Lender, then the Borrowers may, on ten Business Days'
prior written notice to the Administrative Agent and such Lender, replace such
Lender by causing such Lender to (and such Lender shall) assign pursuant to
Section 9.4(b) all of its rights and obligations under this Agreement to a
Lender or other entity selected by the Borrowers and reasonably acceptable to
the Administrative Agent for a purchase price equal to the outstanding principal
amount of such Lender's Loans and all accrued interest and fees and other
amounts payable hereunder; provided that (i) the Borrowers shall have no right
to replace the Administrative Agent, (ii) neither the Administrative Agent nor
any Lender shall have any obligation to the Borrower to find a replacement
Lender or other such entity, (iii) in the event of replacement of a
Nonconsenting Lender or a Lender to which the Borrowers become obligated to pay
additional amounts pursuant to clause (a) of this Section, in order for the
Borrowers to be entitled to replace such a Lender, such replacement must take
place no later than 180 days after (A) the date the Nonconsenting Lender shall
have notified the Borrowers and the Administrative Agent of its failure to agree
to any requested consent, waiver or amendment or (B) the Lender shall have
demanded payment of additional amounts under one of the Sections described in
clause (a) of this Section, as the case may be and (iv) in no event shall the
Lender hereby replaced be required to pay or surrender to such replacement
Lender or other entity any of the fees received by such Lender hereby replaced
pursuant to this Agreement. In the case of a replacement of a Lender to which
the Borrower becomes obligated to pay additional amounts pursuant to clause (a)
of this Section, the Borrower shall pay such additional amounts to such Lender
prior to such Lender being replaced and the payment of such additional amounts
shall be a condition to the replacement of such Lender. In the event that (x)
the Borrower or the Administrative Agent has requested the Lenders to consent to
a departure or waiver of any provisions of the Loan Documents or to agree to any
amendment thereto, (y) the consent, waiver or amendment in question requires the
consent of all Lenders and (z) the Required Lenders have agreed to such consent,
waiver or amendment, then any such Lender who does not agree to such consent,
waiver or amendment shall be deemed a "Nonconsenting Lender". The Borrower's
right to replace a Non-Funding Lender pursuant to this Section 2.17 is, and
shall be, in addition to, and not in lieu of, all other rights and remedies
available to the Borrower against such Non-Funding Lender under this Agreement,
at law, in equity, or by statute.
SECTION 2.18 Nature of Obligations. (a) The Borrowers shall be jointly
and severally liable for the payment and performance of all obligations and
covenants required by this Agreement to be performed by any of them, and each
Borrower shall be bound by any notices (including, without limitation, notices
of borrowings and notices of conversion or continuation), consents or other
actions furnished or taken by any other Borrower hereunder. At the request of
the Administrative Agent or the Required Lenders, each Borrower shall confirm in
writing any action taken or proposed to be taken by such Borrower hereunder,
provided that the failure of any Borrower to furnish such confirmation shall not
affect such Borrower's obligations under the preceding sentence or any other
provision of this Agreement. Each Borrower hereby agrees that it shall be
jointly and severally liable for all Obligations and that such liability shall
be absolute and unconditional irrespective of:
(i) any lack of validity or enforceability of any provision of this
Agreement, any other Loan Document or any other agreement or instrument relating
to this Agreement or any other Loan Document, or avoidance or subordination of
any of the Obligations;
(ii) any change in the time, manner or place of payment of, or in any
other term of, or any increase in the amount of, all or any of the Obligations,
or any other amendment or waiver of any term of, or any consent to departure
from any requirement of, the Agreement or any of the other Loan Documents;
(iii) any exchange, release or non-perfection of any Lien on any
collateral for, or any release or amendment or waiver of any term of any consent
to departure from any requirement of any other guaranty of, all or any of the
Obligations;
(iv) the absence of any attempt to collect any of the Obligations, from
any Borrower or from any Loan Party or any other guarantor or any other action
to enforce the same or the election of any remedy by the Lender;
(v) any waiver, consent, extensions, forbearance or granting of any
indulgence by the Lenders with respect to any provision of this Agreement or any
Loan Document; or
( vi) any other circumstance which might otherwise constitute a legal or
equitable discharge or defense of a borrower or a guarantor.
(b) Notwithstanding anything to the contrary contained herein, in the
event of a sale of all or substantially all of the Capital Stock or assets of or
by any Borrower (directly or indirectly) to a New Fund and the application of
the proceeds thereof in accordance with this Agreement and the other Loan
Documents, such Borrower shall be released of its obligations under this
Agreement and the other Loan Documents.
SECTION 2.19 Increase of Commitments. (a) The Borrower shall have the
Right with the consent of the Administrative Agent and the Syndication
Agent, to request in writing, from time to time (but not more than
twice),that the aggregate amount of the Commitments then in effect be increased
effective upon a specific date (the "Increase Effective Date") set forth in
such request (the "Increase Request") upon the same terms and conditions as
set forth herein, provided that no such increase shall be permitted if,
after giving effect thereto the total aggregate Commitments would exceed
$2,500,000,000. Any such increase shall be in incremental aggregate amounts
of not less than the lesser of (i) $10,000,000 or (ii) $2,500,000,000
minus the amount of the total aggregate Commitments then in effect
(the "Requested Amount") and shall increase permanently the amount of the
total aggregate Commitments then in effect(subject to the Borrower's
right to terminate or reduce the amount of the Commitments pursuant to
Section 2.5).
(b) If on the date (the "Increase Response Date") specified in any
Increase Request any Lenders or any new lenders selected by the Borrower with
the consent of the Administrative Agent and the Syndication Agent (such consent
not to be unreasonably withheld) elect in their sole discretion, to increase
their Commitments (each an "Increasing Lender") by an aggregate amount equal to
the Requested Amount, then, subject to the provisions of this Section 2.19, on
the Increase Effective Date therefor, the Commitments of such Increasing
Lenders, and correspondingly, the total aggregate Commitments, shall be
increased accordingly.
(c) Each increase in the Commitment of an Increasing Lender (including
any new lender) shall be evidenced by a written instrument executed by such
Increasing Lender, the Borrower and the Administrative Agent, and shall take
effect on the related Increase Effective Date.
( d) Upon the request to the Administrative Agent by any Increasing
Lender, the Borrower shall deliver to each such Increasing Lender, in exchange
for the Note held by such Increasing Lender, a new Note, in the principal amount
of such Increasing Lender's Commitment after giving effect to the adjustments
made pursuant to this Section 2.19.
(e) If any Lender or group of Lenders shall have elected to increase
their Commitments as provided in this Section 2.19, then as of the related
Increase Effective Date (i) the Commitments of each Increasing Lender shall take
effect and (ii) the Commitments of the Lenders which are not Increasing Lenders
shall remain constant.
ARTICLE 3
Representations and Warranties
Each Borrower represents and warrants to the Lenders, on the Closing Date and on
the date of each borrowing by such Borrower hereunder, that:
SECTION 3.1 Organization; Powers. Such Borrower is duly formed,
validly existing and in good standing under the laws of the jurisdiction of its
organization or formation, has all requisite power and authority to carry on its
business as now conducted and, except where the failure to do so, individually
or in the aggregate, could not reasonably be expected to result in a Material
Adverse Effect, is qualified to do business in, and is in good standing in,
every jurisdiction where such qualification is required.
SECTION 3.2 Authorization; Enforceability. The Transactions are
within the Borrower's powers and have been duly authorized by all necessary
corporate, partnership, limited liability company or other actions. The Loan
Documents have been duly executed and delivered on behalf of each Loan Party
thereto and constitute a legal, valid and binding obligation of each such Loan
Party, enforceable in accordance with their terms, subject to applicable
bankruptcy, insolvency, reorganization, moratorium or other laws affecting
creditors' rights generally and subject to general principles of equity,
regardless of whether considered in a proceeding in equity or at law.
SECTION 3.3 Governmental Approvals; No Conflicts. The
Transactions (a) do not require any material consent or approval of,
registration or filing with, or any other action by, any Governmental Authority,
except such as have been obtained or made and are in full force and effect, (b)
will not violate any applicable law or regulation or the organizational or
formation documents of any Loan Party or any order of any Governmental
Authority, (c) will not violate or result in a default under any indenture,
material agreement or other material instrument binding upon any Loan Party or
its assets, or give rise to a right thereunder to require any payment to be made
by any Loan Party, and (d) will not result in the creation or imposition of any
Lien on any asset of any Loan Party, other than pursuant to the Loan Documents.
SECTION 3.4 Compliance with Laws and Agreements. Each Loan Party
is in compliance with all laws, regulations and orders of any Governmental
Authority applicable to it or its property and all agreements and other
instruments binding upon it or its property, except where the failure to do so,
individually or in the aggregate, could not reasonably be expected to result in
a Material Adverse Effect. No Default or Event of Default has occurred and is
continuing.
SECTION 3.5 Investment and Holding Company Status. No Borrower is
(a) an "investment company" as defined in, or subject to regulation under, the
Investment Company Act of 1940 or (b) a "holding company" as defined in, or
subject to regulation under, the Public Utility Holding Company Act of 1935.
SECTION 3.6 Material Adverse Effect. There has been no
development or event which has had or could reasonably be expected to have a
Material Adverse Effect.
SECTION 3.7 No Material Litigation. No litigation, investigation
or proceeding of or before any arbitrator or Governmental Authority is pending
or, to the knowledge of such Borrower, threatened by or against any Loan Party
or any Investment Party or against any of their respective properties or
revenues (a) with respect to any of the Loan Documents or any of the
transactions contemplated hereby, or (b) which, if adversely determined, could
reasonably be expected to have a Material Adverse Effect.
SECTION 3.8 Disclosure. No information, financial statement,
report, certificate or other document prepared or furnished by or on behalf of
any Loan Party to the Administrative Agent or any Lender in connection with this
Agreement or any other Loan Document (but excluding all projections and pro
forma financial statements which shall have been prepared in good faith and
based upon reasonable assumptions) contains any untrue statement of a material
fact or omits to state any material fact necessary to make the statements herein
or therein not misleading.
SECTION 3.9 Investments. On and after the date of the making of
each Investment, each applicable Investment Party and New Portfolio Company in
which such Investment is made will be duly organized or formed, validly existing
and in good standing under the laws of the jurisdiction of its organization or
formation, will have all requisite power and authority to carry out its business
as then conducted and proposed to be conducted and, except where the failure to
do so, individually or in the aggregate, could not reasonably be expected to
result in a Material Adverse Effect, will be qualified to do business in, and in
good standing in every jurisdiction where such qualification is required. The
making of each Investment (i) will be within the power of the applicable
Borrower, and each Investment Party and will be duly authorized by all necessary
appropriate action on the part of each such Borrower and Investment Party, (ii)
will not require any consent or approval of, registration or filing with, or any
other action by, any Governmental Authority, except such as will have been
obtained or made and be in full force and effect, (iii) will not violate any
applicable law or regulation, in any material respect, or any organizational
document of any applicable Borrower, Investment Party or New Portfolio Company
or any order of any Governmental Authority, (iv) will not violate or result in a
default under any material indenture, agreement or other instrument binding upon
the applicable Borrower, Investment Party or New Portfolio Company or its
assets, or give rise to a right thereunder to require any payment to be made by
the applicable Borrower, Investment Party or New Portfolio Company (other than
payments made simultaneously with such Investment), (v) will not result in the
creation or imposition of any Lien on any asset of the applicable Borrower,
Investment Party or New Portfolio Company except Liens under the Pledge
Agreement and Liens on the acquired assets to secure Indebtedness owed to third
party lenders incurred in connection with the making of an Investment in the
assets acquired thereby, and (vi) will be consistent with investments made by,
or permitted under, any Specified Fund (other than with respect to geographic
region).
ARTICLE 4
Conditions Precedent
SECTION 4.1 Conditions to Initial Funding. The obligations of the
Lenders to make the Term Loans and of the Issuing Bank to issue any Letter of
Credit hereunder shall not become effective until the date on which each of the
following conditions is satisfied (or waived in accordance with Section 9.2):
(a) Loan Documents. The Administrative Agent (or its counsel) shall
have received (i) this Agreement, duly executed and delivered by each Initial
Borrower, (ii) an Affiliate Guarantee, duly executed and delivered by each
Affiliate Guarantor in existence on the Closing Date, (iii) an Investment
Guarantee duly executed and delivered by each Investment Guarantor in existence
on the Closing Date; (iv) the Pledge Agreement, duly executed and delivered by
each Initial Borrower and EquityCo, together with all documents required to be
delivered thereunder, all certificates representing the Pledged Interests listed
on Schedule I thereto and stock powers endorsed in blank, (v) the Letter
Agreement, duly executed and delivered by each party thereto, and (vi) the
Principal Agreement, duly executed and delivered by each party thereto.
(b) Closing Certificate. The Administrative Agent shall have received,
with a counterpart for each Lender, a certificate of each Loan Party, dated the
Closing Date, substantially in the form of Exhibit E, with appropriate
insertions and attachments.
(c) Legal Opinion. The Administrative Agent shall have received the
executed legal opinion of (i) Weil, Gotshal & Manges LLP, counsel to the Loan
Parties, substantially in the form of Exhibit B, (ii) Nauta Dutilh, counsel to
HM/Europe Coinvestors, C.V. and EquityCo, substantially in the form of Exhibit
C, and (iii) Walkers, counsel to TOH/Europe Cayman Ltd, substantially in the
form of Exhibit D.
(d) Approvals. All governmental and third party approvals necessary
or, in the discretion of the Administrative Agent, advisable in connection with
the Transactions shall have been obtained and be in full force and effect, and
all applicable waiting periods shall have expired without any action being taken
or threatened by any competent authority which would restrain, prevent or
otherwise impose adverse conditions on any Initial Borrower's ability to perform
its obligations under the Loan Documents.
(e) Fees. The Administrative Agent shall have received all fees and
other amounts due and payable on or prior to the date hereof.
(f) Filings. Any documents (including, without limitation, financing
statements) required to be filed, registered or recorded in order to create, for
the benefit of the Administrative Agent and the Lenders, a perfected, first
priority security interest shall have been properly prepared for filing,
registration or recording in each office in each jurisdiction in which such
filings, registrations and recordations are required to perfect such first
priority security interests created by the Pledge Agreement, and the
Administrative Agent shall be satisfied that such recordings and filings will be
completed promptly after the date hereof.
SECTION 4.2 Additional Conditions for Each Credit Event. The
obligation of each Lender to make Term Loans on the occasion of any borrowing
(other than a Loan made pursuant to Section 2.3(e) and Term Loans made for the
payment of interest and Fees), and of the Issuing Bank to issue any Letter of
Credit, is subject to the satisfaction of the following conditions:
(a) Joinder Agreement. In the event the Term Loans are to be drawn by
a Future Borrower not a party to this Agreement, the Administrative Agent shall
have received from such Future Borrower a Joinder Agreement signed by the
appropriate Future Borrower together with such other documentation required
thereunder.
(b) Guarantee. The Administrative Agent shall have received, if
applicable, an Investment Guarantee or an Affiliate Guarantee signed by the
appropriate Investment Guarantor or Affiliate Guarantor.
(c) Pledge Agreement. The Administrative Agent shall have received (i)
from the Borrower a Pledge Supplement (as defined in the Pledge Agreement) to
the Pledge Agreement signed by the Borrower and the Indirect Co-Investor, if
applicable, or (ii) in the case of any Future Borrower not a party to a Pledge
Agreement, a Pledge Agreement signed by such Future Borrower and the Indirect
Co-Investor, if applicable.
(d) Representations and Warranties. The representations and warranties
of the Loan Parties set forth in this Agreement and the Loan Documents shall be
true and correct in all material respects on and as of the date of such
borrowing or the date of issuance of such Letter of Credit, as applicable,
except to the extent they relate to an earlier date, in which case they shall be
true and correct in all material respects as of such earlier date.
(e) No Default. At the time of and immediately after giving effect to
such borrowing or the issuance of such Letter of Credit, as applicable, no
Default or Event of Default shall have occurred and be continuing.
(f) Certificate. With respect to each Term Loan the proceeds of which
will be used to fund an Investment, the Administrative Agent (which shall
forward the same to the Lenders and Issuing Bank) shall have received a
certificate of the applicable Borrower setting forth in reasonable detail, and
to such Borrower's knowledge, information with respect to the following items:
(i) a description of such Investment; (ii) the total cost of such Investment;
(iii) the amount, maturity, source and collateral security for all debt, equity
and other financing for such Investment and the acquisition by or of the
applicable New Portfolio Company of such Investment; and (iv) the name, form of
organization and jurisdiction of organization of such Borrower and, if
applicable, the appropriate Indirect Co-Investor, the applicable New Portfolio
Company and any Investment Party and the respective direct ownership interests
of such Borrower, the Indirect Co-Investor, each Investment Party and the New
Portfolio Company and their respective subsidiaries. In addition, the
Administrative Agent (which shall forward the same to the Lenders) shall receive
from the Borrower: (i) a copy of all purchase documents relating to the
acquisition of the applicable New Portfolio Company and (ii) such other
information reasonably requested by the Lenders regarding the applicable New
Portfolio Company, the Indirect Co-Investor, and the Investment Parties (in each
case, if any).
(g) Co-Investment. The amount of the borrowing shall not equal more
than 97.02% of the Investment in a Directly Owned Investment Party or New
Portfolio Company, as the case may be, and in each case the Co-Investors shall
have made the Co-Investment in an amount not less than 2.98% of such Investment.
(h) Legal Opinion. The Administrative Agent shall have received an
executed legal opinion from the Loan Parties' outside counsel and local counsel,
as to all matters reasonably requested by Administrative Agent including,
without limitation, (a) Regulation U and (b) perfection of the Administrative
Agent's security interest in the Investment pledged by the Pledgors of Pledged
Interests.
(i) Investment. Each Investment shall be reasonably expected by the
Loan Parties to be suitable for purchase by New Fund (the determination of which
will include a determination that the Investment is consistent with past
investments by any Specified Fund). Each borrowing and the issuance of any
Letter of Credit shall be deemed to constitute a representation and warranty by
each Borrower on the date thereof as to the matters specified in paragraphs (c)
and (d) of this Section.
ARTICLE 5
Covenants
Until the principal of and interest on each Term Loan and all other
amounts payable hereunder shall have been paid in full and the
Commitments are terminated and any Letter of Credit shall have expired or
terminated and all LC Disbursements shall have been reimbursed, each
Borrower hereby covenants and agrees with the Lenders that (with references
to "the Borrower" being deemed to be references to "such Borrower"):
SECTION 5.1 Notices of Material Events. The Borrower will
furnish to the Administrative Agent and each Lender prompt written notice of
the following:
(a) the occurrence of any Default or Event of Default;
(b) the filing or commencement of any action, suit or proceeding by or
before any arbitrator or Governmental Authority against or affecting any Loan
Party or any Affiliate thereof that, if adversely determined, could reasonably
be expected to result in a Material Adverse Effect; and
(c) any other development that results in, or could reasonably be
expected to result in, a Material Adverse Effect.
Each notice delivered under this Section shall be accompanied by a statement of
the Borrower setting forth the details of the event or development requiring
such notice and any action taken or proposed to be taken with respect thereto.
SECTION 5.2 Existence; Conduct of Business. The Borrower will do
or cause to be done all things necessary to preserve, renew and keep in full
force and effect (a) its legal existence and (b) the rights, licenses, permits,
privileges and franchises material to the conduct of its business other than
those in the case of clause (b) above, the failure of which to maintain, could
reasonably be expected to have a Material Adverse Effect.
SECTION 5.3 Payment of Obligations. The Borrower will pay its
material obligations, including material tax liabilities, before the same shall
become delinquent or in default, except where (a) the validity or amount thereof
is being contested in good faith by appropriate proceedings, (b) the Borrower
has set aside on its books adequate reserves with respect thereto in accordance
with GAAP and (c) the failure to make payment pending such contest could not
reasonably be expected to result in a Material Adverse Effect.
SECTION 5.4 Compliance with Laws. The Borrower will comply with
all laws, rules, regulations and orders of any Governmental Authority applicable
to it or its property, except where the failure to do so, individually or in the
aggregate, could not reasonably be expected to result in a Material Adverse
Effect.
SECTION 5.5 Use of Proceeds. The proceeds of the Term Loans will
be used only to finance the Investments in New Portfolio Companies and the
payment of interest, fees and expenses due hereunder and Letters of Credit shall
be used only in connection with the consummation of the proposed Investments;
provided that (i) Term Loans may not be borrowed and Letters of Credit may not
be issued for the purpose of making any Investment if the aggregate Investment
Commitment Amount (after giving effect to such Term Loan or Letter of Credit, as
the case may be), would exceed the aggregate Commitments, (ii) no part of the
proceeds of any Term Loan and no Letter of Credit will be used, whether directly
or indirectly, for any purpose that entails a violation of any of the
Regulations of the Board, including Regulations U and X and (iii) the amount of
Term Loans borrowed and the aggregate face amount of Letters of Credit issued
shall not exceed (x) $500,000,000 in the aggregate, in the case of any
Investment in real estate, and (y) $175,000,000 individually or $375,000,000 in
the aggregate, in the case of Investments in New Portfolio Companies domiciled
in Mexico, Central America or South America.
SECTION 5.6 Additional Collateral. (a) With respect to any
investment by a Borrower and an Indirect Co-Investor, if any, in a Directly
Owned Investment Party or a New Portfolio Company, as the case may be, the
applicable Borrower and Indirect Co-Investor, if any, shall execute and deliver
to the Administrative Agent, for the benefit of the Lenders, such Pledge
Agreements or Pledge Supplements to the Pledge Agreement or such other documents
as the Administrative Agent shall deem necessary or advisable to grant to the
Administrative Agent, for the benefit of the Lenders, a Lien on the Capital
Stock issued by the Directly Owned Investment Party or, to the extent there is
no Directly Owned Investment Party, the Capital Stock of the New Portfolio
Company, or in the case of an Investment in Indebtedness, a Lien on such
Indebtedness.
(b) In all cases, the appropriate Pledgor shall, as soon as practicable
but in any event not more than five Business Days after any borrowing, (i)
deliver to the Administrative Agent the stock certificates, notes or other
evidence of ownership representing the Investment in such New Portfolio Company
or such Directly Owned Investment Party, as applicable, together with undated
stock or transfer powers, executed, endorsed and delivered in blank, for any
stock certificates or notes representing such Investment, by a Responsible
Officer of such Pledgor, and (ii) take all actions necessary or advisable to
cause such Lien to be duly perfected in accordance with all applicable
Requirements of Law, including, without limitation, the filing of financing
statements in such jurisdictions as may be required by the Pledge Agreement or
by law or as may be requested by the Administrative Agent and (iii) if
reasonably requested by the Administrative Agent, deliver to the Administrative
Agent legal opinions, including legal opinions of local counsel, relating to the
matters described in this Section 5.6, which opinions shall be in form and
substance, and from counsel, reasonably satisfactory to the Administrative
Agent.
SECTION 5.7 Financial Reporting. Each Borrower will provide to
the Administrative Agent, for distribution to the Lenders, (a) each of the
financial statements and related certificates and other business and financial
information regularly distributed to the lenders pursuant to any credit
agreement for a New Portfolio Company as well as such additional information as
the Lenders may reasonably request hereunder, and (b) within 45 days after the
expiration of the applicable quarter, quarterly unconsolidated financial
statements for each Borrower for the periods ending as of such quarter,
commencing with the quarter ended December 31, 1999.
SECTION 5.8 Additional Guarantors. Within ten Business Days after
the formation of any Affiliate Guarantor or Investment Guarantor on the date any
entity becomes an Affiliate Guarantor or Investment Guarantor within the
definition of Affiliate Guarantor set forth in Section 1.1 hereof, the Borrower
shall cause each such Affiliate Guarantor or Investment Guarantor, as
applicable, to execute and deliver to the Administrative Agent, as appropriate,
an Affiliate Guarantee substantially in the form of Exhibit F attached hereto or
an Investment Guarantee substantially in the form of Exhibit G attached hereto.
SECTION 5.9 Management and Advisory Agreements. Upon the request
of the Administrative Agent, the Borrower shall provide to the Administrative
Agent a copy of each management and advisory agreement in respect of the New
Fund or an Investment in a New Portfolio Company, if any.
SECTION 5.10 Covenant to Pay. Each Borrower covenants in favor of the
Administrative Agent, with the agreement of the Lenders and the Issuing Bank, to
pay the Obligations to the Administrative Agent as joint and several creditor
thereof when and to the extent due from such Borrower under the terms of and
subject always to any express limits set out in this Agreement, to such bank
account as the Administrative Agent may direct, except that each Borrower may
also, subject to the terms of this Agreement until otherwise notified in writing
by the Administrative Agent, pay the Obligations directly to the Administrative
Agent for itself or to the relevant Lender or Issuing Bank, as the case may be,
and each such payment will constitute a pro rata discharge of the covenant to
pay in favor of the Administrative Agent set forth herein.
SECTION 5.11 Margin Securities. All Investments in "margin stock", as
such term is defined in Regulation U of the Board, shall be made through one or
more Investment Parties.
ARTICLE 6
Negative Covenants
Until the principal of and interest on each Term Loan and all other amounts
payable hereunder shall have been paid in full and the Commitments are
terminated and any Letter of Credit shall have expired or terminated and all LC
disbursements shall have been reimbursed, each Borrower hereby covenants and
agrees with the Lenders that (with references to "the Borrower" being deemed to
be references to "such Borrower"):
SECTION 6.1 Indebtedness. The Borrower will not, and will not
permit any Indirect Co-Investor (if applicable) or Investment Party to, create,
incur, assume or permit to exist any Indebtedness, except (a) Indebtedness
created hereunder and under the other Loan Documents, (b) nonconsensual
obligations imposed by operation of law, (c) indemnification obligations arising
under the Borrower's constituent documents, (d) administrative expenses and
taxes, and (e) Indebtedness arising out of any Guarantee or similar agreement
entered into by any Borrower, Indirect Co-Investor or Investment Party in
support of the obligation of a New Portfolio Company or its Subsidiaries;
provided, however, (i) the remaining Commitment after giving effect to such
Guarantee, shall be sufficient to make payments of interest and fees previously
accrued or which will be payable hereunder through the Maturity Date (using for
future periods not covered by existing Interest Periods, the Eurodollar Rate
available on the date of any determination for a three (3) month Interest Period
and using the then current Applicable Margin, (ii) the Commitments shall be
deemed to be utilized in an amount equal to the full amount of such Indebtedness
during the time such Indebtedness remains outstanding, (iii) such Guarantees
shall not exceed $250 million in the aggregate at any one time outstanding, and
(iv) promptly after entering into a permitted Guarantee, give the Administrative
Agent written notice thereof.
SECTION 6.2 Liens. The Borrower will not, and will not permit any
Indirect Co-Investor (if applicable) or any Investment Party to, create, incur,
assume or permit to exist any Lien (other than Liens created pursuant to the
Pledge Agreement) on any property or asset now owned or hereafter acquired by
it, or assign or sell any income or revenues (including accounts receivable) or
rights in respect of any thereof other than (a) Liens for taxes not yet due or
which are being contested in good faith by appropriate proceedings, provided
that adequate reserves with respect thereto are maintained on the books of the
Borrower in accordance with GAAP, (b) Liens in favor of banking institutions
arising as a matter of law and encumbering the deposits (including the right of
setoff) held by such banking institutions in the ordinary course of business and
which are within the general parameters customary in the banking industry, and
(c) attachment and judgment Liens not constituting an Event of Default;
provided, however, that this Section 6.2 shall not apply to any "margin stock"
as such term is defined in Regulation U of the Board, if such margin stock
represents more than 25% of the value of the assets of the Borrower as such
value is required to be computed by Regulation U of the Board.
SECTION 6.3 Fundamental Changes. (a) The Borrower will not, and
will not permit any Indirect Co-Investor (if applicable) or any Investment Party
to, merge into or consolidate with any other Person, or permit any other Person
to merge into or consolidate with it, or liquidate or dissolve; provided that
any Borrower, Indirect Co-Investor or Investment Party may (i) merge into or
consolidate with any other Borrower, Indirect Co-Investor or Investment Party,
or (ii) liquidate or dissolve if, in connection thereunder, all of its assets
are transferred to another Borrower, Indirect Co-Investor or Investment Party,
or if such transfer is done in accordance with Section 6.5.
(b) The Borrower will not engage in any business other than a business
consistent with its current operations and activities on the date of execution
of this Agreement.
SECTION 6.4 Restricted Payments. The Borrower will not, and will
not permit any Investment Party to, make any Restricted Payments (except that
the Investment Parties may make Restricted Payments to the Borrower (and the
Indirect Co-Investor, if any) to repay Term Loans and other amounts due
hereunder and the Borrower may make Restricted Payments to a Co-Investor in
respect of any Co-Investment amount in connection with a sale of assets
permitted under Sections 2.6(b) or 6.5 or with the proceeds funded by a
Co-Investor in connection with transfer among the Co-Investors).
SECTION 6.5 Sale of Assets. The Borrower shall not and will not
permit any Indirect Co-Investor or Investment Party to sell, transfer or
otherwise dispose of any of its respective property other than for cash
(yielding net proceeds) representing at least such Person's cost of such
property (including, without limitation, any interest and fees relating
thereto), the net proceeds (less the ratable interest of any Co-Investors and
any necessary escrows) of which (to the extent attributable to the Investment)
are distributed to the Borrowers to repay the Term Loans; provided, however, the
Borrower or any Investment Party may sell, transfer or otherwise dispose of
"margin stock" as such term is defined in Regulation U of the Board so long as
the net proceeds from such sale shall be held by the Borrower or such Investment
Party, as the case may be, in cash or marketable direct obligations issued by,
or unconditionally guaranteed by, the United States Government maturing on or
within one year from the date of such sale until the Maturity Date; provided
further, that in the event that any such property which shall not constitute
"margin stock" is sold for more than the cost thereof (including, without
limitation, any interest and fees relating thereto), the amount of net cash
proceed in excess of such cost shall be held in a cash collateral account in the
name and under the sole dominion and control of the Administrative Agent as
security for the Obligations.
ARTICLE 7
Events of Default
If any of the following events ("Events of Default") shall occur:
(a) any Borrower shall fail to pay any principal of any Term Loan or LC
Disbursement when and as the same shall become due and payable, whether at the
due date thereof or at a date fixed for prepayment thereof or otherwise;
(b) any Borrower shall fail to pay any interest on any Term Loan or LC
Disbursement or to pay any Fee or any other amount (other than an amount
referred to in clause (a) of this Article) payable under or in connection with
this Agreement, when and as the same shall become due and payable, and such
failure shall continue unremedied for a period of five days;
(c) any representation or warranty made or deemed made by or on behalf
of any Loan Party in or in connection with any Loan Document or any amendment or
modification thereof, or in any report, certificate, financial statement or
other document furnished pursuant to or in connection with any Loan Document or
any amendment or modification thereof, shall prove to have been incorrect in any
material respect when made or deemed made;
(d) any Borrower shall fail to observe or perform any covenant,
condition or agreement contained in Section 5.2(a) or Article 6 or any Guarantor
shall fail to observe or perform any covenant, condition or agreement contained
in Section 10(a)(i) or (d) of its Affiliate Guarantee or Investment Guarantee,
as applicable;
(e) any Loan Party shall fail to observe or perform any covenant,
condition or agreement contained in any Loan Document (other than those
specified in clause (a), (b), (c), (d) or (g) of this Article), and such failure
shall continue unremedied for a period of 30 days;
(f) any Loan Party, Investment Party, or any New Portfolio Company
shall (i) default in making any payment of any principal of or interest on any
Indebtedness (including any Guarantee, but excluding the Term Loans, LC
Disbursements and Guarantees pursuant to the Affiliate Guarantees and Investment
Guarantees) beyond the period of grace, if any, provided in the instrument or
agreement under which such Indebtedness was created; or (ii) default in the
observance or performance of any other agreement or condition relating to any
such Indebtedness or contained in any instrument or agreement evidencing,
securing or relating thereto, or any other event shall occur or condition exist,
the effect of which default or other event or condition is to cause, or to
permit the holder or beneficiary of such Indebtedness (or a trustee or agent on
behalf of such holder or beneficiary) to cause, with the giving of notice if
required, such Indebtedness to become due prior to its stated maturity or (in
the case of any such Indebtedness constituting a Guarantee) to become payable;
provided that a default, event or condition described in clause (i) or (ii) of
this paragraph (f) shall not at any time constitute an Event of Default under
this Agreement unless, at such time, one or more defaults, events or conditions
(without duplication as to the same item of Indebtedness) of the type described
in clauses (i) and (ii) of this paragraph (f) shall have occurred and be
continuing with respect to Indebtedness the outstanding principal amount of
which exceeds in the aggregate $500,000 in the case of any Borrower or
$10,000,000 in the case of any New Portfolio Company, Investment Party or any
other Loan Party; or
(g) (i) any Loan Party, Investment Party, or any New Portfolio Company
shall commence any case, proceeding or other action (A) under any existing or
future law of any jurisdiction, domestic or foreign, relating to bankruptcy,
insolvency, reorganization or relief of debtors, seeking to have an order for
relief entered with respect to it, or seeking to adjudicate it a bankrupt or
insolvent, or seeking reorganization, winding-up, liquidation, dissolution,
composition or other relief with respect to it or its debts, or (B) seeking
appointment of a receiver, trustee, custodian, conservator or other similar
official for it or for all or any substantial part of its assets, or any Loan
Party, Investment Party or any New Portfolio Company shall make a general
assignment for the benefit of its creditors; or (ii) there shall be commenced
against any Loan Party, Investment Party or any New Portfolio Company, any case,
proceeding or other action of a nature referred to in clause (i) above which (A)
results in the entry of an order for relief or any such adjudication or
appointment or (B) remains undismissed, undischarged or unbonded for a period of
60 days; or (iii) there shall be commenced against any Loan Party, Investment
Party or any New Portfolio Company any case, proceeding or other action seeking
issuance of a warrant of attachment, execution, distraint or similar process
against all or any substantial part of its assets which results in the entry of
an order for any such relief which shall not have been vacated, discharged, or
stayed or bonded pending appeal within 60 days from the entry thereof; or (iv)
any Loan Party shall take any action in furtherance of, or indicating its
consent to, approval of, or acquiescence in, any of the acts set forth in clause
(i), (ii), or (iii) above; or (v) any Loan Party, Investment Party or any New
Portfolio Company shall generally not, or shall be unable to, or shall admit in
writing its inability to, pay its debts as they become due; or
(h) one or more judgments or decrees shall be entered against any Loan
Party, Investment Party or New Portfolio Company involving in the aggregate a
liability (not paid or fully covered by insurance as to which the relevant
insurance company has not denied coverage) of $500,000 or more in the case of
any Borrower and $10,000,000 or more in the case of any New Portfolio Company,
Investment Party or any other Loan Party, and all such judgments or decrees
shall not have been vacated, discharged, stayed or bonded pending appeal within
60 days from the entry thereof; or
(i) any Loan Document shall, at any time, cease to be in full force and
effect (unless released by the Administrative Agent at the direction of the
Required Lenders or as otherwise permitted under this Agreement or the other
Loan Documents) or shall be declared null and void, or the validity or
enforceability thereof shall be contested by any Loan Party; or
(j) any Person constituting a "Guarantor" shall not be a party to an
Affiliate Guarantee or an Investment Guarantee, as applicable, within ten
Business Days after such Person has been organized or formed;
(k) a Change in Control shall occur; or
(l) any Investment Party shall fail to distribute any payment made to
it on account of any Investment (net of reasonable expenses and reasonably
required escrows).
then, and in every such event (other than an event with respect to any Borrower
described in clause (g) of this Article), and at any time thereafter during the
continuance of such event, the Administrative Agent may, and at the request of
the Required Lenders shall, by notice to the Borrowers, declare the Term Loans
and LC Disbursements then outstanding to be due and payable in whole (or in
part, in which case any principal not so declared to be due and payable may
thereafter be declared to be due and payable) and the Commitments to be
terminated, and thereupon the principal of the Term Loans and LC Disbursements
so declared to be due and payable, together with accrued interest thereon and
all other obligations of the Borrowers accrued hereunder, shall become due and
payable immediately, without presentment, demand, protest or other notice of any
kind, all of which are hereby waived by each Borrower; and in case of any event
with respect to any Borrower described in clause (g) of this Article, the
principal of the Term Loans and LC Disbursements then outstanding, together with
accrued interest thereon and all other obligations of the Borrowers accrued
hereunder, shall automatically become due and payable and the Commitments shall
be automatically terminated, without presentment, demand, protest or other
notice of any kind, all of which are hereby waived by each Borrower; and at any
time thereafter during the continuance of such event, the Administrative Agent
may exercise all of its rights and remedies under the Pledge Agreement in
accordance with all applicable laws.
With respect to all Letters of Credit with respect to which presentment for
honor shall not have occurred at the time of an acceleration pursuant to the
preceding paragraph, the Borrowers shall at such time deposit in a cash
collateral account opened by the Administrative Agent an amount equal to the
aggregate then undrawn and unexpired amount of such Letters of Credit. Each
Borrower hereby grants to the Administrative Agent, for the benefit of the
Issuing Bank, a security interest in such cash collateral to secure all
obligations of such Borrower in respect of such Letters of Credit under this
Agreement and the other Loan Documents. The Borrowers shall execute and deliver
to the Administrative Agent, for the account of the Issuing Bank, such further
documents and instruments as the Administrative Agent may request to evidence
the creation and perfection of such security interest in such cash collateral
account. Amounts held in such cash collateral account shall be applied by the
Administrative Agent to the payment of drafts drawn under such Letters of
Credit, and the unused portion thereof after all such Letters of Credit shall
have expired or been fully drawn upon, if any, shall be applied to repay other
obligations of the Borrowers hereunder and under any Notes. After all such
Letters of Credit shall have expired or been fully drawn upon, all obligations
under the Letters of Credit shall have been satisfied and all other obligations
of the Borrowers hereunder and under any Notes shall have been paid in full, the
balance, if any, in such cash collateral account shall be returned to Borrowers.
ARTICLE 8
The Administrative Agent
SECTION 8.1 Generally.
Each of the Lenders hereby irrevocably appoints the Administrative Agent as its
agent and authorizes the Administrative Agent to take such actions on its behalf
and to exercise such powers as are delegated to the Administrative Agent by the
terms hereof, together with such actions and powers as are reasonably incidental
thereto.
The bank serving as the Administrative Agent hereunder shall have the same
rights and powers in its capacity as a Lender as any other Lender and may
exercise the same as though it were not the Administrative Agent, and such bank
and its Affiliates may accept deposits from, lend money to and generally engage
in any kind of business with any Loan Party or any Affiliate thereof as if it
were not the Administrative Agent hereunder.
The Administrative Agent shall not have any duties or obligations except those
expressly set forth herein. Without limiting the generality of the foregoing,
(a) the Administrative Agent shall not be subject to any fiduciary or other
implied duties, regardless of whether a Default has occurred and is continuing,
(b) the Administrative Agent shall not have any duty to take any discretionary
action or exercise any discretionary powers, except discretionary rights and
powers expressly contemplated hereby that the Administrative Agent is required
to exercise in writing by the Required Lenders, and (c) except as expressly set
forth herein, the Administrative Agent shall not have any duty to disclose, and
shall not be liable for the failure to disclose, any information relating to any
Loan Party or any of its Affiliates that is communicated to or obtained by the
bank serving as Administrative Agent or any of its Affiliates in any capacity.
The Administrative Agent shall not be liable for any action taken or not taken
by it with the consent or at the request of the Required Lenders or in the
absence of its own gross negligence or willful misconduct. The Administrative
Agent shall be deemed not to have knowledge of any Default unless and until
written notice thereof is given to the Administrative Agent by the Borrower or a
Lender, and the Administrative Agent shall not be responsible for or have any
duty to ascertain or inquire into (i) any statement, warranty or representation
made in or in connection with this Agreement, (ii) the contents of any
certificate, report or other document delivered hereunder or in connection
herewith, (iii) the performance or observance of any of the covenants,
agreements or other terms or conditions set forth herein, (iv) the validity,
enforceability, effectiveness or genuineness of this Agreement or any other
agreement, instrument or document, or (v) the satisfaction of any condition set
forth in Article 4 or elsewhere herein, other than to confirm receipt of items
expressly required to be delivered to the Administrative Agent.
The Administrative Agent shall be entitled to rely upon, and shall not incur any
liability for relying upon, any notice, request, certificate, consent,
statement, instrument, document or other writing believed by it to be genuine
and to have been signed or sent by the proper Person. The Administrative Agent
also may rely upon any statement made to it orally or by telephone and believed
by it to be made by the proper Person, and shall not incur any liability for
relying thereon. The Administrative Agent may consult with legal counsel (who
may be counsel for any Borrower), independent accountants and other experts
selected by it, and shall not be liable for any action taken or not taken by it
in accordance with the advice of any such counsel, accountants or experts.
The Administrative Agent may perform any and all its duties and exercise its
rights and powers by or through any one or more sub-agents appointed by the
Administrative Agent. The Administrative Agent and any such sub-agent may
perform any and all its duties and exercise its rights and powers through their
respective Related Parties. The exculpatory provisions of the preceding
paragraphs shall apply to any such sub-agent and to the Related Parties of the
Administrative Agent and any such sub-agent, and shall apply to their respective
activities in connection with the syndication of the credit facilities provided
for herein as well as activities as Administrative Agent.
Subject to the appointment and acceptance of a successor Administrative Agent as
provided in this paragraph, the Administrative Agent may resign at any time by
notifying the Lenders and the Borrowers. Upon any such resignation, the
Required Lenders shall have the right, in consultation with the Borrowers, to
appoint a successor, which successor shall be approved by the Borrowers (which
approval shall not be unreasonably withheld or delayed). If no successor shall
have been so appointed by the Required Lenders and shall have accepted such
appointment within 30 days after the retiring Administrative Agent gives notice
of its resignation, then the retiring Administrative Agent may, on behalf of the
Lenders, appoint a successor Administrative Agent which shall be a bank
reasonably acceptable to the Borrowers. Upon the acceptance of its appointment
as Administrative Agent hereunder by a successor, such successor shall succeed
to and become vested with all the rights, powers, privileges and duties of the
retiring Administrative Agent, and the retiring Administrative Agent shall be
discharged from its duties and obligations hereunder. Any fees payable by the
Borrowers to a successor Administrative Agent shall be the same as those payable
to its predecessor unless otherwise agreed between the Borrowers and such
successor. After the Administrative Agent's resignation hereunder, the
provisions of this Article and Section 9.3 shall continue in effect for its
benefit in respect of any actions taken or omitted to be taken by it while it
was acting as Administrative Agent.
Each Lender acknowledges that it has, independently and without reliance upon
the Administrative Agent or any other Lender and based on such documents and
information as it has deemed appropriate, made its own credit analysis and
decision to enter into this Agreement. Each Lender also acknowledges that it
will, independently and without reliance upon the Administrative Agent or any
other Lender and based on such documents and information as it shall from time
to time deem appropriate, continue to make its own decisions in taking or not
taking action under or based upon this Agreement, any related agreement or any
document furnished hereunder or thereunder.
SECTION 8.2 Joint and Several Creditorship. The Administrative
Agent shall be the joint and several creditor together with each Lender and the
Issuing Bank of each and every Obligation of any Borrower towards such Bank
under this Agreement or any Loan Document so that accordingly the Administrative
Agent in its individual capacity will have its own independent right to demand
performance by the relevant Borrower of those Obligations, and such Obligations
will be discharged by and to the extent of any discharge thereof either to the
Administrative Agent in its capacity referred to above or to the Administrative
Agent for itself or to the relevant Bank, as the case may be. In case of a
resignation of the Administrative Agent pursuant to Section 8.1, the rights of
the Administrative Agent hereunder shall be assigned by the retiring
Administrative Agent to the successor Administrative Agent by an assignment not
constituting a novation of debt.
ARTICLE 9
Miscellaneous
SECTION 9.1 Notices. Except in the case of notices and other
communications expressly permitted to be given by telephone, all notices and
other communications provided for herein shall be in writing (including by
facsimile transmission) and, unless otherwise expressly provided herein, shall
be deemed to have been duly given or made (a) in the case of delivery by hand,
when delivered, (b) in the case of delivery by mail, three days after being
deposited in the mails, postage prepaid, or (c) in the case of delivery by
facsimile transmission, when sent and receipt has been confirmed, addressed as
follows:
(a) if to any Borrower, to it c/o Hicks, Muse Tate & Furst
Incorporated, 200 Crescent Court, Suite 1600, Dallas, Texas 75201, Attention:
Lawrence D. Stuart, Jr., (Telecopy No. 214-740-7313), with a copy to each other
Borrower);
(b) if to the Administrative Agent, to The Chase Manhattan Bank, Loan
and Agency Services, One Chase Manhattan Plaza, New York, New York 10081,
Attention: Janet Belden (Telecopy No. 212-552-5658), with a copy to The Chase
Manhattan Bank, 270 Park Avenue, New York, New York 10017, Attention: Neil
Boylan (Telecopy No. 212-972-0009); and
(c) if to any Lender, to it at its address (or telecopy number) set
forth in an administrative questionnaire delivered to the Administrative Agent
and as otherwise notified in writing to the Borrowers.
Any party hereto may change its address or telecopy number for notices and other
communications hereunder by notice to the other parties hereto. All notices and
other communications given to any party hereto in accordance with the provisions
of this Agreement shall be deemed to have been given on the date of receipt.
SECTION 9.2 Waivers; Amendments. (a) No failure or delay
by the Administrative Agent or any Lender in exercising any right or power
hereunder shall operate as a waiver thereof, nor shall any single or partial
exercise of any such right or power, or any abandonment or
discontinuance of steps to enforce such a right or power, preclude any other
or further exercise thereof or the exercise of any other right or power.
The rights and remedies of the Administrative Agent and the Lenders
hereunder are cumulative and are not exclusive of any rights or remedies
that they would otherwise have. No waiver of any provision of this
Agreement or consent to any departure by any Borrower therefrom shall in
any event be effective unless the same shall be permitted by paragraph
(b) of this Section, and then such waiver or consent shall be
effective only in the specific instance and for the purpose for which
given. Without limiting the generality of the foregoing, the making of
a Term Loan shall not be construed as a waiver of any Default,
regardless of whether the Administrative Agent or any Lender may have
had notice or knowledge of such Default at the time.
(b) Neither any Loan Document nor any provision thereof may be waived,
amended or modified except pursuant to an agreement or agreements in writing
entered into by the Required Lenders and each affected Loan Party; provided that
no such agreement shall (i) increase the Commitment of any Lender without the
written consent of such Lender, (ii) reduce the amount of, or extend any
scheduled date for payment of, any principal or interest in respect of the Term
Loans, any LC Disbursements or any Letter of Credit fees, without the written
consent of each Lender directly affected thereby, (iii) change any of the
provisions of this Section or the definition of "Required Lenders" without the
written consent of each Lender, (iv) release any Loan Party from its obligations
under the Loan Documents without the written consent of each Lender (except upon
payment in full in cash of the Obligations or, with respect to a given Borrower
or Indirect Co-Investor, upon a sale of the Directly Owned Investment Party or
New Portfolio Company in a transaction permitted hereunder and repayment in full
of such Borrower's Term Loans) or (v) release all or substantially all of the
collateral (except as expressly provided in the Loan Documents) under the
Affiliate Guarantees or Investment Guarantees and the Pledge Agreement (provided
that a partial release of collateral thereunder shall require the consent of the
Required Lenders); provided, further, that no such agreement shall amend, modify
or otherwise affect the rights or duties of the Administrative Agent hereunder
without the prior written consent of the Administrative Agent.
SECTION 9.3 Expenses; Indemnity; Damage Waiver. (a) The Borrowers
shall pay or cause to be paid (i) all reasonable out-of-pocket expenses incurred
by the Administrative Agent, including the reasonable fees, charges and
disbursements of counsel for the Administrative Agent, in connection with the
administration of this Agreement or any amendments, modifications or waivers of
the provisions hereof and (ii) all reasonable out-of-pocket expenses incurred by
the Administrative Agent or any Lender, including the reasonable fees, charges
and disbursements of any counsel for the Administrative Agent or any Lender, in
connection with the enforcement or protection of its rights in connection with
the Loan Documents, including in connection with any workout, restructuring or
negotiations in respect thereof, the reasonable fees and disbursements of
counsel to the Administrative Agent and after the occurrence and during the
continuance of an Event of Default a single counsel to the Lenders collectively.
(b) Each Borrower shall indemnify the Administrative Agent and each
Lender, and each Related Party of any of the foregoing Persons (each such Person
being called an "Indemnitee") against, and hold each Indemnitee harmless from,
any and all losses, claims, damages, liabilities and related expenses (other
than non-Non-Excluded Taxes), including the reasonable fees, charges and
disbursements of any counsel for any Indemnitee, incurred by or asserted against
any Indemnitee arising out of, in connection with, or as a result of (i) the
execution or delivery of the Loan Documents or any agreement or instrument
contemplated thereby, the performance by the parties thereto of their respective
obligations under the Loan Documents or the consummation of the Transactions or
any other transactions contemplated by the Loan Documents, (ii) any Term Loan or
the use of the proceeds therefrom, or (iii) any actual or prospective claim,
litigation, investigation or proceeding relating to any of the foregoing,
whether based on contract, tort or any other theory and regardless of whether
any Indemnitee is a party thereto; provided that such indemnity shall not, as to
any Indemnitee, be available to the extent that such losses, claims, damages,
liabilities or related expenses are determined by a court of competent
jurisdiction by final and nonappealable judgment to have resulted from the gross
negligence or willful misconduct of such Indemnitee or, in the case of any
indemnified liabilities arising out of this Agreement or the other Loan
Documents, from the material breach by any such Indemnitee of this Agreement or
the other Loan Documents, as the case may be; provided that, for purpose of
clarity, no provision of this paragraph (b) shall be deemed to negate Section
9.3(a)(ii) to the extent that it provides that after the occurrence and during
the continuance of an Event of Default, the Lenders shall be reimbursed for a
single counsel.
(c) To the extent that the Borrowers fail to pay any amount required to
be paid by it to the Administrative Agent, each Lender severally agrees to pay
to the Administrative Agent such Lender's Loan Percentage (determined as of the
time that the applicable unreimbursed expense or indemnity payment is sought) of
such unpaid amount; provided that the unreimbursed expense or indemnified loss,
claim, damage, liability or related expense, as the case may be, was incurred by
or asserted against the Administrative Agent in its capacity as such.
(d) To the extent permitted by applicable law, the Borrowers shall not
assert, and each Borrower hereby waives, any claim against any Indemnitee, on
any theory of liability, for special, indirect, consequential or punitive
damages (as opposed to direct or actual damages) arising out of, in connection
with, or as a result of, this Agreement or any agreement or instrument
contemplated hereby, the Transactions, any Term Loan or the use of the proceeds
thereof.
(e) The agreements in this Section 9.3 shall survive repayment of the
Loans and all other amounts payable hereunder.
SECTION 9.4 Successors and Assigns. (a) The provisions of
This Agreement shall be binding upon and inure to the benefit of the parties
Hereto and their respective successors and assigns permitted hereby,
except that no Borrower may assign or otherwise transfer any of its
rights or obligations hereunder without the prior written consent of each
Lender (and any attempted assignment or transfer by such Borrower without
such consent shall be null and void). Nothing in this Agreement, expressed
or implied, shall be construed to confer upon any Person (other than the
parties hereto, their respective successors and assigns permitted hereby
and, to the extent expressly contemplated hereby, the Related Parties of
each of the Administrative Agent and the Lenders) any legal or equitable
right,remedy or claim under or by reason of this Agreement.
(b) Any Lender may assign to one or more assignees a portion of its
rights and obligations under this Agreement (an "Assignee"); provided that (i)
each of the Lenders party to this Agreement on the Closing Date may not assign
more than 49% of its Commitments, Term Loans and LC Exposure without the consent
of the Borrowers, (ii) except in the case of an assignment to a Lender or an
Affiliate of a Lender, each of the Borrowers (such consent not to be
unreasonably withheld) and the Administrative Agent (the consent of the
Administrative Agent may be withheld in its sole discretion) must give their
prior written consent to such assignment, (iii) except in the case of an
assignment to a Lender or an Affiliate of a Lender or an assignment of the
entire remaining amount of the assigning Lender's Commitment, Term Loans and LC
Exposure, the amount of the Term Loans of the assigning Lender subject to each
such assignment (determined as of the date the Assignment and Acceptance with
respect to such assignment is delivered to the Administrative Agent) shall not
be less than $5,000,000 unless each of the Borrowers and the Administrative
Agent otherwise consent, (iv) the parties to each assignment shall execute and
deliver to the Administrative Agent an Assignment and Acceptance, together with
a processing and recordation fee of $4,000 (provided, however, if the Borrowers
request the replacement of any Lender pursuant to Section 2.17 hereof, the
Borrowers shall pay such processing and recordation fee, which shall be funded
with the proceeds of the Term Loans), and (v) the assignee, if it shall not be a
Lender, shall deliver to the Administrative Agent an administrative
questionnaire; provided further that any consent of the Borrowers otherwise
required under this paragraph shall not be required if an Event of Default under
clause (g) of Article 7 has occurred and is continuing. Upon acceptance and
recording pursuant to paragraph (d) of this Section, from and after the
effective date specified in each Assignment and Acceptance, the assignee
thereunder shall be a party hereto and, to the extent of the interest assigned
by such Assignment and Acceptance, have the rights and obligations of a Lender
under this Agreement, and the assigning Lender thereunder shall, to the extent
of the interest assigned by such Assignment and Acceptance, be released from its
obligations under this Agreement (and, in the case of an Assignment and
Acceptance covering all of the assigning Lender's rights and obligations under
this Agreement, such Lender shall cease to be a party hereto but shall continue
to be entitled to the benefits of Sections 2.13, 2.14, 2.15 and 9.3). Any
assignment or transfer by a Lender of rights or obligations under this Agreement
that does not comply with this paragraph shall be treated for purposes of this
Agreement as a sale by such Lender of a participation in such rights and
obligations in accordance with paragraph (e) of this Section. Notwithstanding
anything to the contrary provided herein, in the event of any proposed
assignment by a Lender pursuant to this Section 9.4(b), such assignment shall be
offered to the Lenders pro rata based on their respective Loan Percentages.
(c) The Administrative Agent, acting for this purpose as an agent of
the Borrowers, shall maintain at one of its offices in New York, New York a copy
of each Assignment and Acceptance delivered to it and a register for the
recordation of the names and addresses of the Lenders, and the Commitment of,
and principal amount of the Term Loans whether or not evidenced by a Note owing
to, each Lender pursuant to the terms hereof from time to time (the "Register").
The entries in the Register shall be conclusive, and the Borrowers, the
Administrative Agent and the Lenders may treat each Person whose name is
recorded in the Register pursuant to the terms hereof as a Lender hereunder for
all purposes of this Agreement, notwithstanding notice to the contrary. Any
assignment of any Loan whether or not evidenced by a Note shall be effective
only upon appropriate entries with respect thereto being made in the Register
(and each Note shall expressly so provide). Any assignment or transfer of all
or part of a Loan evidenced by a Note shall be registered on the Register only
upon surrender for registration of assignment or transfer of the Note evidencing
such Loan, accompanied by a duly executed Assignment and Acceptance, and
thereupon one or more new Notes in the same aggregate principal amount shall be
issued to the designated Assignee and the old Notes shall be returned by the
Administrative Agent to appropriate Borrower marked "cancelled".
(d) Upon its receipt of a duly completed Assignment and Acceptance
executed by an assigning Lender and an assignee, the assignee's completed
administrative questionnaire (unless the assignee shall already be a Lender
hereunder), the processing and recordation fee referred to in paragraph (b) of
this Section and any written consent to such assignment required by paragraph
(b) of this Section, the Administrative Agent shall accept such Assignment and
Acceptance and record the information contained therein in the Register. No
assignment shall be effective for purposes of this Agreement unless it has been
recorded in the Register as provided in this paragraph.
(e) Any Lender may, without the consent of the Borrowers but with the
consent of the Administrative Agent (the consent of the Administrative Agent may
be withheld in its sole discretion) sell participations to one or more banks or
other entities (a "Participant") in all or a portion of such Lender's rights and
obligations under this Agreement (including all or a portion of its Commitment
and the Term Loans owing to it); provided that (i) such Lender's obligations
under this Agreement shall remain unchanged, (ii) such Lender shall remain
solely responsible to the other parties hereto for the performance of such
obligations and (iii) the Borrowers, the Administrative Agent and the Lenders
shall continue to deal solely and directly with such Lender in connection with
such Lender's rights and obligations under this Agreement. Any agreement or
instrument pursuant to which a Lender sells such a participation shall provide
that such Lender shall retain the sole right to enforce this Agreement and to
approve any amendment, modification or waiver of any provision of this
Agreement; provided that such agreement or instrument may provide that such
Lender will not, without the consent of the Participant, agree to any amendment,
modification or waiver described in the first proviso to Section 9.2(b) that
affects such Participant. Subject to paragraph (f) of this Section, the
Borrowers agree that each Participant shall be entitled to the benefits of
Sections 2.13, 2.14 and 2.15 to the same extent as if it were a Lender and had
acquired its interest by assignment pursuant to paragraph (b) of this Section;
provided that, in the case of Section 2.14, such Participant shall have complied
with the requirements of said Section and provided, further, that no Participant
shall be entitled to receive any greater amount pursuant to any such Section
than the transferor Lender would have been entitled to receive in respect of the
amount of the participation transferred by such transferor Lender to such
Participant had no such transfer occurred. Notwithstanding anything to the
contrary provided herein, in the event of any proposed participation by a Lender
pursuant to this Section 9.4(e), such participation shall be offered to the
Lenders pro rata based on their respective Loan Percentages.
(f) Any Lender may at any time pledge or assign a security interest in
all or any portion of its rights under this Agreement to secure obligations of
such Lender, including any such pledge or assignment to a Federal Reserve Bank,
and this Section shall not apply to any such pledge or assignment to a Federal
Reserve Bank; provided that no such pledge or assignment of a security interest
shall release a Lender from any of its obligations hereunder or substitute any
such assignee for such Lender as a party hereto.
SECTION 9.5 Survival. All covenants, agreements, representations
and warranties made by the Borrowers herein and in the certificates or other
instruments delivered in connection with or pursuant to this Agreement shall be
considered to have been relied upon by the other parties hereto and shall
survive the execution and delivery of this Agreement and the making of any Term
Loans, regardless of any investigation made by any such other party or on its
behalf.
SECTION 9.6 Counterparts; Integration; Effectiveness. This Agreement
may be executed in counterparts and by facsimile (and by different parties
hereto on different counterparts), each of which shall constitute an original,
but all of which when taken together shall constitute a single contract. This
Agreement and any separate agreements with respect to Fees constitute the entire
contract among the parties relating to the subject matter hereof and supersede
any and all previous agreements and understandings, oral or written, relating to
the subject matter hereof.
SECTION 9.7 Severability. Any provision of this Agreement held to be
invalid, illegal or unenforceable in any jurisdiction shall, as to such
jurisdiction, be ineffective to the extent of such invalidity, illegality or
unenforceability without affecting the validity, legality and enforceability of
the remaining provisions hereof; and the invalidity of a particular provision in
a particular jurisdiction shall not invalidate such provision in any other
jurisdiction.
SECTION 9.8 Right of Setoff. If an Event of Default shall have
occurred and be continuing, each Lender is hereby authorized at any time and
from time to time, to the fullest extent permitted by law, to set off and apply
any and all deposits (general or special, time or demand, provisional or final)
at any time held and other indebtedness at any time owing by such Lender to or
for the credit or the account of any Borrower against any of and all the
obligations of the Borrowers now or hereafter existing under this Agreement held
by such Lender, irrespective of whether or not such Lender shall have made any
demand under this Agreement and although such obligations may be unmatured. The
rights of each Lender under this Section are in addition to other rights and
remedies (including other rights of setoff) which such Lender may have.
SECTION 9.9 GOVERNING LAW; JURISDICTION; CONSENT TO SERVICE OF
PROCESS. (a) THIS AGREEMENT SHALL BE CONSTRUED IN ACCORDANCE WITH AND GOVERNED
BY THE LAW OF THE STATE OF NEW YORK.
(b) Each Borrower hereby irrevocably and unconditionally submits, for
itself and its property, to the nonexclusive jurisdiction of the Supreme Court
of the State of New York sitting in New York County and of the United States
District Court of the Southern District of New York, and any appellate court
from any thereof, in any action or proceeding arising out of or relating to this
Agreement, or for recognition or enforcement of any judgment, and each of the
parties hereto hereby irrevocably and unconditionally agrees that all claims in
respect of any such action or proceeding may be heard and determined in such New
York State or, to the extent permitted by law, in such Federal court. Each of
the parties hereto agrees that a final judgment in any such action or proceeding
shall be conclusive and may be enforced in other jurisdictions by suit on the
judgment or in any other manner provided by law. Nothing in this Agreement
shall affect any right that the Administrative Agent or any Lender may otherwise
have to bring any action or proceeding relating to this Agreement against any
Borrower or any of its properties in the courts of any jurisdiction.
(c) The Borrowers hereby irrevocably and unconditionally waive, to the
fullest extent they may legally and effectively do so, any objection which they
may now or hereafter have to the laying of venue of any suit, action or
proceeding arising out of or relating to this Agreement in any court referred to
in paragraph (b) of this Section. Each of the parties hereto hereby irrevocably
waives, to the fullest extent permitted by law, the defense of an inconvenient
forum to the maintenance of such action or proceeding in any such court.
(d) Each party to this Agreement irrevocably consents to service of
process in the manner provided for notices in Section 9.1. Nothing in this
Agreement will affect the right of any party to this Agreement to serve process
in any other manner permitted by law.
SECTION 9.10 WAIVER OF JURY TRIAL. EACH PARTY HERETO HEREBY WAIVES, TO
THE FULLEST EXTENT PERMITTED BY APPLICABLE LAW, ANY RIGHT IT MAY HAVE TO A TRIAL
BY JURY IN ANY LEGAL PROCEEDING DIRECTLY OR INDIRECTLY ARISING OUT OF OR
RELATING TO THIS AGREEMENT OR THE TRANSACTIONS CONTEMPLATED HEREBY (WHETHER
BASED ON CONTRACT, TORT OR ANY OTHER THEORY). EACH PARTY HERETO (A) CERTIFIES
THAT NO REPRESENTATIVE, AGENT OR ATTORNEY OF ANY OTHER PARTY HAS REPRESENTED,
EXPRESSLY OR OTHERWISE, THAT SUCH OTHER PARTY WOULD NOT, IN THE EVENT OF
LITIGATION, SEEK TO ENFORCE THE FOREGOING WAIVER AND (B) ACKNOWLEDGES THAT IT
AND THE OTHER PARTIES HERETO HAVE BEEN INDUCED TO ENTER INTO THIS AGREEMENT BY,
AMONG OTHER THINGS, THE MUTUAL WAIVERS AND CERTIFICATIONS IN THIS SECTION.
SECTION 9.11 Headings. Article and Section headings and the Table of
Contents used herein are for convenience of reference only, are not part of this
Agreement and shall not affect the construction of, or be taken into
consideration in interpreting, this Agreement.
SECTION 9.12 Confidentiality. Each Lender agrees to keep information
obtained by it pursuant hereto and the other Loan Documents identified as
confidential in writing at the time of delivery confidential in accordance with
such Lender's customary practices and agrees that it will only use such
information in connection with the transactions contemplated by this Agreement
and not disclose any of such information other than (a) to such Lender's
employees, representatives, directors, attorneys, auditors, agents or affiliates
who are advised of the confidential nature of such information, (b) to the
extent such information presently is or hereafter becomes available to such
Lender on a non-confidential basis from any source or such information that is
in the public domain at the time of disclosure, (c) to the extent disclosure is
required by law (including applicable securities laws), regulation, subpoena or
judicial order or process (provided that notice of such requirement or order
shall be promptly furnished to the Borrowers unless such notice is legally
prohibited) or requested or required by bank, securities or investment company
regulations or auditors or any administrative body or commission to whose
jurisdiction such Lender may be subject, (d) to actual or prospective Assignees
or Participants who agree to be bound by the provisions of this Section 9.12,
(e) to the extent required in connection with any litigation between any Loan
Party and any Lender with respect to the Term Loans or this Agreement and the
other Loan Documents or (f) with the Borrowers' prior written consent. The
agreements in this Section 9.12 shall survive repayment of the Term Loans and
all other amounts payable hereunder. Each of the parties hereto (each, a
"Document Party") agrees to keep confidential this Agreement and the other Loan
Documents and the transactions contemplated hereby and thereby; provided that
nothing herein shall prevent any Document Party from disclosing such information
(a) to any other Document Party or any Affiliate of any Document Party, or any
officer, director, employee, agent, or advisor of any Document Party or
Affiliate of any Document Party, (b) to any other Person if reasonably
incidental to the administration of the credit facility provided herein, (c) as
required by any law, rule, or regulation, (d) upon the order of any court or
administrative agency, (e) upon the request or demand of any regulatory agency
or authority, (f) to any New Portfolio Company (or prospective New Portfolio
Company) or any officer, director, employee, agent, or advisor of any Document
Party or Affiliate of such New Portfolio Company in connection with a proposed
Investment by any Borrower in such New Portfolio Company, (g) in connection with
any litigation to which such Document Party or any of its Affiliates may be a
party, or (h) to the extent necessary in connection with the exercise of any
remedy under this Agreement or any other Loan Document.
SECTION 9.13 Syndication. The Borrowers agree that the Administrative
Agent has the right to syndicate the Commitments and the Term Loans at any time
or from time to time to a group of financial institutions (the "Additional
Lenders") identified by the Administrative Agent in consultation with the
Borrowers, if the Administrative Agent and its affiliates determine to syndicate
the Commitments and the Term Loans. The Borrowers agree to actively assist the
Administrative Agent and its affiliates in completing a syndication satisfactory
to the Administrative Agent and the Borrowers, including (a) using commercially
reasonable efforts to ensure that the syndication efforts benefit materially
from the Borrower's lending and equity relationships, (b) direct contact between
the Borrowers and any Additional Lenders, (c) furnishing, or, as the
Administrative Agent may request, assisting in the preparation of, information,
projections and marketing materials to be used in connection with the
syndication and (d) the hosting, with the Administrative Agent and its
affiliates, of one or more meetings of any Additional Lenders. The
Administrative Agent and its affiliates would manage all aspects of the
syndication, in consultation with the Borrowers, including decisions as to the
selection of institutions to be approached and when they will be approached,
when their commitments will be accepted, which institutions will participate,
the allocations of the commitments among any Additional Lenders and the amount
and distribution of fees among any Additional Lenders. The Borrowers
acknowledge that the information the Borrowers may be asked to furnish to the
Administrative Agent and its affiliates and to any Additional Lenders may
include sensitive competitive information, and the Administrative Agent and its
affiliates agree to take appropriate and customary confidentiality precautions
with respect thereto. Notwithstanding anything to the contrary contained
herein, in the event of a syndication (i) no Lender shall be permitted to
syndicate more than 49% of the Commitments, Term Loans and LC Disbursements held
by it on the Closing Date without the prior written consent of the Borrowers and
(ii) any syndication shall be offered to the Lenders pro rata (to the extent
desired by any Lenders) based on their respective Loan Percentages.
SECTION 9.14 Certainty of Funds. At the request of any Borrower, the
Administrative Agent on behalf of the Lenders shall provide such documentation
as may be reasonably agreed between such Borrower and the Administrative Agent
to evidence the availability of the unused Commitment to make Investments by any
Borrower or a proposed Future Borrower.
[The remainder of this page is intentionally left blank.]
<PAGE>
Signature Page To
Credit Agreement
IN WITNESS WHEREOF, the parties hereto have caused this Agreement
to be duly executed by their respective authorized officers as of the
day and year first above written.
Signature Page To
Credit Agreement
Initial Borrowers:
HM/Europe Coinvestors, C.V.
By: TOH/Europe Cayman Ltd.,
its general partner
By:
Name:
Title:
HMTF Bridge Partners, L.P.
By: HMTF Bridge Partners, LLC
its general partner
By:
Name:
Title:
<PAGE>
Signature Page To
Credit Agreement
THE CHASE MANHATTAN BANK
as Administrative Agent, Issuing Bank, and a Lender
By:
Name:
Title:
<PAGE>
BANK OF AMERICA, N.A.
as Syndication Agent and a Lender
By:
Name:
Title:
<PAGE>
Signature Page To
Credit Agreement
BANKERS TRUST COMPANY
as a Lender
By:
Name:
Title:
<PAGE>
Signature Page To
Credit Agreement
CREDIT SUISSE FIRST BOSTON
as a Lender
By:
Name:
Title:
<PAGE>
Signature Page To
Credit Agreement
MORGAN STANLEY SENIOR FUNDING, INC.
as a Lender
By:
Name:
Title:
<PAGE>
Signature Page To
Credit Agreement
DA1:\200181\15\4@GL15!.DOC\52626.0607
MERRILL LYNCH CAPITAL CORPORATION
as a Lender
By:
Name:
Title:
<PAGE>
MFBL FUNDING, INC.
as a Lender
By:
Name:
Title:
<PAGE>
SCHEDULE 2.1
LENDERS' COMMITMENTS
<TABLE>
<CAPTION>
LENDER COMMITMENT
- ----------------------------------- --------------
<S> <C>
The Chase Manhattan Bank $ 400,000,000
Bank of America, N.A. $ 400,000,000
Bankers Trust Company $ 200,000,000
Credit Suisse First Boston $ 200,000,000
Morgan Stanley Senior Funding, Inc. $ 200,000,000
Merrill Lynch Capital Corporation $ 180,000,000
MFBL Funding, Inc. $ 200,000,000
TOTAL COMMITMENTS $1,780,000,000
</TABLE>
<PAGE>
<TABLE>
<CAPTION>
TABLE OF CONTENTS
PAGE
<S> <C>
ARTICLE 1 Definitions. . . . . . . . . . 1
SECTION 1.1 Defined Terms 1
SECTION 1.2 Terms Generally 12
SECTION 1.3 Accounting Terms; GAAP 13
ARTICLE 2 Term Loans . . . . . . . . . . 13
SECTION 2.1 Term Loans 13
SECTION 2.2 Procedure for Term Loan Borrowing 13
SECTION 2.3 Letters of Credit 14
SECTION 2.4 Repayment of Loans; Evidence of Debt; etc. 17
SECTION 2.5 Termination and Reduction of Commitments 18
SECTION 2.6 Prepayments 18
SECTION 2.7 Conversion and Continuation Options 20
SECTION 2.8 Minimum Amounts and Maximum Number of Tranches 20
SECTION 2.9 Interest 20
SECTION 2.10 Fees 21
SECTION 2.11 Inability to Determine Interest Rate 22
SECTION 2.12 Pro Rata Treatment and Payments 22
SECTION 2.13 Requirements of Law 23
SECTION 2.14 Taxes 24
SECTION 2.15 Indemnity 26
SECTION 2.16 Change of Lending Office 27
SECTION 2.17 Replacement of Lenders 27
SECTION 2.18 Nature of Obligations 28
SECTION 2.19 Increase of Commitments 28
ARTICLE 3 Representations and Warranties 29
SECTION 3.1 Organization; Powers 29
SECTION 3.2 Authorization; Enforceability 30
SECTION 3.3 Governmental Approvals; No Conflicts 30
SECTION 3.4 Compliance with Laws and Agreements 30
SECTION 3.5 Investment and Holding Company Status 30
SECTION 3.6 Material Adverse Effect 30
SECTION 3.7 No Material Litigation 30
SECTION 3.8 Disclosure 30
SECTION 3.9 Investments 31
ARTICLE 4 Conditions Precedent . . . . . 31
SECTION 4.1 Conditions to Initial Funding 31
SECTION 4.2 Additional Conditions for Each Credit Event 32
ARTICLE 5 Covenants. . . . . . . . . . . 34
SECTION 5.1 Notices of Material Events 34
SECTION 5.2 Existence; Conduct of Business 34
SECTION 5.3 Payment of Obligations 34
SECTION 5.4 Compliance with Laws 34
SECTION 5.5 Use of Proceeds 34
SECTION 5.6 Additional Collateral 35
SECTION 5.7 Financial Reporting 35
SECTION 5.8 Additional Guarantors 36
SECTION 5.9 Management and Advisory Agreements 36
SECTION 5.10 Covenant to Pay 36
SECTION 5.11 Margin Securities 36
ARTICLE 6 Negative Covenants . . . . . . 36
SECTION 6.1 Indebtedness 36
SECTION 6.2 Liens 37
SECTION 6.3 Fundamental Changes 37
SECTION 6.4 Restricted Payments 37
SECTION 6.5 Sale of Assets 37
ARTICLE 7 Events of Default. . . . . . . 38
ARTICLE 8 The Administrative Agent . . . 41
SECTION 8.1 Generally 41
SECTION 8.2 Joint and Several Creditorship 43
ARTICLE 9 Miscellaneous. . . . . . . . . 43
SECTION 9.1 Notices 43
SECTION 9.2 Waivers; Amendments 43
SECTION 9.3 Expenses; Indemnity; Damage Waiver 44
SECTION 9.4 Successors and Assigns 45
SECTION 9.5 Survival 47
SECTION 9.6 Counterparts; Integration; Effectiveness 48
SECTION 9.7 Severability 48
SECTION 9.8 Right of Setoff 48
SECTION 9.9 GOVERNING LAW; JURISDICTION;CONSENT TO SERVICE
OF PROCESS 48
SECTION 9.10 WAIVER OF JURY TRIAL 49
SECTION 9.11 Headings 49
SECTION 9.12 Confidentiality 49
SECTION 9.13 Syndication 50
SECTION 9.14 Certainty of Funds 50
</TABLE>
INDEX OF EXHIBITS
Exhibit A . . . . . . . . . . . . . . . . Assignment and Acceptance
Exhibit B . . . . . . . . . . . . . . . . Legal Opinion of Weil, Gotshal
& Manges LLP
Exhibit C . . . . . . . . . . . . . . . . Legal Opinion of Nauta Dutilh
Exhibit D . . . . . . . . . . . . . . . . Legal Opinion of Walkers
Exhibit E . . . . . . . . . . . . . . . . Closing Certificate
Exhibit F . . . . . . . . . . . . . . . . Affiliate Guarantee
Exhibit G . . . . . . . . . . . . . . . . Investment Guarantee
Exhibit H . . . . . . . . . . . . . . . . Note
Exhibit I . . . . . . . . . . . . . . . . Pledge Agreement
Exhibit J . . . . . . . . . . . . . . . . Letter Agreement
Exhibit K . . . . . . . . . . . . . . . . Joinder Agreement
Exhibit L . . . . . . . . . . . . . . . . Principal Agreement
INDEX OF SCHEDULES
Schedule 2.1. . . . . . . . . . . . . . . Lender's Commitments
